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Latin America accounts for 40% of global production of copper, led by Chile (27%), Peru (10%) and Mexico (3%). The regions share of global reserves is largely similar to its share of production, although Mexico and Colombia have untapped potential. Existing producers could ramp up production swiftly but may face efficiency challenges in the longer term due to declining ore quality in the resources. The regions share of global copper exploration expenditure has gone up from 35% to 45% in the past decade, indicating the potential for further production increases.

Today the region supplies 35% of the worlds lithium, led by Chile (26%) and Argentina (6%), the second and fourth largest global producers, respectively. The region holds more than half of global lithium reserves, mainly located in Argentina (21%) and Chile (11%). Bolivia also holds huge untapped lithium resources, almost comparable to the size of todays global lithium reserves, although the lack of infrastructure hampers them from being economically viable. Moreover, the regions lithium predominantly lithium carbonate from brine produces fewer emissions than mining from rock and could benefit from the growing adoption of lithium iron phosphate batteries. Latin America could therefore have an even more important role to play in meeting rapidly rising global demand for lithium. The regions lithium exploration spending more than doubled over the last decade, from USD 44 million in 2010 to USD 91 million in 2021, and there is scope to step up activities even further given that the regions share in global exploration spending fell from 52% to 36% over the same period.

Beyond copper and lithium, Latin America has significant potential in graphite, nickel, manganese and rare earth elements production. Brazil alone holds around one fifth of global reserves in each of these resources, but as of today produces only small to moderate amounts, between 0.2% of global production of rare earth elements and 7% for graphite. Latin America has not yet attracted sufficient investment in line with its potential, for example, only 7% of the global exploration budget for nickel and rare earth elements is allocated to the region.

Future exploration campaigns would benefit from updated national geological surveys, as the current geological information does not always cover energy-related critical minerals which have gained more attention in recent years. Chiles geological service SERNAGEOMIN provides detailed open-source geological data with regional and mineral specific focal points. Brazil has established an exclusive division on critical minerals under the geology department (DIPEME). The division has issued regulations reducing the administrative burden for strategic mining projects, with a special focus on lithium and rare earth elements, while also considering graphite, copper and cobalt. Colombia has recently launched a strategic roadmap, Copper Route, to expand the domestic copper industry. However, more information alone will not be sufficient to trigger the investment needed to exploit fully these resources. Governments need to establish frameworks to attract increased investments in mining and processing activities, setting clear regulations and creating incentives, while ensuring compliance with ESG standards. Dialogue with stakeholders, investors, as well as an increase in international cooperation will be crucial for both the design and the implementation of these frameworks.

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Latin Americas opportunity in critical minerals for the clean energy ... - IEA