U.S. Racing to Control Latin America’s Rare Earths

According to Mining.com, one of the most-read publications in the U.S. about the mining, minerals, and metals industry, the U.S. has poured more than $1 billion into critical minerals investments across Latin America since January 2025. This bold move helps explain one of the most talked-about subjects of the past year: rare earths.

Rare minerals, including rare earth elements (REEs) and battery metals, are a group of 17 chemically similar metallic elements: the 15 lanthanides, plus scandium and yttrium. Despite their name, they are not “rare” in the Earth’s crust, but they are difficult to find in concentrated, economically extractable deposits.

They are critical components in high-tech devices, electric vehicles, and defense technology. In recent years, demand has increased sharply due to green energy transition technologies, such as EVs and wind turbines, as well as defense applications like guidance systems and magnets, and high-tech electronics that use many rare earth minerals.

The necessity of these minerals has turned them into a geopolitical issue. Supply chain fragility and the essential role of these materials in modern infrastructure have made them a global strategic priority for countries with the technology, infrastructure, and opportunity to commercialize them.

United States vs. China

Historically, China has been a heavyweight in the sector. It dominates the production and processing of rare earths, accounting for 61% of global mined supply and 91% of global refining and processing capacity for key rare earths in 2024, according to the International Energy Agency.

In April 2025, China launched a strict licensing regime aimed at limiting exports for sectors that feed defense and other high-tech industries, causing bottlenecks in global access to these minerals. Beijing eased some of the restrictions in July 2025, but in early 2026 China imposed tough new export controls targeting dual-use items heading to Japan.

As expected, these trade measures targeting Japan are likely to have ripple effects on buyers that want to diversify supply chains away from China. Japan is one of the few countries that manufactures advanced rare-earth permanent magnets outside China, which controls roughly 90% of global refining and 85% to 90% of magnet production.

Countries like Chile, Argentina, and Brazil have recently been seen as good alternatives for countries like the U.S. that are looking to diversify their supply away from China.

This led the United States, in January 2025, to invest more than $1 billion in critical minerals in Latin America. The Inter-American Development Bank approved a $100 million loan for a $2.5 billion lithium project in Argentina, and the U.S. Development Finance Corporation is evaluating a $465 million investment to expand rare earth operations in Brazil.

Latam Rare Earth Materials

Argentina has implemented policies to attract foreign capital, notably the Incentive Regime for Large Investments (RIGI), launched in July 2024. This regulatory framework offers fiscal, customs, and exchange-rate stability for projects exceeding $200 million.

Lithium is considered one of the most crucial and in-demand materials today. When total resources are considered, Argentina, Chile, and Bolivia contain 64 million tons, a figure six times higher than the 10 million tons recorded in China. Also known as the Lithium Triangle, it includes about 150 internal drainage basins in northwestern Argentina, western Bolivia, northern Chile, and southernmost Peru.

The metal is used in rechargeable batteries for electric vehicles and for the energy storage needed to expand renewable energy. Global demand for this material is expected to grow quickly.

The U.S. Geological Survey (USGS) for 2026 confirms that Argentina and Chile supply 97% of U.S. lithium imports. The U.S. has limited production capacity compared to South American suppliers, since there is only one commercial-scale brine operation in the state of Nevada.

While China remains a top supplier, much has been said about its commercial approach and the boundaries it sets for future pricing. “As long as China continues its saber-rattling regarding dual-use and export restrictions, this will serve to impede trade flows and elevate prices,” said Chris Berry, an independent battery metals analyst and president of House Mountain Partners.

China’s control of rare earths and its dominance will be difficult to break, since the cost of producing these materials is significantly lower than that of its competitors. However, alternatives are being considered due to these monopolistic behaviors.

Latin America is considered a highly valuable investment target for many countries, but its lack of infrastructure and influence in the market makes it challenging for these countries to strengthen their role in the rare earth supply sector in the coming years, as these materials are now being framed as matters of national sovereignty and security.