By: Arnoldus M. van den Hurk PhD & Eng. José A. Estela Ramirez, Mining Energy Transition Forum, PERUMIN 37.

Abstract

This article unveils the geopolitical dynamics behind critical and strategic minerals in Latin America by exploring four key transitions driving unprecedented demand: energy, digital, national security, and sociodemographic. Through the “Mineral Iceberg” metaphor, it reveals how global discourse fixates on the visible tip —the energy transition— while ignoring deeper forces reshaping the material foundation of the global economy. Latin America and Peru are presented as central actors, not merely due to their geological wealth but also their opportunity to move up the value chain. The article proposes a roadmap to prevent the emergence of “Mineral Colonialism 2.0” and build genuine Sovereignty of Value. It concludes with a strategic invitation to the Mining Energy Transition Forum in PERUMIN 37, a landmark event where the future of critical minerals in Latin America and Peru will be debated, designed, and defined.

Keywords: Critical and Strategic Minerals, Geopolitical, Latin America and Peru.

Introduction: Beyond the Tip of the Iceberg

The world has rapidly entered a new geopolitical era defined by materials competition. To navigate it, it is essential to distinguish two concepts that are often confused: critical minerals and strategic minerals. Critical minerals are those with high economic impact and high risk of supply disruption affecting the economy. Strategic minerals are essential for fundamental sectors of the State (defense, energy, industry) whose availability conditions national autonomy. We can have critical minerals that are or are not strategic, and strategic minerals that are or are not critical. And over time, a mineral can go from critical to non-critical, as can a strategic mineral. Figure 1 shows the critical and strategic minerals for the USA. 

Under these definitions, the world is living today in the Age of Strategic Minerals. The current debate, however, is focused almost exclusively on the energy transition, and politics perceives it as a much smaller problem than the real one. This perception is a mirage, a myopia of civilizational proportions. Critical minerals have become the "black swan" of decarbonization, an unforeseen factor that now conditions the feasibility and pace of change. The energy transition, however massive its demand, is only the visible part of a much deeper and more complex iceberg that we will uncover below.

This article proposes to unveil the submerged forces that constitute the true mass of future mineral demand and that are redefining the global geopolitical map. These other forces are the digital transition, the national security transition and, most fundamental of all, the sociodemographic transition to 2050 (Figure 2). We argue that the narrative of a "green" or "digital" economy as synonymous with dematerialization is a fallacy. On the contrary, we are witnessing a profound rematerialization of the global economy. The material basis of our civilization is mutating, shifting from an axis of hydrocarbons to a new axis of metals and non-metallic minerals. An electric vehicle requires six times more mineral inputs than a conventional one, and an onshore wind plant requires nine times more mineral resources than a gas-fired power plant. The physical infrastructure of the digital age, from data centers to 5G networks, has a massive and intensely growing material footprint.

In this new material order, Latin America, and Peru in particular, are not peripheral players, but the geological and strategic epicenter. The region's resource endowment, already recognized by institutions such as the Geological, Mining and Metallurgical Institute (Ingemmet), is no longer a mere comparative advantage but a position of strategic centrality for the 21^st century. This is the ideal moment for the leading institutions of the Peruvian mining sector, taking advantage of the PERUMIN platform, to position themselves at the forefront of the global debate, offering a vision that transcends the conventional and articulates a strategy for the future.

The Four Transitions: Mapping the Hidden Demand

To understand the true scale of the challenge and opportunity, it is imperative to dive into each layer of the iceberg. Quantifying its impact. Uncovering interconnections and multipliers. Internalizing the size of an aggregate demand unprecedented in human history.

The Visible Tip: The Energy Transition

A low-carbon society is a high-metal society. The energy transition is an extractive transition: from coal to copper, oil to lithium, gas to rare earths and platinum to hydrogen. These quotes from REMIO in National Geographic (March 2022) are the key to the issue. The energy transition is the catalyst that has put critical minerals on the global geopolitical agenda.

Their demand, although only the starting point, is of formidable scale. The International Energy Agency (IEA) projections for 2040, under an already stated policies scenario (STEPS), anticipate an increase in total demand for copper by 30%, nickel by 70%, cobalt by 50% and lithium by 470% compared to 2024 levels. Similarly, a World Bank analysis projects that by 2050, graphite, lithium and cobalt production will need to increase by almost 500% over 2018 levels because of demand for batteries. But is it true? The truth is that it is worse.

