Latin America, home to immense biodiversity and vast natural reserves, is at a historic crossroads. The global race to decarbonize economies and secure critical minerals for clean technologies has placed unprecedented attention on the region’s mining and energy sectors. With countries like Chile, Brazil, Argentina, and Mexico leading in lithium, copper, renewable power, and fossil fuel resources, Latin America stands poised to become a cornerstone of the global green transition.
However, this promise is laced with tension. Environmental degradation, social resistance, political instability, and regulatory fragmentation challenge the region’s ability to fully capitalize on its natural advantages. This essay explores the current state of the mining and energy sectors in Latin America, analyzing opportunities, risks, and the delicate balance between growth and sustainability.
Part I: The Mining Renaissance—Powered by Critical Minerals
1. The Lithium Triangle and Battery Supply Chains
At the core of Latin America’s mining resurgence lies the Lithium Triangle—a region encompassing northern Chile, Argentina, and Bolivia. These three countries together hold over half of the world’s lithium resources, essential for electric vehicle batteries and large-scale energy storage.
Chile recently announced its reserves are 28% higher than previously thought and is transitioning to a public-private model. Yet, Indigenous Atacameño communities have raised concerns over water and cultural heritage.
Argentina is poised to grow lithium production by 75% by 2025. Companies like Livent, Allkem, and Ganfeng are key players.
In Bolivia, despite vast reserves in the Salar de Uyuni, production remains limited. Efforts to adopt Direct Lithium Extraction (DLE) are underway, but political volatility impedes progress.
2. Copper, Nickel, and Beyond
Copper is critical for renewables and is abundant in Chile and Peru. Yet, a 2024 Anglo American report warns of a looming supply gap, requiring major regulatory reforms.
Brazil continues expanding its output of nickel and bauxite, though legacy issues like the Brumadinho disaster stress the need for stronger regulations.
Ecuador, Colombia, and Mexico are expanding exploration, but court decisions such as Ecuador’s Constitutional Court ruling have halted key projects.
Part II: Energy Sector Shifts—From Hydrocarbons to Hydrogen
1. The Rise of Renewables
As of 2023, 60% of Latin America’s electricity came from renewables, compared to 30% globally. This includes:
- Hydropower – Dominant in Brazil, Colombia, and Paraguay
- Solar – Chile leads in the Atacama Desert
- Wind – Growing rapidly in Argentina and Uruguay
Chile is phasing out coal by 2040 and deploying battery storage. Brazil’s decentralized model has turned its northeast into a clean energy hub (read more).
2. Green Hydrogen: Promise and Pragmatism
Green hydrogen is now central to national strategies. Chile aims to be a top exporter by 2030, with support from TotalEnergies, Enel, and HIF Global.
Still, a Reuters investigation flagged cost and infrastructure issues. Uruguay and Colombia have launched roadmaps, though Colombia also faces debates over fossil fuel bans.
Part III: Crosscutting Challenges—Governance, ESG, and Geopolitics
1. Environmental and Social Governance (ESG)
From Mapuche protests to urban climate movements, civil society is driving the demand for free, prior, and informed consent (FPIC).
Investors increasingly require adherence to ESG and biodiversity standards for project financing.
2. Institutional Weakness and Regulatory Fragmentation
Mexico’s lithium nationalization and Bolivia’s state control have created investor uncertainty. Meanwhile, Chile and Brazil are modernizing frameworks to attract green capital.
3. Global Geopolitical Tug-of-War
The U.S. Inflation Reduction Act favors lithium from allies. China remains a dominant investor, but scrutiny over infrastructure projects is rising.
Conclusion: A Strategic Frontier for the Green Era
Latin America’s mining and energy sectors are undergoing a historic transformation. Realizing their potential will require transparency, innovation, and community trust.
Success means not just supplying resources but shaping a global model for equitable, sustainable development.
