School of Social & Political Sciences

The new US-Argentine critical minerals deal has been presented as a “win-win” for both countries, but the arrangement reflects long-standing colonial legacies and histories of damaging extractivism in Latin America.

In February of this year, Argentina and the United States signed an agreement to secure the supply of critical minerals between the two countries. The deal forms part of President Milei’s economic growth strategy that seeks to attract foreign investment into the mining sector, capitalising on the surge in external demand for critical minerals. It also follows President Trump’s promise of a $40 billion bailout for Argentina, conditional on Milei winning support from voters in the midterm elections. Beyond providing financial assistance, this support also strengthens US influence in Argentina at a moment when access to critical minerals has become a strategic concern and Washington is seeking to challenge China’s foothold in Latin America’s natural resources.

At first glance, the deal looks like a win-win: the US gains secure access to Argentina’s critical minerals essential for electric vehicles, batteries and green technologies. Argentina, meanwhile, gets “more exports, more investments, and more jobs.” The Milei administration certainly sells it that way. But when we look more closely, it raises a number of deeper questions. Who will capture the value generated by Argentina’s minerals? Will foreign investment translate into long-term domestic development? Or will it primarily benefit foreign companies and states in the Global North seeking secure supply chains for the green transition? And who will bear the environmental and social costs of extracting these critical minerals?

These are not questions confined to the context of Argentina. Rather, they reflect a persistent dilemma that has framed development trajectories and caused deep social and political tensions throughout the region of Latin America. As I argue in this blog, the recent US-Argentine critical minerals deal reflects something much deeper than a simple trade agreement: it reflects a persistent regional pattern of extractivist development, which, from colonial times to the present day, has fuelled external markets whilst leaving local communities and ecosystems to bear the costs.

Extractivism and export-led development

The policy of extracting natural resources for export is not a new one in Latin America. Eduardo Galeano’s ‘Open Veins of Latin America’, provides a classic narrative of this history, which traces back to Latin America’s conquest and colonialisation by the Spanish and Portuguese empires. He describes how Latin America’s economic structure was “born subordinated to the external market” and “centralised around the export sector, where profit and power were concentrated”. This model generated wealth for colonial powers,  whilst leaving behind environmental degradation, labour exploitation and deep inequalities.

Since then, this export-oriented model has continued to shape Latin America’s economic development policy . While different forms of extractivism have developed over time, the underlying logic has remained largely unchanged. The neoliberal turn of the late twentieth century brought the model’s most market-friendly form, prioritising privatisation, deregulation and openness to foreign capital. In the 2000s, the progressive “Pink Tide” governments promised something different, and in important ways they delivered. Revenues from oil, gas, and mining were channelled into social programmes, poverty reduction, and expanded state capacity . Yet the underlying development logic remained largely unchanged. Extraction continued at scale, export markets continued to dictate demand, and the social and environmental costs were still borne disproportionately by local communities and ecosystems .

Seen in this context, Argentina’s current trajectory under Milei does not represent a break with the past, but a return to a more market-oriented form of extractivism which is rooted in its colonial history.

Same patterns, different story

This continuity becomes clear when we look at the policies being advanced by the Milei administration. The drive to turn Argentina into a mining powerhouse is anchored in policies such as Milei’s Large Investment Incentive Regime, or RIGI, which is designed to attract large-scale investors by offering generous tax, trade and foreign exchange benefits over the next 30 years. Global mining giants such as BHP, Glencore, and Rio Tinto have already signalled strong interest in expanding their footprint in Argentina’s lithium and copper sectors. Milei has also made comments that seemingly favour foreign companies, particularly US-based corporations, over local industry in lithium mining projects. This approach risks locking Argentina into a familiar role within the global economy; as a supplier of raw materials to the external market, capturing only the low-value segments of global supply chains . Under the RIGI scheme, investors are allowed to import machinery, capital goods and spare parts, with no obligation or incentive to use local suppliers or build domestic value chains. Sceptics have thus raised concerns that the scheme is so generous to foreign companies that it may sacrifice Argentina’s share of the benefits and limit prospects for its domestic development.

