Latin America’s tumultuous relationship with mining dates back to the conquistadors’ plundering of gold and silver for the Spanish crown. Following independence, the arrival of foreign capital and new technologies introduced practices like mercury use, cyanidation, dynamite and river dredging, which damaged ecosystems and communities. Despite two centuries of investment and some infrastructure development, the costs of mining have often outweighed its benefits for the region.
Today, Latin America faces a critical opportunity to redefine its mining industry through the lens of transition minerals. These minerals—essential for renewable energy and a low-carbon economy—include copper, lithium, nickel, cobalt, graphite and rare earth elements. They are crucial for solar panels, wind turbines, and electric vehicles. Latin America is a significant player in this market, holding 38% of global copper reserves, 52% of lithium, 22% of graphite and nickel, and 17% of zinc, with key deposits in Chile, Bolivia, Argentina, Brazil, Mexico and Peru.
However, there is a risk of repeating past mistakes: extracting minerals with little regard for social and environmental costs, exporting them raw, and receiving insufficient income to improve local conditions. To break this cycle, Latin America must leverage its mineral wealth for greater regional and global benefits.
The demand for transition minerals is set to rise dramatically as countries strive to meet the Paris Agreement goals. By 2040, clean energy technologies could drive over 90% of lithium demand, double copper demand, and significantly increase demand for cobalt and nickel. Latin America’s role in the global supply chain will be crucial.
Geopolitically, the region is stable and poses no major threats, making it an ideal partner for global trade in transition minerals. With existing manufacturing capabilities in the automotive sector and some mineral processing, countries like Chile and Argentina are well-positioned to expand their industrial and technological capacities. Regional cooperation could enhance investments, diversify value chains, and bolster economic development.
Yet, the extraction of transition minerals is not without its challenges. Lithium mining, for example, requires significant water resources and can create environmental stress in arid regions. To address these issues, Latin America must implement robust environmental safeguards and social protections. The Escazú Agreement, a regional environmental treaty, offers a foundation for these efforts.
Collectively, Latin America’s mineral reserves, geopolitical advantages, industrial potential, and commitment to socio-environmental safeguards present a unique opportunity to lead the global energy transition and enhance regional development.
