South American Critical Minerals Pact Targets Copper-Lithium Supply Gap

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South American governments are taking steps to turn the region's vast mineral resources into a more coordinated critical minerals hub.

According to a September 4 report by Mining.com, a joint declaration signed by Chile, Argentina, Bolivia, and Peru on August 28 is aimed at encouraging responsible mining investment, technical cooperation, and greater integration of mineral supply chains. Mining authorities from the four countries reached an agreement during the first ministerial meeting on strategic minerals in Santiago, Chile.

The initiative comes as governments and companies worldwide seek additional sources of minerals used in electrification, artificial intelligence, technology, and defense. According to the article, the four countries want to position South America as a reliable strategic supplier while improving cooperation on geology, regulation, suppliers, workforce skills, and financing.

Why the South America Critical Minerals Pact Matters Now

The push comes against a backdrop of concerns about future supplies of several critical minerals. Mining.com cited International Energy Agency projections showing that, based on the current project pipeline, global copper supply could fall 25% short of demand by 2035. New copper mines typically take more than 15 years to reach production.

Lithium development faces its own challenges, including limited greenfield exploration spending and increasing discovery costs.

Latin America's existing mineral endowment gives the region an important position in addressing those potential shortages. Citing a World Economic Forum report produced with McKinsey & Co., the article noted that the region contains significant reserves of copper, lithium, nickel, graphite, manganese, and rare earth elements.

Argentina and Chile together hold about 40% of global lithium reserves, while Chile and Peru account for roughly 30% of global copper reserves. Brazil holds approximately one-quarter of the world's graphite reserves and about 15% of its rare earth reserves, according to the report.

Key Investor Takeaways

• The August 28 joint declaration creates a framework for cooperation on geology, regulation, suppliers, workforce skills, and investment across the four countries.
• Global copper supply could lag demand by 25% by 2035, creating potential opportunities for projects already in the pipeline in South America.
• Companies such as Eloro Resources Ltd. (ELO:TSX; ELRRF:OTCQX; P2QM:FSE), Fitzroy Minerals Inc. (FTZ:TSX.V; FTZFF:OTCQX), Cerro de Pasco Resources Inc. (CDPR:TSXV; CDPMF:OTCQX; N8HP:FSE), and Kobrea Exploration Corp. (KBX:CSE; KBXFF:OTCQB; F3I:FSE) hold assets in the participating nations and have drawn recent analyst attention.
• Regional coordination could facilitate the development of deposits near national borders, although projects remain subject to country-specific permitting and approvals.

Company Advantage in Latin American Countries

Mining.com also noted that Western efforts to diversify mineral supply chains away from China could increase investor interest in Latin American projects.

Chile and Argentina are already working to reduce barriers affecting mineral deposits that cross their shared border. The countries have cleared operating protocols for major cross-border projects, potentially making those projects easier to permit, develop, and finance under two separate national regulatory systems.

Chilean Mining and Economy Minister Daniel Mas said reviving the country's mining integration treaty could unlock more than US$20.7 billion in investment and eventually add 540,000 metric tons of copper production annually.

The article cautioned, however, that communities, unions, and provincial governments could seek to ensure that employment, investment, and mining revenue remain on their respective sides of the border.

Bolivia Project Advances with Updated Resource

Among the companies with exposure to Bolivia is Eloro Resources Ltd. (ELO:TSX; ELRRF:OTCQX; P2QM:FSE), which is advancing its Iska Iska silver-tin polymetallic project in southern Bolivia. 

The company has attracted positive third-party analyst coverage following an updated mineral resource estimate for Iska Iska. On April 23, 2026, Red Cloud Securities analyst Ron Stewart reiterated a Buy rating on Eloro with a CA$5.50 price target.

At the time, Eloro closed at CA$2 per share, putting Stewart's target 175% above that price.

Stewart highlighted what he viewed as a substantial valuation gap between Eloro and comparable companies.

According to his analysis, Eloro was trading at an enterprise value of US$0.18 per ounce of silver equivalent, compared with a peer-group average of US$1.93 per ounce.

While the project's lower average grade had previously contributed to that discount, Stewart said the updated resource estimate defined a higher-grade core that could support a re-rating.

Chile Copper Project Eyes Multiple 2026-2027 Milestones

In Chile, Fitzroy Minerals Inc. (FTZ:TSX.V; FTZFF:OTCQX) is advancing the Buen Retiro copper project, where third-party commentators have highlighted both the project's development path and the company's valuation. 

