Mined here, refined elsewhere: Latin America’s critical minerals value question

In 2025, Latin America and the Caribbean mined roughly 40% of the world’s copper and around a quarter of its lithium. It refined 26% of that copper, 10% of its cobalt and 7% of its rare earths, and it had no graphite refining capacity at all. These figures, set out in the regional chapter of the International Energy Agency’s Global Critical Minerals Outlook 2026, are the most precise public measurement to date of a structural feature the region’s governments have debated for decades: the value of its minerals overwhelmingly leaves in the least processed form the market will take.

The Outlook also prices the gap. On the current project pipeline, the IEA estimates the region will capture around $185 billion in economic value from key mineral supply chains by 2035, with only about one-fifth of that coming from refining. In an analytical case in which all mined lithium, nickel, cobalt, graphite and rare earths, and two-thirds of copper output, are refined within the region, the figure rises to around $220 billion, an uplift of roughly one-fifth over the base case. The difference, some $35 billion a year by 2035, is the measured size of the value addition question. It is also a question with consequences beyond the region, because Latin American refining is one of the few plausible near-term additions to a global midstream that remains extraordinarily concentrated.

The endowment, measured

The starting point is strength in the ground and at the mine. The region accounts for at least one-fifth of global production of copper, molybdenum, tin and zinc. Chile, Peru and Mexico together supplied almost 40% of mined copper in 2025, and the region produces just under 40% of the world’s molybdenum, largely as a by-product of that copper. More than half of global silver supply comes from the region, led by Mexico, Peru, Bolivia and Argentina, from around one-third of global reserves. In speciality minerals, the concentration is starker still: Brazil accounts for more than 90% of global niobium output, with a single mine supplying around 80% on its own, and Chile produces over one-third of the world’s rhenium, an input for the heat-resistant superalloys used in aerospace.

Lithium is concentrated in the lithium triangle of Argentina, Bolivia and Chile. Chile is an established producer and Argentina a rapidly emerging one; together they hold more than one-third of global reserves and a quarter of production. Bolivia’s resources remain largely undeveloped, and its most advanced venture, a consortium including CATL and Uranium One Group planning direct extraction plants at the Salar de Uyuni, has been suspended by court order. Brazil adds sizeable resources of graphite, nickel and rare earths to the regional picture.

The forward trajectory is uneven. The Outlook finds the copper project pipeline points to mounting difficulty in sustaining current production levels in Chile and Peru, and the permitting history of Southern Copper’s Tia Maria project, whose authorisation was revoked in April 2026 and reinstated eleven days later, illustrates how fragile development timelines remain. Lithium output, by contrast, is expected to grow by close to 50% by the end of the decade on the strength of Argentina’s pipeline. On the IEA’s base case, the region’s shares of global copper and lithium mining, currently around 40% and 25%, hold broadly stable to 2040. What is at stake is therefore not the region’s position as a miner. It is what happens to the material afterwards, a question with immediate fiscal weight in economies where critical minerals account for 55% of export revenue in Chile and 40% in Peru.

The critical minerals Latin America mines, and the value it forgoes

The refining picture inverts the mining one. In 2025, the region refined 26% of the copper it mined and 10% of its cobalt. It separated 7% of its rare earths and refined none of its graphite, despite Brazil’s resource base in both. Nickel fares somewhat better, at roughly 63%, and lithium is the partial exception at around 84%, largely because most Latin American lithium comes from brine, which is already in ionic form and moved early into integrated chemical conversion; full chemical transformation is only unavoidable for hard rock feedstock.

The consequences are visible in the region’s trade structure. Drawing on Harvard Growth Lab trade data, the Outlook shows that economic complexity in Latin America and the Caribbean declined between 2000 and 2023 as exports concentrated further in unprocessed commodities, leaving the region below Southeast Asia, India and China on the index, with only a modest improvement recorded in 2024.

The IEA’s local refining case should be read carefully. It is an analytical construct rather than a forecast: it assumes every tonne of mined lithium, nickel, cobalt, graphite and rare earths, and two-thirds of mined copper, is processed within the region by 2035, and on that assumption lifts captured value from around $185 billion to around $220 billion. The report’s executive summary expresses the same endpoint differently, as an increase of nearly 50% over the value the sector generates today. Both framings describe one result: about one-fifth more value than the 2035 base case, earned from the same mined tonnes.

