Codemig, CBMM renew niobium deal until 2070

The new contract replaces the previous one, which was due to expire in 2032, and increases Codemig’s share in CBMM’s profits to include 25% of the earnings from the sale of materials other than niobium, such as rare-earth elements, without requiring any additional investment from the state-owned company.

Luísa Barreto, CEO of both Codemge and Codemig, told Valor the decision to renew the partnership ahead of schedule followed economic analyses that showed it was the best option to boost revenue and enhance the company’s value, at a time when the state government is debating the federalization of its assets.

“This partnership brings the greatest value to Codemig. Beyond extending the collaboration, we secured better terms that generate more returns for both the company and the state of Minas Gerais, including participation in CBMM’s future investments,” Ms. Barreto said.

Updated market valuations for Codemig are expected to be released in the coming weeks, as they will now include potential revenue from other minerals. According to Ms. Barreto, the new structure also strengthens oversight mechanisms and ensures greater predictability for public finances and legal certainty, securing dividend payments for decades.

Among the alternatives evaluated by the state-owned company were launching a new bidding process, direct mining of niobium, or renewing the existing partnership with CBMM. The renewal was deemed the most viable option. “Other partners would hardly be able to achieve the same sales volume or market share we currently have,” she noted.

Codemig is compensated through a silent partnership (SCP), which grants the state-owned company 25% of CBMM’s net profit. In 2024, the partnership generated R$1.73 billion for the Minas Gerais-based company.

Since 1972, Codemig and CBMM have jointly operated neighboring mines in Araxá through the Companhia Mineradora do Pirocloro de Araxá (Comipa), in which Codemig holds 51% and CBMM 49%. Comipa extracts the ore and sells it exclusively to CBMM, which processes and markets the final product.

Current estimates indicate that Codemig’s mine will be depleted in the early 2060s, while CBMM’s deposits could last until 2070 if production continues at the current pace. Until the new deal, Codemig was entitled to 25% of profits only from niobium and was required to invest 25% in other projects to earn proportional returns, as with barite and magnetite.

“We had already participated in those investments, but we had to contribute 25% to be entitled to the profits. Now, when CBMM explores other minerals, including rare earths, which we know are present in our deposits, we will earn profits without any additional investment,” Ms. Barreto explained.

Rare-earth elements are not yet economically viable for extraction, but if conditions change, Codemig’s stake will already be guaranteed. The new contract also ensures Codemig 25% of profits from the potential sale of mining tailings until 2085, even after the partnership ends.

The extended term also resolves long-standing questions about the contractual balance between the two companies. Codemig’s mine contains a higher niobium grade, while CBMM’s has larger reserves and a longer lifespan—an issue that had raised concerns among regulatory bodies about the fairness of the arrangement. With the new timeframe, projections show that by the end of the contract, CBMM’s extracted volume will surpass Codemig’s, balancing the deal.

“Studies show that, considering the contract through 2070, the total volume of niobium extracted from CBMM’s mine will exceed that from Codemig’s, even after accounting for ore grade differences,” Ms. Barreto said.

This is the third major agreement Ms. Barreto has led on behalf of Minas Gerais. She was also responsible for renegotiating the Mariana and Brumadinho settlement agreements following catastrophic damn breaches around iron mines.

Today, the global ferroniobium market is estimated at fewer than 128,000 tonnes, still limited compared to other minerals critical to the energy transition, such as lithium, with CBMM maintaining global leadership.