The IEA and World Bank calculations refer to the energy transition in terms of "production capacity transition" but not "sensu stricto" energy transition. In Figure 3 we correct this confusion. The equivalence from kg/MWp to kg/MWn is made by the plant factor. If we transition from coal-fired thermal plants, a solar PV plant and a wind plant need 4 times and 2.85 times more metals respectively. So when IEA says that we need 16 Tn of metals for offshore wind, what it should really say is 42.75 Tn per megawatt equivalent. Onshore wind 28.5 tons and solar PV 28 tons.

This mineral intensity is transversal to all clean technologies. The electrification of transportation and the expansion of power grids to support this new demand act as direct multipliers of copper or aluminum consumption, but also of zinc (the hidden metal of the transition). Aware of this potential, Peru, through Ingemmet, has taken a crucial step by publishing in April 2025 the "Catalogue of Critical and Strategic Minerals of Peru", officially identifying the country's potential in 17 key elements for this transition, from copper and zinc to lithium, graphite and indium (Figure 8). This is the superficial claim that everyone sees, but it is only the beginning of the story. Let's dive for the real size of the iceberg.

The "Immaterial" Depth: The Digital Transition 

The notion of an "immaterial" digital economy is one of the great myths of our time. Every internet search, every cryptocurrency transaction, and every query to an artificial intelligence (AI) has a tangible mineral footprint. The physical infrastructure that supports the digital world is a voracious consumer of critical minerals. One demand adds to and competes with that of Energy Transition.

Data centers, the backbone of the cloud and AI, are industrial complexes that rely on a wide range of materials: gallium and germanium for high-performance semiconductors, silicon for chips, tantalum for capacitors, copper for connectivity, rare earth elements for advanced electronic components, and even helium for cooling. The scale is staggering: manufacturing a single 1.5 kg laptop mobilizes approximately 600 kg of raw materials, while a 200-gram internet router requires about 500 kg.

Added to this is the global deployment of 5G networks, which demand a much denser infrastructure of antennas and equipment than previous generations. This technology is particularly intensive in silver, the best conductor for semiconductors and cabling. Demand for silver for 5G applications is estimated to increase 206% by 2030 compared to current levels.

The nexus between digital and energy transitions creates a powerful feedback loop. Data centers are huge consumers of electricity and require green electricity. In the United States alone, they already account for 4% of national electricity consumption, a figure that is projected to exceed 9% by 2030. The pressure to power this growing digital infrastructure with renewable energy multiplies the demand for the same minerals needed for solar panels, wind turbines and batteries, creating a mineral demand spiral. Figure 4 sets out the criticality levels of minerals linked to this feedback loop between the digital and energy transitions over the next 10 years.

Geopolitical Currents: The National Security Transition

In the last decade, critical minerals have migrated from the realm of trade policy to the center of national security strategy. Supply chains have ceased to be mere logistical routes to become a geopolitical battleground, where control of access to minerals is a form of power, the critical has become strategic.

The "militarization" of these supply chains is already a reality. China has demonstrated its willingness to use its dominance in mineral processing as a tool for pressure. Since 2023, China has its mid-stream dominance (refining, chemicals, anodes/cathodes) as an instrument of power. Export restrictions on gallium and germanium in July 2023, on graphite in October 2023, and on rare earth processing technologies in December 2023 and in 2025, have not been isolated acts, but strategic signals directed at its geopolitical competitors.

The response from the West has been forceful. The North Atlantic Treaty Organization (NATO) approved in June 2024 its "Defense-Critical Supply Chain Security Roadmap" (Figure 5), which formalizes the need to secure access to strategic materials as a pillar of collective defense and deterrence capability. This new security doctrine drives the industrial policies of major economies. The U.S. Inflation Reduction Act (IRA) and the European Union's Critical Raw Materials Act (CRMA) are, in essence, national security strategies. Their explicit objective is to diversify supply chains away from China, encouraging production and processing in "friendly" or allied countries (friend-shoring) and within their own borders (reshoring). This geopolitical realignment creates additional and politically motivated demand for minerals from sources considered secure, opening an unprecedented window of opportunity for producers such as Peru.

The Base of the Iceberg: The Socio-Demographic Transition

The largest, most fundamental and inescapable driver of mineral demand is the growth and transformation of human society. Projections for 2050 indicate a population of 9.7 billion. Sixty-eight percent, 6.3 billion, will live in cities (Figure 6).

As explained by Blas and Farchy, and quantified by Resource Capital Funds, there is an income range –US$ 4,000 to 20,000 per capita- where material consumption intensifies: societies build basic infrastructure, and families buy durable goods (housing, automobiles, household appliances). In 1981, the global middle class was 1.051 billion; in 2021 it reached 5.759 billion; in 2050 it would exceed 7.954 billion. This is the volumetric heart of the increasingly critical demand for minerals (Figure 6).

