Brazil backs St George with tax breaks for critical minerals push

Brazil has rolled out the welcome mat for St George Mining’s Araxá project, with the State of Minas Gerais formally approving a preferential goods tax regime for the company’s Araxá niobium and rare earths project. 

The deal removes state goods tax of up to 18 per cent on equipment and materials used to develop both pilot-scale and full-scale processing facilities, a move that directly lowers capital intensity and strengthens the project’s economics.

The agreement was signed at the very top, with Minas Gerais Governor Romeu Zema putting pen to paper alongside the state’s economic development department and Invest Minas. 

For St George, the timing could hardly be better. The company is deep into drilling and development studies at Araxá, while laying the technical and regulatory groundwork for the upcoming feasibility work.

Management says the welcome tax break will flow straight into its economic modelling, sharpening the numbers for what it believes could be a globally significant niobium and rare earths mining operation. 

St George Mining executive chairman John Prineas said: “We are delighted that the Government of Minas Gerais has recognised the value of our development strategy at Araxá with tax exemptions and other support. The tax concessions will feed directly into our economic study for a potential mining operation at Araxá.”

Under an earlier memorandum of understanding, the State of Minas Gerais has committed to fast-tracking approvals for Araxá’s development. The move is designed to shine a light on the region’s credentials as a future hub for niobium and rare earths production and downstream processing, including magnet-related industries, at a time when global supply security has become a priority.

The company plans to make its Technological Centre at Araxá, to be built in partnership with the government, a key pillar of that strategy.  The centre will host a large-scale pilot plant capable of handling 200 to 300 kilograms of material per hour and producing sample products, including ferroniobium, rare earth concentrates, mixed rare earth carbonates and rare earth oxides.

Management views the pilot plant as a critical step in de-risking Araxá, serving as a bridge between laboratory testing and full-scale production. Processing data will initially allow flowsheets to be refined and downstream products to be demonstrated to potential offtake partners. 

Underpinning all of this is a resource base that already stacks up on a global scale. Araxá hosts a mineral inventory of 40.6 million tonnes grading 4.13 per cent total rare earth oxides, making it the largest carbonatite-hosted rare earths deposit in South America.

Notably, the valuable magnet elements, neodymium and praseodymium, account for almost 20 per cent of the total contained metals, strengthening the project’s economic potential. 

Adding another ace to the hand, Araxá also has highly sought-after niobium in the mix, with grades of 0.68 per cent offering a potential second revenue stream.

The project conveniently sits adjacent to CRMM’s massive, long-established niobium operations and the town of Araxá, giving St George a useful leg up on existing infrastructure, a skilled workforce and deep regional expertise. 

With tax relief locked in, pilot plant plans advancing and feasibility work gathering pace, Araxá looks set to transition from an exploration success story into a serious development contender. 

In a market increasingly focused on jurisdictional support and supply-chain resilience, St George’s Brazilian foothold now appears materially stronger.

Is your ASX-listed company doing something interesting? Contact: matt.birney@businessnews.com.au