US pours $1B into into Latin America critical minerals

The United States has poured more than $1 billion into critical minerals investments across Latin America since January 2025, signalling a more assertive effort by Washington to secure supplies of lithium, copper and rare earths vital to energy, defence and advanced technology.

The spending surge under the second Trump administration reflects a broader shift in how governments view mining, with critical minerals increasingly treated as matters of national and energy security rather than simply commodities tied to the energy transition, according to a report by law firm White & Case.

Projects in Brazil and Argentina are drawing direct interest from U.S. agencies and multilateral lenders through loans, equity stakes and structured offtake agreements designed to channel output into U.S.-aligned supply chains, according to Rebecca Campbell, the law firm’s global head of mining and metals, and project financing partner Fernando J. de la Hoz.

“Development of rare earth and critical minerals projects is no longer just a matter of energy transition, but rather, energy security,” Tiago Abreu, chief development officer of Brazilian Rare Earths, told delegates at a mining summit in Belo Horizonte in June 2025.

Recent financing underscores the trend. The Inter-American Development Bank approved a $100 million loan for a $2.5 billion lithium project in Argentina, while the U.S. Development Finance Corporation is considering a $465 million investment to expand Serra Verde’s rare earth operations in Brazil’s Goiás state.

Latin America sits at the centre of the strategic push, holding roughly 60% of the world’s lithium reserves.

Lithium momentum

Brazil and Argentina have emerged as focal points for critical minerals development, driven by vast reserves, government policy and rising foreign investment.

Brazil hosts the world’s second-largest rare earth reserves after China and has seen growing interest in Minas Gerais, where a cluster of projects has earned the nickname “Lithium Valley.” Despite holding about 23% of global rare earth reserves, the country accounts for only about 0.02% of production, highlighting the scale of potential growth.

Argentina has moved aggressively to attract investment. The Incentive Regime for Large Investments, or RIGI, launched in July 2024, offers tax, customs and foreign exchange stability for projects worth more than $200 million. Rio Tinto (ASX: RIO) became the first company approved under the framework in May 2025 for a $2.5 billion lithium project in Salta.

The country already hosts Latin America’s largest number of lithium projects, with seven operating. National lithium output capacity rose from 75,500 tonnes per year in 2023 to about 186,000 tonnes in 2025, and the government expects it to reach 658,000 tonnes by 2035.

Market conditions are also improving after a prolonged downturn. Battery-grade lithium carbonate traded near $18,200 per tonne in early January 2026, rebounding as grid-scale energy storage systems expand even as the global energy transition progresses more slowly than early projections suggested.

Geopolitical balancing

While U.S. investment is accelerating project development, Latin American governments continue to balance geopolitical interests between Washington and Beijing.

Chinese companies remain dominant in mineral processing, particularly rare earths, where more than 90% of global processing occurs in China. Campbell and de la Hoz say governments across the region remain pragmatic, welcoming investment from both sides as they seek capital and technical expertise to develop mineral resources.

Inter-American Development Bank president Ilan Goldfajn said in December that countries across the political spectrum are focused on building domestic processing capacity to capture more value from their resources.

“We are hearing from countries from left to right, independent of political inclination, that this is the moment to increase the value added to their critical minerals,” Goldfajn told the Financial Times in December.

Geopolitics is increasingly influencing mining transactions and regulatory approvals. Campbell and de la Hoz point to MMG’s proposed acquisition of Anglo American’s nickel assets in Brazil, now undergoing a Phase II merger review by European regulators, as an example of how decisions in Brussels or Washington can shape mining deals thousands of kilometres away.

Critical minerals are also gaining strategic importance beyond clean energy. Defence, aerospace and advanced technology sectors are driving demand for secure supply chains, prompting some mining companies in Latin America to align projects with U.S. strategic priorities to secure financing and long-term markets.

Domestic policy changes are also reshaping the investment landscape. Argentina has moved quickly to simplify regulations and attract foreign capital, while Brazil’s reforms have been more incremental and in some cases have increased compliance requirements.

Political risk and community engagement remain key factors shaping project timelines. Resource nationalism, environmental permitting and bureaucratic hurdles continue to influence development schedules even as government-backed financing reduces some investment risk.

Copper

Copper is expected to remain the primary driver of mining investment across Latin America. Chile and Argentina are advancing major copper projects as global demand for the metal — essential for electrification and power grids — is projected to nearly double by 2035.

Several copper projects in Chile alone are expected to begin operating next year with combined investment exceeding $7 billion, reinforcing the metal’s central role in regional mining strategies.

For Campbell and de la Hoz, the surge in lithium and critical minerals investment reflects a broader shift in the global mining landscape, where geology, government policy and geopolitical strategy increasingly determine where projects move forward.