19 Mar United States Redefines Its Critical Minerals Supply Strategy: Implications for Latin America

By,

Dr. Rafael Marrero, Chief Economist — Senior Fellow and Founder | MSI²

WASHINGTON, D.C. – Secretary of State Marco Rubio announced on Wednesday, March 12, a 30-day ceasefire between Ukraine and Russia, along with the signing of a Memorandum of Understanding (MOU) between the United States and Ukraine to establish a public-private partnership for the extraction of critical minerals in Ukrainian territory.

This agreement could lead to a rethinking of the U.S. strategy, redirecting its supply efforts from Latin America to Ukraine. While this decision aims to strengthen Ukraine’s economic recovery and reduce dependence on adversarial sources, it could also profoundly impact resource markets in Latin America, generating economic and geopolitical challenges for the region.

Global Competition for Critical Materials

The international race for essential materials such as lithium, cobalt, nickel, and rare earths is at its peak. These elements are fundamental to strategic sectors like defense, renewable energy, and advanced technology. China and Russia have consolidated their dominance in global supply chains, using their market power to influence both emerging economies and industrialized nations alike.

Until now, Latin America has been a key partner for the United States in obtaining these resources. However, the shift in U.S. policy towards Ukraine suggests a reassessment of priorities that could affect the economic and geopolitical stability of the region.

Strategic Resources in Latin America

Latin America is home to some of the world’s largest reserves of critical materials:

• Lithium Triangle (Chile, Argentina, Bolivia): Over 50% of the world’s lithium reserves, essential for the electric vehicle industry and energy storage.
• Brazil: A leading producer of nickel, cobalt, and rare earths, essential for the technology and defense industries.
• Mexico: An emerging player in the lithium and rare earth market.
• Peru and Chile: Leaders in copper production, a mineral indispensable for global electrical infrastructure.

Despite these assets, the region faces significant challenges such as insufficient U.S. investment in mining infrastructure, growing environmental opposition to extraction, and political instability in several key countries.

Implications of the U.S. Strategy Shift

The pivot toward Ukraine has multiple consequences for Latin America:

• Economic impact: Reduced U.S. investment could hinder mining expansion, decreasing employment opportunities and growth in strategic sectors.
• Strengthening of China: As U.S. presence declines, China could consolidate its influence in the region, securing control over supply chains and displacing the United States from the Latin American market.
• Geopolitical risks: Latin American governments may opt for trade agreements with China, Russia, or the European Union as an alternative to the partial U.S. withdrawal.
• Supply chain disruptions: Ukraine currently lacks the extractive and processing infrastructure that Latin America possesses, which could cause delays and uncertainty in the transition.
• Environmental and social consequences: A potential reduction in mining activity in the region could ease ecological pressures in sensitive areas such as the Amazon and the Lithium Triangle but could also lead to social instability due to job losses.

Strategies to Mitigate the Impact

To avoid losing influence in Latin America and ensure access to critical materials, the United States could adopt a balanced approach:

• Establish a LATAM-Ukraine strategic partnership: A cooperation agreement that maintains purchases of Latin American resources while developing Ukraine’s mining industry.
• Expand economic incentives in Latin America: Offer competitive financing for extraction and processing projects to counter China’s influence.
• Strengthen domestic processing capacity: Invest in infrastructure within the U.S. to reduce reliance on imports.
• Promote the recycling of critical materials: Develop initiatives for the recovery and reuse of strategic minerals to mitigate market volatility.

Conclusion

The United States is at a turning point in its critical minerals supply policy. The new focus on Ukraine is a risky bet that, if not handled prudently, could erode decades of trade and strategic relations with Latin America. Diversifying supply sources is essential, but it should not come at the cost of losing strategic allies in the Western Hemisphere.

As competition for essential resources intensifies, Washington’s decision will shape the future of hemispheric cooperation and redefine power dynamics in the global critical minerals market.

References

Center for Strategic and International Studies. (2024). China’s Control Over Critical Mineral Supply Chains and Its Implications for U.S. Policy. Washington, D.C.

U.S. Embassy in Ukraine. (2025). Joint Statement on the United States-Ukraine Meeting in Jeddah. Washington, D.C.

International Energy Agency. (2024). The Role of Critical Minerals in Clean Energy Transitions. Paris: IEA.

World Bank. (2023). Mineral Resource Governance in Latin America and the Role of International Trade. Washington, D.C.

U.S. Geological Survey. (2024). Mineral Commodity Summaries. Washington, D.C.: U.S. Department of the Interior.

Reuters. (2025). U.S. shifts rare earth supply strategy: Focus on Ukraine over Latin America.