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<\/p>\nEstos pa\u00edses son claves en abastecer minerales para la transici\u00f3n, por la abundancia y diversidad de minerales de alta ley y la eficiente puesta en valor. Minerales de ALC son clave para la reducci\u00f3n del di\u00f3xido de carbono arrojado a la atm\u00f3sfera (Cu; Li; Zn; Ni; Fe; Mn y tierras raras, m\u00e1s Au y Ag). \u201cMinerales cr\u00edticos\u201d: se definen seg\u00fan el pa\u00eds, por sus intereses, criterios y estrategias, as\u00ed como en sus propias necesidades y las de los mercados. Desde los consumidores y destinos de los minerales cr\u00edticos, entre ellos, EE. UU., China, Jap\u00f3n y Europa, hay preocupaci\u00f3n en: c\u00f3mo y d\u00f3nde se producen estos recursos para sus industrias y cu\u00e1n vulnerables son sus suministros. Los gobiernos mejoraron la recaudaci\u00f3n y asignaci\u00f3n de los ingresos provenientes de las industrias extractivas. Los pa\u00edses optimizaron y adecuaron la redistribuci\u00f3n de regal\u00edas y aumentar impactos sociales positivos en las \u00e1reas afectadas. Estos temas estuvieron presentes en la reforma de regal\u00edas de Colombia (2020) y tambi\u00e9n en el desarrollo regional en Chile.<\/p>\n
Latin America is an established producer of several minerals essential for clean energy technologies, and could build on its well-established mining sector to diversify into new minerals and help the global economy avoid the shortfalls and bottlenecks that could threaten clean energy transitions.
The region already produces large quantities of lithium, which is needed for batteries, and copper and underpins the expansion of renewables and electricity networks. But Latin America could expand into a range of other materials such as rare earth elements that are required for electric vehicle motors and wind turbines, and nickel, a key component in batteries. However, to reap this potential, mining activities must adhere to high environmental, social and governance (ESG) standards and also seek ways to generate tangible benefits for local communities.<\/p>\n
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Latin America accounts for 40% of global production of\u00a0copper<\/strong>, led by Chile (27%), Peru (10%) and Mexico (3%). The region\u2019s share of global reserves is largely similar to its share of production, although Mexico and Colombia have untapped potential. Existing producers could ramp up production swiftly but may face efficiency challenges in the longer term due to declining ore quality in the resources. The region\u2019s share of global copper exploration expenditure has gone up from 35% to 45% in the past decade, indicating the potential for further production increases.<\/p>\n Today the region supplies 35% of the world\u2019s\u00a0lithium,\u00a0<\/strong>led by Chile (26%) and Argentina (6%), the second and fourth largest global producers, respectively. The region holds more than half of global lithium reserves, mainly located in Argentina (21%) and Chile (11%). Bolivia also holds huge untapped lithium resources, almost comparable to the size of today\u2019s global lithium reserves<\/a>, although the lack of infrastructure hampers them from being economically viable. Moreover, the region\u2019s lithium \u2013 predominantly lithium carbonate from brine \u2013 produces fewer emissions than mining from rock and could benefit from the growing adoption of lithium iron phosphate batteries. Latin America could therefore have an even more important role to play in meeting rapidly rising global demand for lithium. The region\u2019s lithium exploration spending more than doubled over the last decade, from USD 44 million in 2010 to USD 91 million in 2021, and there is scope to step up activities even further given that the region\u2019s share in global exploration spending fell from 52% to 36% over the same period.<\/p>\n Beyond copper and lithium, Latin America has significant potential in\u00a0graphite,<\/strong>\u00a0nickel, manganese and rare earth<\/strong>\u00a0elements<\/strong>\u00a0production. Brazil alone holds around one fifth of global reserves in each of these resources, but as of today produces only small to moderate amounts, between 0.2% of global production of rare earth elements and 7% for graphite. Latin America has not yet attracted sufficient investment in line with its potential, for example, only 7% of the global exploration budget for nickel and rare earth elements is allocated to the region.<\/p>\n Future exploration campaigns would benefit from updated\u00a0national geological surveys<\/strong>, as the current geological information does not always cover energy-related critical minerals which have gained more attention in recent years. Chile\u2019s geological service SERNAGEOMIN provides detailed open-source geological data with regional and mineral specific focal points. Brazil has established an exclusive division on critical minerals under the geology department (DIPEME). The division has issued regulations reducing the administrative burden for strategic mining projects, with a special focus on lithium and rare earth elements, while also considering graphite, copper and cobalt. Colombia has recently launched a strategic roadmap, Copper Route, to expand the domestic copper industry. However, more information alone will not be sufficient to trigger the investment needed to exploit fully these resources. Governments need to establish frameworks to attract increased investments in mining and processing activities, setting clear regulations and creating incentives, while ensuring compliance with ESG standards. Dialogue with stakeholders, investors, as well as an increase in \u00a0international cooperation will be crucial for both the design and the implementation of these frameworks.<\/p>\n Mining must avoid and mitigate adverse impacts on the environment and local communities<\/strong><\/p>\n Mining has historically accounted for between 13% and 19% of Latin America\u2019s incoming foreign direct investment. The sector has great development potential, but at the same time is accompanied by a high risk of environmental degradation and adverse impacts on local communities. ESG\u00a0issues are already a top concern for international mining companies<\/a>\u00a0and stakeholders.<\/p>\n Environmental standards are not only crucial for protecting the environment, but also for gaining and keeping the support of local communities. Major disasters during the last decade have fed anti-mining sentiment. Prominent examples include the 2014 spill of 40 000 cubic meters of sulfuric acid above the Sonora River in Mexico, affecting the water supply of thousands of people, and the 2019 tailings dam disaster at Brumadinho, Brazil, which killed 270 people. Although Latin American countries have put in place frameworks for environmental licensing and regulation, there is still room for improvement in terms of enforcement and compliance standards, according to\u00a0a recent report of the Inter-American Development Bank.