By Sabrina Escobar
Oil isn't the only commodity to drive President Donald Trump's decision to oust Venezuelan President Nicolás Maduro. The nation's critical minerals shouldn't be overlooked as a potential motive for regime change.
While oil gets the attention, the U.S. has plenty of it, perhaps too much. What it doesn't have are the critical minerals essential to America's artificial intelligence push. Throughout 2025, the U.S. government intervened directly in sectors necessary for AI dominance, according to analysts at Bank of America. Last July, the Department of War awarded a $900 million package to rare-earths producer, MP Materials, to fund the construction of a new domestic magnet-manufacturing facility and expand the company's mining and processing capabilities.
Securing minerals became all the more urgent after China, which accounts for roughly 85% of global processing capacity, restricted rare earth exports last year. Analysts say accessing Greenland's mineral deposits is part of Trump's efforts to bring the island under U.S. control, and it was likely part of the calculation when considering the U.S. incursion into Venezuela.
"You have steel, you have minerals, all the critical minerals, they have great mining history that's gone rusty," Commerce Secretary Howard Lutnick said about Venezuela over the weekend.
There's just one problem when it comes to Venezuela: The country doesn't have as many crucial minerals as some of its neighbors do. And extracting those it does have -- gold, nickel, bauxite (used in aluminum production), and coltan (used for producing electronic devices) among them -- may be more trouble than it's worth, said Christopher Ecclestone, mining strategist at Hallgarten & Company
For one, excepting gold, Venezuela's confirmed minerals are cheap, he said. Prices for bauxite and nickel pale in comparison to copper, lithium, or even tin, which are mined across other South American countries such as Brazil and Chile.
Even trying to extract gold may not provide sufficient incentives for foreign companies to get involved. Most of Venezuela's mineral deposits are located within the Arco Minero del Orinoco, or Orinoco Mining Arc, a remote, jungle-covered mining area largely controlled by illicit networks and armed groups. Conducting exploration or mining projects involves a high degree of risk for any foreign player with no guarantee of a return on investment, Ecclestone said.
"If you think you're going to find a pot of gold or the pot of rare earths at the end of the rainbow, you could spend a lot of time roaming around in the jungle," he added.
That said, the military action in Venezuela demonstrates that the U.S. government's thirst for critical minerals is far from quenched. Firmly re-establishing a U.S. sphere of influence in the Americas -- and kicking China out of the region -- suggests that the government will remain focused on access throughout Latin America.
"South America is loaded with critical materials and minerals and metals, and there's no way that an administration that adheres to the idea that 'we're hunkering down and we want to control trade in our part of the world' is going to simply ignore South America," said Jack Lifton, co-chair of the Critical Minerals Institute.
There's plenty to control. Brazil is one of the world's major sources of the world's iron ore, and has vast -- yet underdeveloped -- deposits of rare earths such as manganese, Linton said. Bolivia and Argentina are rich in lithium, while Peru and Chile operate a large chunk of the world's copper mines.
The latest run-up in copper and lithium spot prices has underpinned the gains in Chile's materials sector, which helped the country's equity market outperform its Latin American peers. Shares of one of Chile's largest materials companies, Sociedad Quimica y Minera de Chile, have surged nearly 90% in the past 12 months. With that increase, the company's U.S. depository shares trade just under 19 times the next 12 months' earnings, a slight premium to the iShares MSCI Global Metals & Mining Producers ETF's 15 times earnings.
Chilean equities should find support from further gains in lithium and copper prices in 2026, wrote a team of HSBC emerging market strategists in a research note Thursday. But with the country's main index sitting above its 10-year historical average, there is "better value elsewhere in LatAm."
Freeport-McMoRan and Hudbay Minerals, both of which operate large copper projects in Peru and are expanding to Chile, could be worth a look. Analysts polled by FactSet see ongoing profit potential -- earnings per share are projected to grow by 54% and 67% for Freeport and Hudbay, respectively, in the fiscal year ending December 2026. Hudbay is the value play here, with a price to earnings ratio of 15 compared to Freeport's 22 times P/E ratio. BofA has a Buy rating on both stocks.
Turning a profit in mining itself is challenging, Lifton said, pointing to companies further down the processing chain as a better bet. Many of the companies shaking up domestic metal refining are private, but are worth keeping an eye on, including Gadolyn and Phoenix Tailings, he added.
Investors can even look outside South America to find publicly traded pure plays, such as MP Materials or USA Rare Earth. The government's investment has made MP the market darling, and shares have more than tripled in the past 12 months. All 16 analysts covering MP Materials rate the stock a Buy, according to FactSet, and the mean target price implies a nearly 30% return.
While Venezuela's mineral industry may turn out to be fool's gold, the rest of the region could well be the golden goose investors are looking for.
Write to editors@barrons.com
This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.
(END) Dow Jones Newswires
January 09, 2026 01:30 ET (06:30 GMT)
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