Heavy Industry in Latin America and the Caribbean
| This article is part of the Heavy Industry Program at Global Energy Monitor which includes data on iron and steel, cement and concrete, chemicals and iron ore mines. |
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Latin America and the Caribbean (LAC) is a middle-income region that has experienced a historical pattern of industrial growth and decline, with a more recent return to relying on commodity exports and a decreasing share of value-added industry. In 2024, the value added by the industrial sector was 30.3% of the regional GDP.[1] The region continues to endure a prolonged period of low economic growth and productivity, with estimates pointing out that real GDP will grow 2.2% on average in 2025 and 2.3% in 2026.[2] The region’s most dominant industries are food products, motor vehicles, and chemicals.[3]
Historically, the region has boasted a strong iron ore mining and steel industry due to its abundance of natural resources. But in recent decades, the region’s industry has faced significant challenges in maintaining its steel output, stemming from the availability of cheap steel imports from China and a deficit in investment.[4] Cement demand in LAC has been historically positive, driven by infrastructure and housing development, and is expected to remain stable and grow slowly in the coming decades.[5] The chemical industry is one of the most relevant industries in the region, but it faces challenges as well, due to feedstock shortages and industry.[6]
LAC heavy industry produces a significant amount of the region’s GHG emissions, contributing almost 20% to the region’s total GHG emissions in 2019.[7]LAC’s heavy industries are energy-intensive, yet operate within one of the world’s cleanest electricity mixes, thanks to its large hydropower reserves and fast-growing development of wind and solar resources.[8] Half of the countries in the region have pledged to achieve net zero emissions by 2025 or earlier. This represents around 65% of GDP in the region and 60% of its energy-related CO2 emissions.[8]
Cement Industry in LAC
The cement industry in Latin America and the Caribbean (LAC) has an operating capacity of roughly 300 mtpa, which represents around 5.7% of the world’s total installed capacity. The region ranks fifth in the world for installed capacity, behind Asia Pacific, Europe, Africa, and the Middle East.[9]Leading producers in the region are Brazil (98.3 mtpa), Mexico (56.6 mtpa), Argentina (24.2 mtpa), and Colombia (17.9 mtpa),[9] collectively representing two-thirds of all the regional installed capacity. Cement is the largest source of CO2 emissions among heavy industry sectors in LAC, representing 43% of regional industrial emissions in 2019.[10] These are mainly from clinker calcination and fuel combustion. The clinker factor in LAC averages 71%, below the world’s average of 76%.[11] Cement plants across Latin America exhibit significant variation in production capacity, size and age. The dominant cement technology is the dry-process rotary kiln with preheater/precalciner and vertical roller mill grinding.[9]
Cement decarbonization
The Interamerican Federation of Cement (FICEM, in Spanish) launched the first comprehensive decarbonization roadmap for LAC in 2024. Among key improvements to reduce cement production emissions in LAC are thermal efficiency, fuel switching, adoption of renewable energy, and material efficiency.[12] However, tight profit margins, aging infrastructure, uneven regulation, construction sector informality, limited carbon pricing mechanisms, and lack of financial and fiscal incentives keep the regional industry in a short-term drive, despite the long-term economic and environmental benefits of investing in advanced technology for decarbonization.[5]
Chemical Industry in LAC
Over the past 15 years, petrochemical production has been declining in the region, with the only significant greenfield investment being Braskem Idesa’s ethane cracker in Mexico in 2016,[13] which added 1 million ton (MT) of ethylene and 1 MT of polyethylene (PE), to supply both local markets.[14] Regarding the major petrochemicals, polypropylene (PP) and polyethylene (PE), LAC is one of the regions with the lowest production profile. Imported polyethylene holds 57% market of the regional market share. The region’s industry struggles with feedstocks, which are both expensive and in short supply, largely because of the dominance of state-owned energy companies struggling to meet national and regional demand.[6]
Iron and Steel Industry in LAC
Steel production is among LAC's most important industries, given its ties to the region’s large construction and motor vehicles manufacturing sector. In 2024, the region produced 56.2 million tons of crude steel and supported 1.4 million jobs.[15] According to GEM’s data, LAC holds a total operating capacity of 63.03 mtpa of crude steel.[16] Brazil (33.63 mtpa), Argentina (9.5 mtpa), and Mexico (7.31 mtpa) are the biggest crude steel producers in the region. Collectively, they represent 80.03% of the region’s installed capacity. Steel production in LAC has fallen by 13% between 2021 and 2024 due to rising Chinese steel imports to the region.[17]
Production technology
Steel in LAC is produced mainly through two production routes: Blast Furnace-Basic Oxygen Furnace (BF-BOF), and Direct Reduced Iron-Electric Arc Furnace (DRI-EAF). In 2024, around 60.5% of the region’s crude steel capacity is through the BOF route, and the rest by the EAF route (39.5%). For iron capacity, 70.9% is from blast furnaces, and the remaining is from DRI.[16]
Raw Materials
Iron ore: In LAC, Brazil, Chile, México, Peru, Brazil have iron ore production and reserves. Brazil has the world’s second-largest iron ore reserves and is the second biggest producer, both behind Australia.[18]GEM’s Global Iron Ore Mines Tracker reported an operating iron ore mine capacity of over 728 mtpa. The iron ore reserve and resource capacity for the region stand at 26,800 Mt and 108,183 Mt, respectively.[19]The Brazilian company Vale is the largest producer of iron ore in the world and operates the largest iron ore mine complex, Serra Norte, which has been active since 1984.