The new 20-60 age cohort - the one with the highest material intensity - will grow from 3.189 billion (2021) to 3.583 billion (2041) in middle-income countries. This age widening ensures sustained demand for base metals and building materials, regardless of the cyclical swings of the global macroeconomy.

Massive urbanization requires a colossal amount of steel for structures, cement for construction, quartz for glass, copper for electrical and communication networks, and aluminum for transportation and construction. The numerical magnitude in the period 2025 - 2050 will be 2.043 trillion tons. Some 1.55 trillion in non-metallic minerals (industrial and construction), 418 billion tons in energy minerals (fossil fuels) and 76 billion tons in metals (Figures 2 and 6). Socio-demographic growth will not be in Latin America but will pivot towards Sub-Saharan Africa, India and Southeast Asia. In 2100 none of the 20 most populated cities in the world will be located in China, but 13 will be African with a low previous capital stock. Building "from scratch" implies a much higher material intensity per capita. 

The speed of energy, digital and national security transitions may vary depending on policies and innovation. However, the demographic transition is a force with immense inertia that creates "non-negotiable" demand forming a base on which the more volatile demand for cutting-edge technologies is stacked. All of this implies that, even if the deployment of electric vehicles is lower, the fundamental demand for copper and aluminum to build new cities and expand electric grids will follow a robust upward trajectory, providing long-term stability for producers of these metals.

Latin America and Peru: Epicenter of the Mineral Age

The confluence of a unique geological endowment and the new geopolitical landscape places Latin America, with Peru as a key pillar, at the nerve center of the Strategic Minerals Era. The region is not simply a supplier; it is the strategic territory where the future of global supply will be defined.

The geological advantage of the region is undeniable (Table 1). In copper, Chile and Peru control more than 30% of the world's reserves. And recent discoveries in Argentina should be added. In 2023, Chile was the world's leading producer, while Peru consolidated its position as the second largest producer, although in 2024 it was the Democratic Republic of Congo. In lithium, the "Lithium Triangle", formed by Argentina, Bolivia and Chile, holds more than 53% of the planet's identified resources. In 2022, Chile and Argentina alone accounted for almost 30% of the world's production.

Added to this wealth is a relative demographic advantage, a crucial concept for understanding the region's strategic position. By 2035 onwards, Latin America and Australia will have the highest per capita production of critical minerals in the world. Asia and Africa will experience explosive population growth consuming much of their own mineral production while Latin America's population growth will be more moderate. Consequently, a greater proportion of Latin American production will be available for export. This availability makes the region an indispensable partner for industrialized economies (Figures 7 and Table 2).

This potential is turning the region into a geopolitical battleground. China has established itself as South America's main trading partner, making strategic investments to control key nodes of the value chain, such as its participation in Chile's SQM or its agreements for lithium extraction in Bolivia. In response, the United States is using its Inflation Reduction Act (IRA) to encourage supply from countries with which it has Free Trade Agreements, such as Peru and Chile, under the doctrine of friend-shoring. A Memorandum of Understanding (MOU) signed in 2024 between the U.S. and Peru specifically seeks to encourage investment and technological innovation in the Peruvian mining sector.

The European Union, through its Critical Raw Materials Act (CRMA), is also actively seeking to diversify its imports away from China by establishing strategic partnerships and modernizing trade agreements, such as the one it has with Chile, to secure access to lithium and other essential minerals.

Strategic Crossroads: Mineral Colonialism 2.0 or Value Sovereignty?

Latin America and Peru are at a historical crossroads (Figure 7). One path, that of inaction or passive strategy, leads to a modern form of economic dependence: "Mineral Colonialism 2.0." In this model, the region is limited to exporting raw materials with low value added, while most of the wealth is generated in the processing and manufacturing stages, controlled by other nations. The data are eloquent: Latin America produces 38.7% of the world's mine copper, but only 10.8% of refined copper. The concentrate is massively shipped to China, which refines 45% of the world's copper, and then returns to the region and the world as high-value products, capturing most of the economic margin (Figure 7).

The other path is not isolationist protectionism, which has proven to be unfeasible - attempts to form an OPEC-style "copper cartel" have historically failed due to the diversity of producers and the elasticity of supply. The alternative is a bold Value Sovereignty strategy. This concept transcends the traditional idea of subsoil resource sovereignty. In the 21st century, the real power lies not in the ownership of the mineral, but in the control of the high-value nodes in the supply chain. Value Sovereignty implies a proactive policy to move up that chain with three lines of action:

1. Fostering Added Value: Investing decisively in the construction of modern smelters and refineries. The region has a latent competitive advantage in this area: the carbon footprint of processing in Latin America, using its increasingly cleaner energy matrix, is lower than in Asia. Moreover, the transport of refined cathodes is less emissions-intensive than that of ore concentrates, a factor that is increasingly relevant in a global market that demands traceability and sustainability.

