China refines about 90% of the world's rare earths and has poured over $20 billion into Peru's mines alone, leaving Latin America exposed even as it holds vast mineral reserves of its own.
At a glance
- China controls an estimated 90% of global rare-earth refining and separation capacity, a concentration security analyst Eduardo Castellet Nogués says gives Beijing leverage over supply to defense and energy industries.
- Latin America holds around half the world's lithium reserves and more than a third of its copper reserves, with a critical-minerals market OLADE values near $180 billion -- yet 62% of its mineral exports still leave as unprocessed ore, per the OECD.
- Chinese firms have invested more than $20 billion in Peru's mining sector, including the $5.85 billion 2014 acquisition of the Las Bambas copper mine, which now supplies about 2% of the world's copper.
- Zijin Mining Group is spending $1.5 billion to expand Peru's La Arena copper-gold mine, aiming for roughly 100,000 tonnes of copper output a year over a mine life extended by close to two decades.
What happened
China now accounts for roughly 90% of the world's rare-earth refining and separation capacity, according to Eduardo Castellet Nogués of the UAE-based TRENDS Research & Advisory, a concentration he says gives Beijing the power to decide who gets access to the materials that keep satellites, fighter jets, radar systems and power turbines running. Latin America sits on the other side of that imbalance: the region holds around half the world's lithium reserves and more than a third of its copper reserves, and its critical-minerals market is worth close to $180 billion, roughly a quarter of the global total, according to the Latin American Energy Organization (OLADE). Yet 62% of the region's mineral exports still leave as unprocessed raw ore, per the Organisation for Economic Co-operation and Development (OECD), and Chinese capital keeps arriving to lock in access to what's left in the ground. Chinese firms have invested more than $20 billion in Peru's mining sector alone, including the 2014 acquisition of Las Bambas, one of the world's largest copper mines, by a consortium led by MMG Limited -- the international mining arm of state-owned China Minmetals Corporation -- alongside Guoxin International Investment and CITIC Metal. In 2026, Zijin Mining Group confirmed a further $1.5 billion expansion of its La Arena copper-gold mine in northern Peru, a project it acquired at the end of 2024 and expects to keep producing for close to two decades.
The details
The bottleneck in the world's critical-minerals supply chain isn't where the ore sits in the ground -- it's where that ore gets turned into something usable. China's roughly 90% share of global rare-earth refining and separation capacity, cited by Eduardo Castellet Nogués, a security analyst at the UAE's TRENDS Research & Advisory, means Beijing doesn't need to own a mine to control what comes out of it. A producer can hold the deposit and still end up sending the raw material to China for processing, because almost no other country has built refining capacity at comparable scale. Nogués frames the resulting exposure in blunt terms: even a temporary shortage of these materials, he says, could bring entire industrial sectors to a standstill, including ones tied to national security such as satellite production, fighter aircraft, radar systems and power turbines.
Latin America's position in that chain is contradictory on paper. The region holds around half the world's lithium reserves and more than a third of its copper reserves, alongside meaningful deposits of nickel, graphite, cobalt and rare-earth elements -- Brazil alone holds the world's second-largest rare-earth reserves after China itself. OLADE puts the region's critical-minerals market at close to $180 billion, about a quarter of the global total. But resource wealth hasn't translated into processing capacity: the OECD estimates 62% of the region's mineral exports still leave as unprocessed raw material, which means most of the value created by turning ore into battery-grade lithium or refined rare-earth oxides is captured somewhere else -- overwhelmingly, in China.
Chinese capital has moved to close that gap on its own terms rather than wait for Latin American producers to build refining capacity of their own. Chinese firms have put more than $20 billion into Peru's mining sector, a figure that includes the 2014 purchase of Las Bambas, one of the world's largest copper mines, for $5.85 billion by a consortium led by MMG Limited -- the international arm of state-owned China Minmetals Corporation -- alongside Guoxin International Investment and CITIC Metal. Las Bambas now accounts for roughly 2% of global copper supply on its own. More recently, Zijin Mining Group, which acquired Peru's La Arena copper-gold mine at the end of 2024, confirmed a $1.5 billion investment in 2026 to extend the mine's life by close to two decades, with output expected to reach around 100,000 tonnes of copper and 3.8 tonnes of gold a year once construction wraps. Nogués argues this pattern isn't incidental: companies backed by the Chinese Communist Party, he says, can acquire or outbid virtually any potential rival, making it difficult for competing refiners to gain a foothold even where the ore itself sits outside China's borders.
Governments in the region have started responding, each pulling a different lever. Argentina's Incentive Regime for Large Investments (RIGI), passed into law in 2024, offers 30 years of fiscal, regulatory and foreign-exchange stability plus a reduced 25% corporate tax rate to projects investing at least $200 million -- a package that has helped draw roughly $46 billion of a proposed $69.2 billion investment pipeline into copper and lithium projects specifically. Chile published its National Critical Minerals Strategy on January 27, 2026, covering 14 minerals and explicitly pushing public-private partnerships across the full lithium cycle, from extraction through battery-cell assembly and recycling, as the country's own lithium output is projected to reach 67,300 tonnes this year. Brazil went furthest on paper, unveiling its National Mining Plan 2050 in July 2026, which targets raising the country's share of global critical-mineral production from 8.3% to 12.2% by 2050, cutting average permit-review times from 1,563 days to 780, and building out rare-earth separation, metal-making and permanent-magnet manufacturing rather than continuing to ship ore abroad.
