Source: US Geological Survey
 

The graph shows Latin America and the Caribbean's significant endowments of minerals considered strategic by the US, Japan, the EU, and China. It is important to note that these countries classify minerals as critical, not only because of their importance in the energy transition but also because of their impact on the development of specific national industries, which are considered strategic.

The Role of Spain and the Rest of the EU

The European Union can play a critical role in harnessing these resources in Latin America. While the continent lacks significant reserves of critical materials, it possesses the necessary capital and technology to extract and process these resources in a sustainable manner. Several European companies are currently investing in mining projects in Latin America and the Caribbean, giving them access to key minerals; however, increasing competition from Chinese and US counterparts could mean the loss of future opportunities for new business development. 

Europe's priority towards energy transition is also reflected in its low-carbon value chain policy. The EU has set stringent standards in terms of environmental and social sustainability in mineral production, requiring companies to comply with strict requirements to ensure traceability and accountability in the supply chain. This not only ensures the sustainability of mineral extraction but also promotes investment in more sustainable practices in Latin America and the Caribbean.

However, this is not just a compliance issue, it is also a key factor in global competitiveness. Companies that adopt cleaner practices can attract environmentally conscious consumers and business partners through compliance with increasingly stringent sustainability standards around the world. In addition, the global financial sector is increasingly taking sustainability standards into account when providing resources to certain industries and projects.

China and the US, the world's two largest economies, have developed national strategies to ensure the reliable supply of critical minerals needed for the energy transition and the development of specific industries. China, in particular, has secured a dominant position in the production and processing of many of these minerals. Its ability to offer financing, attractive purchasing terms, and guarantee steady demand has given it a significant competitive advantage. For its part, the US has made it a priority to reduce its dependence on imports of critical minerals, which has led to the development of domestic value chains. This has translated into investments in the extraction and processing of minerals within its borders, including lithium and rare earths.

The importance of low-carbon value chains in the production of critical minerals cannot be underestimated. Mining and mineral processing are often carbon-intensive activities due to energy consumption and greenhouse gas emissions. For the energy transition to be truly sustainable, it is essential to reduce the carbon footprint associated with these processes. Therefore, the exploitation of critical minerals in Latin America and the Caribbean faces a crucial challenge: balancing competitiveness with social and environmental sustainability. While the region possesses the resources, large-scale mineral extraction can have negative impacts on local communities and the ecosystem. Mining activity is often associated with deforestation, water pollution, harm to local communities, and loss of biodiversity.

To address this challenge, it is essential that governments, the private sector, and communities work together to develop sustainable practices. This involves effective planning, the adoption of clean technologies and the implementation of social safeguards to protect local communities. In addition, transparency in the supply chain is required to ensure that minerals are extracted and processed responsibly.



Spain, with its experience in renewable energy and strategic geographical position, can play a key role in exploiting critical minerals in Latin America and the Caribbean in a competitive, yet sustainable way. The country has made significant progress in renewable generation, especially in solar and wind. Spain can also draw on its experience in managing sustainable projects and implementing responsible business practices. It can act as a bridge between Latin America and the rest of the EU, facilitating investment and technology transfer to ensure that mineral exploitation is socially and environmentally sustainable.

Spain and Latin America and the Caribbean share a high level of commitment to the fight against climate change and the green transition. Given Spain's membership in the EU and its own emission reduction strategy, it has managed to design and implement effective public policies within an institutional and legal environment that provides clear rules and stability for investments. In contrast to the EU, in the case of Latin America, coordination at the regional level has been limited, resulting in differences in countries' energy transition strategies, as well as in their specific public policies and regulatory frameworks. This presents opportunities for cooperation between the two regions.

Some Proposals for Collaboration

An interesting alternative for joint work between Spain, the rest of the EU, and Latin America and the Caribbean could be in the production of green hydrogen. The combination of abundance of critical minerals, Latin America's natural conditions for renewable energy production, and the technological capabilities of Spain and other EU members to exploit resources in a sustainable manner and contribute to the expansion of clean energy production could become a win-win alliance. This would contribute to an acceleration of the energy transition in Latin America and at the same time provide opportunities for Spanish and European companies to find profitable business opportunities.

Another key area of collaboration, taking advantage of the region's lithium reserves and the technological capabilities of Spain and other EU members, could be joint transport electrification projects, including the production of electric cars and their components in Latin America and the Caribbean. To this end, it would be important to make diplomatic efforts and investment commitments that show that the combination of technological capabilities and the abundance of natural resources could benefit both regions. Spain and the rest of the EU could accelerate their electric mobility programmes, and Latin America and the Caribbean, which lags behind in this sector, could make rapid progress and take advantage of the spillover effects of technology-laden investments and human resource training.

While the supply of critical minerals is key to Europe's energy transition, it is no less true that they also play a key role for Latin America and the Caribbean. Despite having energy matrices with a high component of clean energy, mainly hydroelectric, Latin American countries have great potential to develop other renewable energies such as solar and wind energy, where the EU has a long tradition of investment and technological innovation. It is clear that there is room for cooperation in the diversification of energy sources in both regions.

Moreover, the EU plays a key role as a provider of capital and financing for Latin America and the Caribbean, which after the pandemic increased its external debt and fiscal deficits, limiting its possibilities to raise funds to finance green projects. EU financial institutions, such as the European Investment Bank (EIB) and other national development aid institutions, can help reduce the cost of financing in Latin America. In addition, Spain and the rest of the EU states have an important geopolitical influence on the decisions of global and regional multilateral banks, which require more capital to support middle-income countries – which are the majority in Latin America and the Caribbean.

Critical minerals are essential for the global energy transition, and Latin America and the Caribbean play a key role in their production. As the EU, China, and the US compete for these resources, sustainability becomes a critical factor. The adoption of low-carbon value chains and the implementation of sustainable practices are essential to ensure that the exploitation of strategic minerals is beneficial for all stakeholders. A strategic partnership between Latin America and the EU, with Spain as the articulator, with well-defined projects, diplomatic efforts, investment, and financing, would benefit both parties and the rest of the world, as it could accelerate the energy transition in both regions and utilise the wealth of critical materials in Latin America and the Caribbean sustainably.