Latin America: The World's Copper Stronghold

When it comes to copper, Latin America could be a strategic partner to the United States, given its large share of reserves as well as its geographical proximity. Over the past two decades, copper exports from Latin America have been on the rise, but most of this supply has been routed to China.

China has strategically secured an increasing volume of raw copper supply from Chile to feed its refineries and meet the significant domestic demand generated by its infrastructure and energy industries.

To achieve this, China has leveraged various diplomatic efforts with Chile, from which it imports almost one-third (31 percent) of its total raw copper. In 2012, Chile was identified as a "strategic partner" to China; in 2016, it advanced to a "comprehensive strategic partner." In 2018, it became one of the first Latin American countries to join China's Belt and Road Initiative.

In parallel, over the last two decades, the same story has played out in other Latin American countries. Even Mexico, the United States' largest trading partner, relies on China to offtake its copper ore. In 2021, 94 percent of Mexico's copper exports were sent to China, up from 82 percent in 2011. Meanwhile, less than 1 percent was exported to the United States​ in 2021​.

China was able to secure a long-lasting supply of raw copper through strategic long-term offtake agreements with international mining companies located in Latin America. Chile, Peru, and Mexico collectively lead as China's largest raw copper suppliers, with exports totaling $28.8 billion in 2022.

This steady flow of Latin American copper fuels China's dominant hold on copper refining-it refines more copper than any other country. Despite holding only 4 percent of global copper reserves, China produces 45 percent of the world's refined copper.