As global demand for critical minerals surges, South America is emerging as a pivotal region for Western nations looking to reduce their reliance on China. A recent report from Verisk Maplecroft highlights the continent’s potential as a politically stable and resource-rich area, making it an attractive option for diversifying critical mineral supply chains.
The report underscores the urgency of this shift, noting that countries like the United States and its allies are intensifying efforts to secure essential materials such as lithium, copper, cobalt, nickel, graphite, and rare earth elements. These initiatives are driven by concerns over technological dependency and geopolitical tensions. Noteworthy actions include the U.S. expanding its strategic mineral stockpiles and a collaborative effort among 55 countries to form a preferential trade bloc focused on critical minerals.
Verisk Maplecroft’s analysis utilized its Resource Nationalism Index and Political Risk Data to evaluate ten emerging markets, revealing that Argentina, Brazil, Chile, and Peru stand out due to their substantial mineral reserves coupled with relatively low levels of state intervention and political risk. In contrast, nations such as the Democratic Republic of Congo, Indonesia, and Tanzania are categorized among the highest-risk jurisdictions globally.
Jimena Blanco, chief analyst at Verisk Maplecroft, emphasized that South America’s unique advantage lies not only in its rich mineral deposits but also in its favorable risk profile. The region’s combination of significant reserves of technology-critical minerals with manageable political instability positions it favorably against other global producers.
Western governments are recognizing this stability through various strategic initiatives. The U.S. has established the Strategic Minerals Cooperation Framework with the Democratic Republic of Congo and is pursuing critical mineral processing capabilities in Brazil. Additionally, the EU-India free trade agreement includes components aimed at enhancing rare earth supply chains.
Despite South America’s relative stability, some sectors still face medium-risk exposure. Countries like India and Indonesia exhibit high political volatility alongside aggressive government control, which raises concerns about potential export restrictions and local value-addition mandates. Blanco noted that managing these risks will be crucial for securing a competitive edge in the race for tech-critical minerals.
The geopolitical landscape further favors South America’s role in global supply chains. The report indicates varied alignments with Western interests; for instance, Argentina and the Philippines are identified as close U.S. allies, while Brazil and DR Congo show less alignment with Washington’s policies. This intricate interplay of resource availability and geopolitical ties positions South America as an essential hub for Western strategies aimed at diversifying critical mineral sources.