There is also a security dividend for everyone else. The Outlook estimates the local refining case would add around 10 kt of lithium, 55 kt of nickel and close to 70 kt of graphite to diversified global supply by 2035. Set against the base case, in which refined material available outside the dominant supplier covers only around 28% of demand outside that supplier for graphite, 36% for nickel and 82% for lithium in 2035, these are modest volumes with disproportionate meaning. For import-dependent economies that have written diversification thresholds into law, such as the EU Critical Raw Materials Act’s benchmark that no single third country supply more than 65% of any strategic raw material, marginal refined supply from Latin America is precisely the kind that determines whether targets are met.

LAC: mined here, refined elsewhere

Why the value leaves

The constraint is not geology. The Outlook’s global analysis, whose themes we examined in why the chokepoint is not at the mine, finds capital costs for refining projects outside the dominant supplier run 20% to over 150% higher, and operating costs around 50% higher, driven by feedstock, energy and reagent prices. The financing environment compounds the cost gap: metals and mining companies headquartered in Europe and the United States have paid an almost 50% premium on raising capital relative to power generation companies over the past decade. Latin American projects carry these global disadvantages, plus a set of regional ones.

Permitting is the most quantifiable. In Chile, total permitting and development time spans between 54 and 139 months depending on project complexity, with desalination plants and tailings facilities at the long end. Infrastructure is the second: transport, power and water networks in key mining corridors were built for concentrate export, not for processing clusters. The third is technological. Battery precursor and cathode production, rare earth separation and magnet manufacturing depend on know-how, equipment and proprietary processes concentrated in incumbent producing countries, and the Outlook is blunt that these capability gaps, rather than resources, are the binding constraint on midstream entry.

Water runs through everything. Water demand from Chilean copper production is projected to exceed 650 million cubic metres, in a country whose response has been a pronounced shift to desalinated seawater under a newly established regulatory framework, itself capital- and energy-intensive. In brine lithium, around 70% of the water footprint per tonne of product arises at the brine concentration stage in Chile’s Atacama operations. The counter-examples matter: Peru’s Quellaveco copper project runs recirculation rates of approximately 85%, supported by multipurpose water infrastructure developed with local stakeholders.

Against these costs sits one structural advantage the region rarely prices into its own narrative. With renewables above 60% of electricity generation, mineral production in the region carries notably lower emissions intensity than in other producing regions, and operators are extending the edge: at Argentina’s Lindero mine, integrating solar generation and battery storage cut annual diesel consumption by roughly 40%. As buyers and governments move towards traceability and standards-based differentiation, a low-carbon grid becomes a bankable attribute of refined product rather than a talking point.

What governments are changing

The policy response now runs along four distinct lines. The first is capital attraction. Argentina’s Incentive Regime for Large Investments, adopted in 2024, progressively removes the obligation to repatriate export proceeds, caps corporate income tax at 25%, adds accelerated depreciation and import and export duty exemptions, and remains open until July 2027; by June 2026, nine mining projects had been approved under it for a combined $10 billion, mainly in lithium and copper. Bolivia designated mining investment a strategic priority by supreme decree at the end of 2025, attaching a 15-year fiscal stability period and fast-track approval, and Venezuela’s Organic Mining Law of April 2026 reopened the sector to private and foreign capital through concessions of up to 30 years with international arbitration mechanisms.

The second is permitting. Chile’s 2025 Framework Law on Sectoral Authorisations targets reductions in permitting times of 30% to 70%, against a National Mining Policy 2050 goal of halving them, and a May 2026 bill would simplify the concession maintenance regime. Colombia’s mining agency has proposed shortening consultation periods from 216 to 90 days while maintaining inclusive stakeholder engagement, following a first competitive tender of 14 strategic mining areas in 2025. Peru operates a Digital Single Window integrating nine permitting entities, has extended its VAT refund for exploration to 2027, and expects complete national geological map coverage by the end of 2026.

The third is explicit downstream ambition, led by Brazil and Chile. Brazil’s first National Critical and Strategic Minerals Policy reached the Senate in May 2026 carrying nine policy instruments, alongside the Nova Indústria programme’s prioritisation of batteries, electric vehicles and mineral processing, the MagBras project to establish a complete domestic rare earth magnet value chain, and a $1 billion fund from BNDES and Finep for domestic processing and value chain development. Chile’s 2024 National Lithium Strategy reserves a share of lithium at preferential prices for domestic refining and battery industries, with Novandino, the partnership between Codelco and SQM, as a central vehicle, and its January 2026 National Critical Minerals Strategy formalises value addition as national policy. Mexico’s 2023 mining reform moved in a different register, making concessions subject to public bidding, expanding consultation obligations, prioritising water for human consumption and requiring 60% of concessioned water to be recycled.