GGM Advisory Inc.'s Michael Ballanger highlighted Fitzroy in a September 8 report, describing the company as his top pick and No. 1 holding.

Ballanger argued that Fitzroy's market valuation had not reflected the progress made at Buen Retiro and pointed to a series of upcoming milestones that he believed could change how the market values the company.

Those milestones included metallurgical results expected in the third quarter of 2026, a mineral resource estimate and preliminary economic assessment targeted for the fourth quarter, final metallurgical work in the first quarter of 2027, and a prefeasibility study anticipated in the second quarter of 2027.

Peru Tailings Project Draws Attention to Historic Grades

In Peru, Cerro de Pasco Resources Inc. (CDPR:TSXV; CDPMF:OTCQX; N8HP:FSE) is advancing the Quiulacocha tailings project, which seeks to recover metals from material generated by more than a century of mining at Cerro de Pasco. 

Chen Lin of the What Is Chen Buying? What Is Chen Selling? newsletter highlighted Cerro de Pasco in a July 30 report, calling its drilling program the "single most exciting drill catalyst" he was aware of at the time.

Lin focused particularly on drilling of the oldest tailings at the historic mining complex, which he said were being tested for the first time with modern drilling.

Argentina Portfolio Targets Porphyry Copper Systems

Kobrea Exploration Corp. (KBX:CSE; KBXFF:OTCQB; F3I:FSE) is focused on copper exploration in Mendoza Province through its Western Malarge Copper Projects. 

Kobrea holds the right to earn a 100% interest in seven projects covering approximately 733 square kilometers in the Western Malarge Mining District.

The district-scale property contains more than 12 identified porphyry copper and copper-gold prospects and is located within the Neogene Porphyry Belt, which extends across the border between Argentina and Chile.

Among the company's principal targets is El Perdido, where previous exploration identified a copper-gold porphyry system. Kobrea completed its initial diamond drilling program there in 2026, drilling 2,358 meters across six holes and confirming a hydrothermal porphyry system containing copper, gold, molybdenum, and silver mineralization.

The company reported that alteration, veining, and sulphide assemblages increased in intensity at depth and that the interpreted core of the system remained untested.

The broader Western Malarge portfolio also includes the El Destino, Sofi, and Cuprum projects.

Common Questions from Investors

What is the status of the South American critical minerals agreement? The four nations signed a joint declaration on August 28, focused on cooperation; specific investment projects remain subject to individual country approvals and permitting.

How do cross-border deposits benefit from the new framework? Chile and Argentina have already cleared operating protocols that may simplify permitting for deposits straddling their border, though revenue-sharing issues could still arise.

What is a porphyry copper system? It is a large mineral deposit formed by hydrothermal fluids that investors often evaluate for long-term production potential due to its scale and by-product metals such as gold and molybdenum.

Why do tailings projects matter in Peru? Recovering metals from historic waste material can extend mine life without new greenfield disturbance, though grades must be confirmed through drilling before economic viability is clear.

The broader challenge for South America is not simply increasing mineral extraction but developing processing and manufacturing capacity that allows countries to capture more of the value generated by their resources. Brazil's recently approved critical minerals framework, which was awaiting presidential sanction, was cited as one example. The initiative includes approximately US$1 billion in tax incentives, a new guarantee fund, and efforts to expand domestic refining and the production of batteries and magnets.

Those incentives are accompanied by increased government oversight. A new council will have authority to screen certain foreign investments and influence involving companies that hold critical and strategic mineral rights, creating a balance between attracting investment and maintaining greater state control.

Verisk Maplecroft's country-risk analysis identified Argentina, Brazil, Chile, and Peru as attractive critical minerals jurisdictions because of their combination of large mineral deposits, comparatively lower resource-nationalism risks, and improving operating environments.

Still, the report concluded that mineral resources alone will not determine whether the region succeeds. Permitting timelines, fiscal stability, consistent government policy, and the ability to attract long-term capital will ultimately determine whether South America can convert its geological advantages into operating mines, processing facilities, and a larger role in global critical minerals supply chains.

South America already possesses many of the minerals the global economy increasingly needs. The next test will be whether regional cooperation, policy reforms and investment can turn that resource base into sustained production.

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