South America's Critical Minerals Pact Aims to Address Future Supply Shortages
The South American Critical Minerals Pact is an initiative signed by Chile, Argentina, Bolivia, and Peru to encourage responsible mining investment, technical cooperation, and integration of mineral supply chains. The pact aims to position South America as a reliable strategic supplier, addressing concerns about future supplies of critical minerals such as copper and lithium. According to the International Energy Agency, global copper supply could fall 25% short of demand by 2035 due to the long lead times for new mine development.
Argentina and Chile together hold about 40% of global lithium reserves, while Chile and Peru account for roughly 30% of global copper reserves. Brazil holds approximately one-quarter of the world's graphite reserves and about 15% of its rare earth reserves. The pact creates a framework for cooperation on geology, regulation, suppliers, workforce skills, and investment across the four countries.
The region's existing mineral endowment gives South America an important position in addressing potential shortages. Western efforts to diversify mineral supply chains away from China could increase investor interest in Latin American projects. Chile and Argentina are already working to reduce barriers affecting mineral deposits that cross their shared border, potentially making those projects easier to permit, develop, and finance.