"Critical Minerals & Energy: Powering Economic Development" - Keynote Speech by IMF Deputy Managing Director Nigel Clarke
IMF News, March 13, 2026
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- Published: March 13, 2026
Overview
- Event: Keynote Speech by Nigel Clarke at the Inter-America Development Bank Annual Meetings in Paraguay.
- Date: March 13, 2026.
- Core message: Latin America and the Caribbean (LAC) possess strategic energy and critical minerals assets that can power economic development if complemented by resilience, investment, and trusted partnerships.
Key facts and statistics
- Renewables account for about 69 percent of electricity generation in Latin America and the Caribbean.
- Oil production in the region: about 9.7 million barrels per day of oil production in 2024.
- Chile, Peru, and Mexico account for about 37 percent of global copper mine production.
- The broader lithium triangle—Argentina, Bolivia, and Chile—holds about half of global lithium resources.
- Across various critical minerals markets, the top three refining countries account, on average, for 86 percent of processing capacity.
- Chile developed LNG import capacity with Quintero (operating since 2009) and Mejillones (since 2010).
- The EU–Mercosur agreement would bring together a market of 720 million people, covering nearly 21 percent of the world economy.
- Economic modeling by the European Commission suggests the EU–Mercosur agreement could help Mercosur exports to the European Union grow by almost 17 percent.
Major themes and findings
- Global landscape change
- Two-decade trend: global production and supply chains have become more concentrated, raising chokepoint risks in less substitutable goods.
- Recent shocks (pandemic, wars, conflict in the Middle East) demonstrate that disruptions in concentrated sectors quickly affect inflation, output, investment, and confidence.
- Geoeconomic fragmentation is altering trade and investment patterns in strategic sectors, including energy and critical mineral supply chains.
- Opportunity for LAC
- LAC can reduce domestic vulnerabilities and become a trusted supplier abroad, especially for processed materials rather than only raw inputs.
- Capturing more value domestically can translate into faster productivity growth, better jobs, and stronger export earnings.
- Resilience through diversification
- IMF economic modeling suggests targeted diversification can improve resilience while limiting efficiency losses, particularly in concentrated, upstream, and hard-to-replace sectors.
- Chile’s LNG import capacity (Quintero, Mejillones) is presented as a practical diversification example that strengthened energy reliability.
- Closed markets increase concentration risk; integrated and competitive supply chains reduce vulnerability and build credibility as a reliable supplier.
- Regional and global integration
- Deeper regional integration can lower trade costs, reduce frictions, and support regional value chains (e.g., mining in one country, smelting/refining in another, manufacturing in a third).
- Integration with the rest of the world through deep and comprehensive trade agreements enhances predictability and sourcing options for firms.
Policy recommendations and priorities
- Strengthen value chain resilience through diversification, not protectionism
- Pursue targeted diversification in highly concentrated, upstream sectors.
- Avoid closed markets that increase concentration risk.
- Promote integrated and competitive supply chains to reduce vulnerability to shocks.
- Enhance regional integration and reduce trade frictions
- Close gaps in transport and customs infrastructure.
- Reduce non-tariff barriers.
- Strengthen trade policy coordination within the region to support cross-border value chains.
- Create an enabling environment for investment
- Deliver macroeconomic stability: low and stable inflation, sustainable public finances.
- Ensure predictable tax systems and transparent regulations.
- Build strong, credible institutions to reduce policy uncertainty and attract long-term private investment.
- Recognize government and private sector roles as complements: governments provide the policy environment; the private sector supplies capital, technology, and execution.
- Leverage trade agreements
- Use deep and comprehensive trade agreements (example: EU–Mercosur) to expand markets, increase predictability, and encourage higher value-added exports.
Expected economic outcomes if recommendations are implemented
- Fewer costly disruptions and more stable growth through more resilient supply chains.
- Movement up the value chain leading to better jobs, higher standards of living, and long-term prosperity.
Source: Keynote Speech by IMF Deputy Managing Director Nigel Clarke, March 13, 2026.