A lithium pond in the Atacama Desert, Chile.
Since January 2025, the United States has invested over $1 billion in critical mineral initiatives across Latin America. This marks a significant effort by the U.S. government to secure essential supplies of lithium, copper, and rare earth elements, which are crucial for energy, defense, and advanced technology.
This increase in funding, observed during the second Trump administration, reflects a shift in perspective about mining. According to a report by the law firm White & Case, these minerals are now regarded as vital to national and energy security, rather than simply commodities tied to energy transitions.
Rebecca Campbell, who leads the mining and metals global department at the law firm, along with Fernando J. de la Oz, a partner in project finance, noted that projects in Brazil and Argentina are garnering direct interest from U.S. government agencies and financial institutions. This interest manifests through financing, equity investments, and structured agreements facilitating the flow of production into U.S.-aligned supply networks.
“The development of rare earth and critical mineral projects has shifted from being just an energy transition concern to a central energy security issue,” stated Tiago Abreu, Chief Development Officer of Brazil Rare Earths, during the Mining Summit in Belo Horizonte in June 2025.
Recent investments underline this trend. The Inter-American Development Bank approved a $100 million loan for a $2.5 billion lithium project in Argentina. Additionally, the U.S. Development Finance Corporation is weighing a $465 million investment to expand rare earth operations in Serra Verde, Brazil.
Latin America plays a crucial role in this strategic initiative, holding about 60% of the world’s lithium reserves.
The power of lithium
Brazil and Argentina are becoming key centers for mineral development. They have significant reserves and favorable government policies, which, along with increased foreign investment, enhance their positions.
Brazil holds the second-largest rare earth reserves globally, just behind China. Interest is growing in the Minas Gerais region, nicknamed “Lithium Valley.” However, despite possessing around 23.3% of the global rare earth reserves, Brazil only contributes about 0.02% to production, indicating substantial growth potential.
Argentina is eager to draw in investments. The Large Investment Incentive Scheme (RIGI), launched in July 2024, ensures tax breaks, duty exemptions, and exchange stability for projects exceeding $200 million. In May 2025, Rio Tinto became the first company to gain approval under this scheme for a $2.5 billion lithium project in Salta.
Argentina hosts the most lithium projects in Latin America, with seven currently operational. The country’s lithium production capacity is set to rise from 75,500 tons in 2023 to about 186,000 tons by 2025, with ambitions to reach 658,000 tons by 2035.
Market conditions for lithium are notably improving, as battery-grade lithium carbonate was trading around $18,200 a tonne in early January 2026, recovering as grid-level energy storage systems expand, despite a slower-than-expected global energy transition.
Geopolitical balance
While U.S. investment accelerates project development in these countries, governments in Latin America are navigating their geopolitical interests between the U.S. and China.
Chinese firms continue to dominate in mineral processing, especially rare earths, with over 90% of global processing occurring in China. Campbell and De la Oz observed that regional governments remain practical, welcoming investment from both nations, seeking capital and expertise to cultivate their mineral resources.
Ilan Goldfein, President of the Inter-American Development Bank, remarked that countries across the political spectrum are now emphasizing building domestic processing capacities to extract more value from their resources.
“No matter their political stance, we’re hearing from countries across the spectrum that the time has come to add value to critical minerals,” Goldfein noted.
Geopolitical considerations are increasingly impacting mining transactions and regulatory approvals. For instance, MMG’s attempt to acquire Anglo American’s nickel assets in Brazil is under European regulators’ merger review, illustrating how decisions made in far-off places influence mining deals locally.
Critical minerals are gaining importance beyond just clean energy. The defense, aerospace, and advanced technology sectors are demanding secure supply chains, prompting some mining companies in Latin America to align their projects with U.S. strategic priorities for financing and stable markets.
Changes in domestic policy are also modifying the investment climate. While Argentina has swiftly simplified regulations to attract foreign investment, Brazil’s reforms have been more gradual and at times increase compliance demands.
Political risks and community engagement are still significant factors affecting project timelines. Resource nationalism, environmental permits, and bureaucratic challenges continue to influence development schedules, although government-backed funding has somewhat mitigated investment risks.
Driver’s seat: copper
Copper is set to remain the primary driver of mining investments in Latin America. Both Chile and Argentina are advancing large-scale copper projects, as global demand for copper—critical for electrification and power grids—is projected to nearly double by 2035.
Multiple copper projects in Chile are projected to launch next year, with combined investments expected to exceed $7 billion, underscoring copper’s pivotal role in the region’s mining strategy.
Campbell and De la Oz believe that the increase in investments in lithium and critical minerals signals broader changes in the global mining landscape, dictated by geology, policy, and geopolitical strategy.
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Latin America is stepping into 2026 with its resources at the forefront of a growing global power struggle, as governments and investors focus on who controls critical minerals and the supply chains that support them.
