Latin America holds some of the world’s richest deposits of minerals essential to the global energy transition, yet structural obstacles could prevent the region from fully capitalizing on the rapidly growing demand for critical resources, according to a new report from Moody’s.

The credit rating agency estimates that Latin America contains approximately 40% of global copper reserves and around 60% of the world’s lithium brine resources. The region also possesses significant reserves of nickel, graphite, and rare earth elements, positioning countries such as Chile, Peru, Argentina, and Brazil as potentially strategic suppliers for electric vehicles, renewable energy, and artificial intelligence infrastructure.

Despite these advantages, Moody’s cautioned that regulatory uncertainty, infrastructure deficiencies, financing limitations, and technical challenges continue to slow investment and project development throughout the region.

Mining Strength Does Not Guarantee Value Creation

Moody’s noted that while mining capacity continues to expand, developing downstream processing and refining facilities remains considerably more difficult. This limits Latin America’s ability to move beyond exporting raw materials and capture higher-value opportunities within the global supply chain.

The agency identified policy uncertainty as one of the industry’s most significant risks, warning that regulatory instability could delay even commercially attractive mining projects.

China continues to dominate the processing segment after decades of coordinated investment across refining, manufacturing, workforce development, and integrated supply chains. According to Moody’s, China currently accounts for between 60% and 80% of global processing capacity for lithium, cobalt, graphite, and rare earth elements, including approximately 70% of global lithium refining, 78% of cobalt refining, and 92% of rare earth processing.

The report concludes that new producers in Latin America cannot replicate this highly integrated ecosystem in the near term.

Each Country Faces Different Challenges

Moody’s highlighted varying strengths and weaknesses among the region’s largest mining economies.

Chile benefits from established mining expertise, experienced labor, and existing infrastructure that could support expanded lithium refining. However, increasing water scarcity, rising electricity demand, and stricter environmental regulations remain important constraints.

Argentina possesses significant lithium and copper resources but continues to face infrastructure shortcomings and regulatory uncertainty that weigh on investor confidence.

Peru remains one of the world’s leading copper producers, although recurring political instability and social conflicts have delayed several major mining investments.

Brazil offers abundant mineral resources and a relatively clean energy mix but continues to rely heavily on international partnerships to strengthen its processing capabilities and close technological gaps.

Large Producers Hold an Advantage

Moody’s also observed that Latin America’s mining industry is evolving at different speeds.

Established producers such as Chile’s Codelco and SQM, along with Brazil’s Vale, benefit from their operational scale, financing access, and industry experience. Smaller mining companies, by contrast, often struggle to secure long-term financing and commercial agreements despite controlling high-quality mineral assets.

This uneven access to capital may further widen the competitive gap between established producers and emerging developers.

Experts Emphasize Infrastructure and Regulatory Reform

Patrick Hall, Deloitte’s Energy, Resources and Industrials leader in Chile, said Latin America possesses the natural resources needed to become a leading supplier of critical minerals but warned that success will depend on more than geology.

He argued that investors increasingly evaluate regulatory stability, permitting timelines, infrastructure quality, legal certainty, financing availability, and technological readiness alongside resource quality when making investment decisions.

Hall identified permitting, infrastructure, financing, and technological modernization as the four primary challenges the region must address. He added that future competitiveness will increasingly depend on digitalization, automation, artificial intelligence, and reliable access to energy, water, transportation, ports, and processing facilities.

Mining engineering professor Manuel Reyes of Andrés Bello University echoed those concerns, arguing that large mineral reserves alone do not translate into market leadership.

Reyes said Latin America continues to function primarily as a raw materials exporter while much of the value-added processing remains concentrated in Asia. He also noted that greenfield mining projects in the region can require up to 18 years to reach production, far longer than the timeline needed to meet accelerating global demand for critical minerals.

Closing Insights

Latin America’s vast reserves of copper, lithium, and other critical minerals position the region as a strategically important supplier for the global energy transition. However, Moody’s emphasizes that geological resources alone will not determine future leadership. Countries that improve regulatory certainty, accelerate permitting, strengthen infrastructure, expand processing capacity, and attract long-term investment will be best positioned to capture a larger share of the rapidly evolving critical minerals value chain.