2021 Brazil Development Research Report

Figure: Distribution of Brazilian Enterprises (by number) 3.2 Major Listed Companies 1. Vale SA [VALE3.SA] Vale S.A. is the world’s second-largest and the largest in the Americas metal and mining company. By output volume, it is the world’s largest producer of iron ore and iron ore pellets. It is a leading nickel producer and one of the leading producers of manganese ore and ferroalloys. In addition, Vale produces copper, coal, fertilizer nutrients, cobalt, platinum-group metals, and other products. To support its mining operations, Vale operates an extensive logistics system in Brazil, comprising multiple railways, several seaports, and one port. Furthermore, the company is constructing a maritime freight fleet to transport iron ore to Asia. Vale also invests—directly or through subsidiaries and jointly controlled entities—in the energy and steel sectors. 2. Ambev SA [ABEV3.SA] Ambev (formerly Inbev Participações Societárias S.A.) is a Brazilian company engaged in brewing. Ambev produces, distributes, and sells beer, carbonated soft drinks, and other non-alcoholic and non-carbonated beverages across the Americas. The company operates through three divisions: Northern Latin America—including its operations in Brazil, where Ambev has two branches: beer sales (Brazilian beer) and carbonated and non-alcoholic non-carbonated beverage sales—as well as its Hispanic Latin American operations (excluding Southern Latin America but including the Dominican Republic, Venezuela, Ecuador, Guatemala—which also supplies El Salvador and Nicaragua—and Peru); and Southern Latin America, covering operations in Argentina, Bolivia, Paraguay, Uruguay, Chile, Canada, and other regions. On November 11, 2013, the company was renamed Ambev Group. 3. Petrobras [PETR3.SA] Petrobras is a Brazilian integrated oil and gas company. It divides its operations into six segments: exploration and production; refining, transportation, and marketing; natural gas and energy; biofuels; distribution; and international operations. Through its subsidiaries, Petrobras engages in research, extraction, refining, processing, trading, and transportation of crude oil, petroleum derivatives, natural gas, and other hydrocarbon fluids sourced from oil wells, shale, and other rock formations. It also participates in energy development, production, transportation, distribution, and commercialization. Petrobras offers products including road transport fuels such as motor gasoline, diesel, and natural gas; agricultural and beef cattle farming inputs such as sunflower meal; and industrial products such as solvents and alkanes. The company serves both individual and corporate customers. 4. WEG SA [WEGE3.SA] WEG S.A. is a Brazilian holding company primarily engaged in the manufacturing of electrical equipment and components. Together with its subsidiaries, the company actively manufactures and sells electric motors, generators, and transformers; gearmotors, gear reducers, frequency inverters, motor starters, and electromechanical drives; control and protection systems for circuits and industrial automation; power traction solutions (for land and marine applications); solutions for generating renewable and distributed energy—including full exploitation of small hydropower plants, thermal biomass, wind, and solar sources; alternators for generator sets with uninterruptible power supply capability; substations; industrial electrical and electronic equipment systems; and industrial paints and varnishes.

Latin American Studies | Legal News and Updates from Key Latin American Regions – March 2026 (Bilingual: Chinese–English)

To counter the sharp rise in international oil prices, the Brazilian government issued Provisional Measure No. 1340 on March 12, 2026, imposing a 12% export tax (Portuguese: Imposto de Exportação) on crude oil and asphaltic mineral oils (Mercosur tariff code 2709). The measure simultaneously established a temporary subsidy program for diesel producers and importers, effective from March 12, 2026, and valid until December 31. Decree No. 12,878, published on March 13, specified 11 subsidy disbursement cycles. Additionally, Provisional Measure No. 1344, issued on March 19, 2026, created an extraordinary credit line of BRL 10 billion (approximately USD 1.95 billion) to finance this subsidy program. The Brazilian government reserved the authority—under specific circumstances—to reduce the export tax rate via the Foreign Trade Chamber (Portuguese: Câmara de Comércio Exterior). Key Points: • Crude Oil Export Tax: A new export duty on crude oil and asphaltic mineral oils will directly affect export transactions and depress netback prices for producers. Levied at the point of export, this tax will alter the economic equilibrium under existing take-or-pay and production arrangements. • Diesel Subsidy Mechanism: The government introduced a temporary subsidy scheme targeting diesel producers and importers to hedge against rising fuel prices. Subsidies are administered and disbursed by the Brazilian federal government through fixed settlement cycles. • Public Funding Framework: Subsidy funds are allocated via a federal extraordinary credit line, providing short-term fiscal support while maintaining budgetary discipline over implementation. • Regulatory Enforcement and Price Control: This measure strengthens oversight of domestic fuel pricing practices and imposes heavy penalties for abusive pricing behavior in the domestic market. • Regulatory Flexibility (via the Foreign Trade Chamber): The government retains administrative authority to lower the export tax rate without requiring new legislation, enabling policy adjustments responsive to market conditions. Practical Implications: • Direct Impact on Chinese Oil Companies: The export tax will reduce net revenues from crude exports, potentially affecting profitability under existing production-sharing and take-or-pay agreements; affected enterprises should reassess their pricing mechanisms and contractual risk allocation. • Contractual Risk Allocation: Operators and investors should review whether the export tax qualifies as a recoverable cost or a “change in law” event under production-sharing agreements, concession contracts, and other commercial arrangements. • Risk of Extension of Short-Term Regulatory Measures: Although this measure is temporary, there remains a possibility it may be extended or converted into permanent legislation. Enterprises should closely monitor legislative developments and incorporate regulatory volatility into medium-term planning. • Operational and Financial Adjustments: The combined effect of the export tax and diesel subsidies may distort price signals across the entire value chain, requiring enterprises to adjust transfer pricing, logistics arrangements, and supply-chain strategies accordingly. • Ongoing Monitoring of Regulatory Developments: Given the government’s authority to adjust the export tax rate administratively, enterprises should continuously track decisions issued by the Foreign Trade Chamber and broader fuel-market regulatory policies. Brazil Initiates Anti-Dumping Investigation on Graphite Electrodes Originating from China

Brazil's Petrobras Board Approves Joining Diesel Subsidy Program

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Brazil's Petrobras board approved joining a new government diesel subsidy program worth 1 real per liter. The initiative aims to stabilize fuel costs ahead of October's election while accumulating billions in total subsidies across fuel types.

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Brazil's Petrobras Board Approves Joining Diesel Subsidy Program

Brazil's Petrobras Board Approves Joining Diesel Subsidy Program

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