Brazil’s federal government is interested in acquiring niobium special purpose firm Codemig, controlled by Minas Gerais state. 

Codemig receives royalties from the production of niobium, which is mainly used in HSLA steel.  Last year, Minas Gerais announced its intention to privatise Codemig. However, thus far plans have failed to advance as state legislators have still not evaluated the process.  In February, the Legislative Assembly of Minas Gerais rejected the urgent request to vote on the sale of Codemig.  Nonetheless, Minas Gerais governor, Romeu Zema, has expressed interest in selling its shares in Codemig, prompting the federal government to start negotiations. 

President Bolsonaro’s statement affirms a desire to keep niobium assets from falling into foreign hands. While Brazil accounts for 90% of niobium supply, foreign firms control a notable portion of capacity.  The country’s largest producer, CBMM, is 15% owned by a Chinese consortium and 15% owned by a Japanese-South Korean consortium.  And Brazil’s second-largest niobium operation, the open-pit Boa Vista Mine, has been 100% owned by China Molybdenum since 2016.  As such, only 55% of niobium supply is strictly in Brazilian hands.