The fourth is coordination. The Permanent Forum for Technical Dialogue on Lithium, run by ECLAC since 2022, brings together Argentina, Bolivia, Chile and Mexico. Three bi-oceanic corridors are being advanced to connect Atlantic and Pacific trade across Argentina, Bolivia, Brazil, Chile and Peru, and Chile and Argentina reactivated the commission of their Mining Integration and Complementation Treaty in 2026. The Inter-American Development Bank’s LAC Minerals initiative pairs blended finance with technical support, including for the Rincón lithium project in Argentina. Externally, Argentina concluded a framework with the United States on mining and refining in February 2026 and has signed memoranda with partners including the European Commission, Canada, India and the United Arab Emirates; Chile and Peru have concluded comparable instruments; and in the Caribbean, the Dominican Republic and Jamaica have built new institutions and policies to attract mineral investment. Social licence remains the condition on which all of it rests. The Escazú Agreement is progressively reshaping consultation and access to information across the region, and prior consultation frameworks for Indigenous peoples, such as Peru’s 2011 law, sit inside project timelines rather than alongside them.

The technologies that could shift the economics

Direct lithium extraction targets recovery rates above 90%, against 40% to 60% for conventional evaporation ponds, and already accounts for almost 10% of global lithium supply, mostly in combination with ponds. The region hosts the principal large-scale projects outside China: the Fénix operation in Argentina, acquired by Rio Tinto in 2025 after more than three decades of hybrid operation; Eramet’s Centenario, targeting 24 kt of lithium capacity by 2027; and Rio Tinto’s Rincón, planned to reach 60 kt when fully expanded. Albemarle has begun environmental review for a project in Chile’s Antofagasta region, and Novandino is planning projects in the Atacama.

In rare earths, Brazil’s Serra Verde aims to produce 6.4 kt of rare earth oxides by the end of 2027 from the Pela Ema ionic adsorption clay deposit using low-emissions electricity, with further projects in advanced permitting or feasibility. Advanced hydrometallurgy, including new heap leaching, pressure leaching and bioleaching routes, is directly relevant to Chilean and Peruvian copper as ore grades decline, and Chile’s development agency awarded three research projects in 2026 on recovering cobalt and rare earths from tailings. Downstream, Brazilian collaborations are exploring niobium-based battery anodes, and the coincidence of graphite, silicon and low-carbon power gives Brazil a credible basis for silicon-carbon anode manufacturing. Recycling is the largest untapped margin: the region currently collects just 3% of its e-waste, against a global average of 22%.

What would have to be true

The $220 billion case will not materialise from resource endowment and policy announcement alone; the Outlook’s own base case, built from actual projects, delivers only a fraction of it. Three conditions separate the two. The first is capital on terms that close the cost gap, which means instruments matched to market structure: upfront capital support where projects are capital-intensive, and price and volume risk mitigation where markets are small and opaque, the logic we set out in the final filter. The second is demand. Refined Latin American product needs committed buyers at what the IEA calls a mineral security premium, and the Outlook is explicit that diversified projects can sustain operations only if consumers are motivated to buy from diversified suppliers. Offtake anchored in partnerships, from the United States framework with Argentina to European engagement under the Critical Raw Materials Act’s diversification benchmarks, is where that motivation becomes contract. The third is ecosystem: the skills, equipment and technology transfer without which refining projects stall regardless of financing, and the water management and community consent without which they stall regardless of everything else.

The region’s own complementarities point the way. Chile and Peru bring mature copper ecosystems with specialised suppliers and export infrastructure, Brazil brings diversified output and metallurgical capability, and Mexico brings an automotive and electronics manufacturing base that could anchor downstream demand. Whether Latin America and the Caribbean remains the world’s mine or becomes part of its midstream will be settled at financing tables and in permitting offices over the next decade, not in the geology. The contribution of the 2026 Outlook is to have priced the difference, at roughly $35 billion a year by 2035, and to have shown that the same investments would buy a measurable increment of supply security for everyone else.

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This article draws on the special chapter on Latin America and the Caribbean in the IEA’s Global Critical Minerals Outlook 2026 and on AAP Consulting’s CRM hub, a structured resource examining the system behind critical raw materials supply. Organisations seeking to explore how these findings apply to specific jurisdictions, materials or projects are invited to get in touch.

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