Latin America’s role in the global energy transition is being defined less by the renewables it deploys at home than by the minerals it extracts for use elsewhere. A region long shaped by the export of commodities is once again finding its fortunes tied to what lies beneath its soil, but the minerals in demand have changed, and so have the geopolitical and environmental stakes that surround them. The question facing governments across the region is whether a new mining boom can deliver development this time, or whether it will replay older patterns of dependency.

The minerals that matter for the transition are concentrated in a band that runs through the region. Lithium reserves stretch across a high-altitude triangle shared by three Andean countries, holding a share of the world’s known supply large enough to make the area indispensable for batteries. Copper, essential to electrification of every kind, is dominated by producers along the western coast of South America. Other inputs, from rare earths to certain industrial metals, are likewise found in commercially significant quantities. The combination places the region at the geological center of a global build-out.

The economics are powerful. Demand projections for the minerals of the transition imply growth on a scale that few extractive industries have ever seen, and prices, while volatile, have for sustained periods commanded levels that transform government revenues and corporate balance sheets. Foreign investment, much of it from companies headquartered in the major industrial economies, has flowed in pursuit of long-term supply. Some governments have moved to capture a larger share of the rents, requiring local processing, taking equity stakes in projects, or asserting strategic control over reserves.

The development logic is not as simple as the revenues might suggest. The history of resource booms in the region is a cautionary one, marked by episodes in which the gains flowed mostly outward, the booms turned to busts, and the economies left behind found themselves more dependent and less diversified than before. Avoiding that pattern requires building processing and manufacturing capacity downstream of extraction, capturing the value that comes from refining and assembly rather than from raw ore. Some governments are explicitly pursuing this strategy, with mixed early results.

The environmental costs are substantial and concentrated. Lithium extraction in the high deserts depends on enormous quantities of water in regions where water is scarce, drawing protest from indigenous communities whose livelihoods depend on the same hydrology. Copper mining produces vast volumes of tailings and consumes significant energy. The contradictions of an extractive industry whose product is meant to enable a cleaner global economy are sharp, and they fall most heavily on the communities nearest the mines. Disputes over consultation, consent, and the distribution of benefits have grown more frequent and more consequential.

The geopolitics layer additional complexity on top of the economics. The minerals the region holds are sought by multiple competing powers, and the terms on which projects are financed and developed have become a subject of contention among them. Investment from one major economy is treated by another as a strategic concern, and the region’s governments find themselves courted from different directions. Some have sought to use the competition to negotiate better terms; others have allowed their alignments to harden. The room for genuinely independent policy is real but contested.

Domestic politics also matter. Public attitudes toward mining vary widely across countries and within them, with mining communities, environmental movements, indigenous organizations, and national publics often holding incompatible views. Governments that move too aggressively to expand extraction face mobilization and unrest; governments that move too cautiously forgo revenue and investment. The room for political maneuvering shrinks as the value of the resource rises, increasing the stakes of every decision about a permit, a royalty, or a community agreement.

Whether the current boom translates into durable development will depend less on the volume of ore extracted than on the structures built around it. Sovereign wealth arrangements, investment in education and infrastructure, environmental safeguards that are actually enforced, and processing industries that retain value in the region are among the elements that distinguish lasting gains from temporary windfalls. Several governments are attempting some combination of these measures; the results remain uncertain.

The broader significance of the region’s position is that the energy transition cannot succeed at the scale and pace its proponents envision without sustained access to what Latin America holds. The minerals will be extracted, in one form or another, by someone, under terms that will be set in part by negotiation and in part by power. How those terms come to be defined, and whom they ultimately serve, will be among the more consequential questions of the next decade, and the answers will shape both the climate trajectory and the development prospects of an entire region.