The Race for Critical Minerals
The global shift towards decarbonization, electrification and digitalization is accelerating demand for critical minerals such as lithium, copper, cobalt and nickel. These materials are essential for batteries, electric vehicles, renewable energy systems and data infrastructure.
In addition, AI and data processing centers are becoming a new layer of demand, requiring large volumes of energy and infrastructure, further increasing pressure on already constrained resources.
At the same time, supply is struggling to keep pace. Long development timelines for mining projects, combined with geopolitical concentration, are creating structural pressure on availability.
The policy approach is also shifting. Where global trade in resources was traditionally driven by free-market sourcing, we now see a “security-first” approach, with increasing resource nationalism and strategic control over supply chains.
International organizations such as the United Nations Conference on Trade and Development are working on initiatives to improve transparency and coordination, including global databases and frameworks such as NRIE (Natural Resource Information Exchange), aimed at more efficient and transparent resource management.
Key Minerals — supply, demand & risk
Lithium
Use: Core component in lithium-ion batteries (EVs, storage, electronics)
Main producers: Australia, Chile, China, Argentina
Strategic positioning: China is not only a producer but the dominant processor and refiner, and a major importer of raw materials
Market dynamics: Demand accelerating rapidly; market shifting from surplus to projected deficit by mid-decade
Risks: Supply concentration, environmental constraints, slow ramp-up of new projects
Outlook: Structural shortages likely without significant investment in both extraction and refining
Copper
Use: Electrical infrastructure, renewable energy systems, EVs, grid expansion
Main producers: Chile, Peru, China, Democratic Republic of Congo
Market dynamics: Strong demand growth driven by electrification and infrastructure
Risks: Declining ore grades, aging assets, permitting delays
Outlook: Persistent supply pressure with long-term deficits expected
Cobalt
Use: Battery stability and performance
Main producers: Democratic Republic of Congo, Indonesia, Russia
Market dynamics: Highly concentrated supply chain
Risks: Geopolitical exposure, ethical sourcing concerns, regulatory tightening
Outlook: Continued supply risk despite efforts to reduce dependency
Nickel
Use: Stainless steel and high-energy battery chemistries
Main producers: Indonesia, Philippines, Russia, Canada
Market dynamics: Rapid growth in battery-grade demand
Risks: Environmental constraints, processing complexity, policy changes
Outlook: Volatility remains high; refining capacity is a key bottleneck
From extraction to control — a structural shift
The focus in the sector has changed fundamentally.
Past: securing access to mines and raw materials.
Now: control over processing and refining (“midstream”) has become the strategic priority.
China currently controls an estimated 60–80% of global refining capacity for key critical minerals. This makes geographical concentration — not physical scarcity — the main risk in global supply chains.
As a result, a global race has started. The United States, Europe and India are investing heavily in local refining capacity to reduce dependency and regain control over strategic materials.
Peru & South America — strategic positioning
South America plays a central role in the global supply of critical minerals. Chile and Argentina dominate lithium production, while Peru is a key global supplier of copper.
Importantly, Peru is also emerging as a potential lithium producer, with confirmed deposits in the south of the country (notably in the Puno region), positioning it for future participation in the battery supply chain.
Beyond lithium and copper, Peru holds a broad mineral base, reinforcing its long-term strategic importance.
At the same time, infrastructure and logistics continue to develop, supported by foreign investment and increasing integration into global trade flows.
For the region as a whole, the opportunity is clear: move from raw material export towards processing and value-added production, capturing a larger share of the value chain.
Substitution, Recycling & Urban Mining
To address supply pressure, industries are actively exploring alternatives.
Battery technologies are evolving to reduce reliance on certain minerals, while recycling is gaining importance. In particular, “urban mining” — the recovery of metals from used electronics and batteries — is becoming a complementary source of supply.
However, these solutions remain insufficient to fully offset demand growth in the short to medium term. Primary extraction will continue to play a dominant role.
Opportunities & Outlook
The current situation reflects a structural imbalance between rapidly increasing demand and constrained supply.
On the demand side, electrification, energy transition and AI-driven infrastructure will continue to expand. On the supply side, long project timelines and regulatory constraints limit immediate response.
At the same time, the shift towards resource security and regional control is redefining trade flows. Supply chains are becoming more fragmented, with countries prioritizing access and control over efficiency.
For South America, this creates a significant opportunity. The region is not only resource-rich, but also increasingly relevant as a strategic partner in global supply diversification.
In the medium term, markets are expected to remain tight, with continued price volatility. Structural stabilization will depend on the speed of investment in extraction, refining capacity and recycling technologies.
In that context, critical minerals are evolving from commodities into strategic assets at the core of global economic and geopolitical competition.
