ARGUMENT: CRITICAL MINERALSAddressing China’s Growing Influence over Latin America’s Mineral Resources

The United States, in partnership with regional allies, will try to achieve several worthy goals at the Summit of the Americas. The summit will also offer an opportunity for the U.S. government to work with its partners in the region to address a major strategic challenge: China’s growing influence over Latin America’s critical and natural mineral resources.

Adina Renee Adler and Haley Ryan write in Lawfare that in the past two decades, Chinese-owned companies have significantly increased their investments in the extraction and processing of so-called “critical minerals” in Latin America—including lithium and nickel—which the United States defines as “non-fuel minerals essential to the economic and national security of the United States.” The authors note that Chinese-owned companies have also been deepening their investments in other mineral resources in Latin America—including copper, iron-ore, and gold—which, though not defined as “critical,” nevertheless serve as the technological foundation for a range of consumer, clean energy, and military technologies.

Adler and Ryan write:

Between 2018 and 2020, China’s net foreign direct investment in mining overseas totaled nearly $16 billion, including investments in South America’s so-called “lithium triangle,” the region spanning parts of Argentina, Chile, and Bolivia that account for roughly 56 percent of the world’s lithium resources. As demand for lithium and other critical minerals continues to grow—driven in part by the growing demand for lithium-intensive clean energy technologies like rechargeable batteries—China has wasted no time in securing its share of global lithium resources.  

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These investments, part of China’s broader effort under its Belt and Road initiative to expand its economic influence into the Western Hemisphere, have contributed to China’s growing global mineral resources dominance. For rare earths alone—a subset of the larger category of critical minerals—China is estimated to account for approximately 85% of the world’s processing capacity.

This presents a strategic challenge for the United States and its allies, who are increasingly dependent on China’s productionof mineral resources. Presently, the United States is 100-percent net import reliant on its supply of at least 13 of the 33 critical minerals included in the Department of the Interior’s February 2022 list of critical mineralsfor which the U.S. Geological Survey produces data, and it is more than 50 percent net import reliant for at least an additional 13 of these critical minerals. For nearly 40 percentof the critical minerals listed, China was the leading supplier.

Adler and Ryan conclude:

The United States needs to address China’s ongoing efforts to extend its influence over critical and natural mineral supply chains into Latin America. As the ongoing global shortage of semiconductors has demonstrated, the economic well-being and national security of the United States depends on building secure, resilient and diversified supply chains for strategically important technologies and the critical minerals that support them. Allowing a geostrategic competitor like China to wield disproportionate influence over access to critical minerals—or allowing production to become concentrated in a single geographic region—poses a serious risk to the United States and its allies.