March 13, 2026Critical Minerals & Energy: Powering Economic Development

March 13, 2026

It is a pleasure to join you today. This is an important discussion-critical minerals and energy: powering economic development.

Already, Latin America and the Caribbean are in a position of strength. The region has one of the cleanest electricity mixes in the world, with renewables accounting for about 69 percent of electricity generation.

At the same time, the region remains a major energy producer, with about 9.7 million barrels per day of oil production in 2024 and a sizeable hydrocarbon resource base.

The region is also central to critical minerals. Chile, Peru, and Mexico account for about 37 percent of global copper mine production. The broader lithium triangle-Argentina, Bolivia, and Chile-holds about half of global lithium resources.

These are strategic assets in a more fragmented global economy-and, as I'll explain, they create a real opportunity for Latin America and the Caribbean. The region can harness this opportunity, capture more value at home, and become a more reliable hub in global supply chains. This will translate into faster productivity growth, better jobs, and stronger export earnings.

But to fully reap the benefits, a strong foundation of resilience, investment, and trusted partnerships will be essential.

How can this be done? Let me highlight three points.

First: Recognize That the Global Landscape Has Changed

Over the last two decades, global production and supply chains have become more concentrated. This raises concerns about chokepoints-where greater reliance on less substitutable goods meets higher risks of disruption. For example, across various critical minerals markets, the top three refining countries account, on average, for 86 percent of processing capacity.

The events of this decade, from the pandemic to wars, have shown that supply chains are not just a business logistics issue-they also have macroeconomic consequences. We have been reminded of this again in recent weeks with the conflict in the Middle East. When disruptions hit concentrated and hard-to-substitute sectors-especially energy and strategic inputs-the effects can quickly show up in inflation, output, investment, and confidence.

Geoeconomic fragmentation is also affecting trade and investment patterns in strategic sectors, including energy and critical mineral supply chains.

The opportunity for Latin America and the Caribbean is therefore twofold: to reduce vulnerabilities at home through more resilient supply chains, and to become a trusted and reliable supplier abroad-especially of processed materials, not just raw inputs.

Second: Strengthen Value Chain Resilience Through Diversification, Not Closed Markets

IMF economic modeling suggests that targeted diversification can improve resilience while limiting efficiency losses-especially in sectors that are highly concentrated, upstream, and difficult to replace.

A practical example is Chile's response to the mid-2000s curtailment of pipeline gas imports from its then-dominant supplier. Chile diversified this critical input by developing LNG import capacity-Quintero (operating since 2009) and Mejillones (since 2010)-giving it access to the global LNG market and strengthening energy reliability.

Closed markets, by contrast, increase concentration risk.

Integrated and competitive supply chains that are less vulnerable to shocks also build the region's credibility as a reliable supplier.

For Latin America and the Caribbean, deeper regional integration can be a powerful and practical tool for resilience. Lower trade costs and cross-border frictions can translate into a greater variety of suppliers for businesses, higher trade and investment, and better resource allocation.

Closing gaps in transport and customs infrastructure, reducing non-tariff barriers, and strengthening trade policy coordination within the region can also support regional value chains-for example, copper concentrate mined in one country, smelted and refined in another, and then turned into wire, tubing, or grid components in a third.

Resilience also depends on integration with the rest of the world. With deep and comprehensive trade agreements, firms can operate with greater predictability, as well as more sourcing and production options.

That is why the recent EU-Mercosur agreement is such a welcome development. It would bring together a market of 720 million people, covering nearly 21 percent of the world economy. Over time, it could help Mercosur exports to the European Union grow by almost 17 percent-according to economic modeling by the European Commission-while also encouraging more diversified and higher value-added exports.

Third: Create an Enabling Policy Environment for Investment

Why? Because resilience requires investment, and investment requires good policies. Businesses can manage commercial and technology risks, but policy uncertainty can be a significant source of risk. Long-term investment requires confidence: low and stable inflation, sustainable public finances, predictable tax systems, transparent regulations, and strong, credible institutions.

This is where the efforts of governments and the private sector are complements, not substitutes.

Governments create an environment for entrepreneurship, competition, and investment. The private sector brings capital, technology, execution capacity, and market discipline.

To maximize long-term private investment across linked value chains-from energy supply and mining, to processing and refining, to grids and infrastructure, and on to manufacturing-macroeconomic stability, predictable policy frameworks, and regulatory clarity are essential.

Conclusion

Latin America and the Caribbean have a unique opportunity to build more resilient supply chains and to become a trusted and reliable supplier to the rest of the world-of both processed and raw inputs. More resilient supply chains would mean fewer costly disruptions and more stable growth.

Through sound policy and investment decisions, countries can move up the value chain, ensuring better jobs, higher standards of living, and long-term prosperity.

Thank you.

IMF Communications Department

MEDIA RELATIONS

PRESS OFFICER: Wafa Amr

Phone: +1 202 623-7100Email: [email protected]

@IMFSpokesperson