The mining landscape in the United States is complicated by a strict regulatory regime, public resistance to new operations, and the rights of Indigenous people. Many potential mining projects, such as the NewRange copper-nickel mine in Minnesota, have faced years of litigation, either postponing project startups or derailing them entirely. Despite Secretary Granholm’s urgent tone, U.S. mine production of copper fell to 1,100 tons in 2023 from 1,230 tons in 2022. The Biden administration has sought to maintain positive relations with Chile and Peru but is also playing catch-up. Indeed, President Biden’s only mention of Latin America during his State of the Union address was related to migration.

China is changing the landscape; copper mining has always been a highly competitive industry, and the geopolitical imperatives surrounding its production are thickening. China will continue to extract copper from Chile and Peru, increase domestic production, and maintain a relentless push to drive competitors out of the global refined copper business. All of this will impact the cost of copper and have geopolitical implications. 

Chile and Peru will have to consider their prospects more carefully, especially if the U.S.-China rivalry intensifies, which is likely. Belatedly, the United States and other advanced economies are pushing back; to use a corny phrase, they are chasing the dragon. In this, securing supply chains assumes even greater importance. It will likely become an issue in the U.S. presidential election, with big questions over securing extended supply chains versus encouraging domestic production. Some argue it is a debate between going woke (i.e., green) or broke (not having access to foreign supply and limiting production at home). While this is a gross simplification of the issue, the tensions over access to copper supply will only increase for both producer and user counties, with China again playing the role of a catalyst.

 Dr. Scott B. MacDonald is the Chief Economist for Smith’s Research & Gradings, a Fellow with the Caribbean Policy Consortium, and a Research fellow with Global Americans. Prior to those positions, he worked for the Office of the Comptroller of the Currency, Credit Suisse, Donaldson, Lufkin and Jenrette, KWR International, and Mitsubishi Corporation. His most recent book is The New Cold War, China and the Caribbean (Palgrave Macmillan 2022).

Alejandro Trenchi is a Research Assistant at Global Americans for the organization’s High-Level Working Group on Climate Change in the Caribbean. Follow him on X: @trenchiale.

Image: Shutterstock.com.