Further, Milei’s promise of significant job creation, one that has frequently been invoked by governments to justify extractive activities, is unlikely to materialise. Extractivism has shifted from being a labour-intensive activity to a capital and import intensive one, and technological advances in recent years have replaced labour . In fact, estimates suggest that for every $1 million of investment into mining projects, only two or less direct jobs are created . Thus, while mining may generate revenue, most of the profits are likely to flow to foreign companies, with little prospect of domestic development or job creation in Argentina itself.

The local costs

Under both conservative and progressive governments, extractivism has had negative consequences for the environment and local communities throughout the region . Smart describes the areas most affected by extractive activity as ‘sacrifice zones’; areas that are environmentally and socially sacrificed by governments in support of development. In Argentina, sacrifice zones are already emerging to make way for the mining projects promised to drive economic growth. President Milei recently backed a Bill seeking to modify Argentina’s Glacier Law to loosen barriers that currently ban mining within glacial and preglacial zones. The current law, which protects these areas, is framed by Milei as holding the economy back. In Mendoza, a province that relies on glacier-fed water systems, thousands of local residents have protested against a recently approved large-scale copper mining project, raising concerns that it could exacerbate water scarcity the region. Signs reading “Mendoza’s water is not up for negotiation” capture the trade-offs being made; access to water in the name of ‘economic growth’.

Extractivism has often triggered social conflict and resistance, particularly from indigenous communities who have inhabited those areas for centuries . Jujuy, a province in northern Argentina, holds some of the world’s largest lithium deposits, but is also home to over 400 indigenous groups whose land is under threat from mining projects. In 2023, the provincial government of Jujuy modified its environmental impact assessment of mining activities to enable projects to advance in Indigenous territories without proper consultation with and participation from communities. Jujuy residents have argued that while lithium is being extracted to fuel global demand, they are receiving few economic benefits. Instead, they face threats to their livelihoods and health due to water depletion and pollution linked to mining activities.

A new ‘green’ colonialism?

The global ‘green transition’ adds an important new layer to this story. This shift towards low-carbon energy sources is driving a rapid expansion in the extraction of critical minerals, largely concentrated in the Global South. Scholars and activists have voiced concerns that this transition represents a new form of colonialism under ‘greener’ rhetoric; what they describe as ‘green colonialism’. In this context, the prospect of a mining boom in Argentina risks replicating the same colonial dynamics that have long channelled value from Latin America to external actors, now principally the US, China and multinational corporations, while leaving behind a trail of environmental degradation and suffering for local communities.

For those of us living in the Global North, it is easy to ignore how our own consumer choices – our phones, laptops, electric cars – often depend on minerals extracted from the Global South. The ‘clean energy’ transition looks a lot less clean once we look more closely at where these minerals come from and the harmful impacts our choices can have on ecosystems and communities. Recent research by Oxfam brings these structural imbalances into sharp relief. The report  shows that those who benefit most from critical mineral extraction are elites and multinational corporations based in the Global North, while those who bear the harmful social and environmental impacts are the people who live closest to the extraction sites in the Global South. In particular, it notes that while Latin America is home to over half of the world’s lithium reserves, it captures only a small fraction of the value chain at the national and regional levels. Most strikingly, it is  estimated that within just 11 years, Latin America will extract more lithium than the Spanish empire extracted silver over three centuries of colonial rule, yet more than 90% of the value is expected to be captured outside the region, primarily by companies in China, Europe and the US.

Conclusion

Ultimately, what emerges from this story is a familiar pattern within Latin America’s political economy. From colonial times to the present day, the region’s integration into the global economy has largely been structured around the extraction and export of its natural resources. Whether the commodity was silver in the sixteenth century, or lithium in the twenty-first, development has repeatedly been imagined through export-led growth driven by external demand. While the actors and rhetoric have changed – from European empires to the US and China, and from colonialism to green colonialism – the underlying structure remains consistent. Outsiders reap the greatest share of the benefits, while ecosystems and local communities bear the environmental and social costs. Seen in this light, Argentina’s new mining boom looks unlikely to break with this pattern.

Banner photo credits: “Javier Milei” - Photo by Gage Skidmore via Flickr. Used under Creative Commons licence. Please attribute to Gage Skidmore if reused.

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This blog is part of the SPS Student Academic Blog series. You can read more contributions from the series here.

First published: 27 May 2026