None of those plans changes the refining math today. Nogués's own prescription is a geographically distributed system -- separate stages of extraction, refining and manufacturing spread across the European Union, the United States, Brazil and other countries as one integrated commercial network -- as the way to counter what he calls Beijing's predatory pricing practices. That kind of network would need years of coordinated investment across multiple jurisdictions to reach anything like China's current scale. In the meantime, the mines being auctioned, acquired and expanded across Peru, Argentina, Chile and Brazil are exactly the assets whose downstream processing the region is still trying to keep from flowing straight back to China.
Why it matters
For a market that already tracks how China's rare-earth export licensing moves prices globally, the same dynamic is now visible one layer upstream, in who owns and finances the mines themselves. Latin America's mineral wealth means little to global supply diversification if the processing step stays concentrated in China regardless of who holds the mining rights -- which is the specific risk Argentina, Chile and Brazil's new policies are each trying, in their own way, to address before more of the region's raw ore locks into that same pipeline.
Our read
Outlook: neutral. This is a structural analysis of investment and refining concentration, not a near-term supply or demand shock. Argentina's RIGI, Chile's strategy and Brazil's Mining Plan 2050 all run on multi-year horizons, while China's roughly 90% refining share stays unchanged today, keeping the direct near-term price impact neutral even as it sharpens the case for diversification investment.
What to watch
- Whether Zijin Mining Group's $1.5 billion La Arena expansion reaches its targeted roughly 100,000-tonne annual copper output on schedule
- Argentina's RIGI investment pipeline -- how much of the proposed $69.2 billion actually converts into completed copper and lithium projects
- Progress on Brazil's National Mining Plan 2050 permit-time target, cutting average reviews from 1,563 to 780 days, as an early test of follow-through
- Chile's 2026 lithium output against its 67,300-tonne target from the Salar de Atacama expansion
For information only, not investment advice.
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Detailed analysis
Timeline
- 2014: A consortium led by MMG Limited acquired Peru's Las Bambas copper mine for $5.85 billion, then the largest overseas mining acquisition by a Chinese entity.
- 2016: Las Bambas began commercial production, eventually reaching about 2% of global copper supply.
- 2024: Zijin Mining Group acquired the La Arena copper-gold mine in northern Peru.
- 2026-01-27: Chile published its National Critical Minerals Strategy, covering 14 minerals including lithium and copper.
- 2026-04-29: Zijin Mining Group confirmed a $1.5 billion investment to expand La Arena and extend its mine life by close to two decades.
- 2026-07-02: Brazil's government unveiled its National Mining Plan 2050, targeting a rise in global critical-mineral production share from 8.3% to 12.2%.
- 2026-09-14: Diálogo Américas published its analysis of China's critical-minerals network and the security risks it poses for the Americas.
Demand Drivers
Nogués ties rare-earth demand directly to national-security-linked manufacturing -- satellites, fighter aircraft, radar systems and power turbines -- alongside the batteries and electric vehicles driving Latin America's own lithium and copper investment boom.
Supply Drivers
Chinese firms have invested more than $20 billion in Peru's mining sector, including Las Bambas and Zijin Mining Group's $1.5 billion La Arena expansion, deepening China's control over Latin American extraction even as the region tries to build independent processing capacity.
Government Policies
Argentina's RIGI (2024), Chile's National Critical Minerals Strategy (January 2026) and Brazil's National Mining Plan 2050 (July 2026) are each aimed at capturing more downstream processing value from critical minerals rather than continuing to export raw ore.
Currency Impact
Argentina's RIGI grants qualifying projects 30 years of foreign-exchange stability and repatriation rights, a currency-specific incentive aimed at large mining investors wary of peso volatility.
Geopolitical Risks
Nogués points to China's past use of rare-earth dominance as a geopolitical tool, restricting access during its dispute with Japan over the Senkaku Islands, as precedent for why concentrated refining control carries security risk beyond ordinary commercial leverage.
Mining Production
Las Bambas already supplies about 2% of global copper output; Zijin's expanded La Arena mine is expected to add roughly 100,000 tonnes of copper and 3.8 tonnes of gold annually, while Chile's 2026 lithium output is projected at 67,300 tonnes.
Refinery Output
China's roughly 90% share of global rare-earth refining and separation capacity sits against a Latin American region where, per the OECD, 62% of mineral exports still leave as unprocessed raw material -- the specific imbalance Brazil's, Chile's and Argentina's new plans target.
