EU sees Mercosur as a source of critical minerals
BNamericas | 20 January 2026
EU sees Mercosur as a source of critical minerals
The European Union recognizes the key role that the free trade agreement with Mercosur, an economic bloc formed by Argentina, Brazil, Paraguay and Uruguay, will have for the supply of critical minerals to the European continent.
"A secure and sustainable supply of critical raw materials is at the heart of the green and digital transitions. It is vital for increasing the European Union’s security and defense capabilities. Although the European Critical Raw Materials Act aims to ensure a diversified, secure, and sustainable supply of these inputs for EU industry, the bloc is still not self-sufficient and will remain dependent on imports", said the European Commission in a statement.
"The EU–Mercosur agreement will be fundamental to ensure the supply of critical raw materials, since the Mercosur countries are major producers of many of these materials, and this takes place in a safe and sustainable way", he added.
Recently, the two blocs signed a free trade agreement after more than 20 years of negotiations.
According to material prepared by the European Commission, Mercosur countries are already important suppliers of minerals to Europe. In Brazil’s case, the document highlights aluminum/bauxite, natural graphite, niobium, manganese, metallic silicon, vanadium, and tantalum, as well as lithium from Argentina.
According to the European Commission, the trade agreement tends to increase mining exports from Mercosur countries to the European Union. For Europe, the pact should also bring benefits due to access to raw materials at lower costs.
According to market participants, Europe’s need for access to critical minerals could trigger a wave of investment in projects in Brazil and Argentina.
"Once Europe recognizes South America as an important source of critical raw materials to meet its needs, at some point European companies will also assess potential investments in mining projects here in the region," Carlos Daltozo, head of research at investment firm Tuesday Capital, told BNamericas.
The expectation of an intensification of trade relations between Europe and South America, in the context of the agreement, may replicate, to some extent, the movement observed with China, when the Asian giant became South America’s main trading partner over the last few decades, surpassing the United States and also resulting in a wave of Chinese investments in the region.
“A closer trade relationship between the countries has a broadly positive effect on the business environment. But it may be difficult to replicate the same intensity of investments seen from Chinese companies in the region, because companies from China have access to highly subsidized government financing lines, which is not the case for European companies,” said Daltozo.
The European Commission’s report on the impacts of the trade agreement with Mercosur on the mineral sector can be read here.
(The original version of this content was written in Portuguese)
