As critical minerals become increasingly central to global industrial strategy, a growing divergence is emerging between how major economies and leading South American mineral-producing nations are approaching the sector, according to a report by two São Paulo, Brazil-based academics.

While G7 countries have embraced economic security as a framework for securing access to strategic minerals and safeguarding supply chains, South America's leading producers – including Brazil, Chile and Argentina – continue to prioritise economic development, industrial upgrading and investment attraction as the primary objectives of mineral governance, note Federal University of São Paulo assistant Professor Natália Figueiredo and FGV São Paulo School of Law associate Professor Michelle Badin.

The researchers argue that economic security has rapidly become a defining concept in G7 discussions surrounding critical minerals, where policy initiatives increasingly focus on resilience, derisking and tighter oversight of strategic technologies and supply chains.

In contrast, South American mineral-producing nations continue to view their resource endowments largely as vehicles for economic growth, industrial development and fiscal revenue generation.

This distinction is particularly significant given the region's growing importance in global critical mineral supply chains.

More specifically, Brazil, Chile and Argentina occupy a central position in the global critical minerals landscape, point out Figueiredo and Badin.

Brazil holds an overwhelming share of global niobium reserves and also possesses significant graphite, rare earth element and nickel resources.

Meanwhile, Chile and Argentina form part of the so-called “lithium triangle”, which contains a substantial proportion of global lithium reserves. Chile is also an extensive producer of copper, further reinforcing the country’s strategic importance in the energy transition.

Figueiredo and Badin note that the economic contribution of mining has become increasingly significant across all three countries, with mining accounting for a major share of exports in Chile, while Brazil’s minerals sector generates a substantial portion of the country’s trade surplus. Argentina's mining exports have also expanded in recent years, increasing the sector's importance within the national economy.

Against this backdrop, the professors describe the emergence of a new criticality paradigm in which minerals have shifted from being largely industrial commodities to becoming strategic assets underpinning energy transition technologies, advanced manufacturing, semiconductors and defence applications.

Development Takes Precedence

A key finding of Figueiredo and Badin’s analysis is that Brazil, Chile and Argentina do not use economic security as a guiding principle for mineral policy in the same way as the US and EU.

In North America and Europe, economic security is frequently used to justify interventionist measures designed to protect strategic industries and reduce dependence on foreign suppliers. By contrast, in South America, mineral policy remains focused on development objectives.

The researchers identify three major areas of divergence. The first relates to constitutional and legal traditions. In Brazil and Argentina, concepts linked to national security have historically been associated with territorial defence and State protection rather than economic policy. Chile’s constitutional framework has historically provided a broader interpretation, but practical implementation remains largely focused on specific areas such as infrastructure protection, border regulation and intelligence activities rather than broad economic intervention.

The second difference lies in mineral governance itself. Although the three countries have adopted different policy tools, none has incorporated economic security into legislation or strategic mineral policy documents in the manner seen in the US or Europe, say Figueiredo and Badin.

Instead, Brazil and Argentina have pursued policies aimed at reducing investment barriers and improving project certainty. Chile combines investment promotion with greater State coordination, using State-owned enterprises and partnership models to encourage research, development and domestic value addition.

Across all three countries, however, Figueiredo and Badin point out that the dominant policy language centres on development, diversification and value creation rather than supply-chain protection.

The third distinction concerns foreign investment regulation. Unlike the US and several European countries, Brazil, Chile and Argentina do not operate broad, security-based foreign investment screening systems. While sector-specific restrictions exist, Figueiredo and Badin say that investment frameworks remain largely geared toward facilitating capital inflows rather than restricting them.

The study suggests that structural economic realities also help explain why South America has not embraced the economic security narrative.

All three countries remain heavily integrated into global commodity markets and continue to rely on foreign investment to support economic growth. As a result, Figueiredo and Badin say policymakers face different priorities from those of advanced industrial economies seeking to protect established technology sectors.