The ground beneath Latin America has always held extraordinary wealth. Gold and silver built the Spanish empire. Bauxite and chromium helped the Allies win World War II. Now, lithium, copper, niobium, and rare earth elements are at the center of the most consequential resource competition in the world — and Latin America sits at its geographic heart.
"“he region has immense mineral wealth,” says Henry Ziemer, associate fellow at the Center for Strategic and International Studies. “Particularly in the form of copper and lithium, which are projected to skyrocket in demand, as well as more bespoke minerals such as niobium, used in aerospace and steel manufacturing, nickel, and rare-earth elements.”
The numbers behind that assessment are staggering. Latin America holds roughly 60% of the world’s lithium reserves, the largest copper reserves on the planet, and the second-largest rare earth reserves after China. Global demand for lithium could increase by a factor of 40 over the next 15 years, according to the International Energy Agency, and could outpace current global production output by 2028.
The IEA also projects copper demand to soar by 40% over the next five years, outpacing current output by 2030. The convergence of electrification, EV expansion, AI data center buildout, and defense technology demand on the same set of metals has turned Latin America’s geological endowment into a first-order geopolitical asset. Washington and Beijing are both moving — and the countries that manage this competition most effectively stand to define their economic trajectories for a generation.
Washington Moves First — With $1 Billion
The United States has poured more than $1 billion into critical minerals investments across Latin America since January 2025, signaling a more assertive effort by Washington to secure supplies of lithium, copper, and rare earths vital to energy, defense, and advanced technology. The spending surge under the second Trump administration reflects a broader shift in how governments view mining — with critical minerals increasingly treated as matters of national and energy security rather than simply commodities tied to the energy transition.
Under the auspices of the second Trump administration, the mining sector is experiencing a transformation, driven by a combination of geopolitical tension, government-backed financing, and the growing importance of these minerals for core infrastructure, clean energy, and defense technologies.
US influence is also shaping corporate behavior, with some mining companies reorienting operations to align with the Trump administration’s priorities in an effort to secure long-term supply chain reliability in a geopolitically sensitive environment.
The strategic logic is straightforward. China holds over 40% of the global smelting and refining capacity for copper, lithium, rare earths, and cobalt — market dominance that allows it to exert significant influence over global pricing, whether through increasing or restricting exports of key commodities or by implementing restrictions on key materials. Washington’s $1 billion deployment is an attempt to lock in supply before Chinese processing dominance becomes an insurmountable structural advantage.
China Is Already Embedded
Washington is moving assertively. But China got there first. Critical minerals are central to China’s relationship with Latin America. Lithium, copper, and rare earths are the focus of investments and agreements aimed at securing the supply of key inputs for China’s battery, electric vehicle, and renewable energy industries.
Although the total volume of Chinese financing has decreased, the economic relationship has become more diversified, with a growing role for individual companies and less prominence for the Chinese state as a direct lender.
The most visible example of Chinese strategic positioning is in Argentina’s lithium sector. Chinese battery manufacturer CATL’s $5 billion investment in Argentine lithium processing exemplifies China's market share protection strategy — long-term offtake agreements with Latin American producers, technology partnerships that create switching costs, and strategic investments in processing facilities.
China accounted for 65% of Chilean mineral exports in 2021, amounting to about 6% of Chile’s GDP. That figure reflects a commercial relationship so deeply embedded in Chile’s fiscal architecture that any rapid reorientation toward Washington would carry significant economic risk — regardless of the government’s political preferences.
Country by Country: The Mineral Map
Chile is the world’s largest copper producer and a dominant force in lithium. The nation’s state-run copper conglomerate, Codelco’s expansion program, targets an additional 200,000 tonnes of annual copper production by 2028, specifically focused on grades suitable for renewable energy applications.
Chile’s Constitutional Council has endorsed state control over lithium resources while maintaining openness to technology partnerships and downstream processing investments. Under Kast, Chile is moving closer to Washington — but the depth of Chinese commercial exposure creates a hedge that no government can fully unwind.
Peru is positioned to be the region’s fastest-growing major economy in 2026, driven directly by record gold and copper prices. Peru anchors global copper production alongside Chile and is increasingly the focus of both U.S. and Chinese investment in new extraction capacity. The outcome of the presidential runoff — still unresolved between Fujimori and Sánchez — will determine whether Peru’s mineral sector opens further to international capital or retreats toward resource nationalism.
Argentina under Milei has made a dramatic pivot toward U.S.-aligned investment. Chile and Argentina account for 97% of U.S. lithium imports. Milei’s deregulation agenda has made Argentina one of the most investor-friendly mining environments in the region — but the lithium sector’s existing Chinese processing partnerships mean Beijing retains significant leverage regardless of Buenos Aires’s political alignment.
Brazil holds the world’s third-largest reserves of nickel and rare earth elements, along with significant niobium deposits — a mineral used in aerospace and advanced steel manufacturing that Brazil effectively monopolizes globally. Brazil has devoted $815 million to bolstering its critical minerals production capacity.
Vale’s $5.4 to $5.7 billion investment plan for critical minerals represents the largest commitment by a Brazilian mining company, focusing on nickel, copper, and rare earth element development. The October presidential election — pitting Lula against Flávio Bolsonaro — will determine whether Brazil deepens its Washington alignment or maintains its strategic hedging between the two superpowers.
Bolivia too holds some of the world’s largest lithium deposits — the Salar de Uyuni alone may contain the single largest lithium reserve on earth — but has been the slowest to develop them, due to a combination of political instability, state control ideology, and infrastructure limitations. Bolivia’s lithium remains the great unrealized prize of the regional mineral race.
The Hedging Strategy
Despite Washington’s $1 billion push and the political shift toward right-wing governments across the region, Latin America’s approach to the U.S.-China mineral competition is fundamentally pragmatic rather than ideological.
Latin American governments must navigate investments from both U.S. and Chinese entities. While Chinese capital remains a dominant force in processing capacity — particularly for rare earths, where more than 90% of global processing occurs in China — the countries in the region remain pragmatic, welcoming investment from both sides.
For Latin American governments, this competition offers both opportunities and pressure. “Looking ahead to 2026, the drivers will be multidimensional: trade and investment, technological cooperation and energy,” according to analysts at the Argentine Council for International Relations.
“Beyond changes in the volume or sectors of investment, a key variable affecting China”s relationship with Latin America today is the intensification of competition with the United States.”
The pressure cuts both ways.
Washington wants exclusive supply agreements and Belt and Road exits. Beijing wants processing partnerships and long-term offtake contracts. Latin American governments want the best deal — and the leverage that comes from being courted by both.
What Comes Next
Lithium demand alone is expected to increase by 400 to 500 percent over the next decade, while copper requirements for renewable energy infrastructure could require production levels that have no historical precedent. The countries that have already invested in regulatory infrastructure, extraction capacity, and international partnerships will be best positioned to capture that demand curve.
The elections of 2026 — Colombia on June 21, Peru’s runoff still undecided, Brazil on October 2 — will shape the political environment in which those investments are made. A region that sweeps right — toward pro-market governments aligned with Washington — would accelerate U.S. capital deployment and potentially begin to erode China’s processing dominance at the margins.
But the geology doesn’t move. The lithium in the Atacama, the copper in the Andes, and the rare earths in the Amazon will still be there regardless of who wins any election.
The question is who gets to extract them, on whose terms, and through whose supply chains — and that question is now being answered simultaneously in Santiago boardrooms, Beijing ministries, Washington agencies, and the voting booths of four major Latin American democracies.
