Illegal Critical Minerals Put Brazilian Ports on Alert as Seizures Hit 25,000 Tonnes

Illegal mining and the smuggling of critical minerals have become one of the mining sector’s main challenges. At Brazilian Federal Revenue Service customs offices, the problem has drawn attention because of its volume, scale and rapid expansion.

Since the second half of 2024, more than 50,000 tonnes of minerals classified as strategic or critical have been involved in attempts to leave Brazil illegally through different ports.

Data obtained by Folha from the Federal Revenue Service in Santos, São Paulo, show that 943 containers were intercepted by Brazilian customs authorities over the past two years. They were illegally loaded with copper, manganese, ilmenite, zircon, quartz and other minerals.

The seizures total 25,000 tonnes. The amount retained would have been twice as large had a single shipment of 25,000 tonnes of illegal manganese not managed to leave the Port of Belém, Pará, aboard a bulk carrier before the Federal Revenue Service intervened. The episode resulted in a R$10 million fine.

“Brazil became very focused on gold and diamonds and failed to pay attention to the various other natural resources that are now in demand because of this geopolitical dispute, but which had already been leaving the country for a long time,” said Rômulo Brandão Neto, head of the Federal Revenue Service’s export surveillance and enforcement operations team in Santos.

For comparison, the 25,000 tonnes seized represent about 1% of all legally exported copper and manganese shipped by Brazil over the same period, according to Comex Stat data.

Copper — essential for energy-transition technologies and electric-vehicle batteries — was the mineral most frequently intercepted. Since 2024, more than 10,000 tonnes have been seized in 395 containers at the ports of Belém, Santos, Pecém in Ceará, Itajaí in Santa Catarina, Salvador and Vitória.

Manganese — used in steel and batteries — was the second most common mineral in these operations. Nearly 8,000 tonnes were seized at three ports.

They were followed by ilmenite, a source of titanium that is strategic for the defense industry; quartz, associated with silicon and essential for semiconductors and solar panels; zircon, used in nuclear reactors; as well as shipments of other ores containing illegally sourced gold.

According to Rômulo, only a police investigation can determine which groups are trying to buy these illegal minerals. “But there is one destination that accounts for the largest volume: the Asian continent, China.”

Contacted for comment, the Federal Police said it had no spokesperson available to discuss the matter.

Rômulo said the main irregularity is the use of fraudulent invoices to give the cargo an appearance of legality.

Unlike gold and drug smuggling, in which illicit goods are typically concealed inside legitimate cargo, critical minerals require significant volumes and have to be transported openly.

Because the physical cargo cannot be hidden, the illegality lies in falsifying its history.

Criminal groups use shell companies and nominees with genuine licenses issued by ANM, Brazil’s National Mining Agency, to give illegally extracted minerals an appearance of legality.

The licenses are generally tied to legally registered land and authorize the extraction of a specified quantity of mineral.

Using these documents, the shell company issues fraudulent invoices to cover larger volumes of minerals extracted elsewhere.

“These are companies that have mining licenses, valid permits and valid environmental licenses, but use them only to issue fraudulent invoices so another company can carry out the export. That is the pattern. Brazil is flooded with licenses issued to people who use them solely to generate fraudulent invoices,” Rômulo said.

In a statement, ANM said trade in illegally sourced minerals causes damage that goes beyond the direct loss of federal government assets.

“It distorts competition to the detriment of companies that comply with the law, can result in losses of public revenue and undermines the credibility of Brazilian mineral production among international buyers and markets,” the agency said.

According to ANM, expanding its ability to trace the origin of minerals and integrating mining, tax, logistics and customs information are among the agency’s strategic priorities.

INFILTRATION BY ORGANIZED CRIME

Pablo Cesário, president of Ibram, the Brazilian Mining Institute, said illegal mining is one of the organization’s biggest concerns.

He said the problem has moved beyond small-scale operations and developed into an industrial-scale activity. The shift has been driven by rising prices and the infiltration of criminal organizations.

“The phenomenon we are facing is similar to what exists in other sectors of the economy and ultimately led to [Operation] Carbono Oculto, but it is also very clearly visible in the tobacco, beverage and crop-protection sectors: the infiltration of organized crime into formal business networks,” he said.

According to Pablo, organized crime has become interested in critical minerals because global prices have surged.

Although there is a worldwide geopolitical debate surrounding the issue, he believes the rise in smuggling is financially driven.

DYNAMIC SMUGGLING ROUTES AND LACK OF GOVERNMENT INTEGRATION

Rômulo warned that smuggling routes are shifting rapidly. He said that in 2024 the Federal Revenue Service began an operation in Pará, at the Port of Vila do Conde, focused on illegal mineral exports.

“We found that more than 90% of mineral exports shipped in containers in that state were either of illicit origin or involved in some form of fraud,” he said.

Faced with the crackdown, Rômulo said mineral exports in containers fell to zero in the region.

However, criminal networks moved to other ports, including Pecém in Ceará and later Santos, Salvador, Itajaí and Paranaguá in Paraná.

He lamented the existence of bottlenecks that turn the effort to intercept illegal minerals into an exercise in futility.

According to the official, police and environmental authorities conduct enforcement operations and destroy dredges and illegal mining sites in the country’s interior.

However, he said port customs authorities are never informed which companies, identified by their CNPJ tax-registration numbers, have been cited. Without those records being blocked, the cargo continues to move through Brazilian ports.

“There needs to be coordinated work. When you go to an illegal mining site, seize the machinery and the stock, that is commendable. But if we are not aware that part of the merchandise that was there is already in transit to Brazil’s 38 ports or stored somewhere waiting to be shipped out, the work has not been as effective,” he said.

Source: Thiago Bethônico for Folha de São Paulo

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