A report by The Economist reveals that Latin American countries have the necessary elements to be at the forefront worldwide. But can they?
A report of The Economist reveals that Latin American countries have the necessary elements to be at the forefront worldwide in food, mining resources and energy in the next century. However, having the raw materials is not a guarantee of better times.
At the food level, Latin America already produces one third of beef, corn, poultry, and sugar on offer worldwide, and even 60% of soywhose main buyer is the Chinese giant.
However, the region becomes even more important in terms of its mineral resources, for its richness in minerals necessary for the ecological transition. This is where a third of the world copper and up to 60% of lithium, especially of Chile, Argentina and Boliviaa fundamental element in the manufacture of batteries.
However, having high reserves is not a guarantee. In the past, tungsten or saltpeter were the materials in demand and technology advances.
The Economist headlines this past Tuesday, that “Latin America may be the next super power of commodities.” But he questions: “Will he be able to?”
“Latin America is no stranger to supplying the world with raw materials, but it could be on the verge of a boom,” the magazine highlights. But it clarifies the failures of the past and its squalid GDP despite its riches.
“Argentina owes its name to the Latin of the silver shipped from its ports after it was extracted by the conquistadors in Bolivia and Peru; the Brazilian descends from the Brazilwood, exploited by Europeans in the 16th century,” he recalls.
And he adds: “The vast wealth of countries subsequently helped unleash coups, populist takeovers, crime and corruption. Meanwhile, the region’s economies remain unbalanced, its GDP per person worth a quarter of that of the United States, and inequality is high. Can Latin America manage to reap the fruits of this new boom?
“The moment is now”
“The mining potential of Latin America is a reality. Although it is true that it can become a power, the question is that it can develop its resources responsibly and also taking into account the advancement of technology”, explains Javier Rojas, director of the consulting firm Argentina Mining, to RFI.
“For example, if we talk about lithium today, the time for lithium is now because one does not know for how much longer that mineral will be possible to use in batteries. maybe tomorrow a new technology appears which makes this mineral obsolete. So it is like when there is a brake on the exploratory activity of the projects, that hurts development, but the potential is specific to Latin America ”, he maintains.
The “but” that can be put to Latin America in this field is also your little investment. Only 0.6% of its GDP goes to research and development. As a result, the production of goods such as batteries with these minerals it is done in better equipped foreign countries. There is a certain analogy with the extraction of minerals itself, where the capital is foreign.
“Many of the investments made in mining in general are high risk. To give an example of 100 projects that are explored, one becomes a mineso essentially in Argentina, exploration is carried out by companies, whether from Canada, Australia, to a lesser extent from China and the United States”, he highlights.
The third element is energy. Both in green energy, with the example of Brazil, where 45% of energy consumption comes from renewables, and fossils: Argentina, Brazil, Guyana and Mexico could produce 11 million barrels of oil per day in 2030, as much as they produced last year Saudi Arabia, one of the world giants.