Latin America and critical minerals for the energy transition

Latin America and critical minerals for the energy transition

During the last decade, mining has gained relevance in the international energy debate and climate change, given that minerals such as lithium, copper, zinc and rare earths, among others, play a central role in the energy transition as key inputs for electrification , electric mobility or digitization. To make wind turbines you need iron, aluminium, copper, manganese and molybdenum. For rechargeable batteries, lithium and nickel are essential. And you can’t talk about increases in electrification or electromobility without highlighting copper. Other sectors, such as transportation or construction, will also require increasing amounts of minerals.

Latin America and the Caribbean (LAC) has a key role in this growing supply of essential minerals. This thanks to its abundant and diverse mineral resources of high quality and concentration.[1], as well as for its experience in extraction and enhancement. LAC mineral deposits include key inputs for decarbonization such as copper, lithium, zinc, nickel, iron, manganese and rare earths, as well as gold and silver, among many others. Therefore, it is imperative and possible to take advantage of the opportunity offered by decarbonization. Now and in the future, several of these minerals found in our region are and will be essential for the energy transition that will last for decades.

About the so-called “critical minerals”

Despite their importance, the definition of “critical minerals” varies from country to country, since they define them according to their own interests, criteria and supply strategies, since their needs and those of their markets are different. However, the concept of this type of mineral almost always focuses on the criticality for the development of a priority industry or sector for a country, for which the continuous and secure supply of these resources, through extraction or recycling, is vital. importance.[2] From the perspective of consumers and export destinations of critical minerals, including the US, China, Japan and Europe, there is a significant focus on (1) how and where these minerals are produced for their industries and (2) how vulnerable their supply chains are. This has led to the development of lists and strategies to ensure a stable and secure supply of these minerals. For example:

  • The US government regularly updates its listing, with the latest version being February 2022[3]. This includes 50 minerals, among which are zinc, lithium, magnesium, manganese, nickel, platinum, cobalt, aluminum, and graphite.
  • the european listing[4] includes 30 minerals and other raw materials and is updated every two years. Unlike the US, this list includes phosphorous, metallurgical carbon, silicon, strontium, and phosphates, but excludes tin, zinc, nickel, and manganese, for example.
  • The Japanese government developed the first strategies to ensure the supply of minerals at the beginning of the century. In the latest update of the 2020 critical minerals list, it identifies 32 minerals, including copper, unlike the US and European lists.
  • The list of critical minerals prepared by China in 2016 and without recent updates is the shortest with 28 minerals, of which 16 are rare earths. It differs from the US and Europe in several respects: it includes iron, copper and gold, and is not interested in platinum group metals or graphite, niobium or cobalt.
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From the evaluation of these lists, it is clear that: (1) the criticality of minerals depends on who prepares the list, and not on a single globally agreed list; and (2) the criticality of a material or its inclusion in a list does not mean that it is necessarily key to the energy transition, but simply that it is essential for an industry prioritized by the government that prepares said list.

Where does our region stand in this scenario?

LAC has important reserves of several minerals that, being considered critical by at least one international market, could be the focus of efforts and investment promotion to meet the enormous future demands of the US, China, Japan or Europe and thus be able to create even more more opportunities for the region from mining.

Latin America and critical minerals for the energy transition
Table 1 – Major LAC reserves of minerals listed as critical; source: USGS, 2022

What are the next steps?

Mining has had to constantly update and adapt to new challenges and opportunities, and given the scenario of growing demand for critical minerals to face climate change, the great challenge for LAC is to understand how to adapt mining strategies and policies, way to attract the investment capital required to produce the necessary resources for the transition and to do so with sectoral policies that ensure the competitiveness and sustainability of mining activity, particularly in terms of its relationship with the environment and surrounding communities. In this way, the region will be able to further strengthen its position as the main ally in the supply of critical minerals for large markets while advancing with the diversification of the sector, adding value locally, through intelligent and efficient regional production chains aimed at markets for products with a higher degree of refining and processing.

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In this first blog, we explain the concept, importance and motivation of critical mineral lists, prepared by large mining consumers. We also address the opportunities this presents for LAC. In a future edition, we will delve into the applications of these minerals in the energy transition and their future projection.

[1] The content of a mineral is the relationship between the amount of useful mineral with respect to the amount in the ore.


[3] USGS (2022) Final List of Critical Minerals

[4] Resilience of Critical Commodities: Charting the Path to Greater

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