The global AI buildout is quickly becoming more than a technology story. As investment in data centers, power infrastructure, advanced manufacturing, and defense capabilities accelerates, so does demand for the physical inputs required to support that growth. Copper, lithium, rare earths, and other critical minerals are increasingly central to the next phase of global economic competition.
Latin America sits near the center of that shift. The region holds a significant share of the world’s critical mineral reserves, yet its full potential in global supply chains has not yet been realized. For investors, this creates a more nuanced opportunity: Latin America offers exposure to several durable growth themes, including AI infrastructure, energy security, and supply-chain diversification, but realizing that potential will depend on country-specific capital investment and policy reform.
Latin America houses a significant share of the critical minerals required to support AI, the energy transition, and military systems.
- Roughly 30% of global copper reserves are in the region, primarily in Chile and Peru. Copper remains a foundational input for power infrastructure, data centers, electrification, and defense production.
- The region houses about 45% of global lithium reserves within Chile, Bolivia, and Argentina, commonly known as the Lithium Triangle. Lithium is a key component in batteries used across consumer electronics, electric vehicles, and energy storage systems.
- Latin America is also rich in silver, nickel, and rare earths (primarily in Brazil), all of which also play an important role in advanced electronics, battery technologies, and semiconductors.
While Latin America’s resource base is becoming more valuable, reserves do not automatically translate into supply. Mining projects often face slow permitting, complex environmental reviews, and overlapping regulatory approvals. These hurdles can stretch development timelines, raise costs, and make it harder for new projects to move from discovery to production.
The challenge is not only regulatory. Political volatility, underdeveloped infrastructure, and local opposition can disrupt even well-capitalized projects. In some cases, public backlash has led to policy shifts or project closures, reinforcing concerns among global mining companies about committing capital to the region.
During its infrastructure boom in the early 2000s, China invested heavily across Latin America’s raw materials sector, targeting countries with large reserves of copper, coal, natural gas, oil, uranium, and, more recently, lithium. Those investments were not limited to mines. Chinese firms also helped finance the energy and transportation infrastructure needed to move resources from remote areas into global supply chains.
That early investment has given China a durable advantage. While China does not dominate global mineral extraction (its global share of mineral extraction is only 10-30%), it plays an outsized role in refining and processing (some 60-70% total, and nearly 90% in rare earths), the part of the supply chain where raw materials become usable inputs for technology, energy, and defense systems. That refining capacity has made China a central gatekeeper in critical minerals, even when the minerals themselves are mined elsewhere.
That concentration has become a strategic concern for the U.S. and its allies. Securing access to refined minerals through more diversified supply chains is now a policy priority, which is drawing more U.S. and European attention to Latin America. For the region, where roughly 20% of extracted minerals are processed domestically, this shift presents an opportunity that extends beyond extraction.
A stronger investment case is also supported by a gradual shift in the policy backdrop. After years of inflation volatility, underinvestment, fiscal pressure, and uneven growth, voters in several Latin American countries appear to be placing greater emphasis on economic stability, private investment, public security, and fiscal discipline.
That shift has helped create a more constructive environment for market-oriented policy in parts of the region. Recent election outcomes in countries such as Bolivia, Honduras, Chile, Costa Rica, Peru, and Colombia suggest growing support for governments that are more focused on development, investment, and stability. The trend is not uniform, and policy uncertainty remains a risk, but the direction of travel is becoming more supportive for investors, with Brazil illustrating an important nuance.
Brazil’s ability to attract foreign investment under President Lula’s leadership, alongside its growing importance in global critical-mineral and energy supply chains, highlights how strategic resource endowments can support investment even when policy uncertainty persists.
Additionally, several governments have signaled:
- A more supportive stance toward mining, including efforts to reduce regulatory bottlenecks and streamline permitting processes. In key markets such as Chile, efforts are already underway to accelerate mining permitting approval timelines.
- Stronger investor protection and lower taxes, both designed to attract capital.
- Greater openness to strengthening ties with the U.S. and other Western economies, broadening strategic partnerships beyond China.
The external backdrop is also becoming more supportive. As U.S.-China competition intensifies, Washington and its allies have a stronger incentive to deepen ties with resource-rich Latin American countries. Critical minerals, energy security, and supply-chain diversification are no longer just commercial issues; they are strategic priorities.
Still, the region is unlikely to make a clean break from China. For key Latin American economies, China remains a major source of capital, infrastructure financing, and commodity demand. Even as newly elected governments become more open to U.S. and European partnerships, most countries will likely continue to balance relationships with both sides, giving Latin America more leverage as the world competes for access to strategic resources.
Latin America’s resource advantage is not new. The region has long held abundant reserves of commodities and rare earth metals, and yet those advantages have often been offset by political volatility, regulatory uncertainty, fiscal pressure, security concerns, and uneven growth. These structural barriers, plus heightened vulnerabilities to cyclical risks, have hindered sentiment that has ultimately been reflected in valuations: the MSCI Latin America Index’s long-term average forward multiple of 11x sits below other major equity indices, including roughly 14x for MSCI Asia Pacific and MSCI EAFE, and about 17x for the S&P 500.
The investment case, however, is changing. Latin America is becoming more relevant to several structural themes that are likely to persist across market cycles. At the same time, more proactive policymaking has helped strengthen central bank credibility and financial stability in parts of the region, making the historical discount more interesting where resource exposure is supported by credible policy frameworks and improving investment conditions.
Equities:
- Investment opportunities may be more attractive where resource exposure is paired with improving policy frameworks
- Copper, lithium, rare earths, and related infrastructure remain the clearest areas of focus, while financials and infrastructure-linked companies may benefit as investment activity accelerates.
- Investors may benefit from a focus on targeted exposure to companies and markets positioned to benefit from rising demand for strategic resources.
Credit:
- The opportunity is more selective across credit markets
- Countries that combine resource exposure with relatively stable fiscal and policy frameworks are likely to be better positioned.
For investors, Latin America offers exposure to the global AI infrastructure theme, without simply adding to concentrations in global technology stocks. Notably, potential demand drivers extend beyond AI and may also include energy transition initiatives, defense spending, and supply-chain diversification efforts. The key is selectivity: investors need to distinguish between broad regional allocations and targeted exposure to countries, sectors, and companies positioned to benefit from policy support and rising strategic demand.
Footnotes
In 2023, Cobre Panamá – a Canada-operated massive open-pit copper mine in Panama – saw anti-mining protests lasting well over a month, which resulted in Panama’s Supreme Court ultimately shutting down the mine. The mine remains closed as of July 2026, though recent reports suggest efforts are underway to reopen the copper mine.
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Investing involves risk, including possible loss of principal. Past Performance does not guarantee future return. All financial investments involve an element of risk. AI companies face significant investment risks due to limited resources, intense competition, and rapid product obsolescence, making them particularly vulnerable to market volatility. International investing involves greater risks such as currency fluctuations, political/social instability, and differing accounting standards. Equity markets are subject to many factors, including economic conditions, government regulations, market sentiment, local and international political events, and environmental and technological issues that may impact return and volatility. Risk is magnified in emerging markets, which may lack established legal, political, business, or social structures to support securities markets. Investment in natural resource industries and commodity related derivatives can be affected by political/economic developments, market shocks/natural disasters, and other factors.
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