Creating Value For The Critical Minerals Supply Chain In Latin America

The growing demand for critical minerals in the energy transition poses a generational opportunity and a significant risk to resource-rich countries, especially in Latin America. According to the International Energy Agency, the region possesses about 35% of global reserves of copper and 50% of global reserves for lithium. While extraction is widely extended in the region, refining and processing are normally outsourced abroad, particularly for stages of processing that add the most value. There is an immediate need to assess how resource-rich countries and local communities can reap the benefits associated with critical minerals production, refining, and processing. To scale critical mineral supply chains, local communities must be treated as partners in the process. This is vital for a just transition and meeting climate goals, as demand for metals such as copper-which is essential for electrification-is forecast to double by 2035. This policy brief explores opportunities to promote ‘value-added’ economic activity within critical mineral supply chains in Latin America centered around three pillars: (i) forging a framework for global RD&D cooperation to develop local skills and technologies, particularly in refining and processing; (ii) leveraging the potential of regional cooperation to promote supply chain diversification; and (iii) providing a tax credit to localize and incentivize midstream and downstream critical minerals supply chains. This approach would position Latin America at the center ofthe energy transition, unlocking its economic potential to benefit from critical minerals supply chains, fostering sustainable growth, and aligning with global efforts towards a just energy transition.