Coal: The LAC region relies on domestic and imported metallurgical coal production to meet its steel industry needs, with Colombia being a notable regional producer. Colombia maintains a volume of 4 million to 4.5 million tonnes of metallurgical coke exports per year and about 1 million-1.5 million tonnes of metallurgical coal.[20]
Steel decarbonization
- Latin America’s steel industry seeks to reduce its emissions by 50% by 2030 and achieve carbon neutrality by 2050.
- In Brazil, approximately 11 % of steel production relies on charcoal derived from biomass in mini-blast furnaces, called biochar, making the country a global leader in using bio-based carbon in steelmaking. The biochar route is being presented as a decarbonization lever, but it also raises concerns about plantation expansion and water-use impacts (especially in eucalyptus monocultures in Minas Gerais) that may offset its climate benefits.[21]
Other resources
References
- ↑ "World Development Indicators | DataBank". databank.worldbank.org. Retrieved 2025-10-29.
- ↑ "Latin America and the Caribbean Endures a Prolonged Period of Low Growth: It Will Grow 2.2% in 2025 and 2.3% in 2026 | Economic Commission for Latin America and the Caribbean". www.cepal.org. Retrieved 2025-10-29.
- ↑ "International Yearbook of Industrial Statistics 2024 - Factsheet: Latin America and the Caribbean". United Nations Industrial Development Organization. Retrieved 10-29-2025.
{{cite web}}: Check date values in:|access-date=(help)CS1 maint: url-status (link) - ↑ "The Steel Industry in Latin America: Past, Present, Future and Masteel UK's role in the region. - Masteel". masteel.co.uk. Retrieved 2025-10-29.
- ↑ 5.0 5.1 Camargo-Bertel, Andrés André; Hincapie, Diego; Pugliese, Victor; Gonzalez-Quiroga, Arturo; Pupo-Roncallo, Oscar (2025-04). "Decarbonizing the cement industry in Latin America and the Caribbean: A comprehensive review of strategies, barriers, and policies". Energy Conversion and Management: X. 26: 100956. doi:10.1016/j.ecmx.2025.100956. ISSN 2590-1745.
{{cite journal}}: Check date values in:|date=(help) - ↑ 6.0 6.1 "Global Business Reports - Latin America Petrochemicals and Chemicals 2024". www.gbreports.com. Retrieved 2025-10-29.
- ↑ Gischler, Christiaan; Anaya, Fernando; Ramírez, Michelle; Urquizo, Matilde; Parra, Christian; Gonzalez, Julian; Colaferro, Patricia; Inglese, José Luis; Pareja, Ricardo; Pinilla, Carlos (2023-12-06). "Acelerando la descarbonización de la industria pesada en América Latina y el Caribe: nota introductoria". Interamerican Development Bank (IDB).
{{cite journal}}: Cite journal requires|journal=(help) - ↑ 8.0 8.1 "Latin America Energy Outlook 2023 – Analysis - IEA". www.iea.org. Retrieved 2025-10-29.
- ↑ 9.0 9.1 9.2 "Global Cement and Concrete Tracker". Global Energy Monitor. July 2025 (V1) release. Retrieved 2025-10-29.
{{cite web}}: Check date values in:|date=(help)CS1 maint: url-status (link) - ↑ "Panorama energético de América Latina y el Caribe 2022 - OLADE". www.olade.org. Retrieved 2025-10-29.
- ↑ Camargo-Bertel, Andrés André; Hincapie, Diego; Pugliese, Victor; Gonzalez-Quiroga, Arturo; Pupo-Roncallo, Oscar (2025-04). "Decarbonizing the cement industry in Latin America and the Caribbean: A comprehensive review of strategies, barriers, and policies". Energy Conversion and Management: X. 26: 100956. doi:10.1016/j.ecmx.2025.100956. ISSN 2590-1745.
{{cite journal}}: Check date values in:|date=(help) - ↑ "Cemento & Concreto de Iberoamerica y el Caribe". FICEM. 11. 2024.
- ↑ "Introduction - Latin America Petrochemicals and Chemicals 2023". apla.gbreports.com. Retrieved 2025-10-30.
- ↑ "Business briefing for September 9". Chemical & Engineering News. Retrieved 2025-10-30.
{{cite web}}: CS1 maint: url-status (link) - ↑ "Alacero". alacero.org. Retrieved 2025-10-30.
{{cite web}}: CS1 maint: url-status (link) - ↑ 16.0 16.1 "Global Iron and Steel Tracker - Global Energy Monitor". globalenergymonitor.org. Retrieved 2025-10-30.
- ↑ "Alacero: Unfair trade threatens jobs and industry in Latin America" (PDF). Alacero. 09-14-2025.
{{cite news}}: Check date values in:|date=(help) - ↑ Tuck, Candice (January 2025). "IRON ORE" (PDF). U.S. Geological Survey, Mineral Commodity Summaries: 100.
- ↑ "Global Iron Ore Mines Tracker - Global Energy Monitor". Global Energy Monitor. August 2025 (V1) release. Retrieved 2025-10-30.
{{cite web}}: Check date values in:|date=(help)CS1 maint: url-status (link) - ↑ "Colombia continues as a major coal and coke exporter - Gabriel GONZÁLEZ - The Energy Year". theenergyyear.com. Retrieved 2025-10-30.
- ↑ "Forging a sustainable future: Brazil's opportunity to lead in steel decarbonization - Global Energy Monitor". globalenergymonitor.org. Retrieved 2025-10-30.