2. Boosting Innovation: Promoting and adopting cutting-edge technologies. Direct Lithium Extraction (DLE), for example, promises to drastically reduce water consumption and environmental impact in salt flats. Secondary mining, which consists of the recovery of valuable minerals from tailings and old mine waste, represents not only a new source of supply, but also a Circular Economy that contributes to environmental remediation.

3. Governance and Sustainability as a Competitive Advantage: Align mineral development strategy with the highest standards of governance, such as those articulated in the IIMP Decalogue. Integrity, transparency, social and environmental responsibility, and respect for human rights are not mere compliance costs. They are prerequisites for attracting high-quality investment from the West, operating under demanding regulatory frameworks such as CRMA, and are fundamental to maintaining the social license to operate in a stable and predictable manner.

By developing refining and manufacturing capabilities, a country like Peru not only captures more economic value but increases its strategic relevance. It moves from being an easily substitutable "resource field" to a "strategic partner" with indispensable assets for the U.S. and European supply chains, thus gaining bargaining power and resilience.

Conclusion and Call to Action: An Agenda for Peru's Mineral Future

The "Mineral Iceberg" analysis reveals an inescapable reality: the magnitude of opportunity and risk faced by Latin America and Peru is far greater than commonly perceived. The confluence of four global transitions - energy, digital, security and socio-demographic - is generating a structural demand for minerals that positions the region at the center of the 21st century geopolitical chessboard. The window of opportunity to act is now, while the global reconfiguration of supply chains is in full swing and world powers are actively seeking reliable and sustainable partners. Inaction will relegate us to a subordinate role; strategic action can ensure an era of prosperity and leadership.

To capitalize on this historic opportunity, bold vision and coordinated action between the private sector, government and academia is required. We propose a three-pillar agenda for Peru:

1. For Trade Institutions and Academia: Create a "Strategic Minerals Observatory for Peru”. A Peruvian mining institution of reference, such as the Peruvian Institute of Mining Engineers (IIMP) and the National Society of Mining, Petroleum and Energy (SNMPE), are urged to lead the formation of a world-class think tank, based in Peru, dedicated to Mineral Intelligence analyzing the markets and geopolitics of critical and strategic minerals from the integral vision that the Mineral Iceberg gives us. Both institutions have the mission to be authoritative references and promote the competitive and sustainable development of the sector. Monitoring demand trends, the policies of the major powers and technological innovations. Providing real-time strategic intelligence to governments and industry in the region. All this would enable informed and coordinated decision making, moving from a reactive to a proactive stance on the global stage.

2. For the Peruvian Government and its Technical Entities: Design and Implement a "National Policy on Strategic Minerals and Value Chains". It is imperative that Peru develop a national strategy that goes beyond the promotion of extraction. This policy should build on the fundamental prospecting and cataloguing work already carried out by the Geological, Mining and Metallurgical Institute (Ingemmet, Figure 8). It should establish clear fiscal, regulatory and financial incentives to attract investment in the value-added stages: smelters, refineries and manufacturing of basic components. It should actively align with those of key partners such as the United States (through the MOU) and the European Union (under the CRMA) to attract not only capital, but also technology transfer and access to high value markets.

3. For the Mining Industry: Evolve from the "Extraction and Export" Model to the "Shared Value and Territorial Development" Model. Shift from a mining mindset to a mineral geopolitical mindset. In line with the principles of sustainable development promoted by the industry through its associations, the sector has the opportunity and responsibility to become an engine of broader development. Proactive investment in dual-use infrastructure (energy, water, wastes, logistics) that benefits both operations and communities must be made. Creation of high-level human capital training programs. Forging strategic alliances with local research centers and universities for the development of a robust and technologically advanced ancillary industry. This approach not only ensures the social license to operate but also anchors the industry's competitiveness in an ecosystem of innovation and shared prosperity, guaranteeing its long-term viability.

PERUMIN 37, and the Future of Strategic Minerals

The future is not written. Peru and Latin America can be mere suppliers of raw materials in a new global order, or they can become architects of their own destiny, taking advantage of their geological wealth to build a Mineral Sovereignty of lasting value. The choice is ours and the time to act is now.

And that is why we invite you to be part of the future on September 25, 2025, in Arequipa PERUMIN 37 at the Mining Energy Transition Forum. Conferences and panels of international experts will share their knowledge so that we can all be authors of the future of the Strategic Minerals Era in Latin America and Peru. 

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