US critical minerals bill expected to favor Latin America

The dependence on imports of minerals critical to ensuring economic and national security in the United States is expected to continue under Donald Trump's administration, possibly with an expanded list that will include copper. In this context, Latin America would remain a key supplier.

A bill sponsored by Trump's Republican party that would link the Department of Energy's identification of basic materials with the US Geological Survey's (USGS) list of critical minerals was approved by the House of Representatives on Thursday, sending it to the Senate.

The initiative, called the Critical Mineral Consistency Act, would grant all products the same benefits as the current USGS list, making them eligible for clean energy tax credits and financial support.

While the process of obtaining permits for mining projects for critical minerals in the United States, including copper, is being sought to be streamlined in order to strengthen the domestic supply chain and reduce dependence on China, this is not likely to happen in the short term.

Rodrigo Russo, director of compliance and business intelligence at consultancy Control Risks, told BNamericas that the geopolitical rivalry between China and the United States will be a key issue on Trump's agenda and for this reason, there would be interest in "strengthening strategic alliances with Latin American countries that have mining."

Russo suggests that Latin American governments, in turn, carefully evaluate what they can gain from proposals in areas such as financing, logistics, infrastructure and technologies.

Last year, the United States relied on imports for 100% of 12 minerals and over 50% for 29 of the 50 critical minerals listed by the USGS.

China and Canada led with more than 50% of imported products, but Brazil, Mexico, Chile, Bolivia, Peru and Argentina also played an important role.

Country	Products imported by the US in 2023
Brazil	asbestos, natural mica, niobium, fused aluminum oxide, dimension stone, iron oxide pigments, silicon carbide abrasive, alumina, vanadium, magnesium components, silicon metal and ferro silicon, vermiculite
Mexico	fluorite, graphite, strontium, bismuth, refined zinc, barite, silver, selenium, refined copper, refined lead, perlite, salt, cement
Chile	rhenium, iodine, refined copper, lithium, salt
Bolivia	antimony, refined tin, tungsten
Peru	refined zinc, refined tin
Argentina	lithium
Source:	USGS Critical Minerals Report 2024

Argentina and Chile

Although Trump wants to support the boom in the oil and gas sector, as its is an important pillar of the national economy and has not shown a broad interest in promoting electric vehicles, the participation of JD Vance as vice president and Elon Musk, CEO of Tesla, as head of the so-called department of government efficiency – which will act as an advisory council to the government – could change the line.

Vance believes it is key to build a clean, broad and resilient energy matrix, while Musk has defined himself as “pro-environment” and his electromobility company has agreements with multiple lithium producers, including some with assets in Argentina.

Tesla has a current contract with Ganfeng, which participates in the Argentine projects Mariana, Pozuelos-Pastos Grandes, Incahuasi, Cauchari-Olaroz and Sal de Puna, and with Arcadium Lithium, which as of 2025 will belong to Río Tinto, to whom it will transfer the portfolio of operations in the Hombre Muerto salt flat, which includes the Fenix plant, the Güemes lithium chloride plant and the Sal de Vida and Cauchari projects.

In Chile, meanwhile, Tesla is reportedly planning to set up a lithium processing plant and has held meetings with local producer SQM. As for Chilean copper, last year exports to the United States hit their second highest volume in 10 years, reaching 545,474t, according to data from state copper commission Cochilco.

Although Trump has promised to increase import tariffs on foreign products by 20%, except for China which would be hit by a 60% hike, and wants to review free trade agreements, generating uncertainty in future relations with Latin American countries, he ultimately wants to end dependence on minerals from China and Russia.

Adding to the complexities of developing mining projects in the US, which take an average of 29 years, according to a report by S&P Global, geopolitics would be the main focus of the Trump government, leaving allies such as Argentina and Chile in a somewhat safer position, Russo said.