Tapping mineral potential

China-Latin America resource partnership will not only help reshape global mining governance landscape but also inject momentum into South-South cooperation

At a time when the global green transition advances amid evolving major-country relations, Latin America is experiencing an unprecedented overhaul of its industry rules. According to the International Energy Agency, Latin America is home to about 35 percent of the world's lithium supplies and around 40 percent of global copper resources.

The region has seen some major resource-rich countries launch a wave of "competitive deregulation" to attract investment. Chile unveiled its inaugural National Critical Minerals Strategy; soon after this move, the new administration tried to unlock mining investment through tax cuts. Peru's new administration has also reformed its environmental regulations for mining exploration, with the aim of reducing uncertainty and speeding up procedures, amid strong regional competition to attract international capital to the sector.

Yet, behind this race for investment lies a core objective of Latin American mining policy: to leverage the region's resource endowments to build local industrial capacity and use openness to promote local processing.

Some Western narratives have attempted to reduce the evolution of Latin America's mining policies to resource nationalism or geopolitical bloc confrontation. However, a closer examination — from Brazil's hard legislative requirements for domestic rare-earth processing to Mexico's assertion of state sovereignty over strategic resources — reveals a profound conceptual awakening across the region. Eager to break free from their historic fate as marginalized exporters of raw commodities, some Latin American nations are seizing the window of opportunity created by the global energy transition to move up into midstream smelting and high-value-added manufacturing.

This creates deep structural synergies with China's competitive advantages in refining, battery materials manufacturing and green hydrogen metallurgy. For China-Latin America cooperation, this is no mere buy-and-sell commodity transaction; it is an opportunity to help reshape the global division of labor across resource supply chains.

More importantly, China does not seek regional predominance or spheres of influence; it simply takes actions to maintain a constructive presence, demonstrating its reliable partnership with Latin American countries.

In recent years, as China-Latin America cooperation has deepened, mineral trade between China and some Latin American countries has steadily increased. Taking Peru as an example, China is Peru's largest trading partner globally, while Peru is China's fourth-largest trading partner in Latin America. In 2025, bilateral trade between Peru and China reached $50.44 billion, with Chinese imports amounting to $32.63 billion, up 26.9 percent and 30.1 percent year-on-year respectively. China mainly exports mechanical and electrical products and high-tech products, while importing fishmeal and mineral products such as copper and iron. In addition, the Belt and Road Initiative has provided important support for China-Latin America mineral cooperation.

Nevertheless, China-Latin America cooperation in critical minerals still faces internal risks — including changes of government in host countries, community frictions and tightening environmental standards — alongside some external pressures from the United States.

To confront this complex situation, China and Latin America can further deepen their supply-chain integration, while transcending cyclical risks via win-win institutional design.

First, transitioning the cooperation paradigm from mere mining to an integrated supply-chain community. Chinese enterprises can align with host countries' demands for local value addition by coupling capital investment with technology transfer when mutually beneficial conditions allow. In core lithium-battery regions such as Argentina and Chile, operations can move beyond extracting crude lithium salts to exploring the joint building of local capacity for cathode materials, battery assembly and even electric vehicle manufacturing. By converting China's hard technological capabilities into soft empowerment for host-country industrialization, Chinese projects can become drivers of Latin America's economic upgrading.

Second, leveraging institutionalized multilateral frameworks to build high-resilience models of compliant governance. As joint action plans under the China-CELAC framework take cooperation in critical mineral technology to new heights, the partnership now enjoys strong institutional backing. At the corporate level, businesses can fully capitalize on the fiscal and tax certainty offered by new policies such as Argentina's Incentive Regime for Large Investments, embedding technical compliance; environmental, social and governance standards; and indigenous benefit-sharing mechanisms into the entire project life cycle. Companies can proactively align with emerging local revenue-distribution reforms by taking the lead in pilot projects. The deeper the shared interests go, the stronger the partnership will be, allowing transparent, green and inclusive operations to cut through the bias of exclusionary geopolitical narratives.

Critical minerals are not bargaining chips for hegemony; they are bridges for humanity's collective transition to a low-carbon future. The rationale of some Latin American nations to take reforms in their mining sectors is combined with their aspirations for sustainable development based on their specific national conditions. With technology as the bond and full-value-chain cooperation as the foundation, this new type of resource partnership between China and Latin America will not only help reshape the global mining governance landscape but also inject momentum into South-South cooperation.

The author is an associate research fellow at Chongyang Institute for Financial Studies, Renmin University of China.

The author contributed this article to China Watch, a think tank powered by China Daily. The views do not necessarily reflect those of China Daily.

Contact the editor at editor@chinawatch.cn.