What could lift prices
- Chinese capital continues flowing into Latin American mining at scale -- more than $20 billion in Peru alone, plus Zijin Mining Group's $1.5 billion La Arena expansion -- signaling durable confidence in the region's copper and gold output.
- Argentina's RIGI has already drawn roughly $46 billion of a proposed $69.2 billion pipeline into copper and lithium projects, an unusually large committed-capital signal for the region.
- Brazil, Chile and Argentina are each building policy frameworks aimed at capturing more downstream processing value, which could raise the share of regional mineral exports sold as refined product rather than raw ore over time.
What could weigh on prices
- China's roughly 90% share of global rare-earth refining and separation capacity gives it outsized pricing power regardless of where the ore is mined, limiting how much value Latin American producers can capture even as investment flows in.
- 62% of the region's mineral exports still leave as unprocessed raw material, per the OECD, meaning the refining bottleneck the new national strategies target hasn't closed yet.
- Much of the investment reshaping Peru's mining sector specifically is Chinese-controlled -- Las Bambas and La Arena among the largest examples -- concentrating both extraction and eventual buyer leverage in the same country accused of dominating downstream refining.
Country impact
| Country | Impact | Reason |
|---|---|---|
| Peru | High | Chinese firms have invested more than $20 billion in Peru's mining sector, including two of the region's most prominent Chinese-controlled assets, Las Bambas and the expanding La Arena mine. |
| China | High | China's roughly 90% share of global rare-earth refining capacity, combined with its expanding mine ownership in Peru, gives it leverage over both the extraction and processing stages of Latin America's critical-minerals supply chain. |
| Brazil | Medium | Brazil holds the world's second-largest rare-earth reserves after China and unveiled the region's most ambitious processing-capacity plan, the National Mining Plan 2050, in July 2026. |
| Chile | Medium | Chile published its National Critical Minerals Strategy on January 27, 2026, covering 14 minerals and pushing public-private partnerships across the full lithium value chain. |
| Argentina | Medium | Argentina's RIGI investment regime has drawn a large share of its proposed pipeline into copper and lithium projects in the Lithium Triangle. |
Industry impact
| Industry | Effect | Reason |
|---|---|---|
| Mining | Positive | Chinese and regional capital continues flowing into Latin American extraction projects, from Peru's copper mines to Argentina and Chile's lithium expansions, at a scale few other regions are currently matching. |
| Aerospace & Defence | Negative | Nogués names satellite production, fighter aircraft and radar systems among the sectors most exposed to a rare-earth supply shortage, given China's near-total control of refining capacity. |
| Electric Vehicle Manufacturing | Positive | Growing lithium and copper investment across Argentina, Chile and Peru gives regional and global battery and EV supply chains an alternative extraction base, even though refining still runs largely through China. |
| Power Generation | Negative | High-efficiency turbines and generators often depend on rare-earth permanent magnets, one reason Nogués named power turbines among the sectors exposed to supply concentration in Chinese refining. |
Who gains, who loses
- Chinese state-linked mining companies (Zijin Mining Group, MMG Limited): Both companies hold major, expanding Peruvian assets -- Las Bambas and La Arena -- that give them a growing share of Latin American copper output alongside China's existing refining dominance.
- Latin American governments collecting royalties and investment inflows: Peru, Argentina, Chile and Brazil all benefit fiscally from expanding mining investment in the near term, even before any of it converts into domestic processing capacity.
- Non-Chinese refiners and processors trying to compete in the region: Nogués says companies backed by the Chinese Communist Party can acquire or outbid virtually any potential rival, making it difficult for competing refiners to gain a foothold even on ore mined outside China.
- Defense and energy manufacturers dependent on rare-earth magnets and alloys: Satellite, fighter-aircraft, radar and power-turbine production all depend on materials that flow through a refining base roughly 90% concentrated in China.
Other ways this could play out
- If Brazil's National Mining Plan 2050, Chile's Critical Minerals Strategy and Argentina's RIGI pipeline convert into real refining and battery-cell capacity on the timelines each government has set, Latin America could capture a meaningfully larger share of processing value than the current 62% raw-export figure suggests.
- If Nogués's proposed distributed refining network across the EU, US, Brazil and other countries doesn't attract capital comparable to what Chinese firms are already committing in Peru, the region's processing gap could persist even as extraction investment keeps growing.
Price risks
- China's refining dominance means any tightening of its rare-earth export or investment policy could affect Latin American-sourced copper and lithium pricing power even without new mining disruptions in the region itself.
- A slower-than-planned rollout of Brazil, Chile and Argentina's processing investments would leave more of the region's mineral exports priced as raw ore rather than higher-value refined product for longer.
Historical comparison
- China-Japan Senkaku Islands dispute (past decade): Nogués cites China's earlier restriction of rare-earth access to Japan during their dispute over the Senkaku Islands as precedent for how Beijing's refining dominance can be turned into a geopolitical lever, not just a commercial one.
Technical view
Price is trading above both its 20-period and 50-period moving averages, a bullish alignment.
Computed from metalscost.com's own stored price history.
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