<\/a><\/p>\n Prior to commencing new projects, baselines should be established for key environmental indicators, such as groundwater quality, and then monitored continuously during operations. Top priority should be given to thorough risk and tailings management, response preparedness and auditing. There needs to be transparency about water use, and on the characteristics of waste water and other emissions. Governments need to provide robust regulatory regimes with sufficient permitting and compliance staff, as well as reliable public information and emergency response plans that are well structured and match the scale of risk. Further specific guidance for both governments and mining companies has been developed by the\u00a0United Nations Environment P<\/a>rogramme, with the support by\u00a0Group of Friends of Paragraph 47<\/a>, which includes Argentina, Brazil, Chile and Colombia.<\/p>\n In Latin America, mining projects can face particularly strong opposition from local communities. According to one\u00a0worldwide database on mining conflicts<\/a>, 45% of reported conflicts are located in Latin America, where activities are often located near sensitive and biodiverse ecosystems, many of which are home to vulnerable communities. These elements, paired with the intensive use of land and water resources, and the deployment of heavy machinery brought by mining activities, raise the likelihood of conflicts and create challenges for companies to obtain a \u201dsocial licence to operate\u201d.<\/p>\n Social licence generally refers to whether a company or project has the ongoing acceptance of the local community, beyond what is required by legal or regulatory processes. Key factors for companies to achieve and maintain this approval in Latin America include the participation of affected stakeholders, working with communities to maximise benefits and minimise impacts, as well as compliance with robust sustainability standards.<\/p>\n Stakeholder participation<\/strong><\/p>\n Although countries in Latin America have established frameworks for consulting and involving local stakeholders, the formal processes in place cannot guarantee support for individual projects. Stakeholders frequently include local indigenous or ethnic groups that have to be consulted under the principles set in ILO Convention 169 on Indigenous and Tribal Peoples (ILO 169). Over the last three decades, Latin American countries have adopted different approaches to implementing the obligations under ILO 169, shaped by the political and institutional structures of each jurisdiction. These efforts have sought not only to ensure a better representation of indigenous communities in the decision making around mining projects, but also to reduce risks for investors and project implementation. At the same time, some companies have developed ESG management procedures that go beyond what is foreseen by regulations.<\/p>\n Legal frameworks for stakeholder participation in selected countries<\/strong><\/p>\n Across the region, communities persistently claim to be poorly \u2013 or not at all \u2013 represented in the negotiations with mining companies, pointing to the need to improve the recognition of all relevant stakeholders and their appropriate representatives. Complaints by consulted stakeholders of having only minimal influence over the final decision regarding consulted projects are also frequent. On the other side, investors cite unclear procedures, long processing times and lack of institutional capacity as\u00a0obstacles that affect investment attractiveness<\/a>.<\/p>\n Ensuring a fair distribution of benefits<\/strong><\/p>\n Latin America as a region has some of the widest wealth disparities in the world, as measured by GINI coefficient, and the gap has widened in recent years. Lack of local benefits from mining projects, or perceptions thereof, are a prominent cause of social unrest, with protests halting mining operations or slowing new developments.<\/p>\n In the last two decades, many Latin American governments have improved the collection, allocation and expenditure of revenues coming from mining and other extractive industries. Countries have concentrated their efforts on reshaping royalty redistribution models and increasing positive social impacts in areas affected by mining activities. These ambitions were at the centre of\u00a0Colombia\u2019s royalties reform in 2020<\/a>\u00a0and also guided the creation of a\u00a0special contribution for regional development in Chile<\/a>\u00a0in the same year. However, much more action will be required by governments and industry to ensure that tangible benefits of mining projects reach local communities, both through fiscal policy, but also the fostering of development effects, e.g. through promoting the addition of higher-value added activities (processing) or improvements to local infrastructure which can support broader economic development.<\/p>\n Latin America\u2019s critical minerals opportunity<\/strong><\/p>\n Latin America holds great promise in critical minerals mining and processing and could make an important contribution to ensuring a long-term reliable supply of the minerals required for global energy transitions. Additional investments in this sector could also open new avenues for economic growth and diversification by developing local processing capacities and production of clean energy technology components. The abundant availability of clean energy resources (hydropower, solar and wind) gives the region a competitive advantage for building a low-carbon mining sector \u2013 and some countries have started to embark on this route.<\/p>\n To better capitalise on this potential, the region needs to make progress on ESG challenges. In practice, the three components of ESG are strongly intertwined and governments across the region have stepped up their ambitions in recent years: for example, in 2018, 25 countries led by co-chairs Chile and Costa Rica adopted the\u00a0Escaz\u00fa Agreement<\/a>, which aims to \u201cguarantee the implementation of the rights of access to environmental information, public participation in the environmental decision-making process and access to justice in environmental matters\u201d. The agreement has since been ratified by 14 countries, including Argentina, Colombia, Chile and Mexico. The agreement, along with other initiatives such as the\u00a0Group of Friends of Paragraph 47<\/a>, shows the political will in the region to take action on ESG issues that are at the centre of a sustainable approach to mining activities. The IEA looks forward to continuing to work with producer and consumer countries alike in order to contribute to addressing these challenges and enabling Latin America to develop these valuable resources in a sustainable way that brings benefits to all its people while supporting global clean energy transitions.<\/p>\n