Chilean government preparing national strategy for critical minerals

Mining institutions in Chile are preparing a study on geological potential, demand and the geopolitical context to launch a national strategy for critical and strategic minerals in 2025.

Along with taking advantage of growing demand for mining products for the global energy transition, the strategy is seen as key to diversifying the economy and attracting investments.

The study is being carried out by Mining Ministry, state copper commission Cochilco and geology and mining service Sernageomin. International treaties and the situation of suppliers are also being reviewed to ensure sustainable supply, said a statement from the sectoral ministry.

Next year, citizen participation and joint work with industry, academia and communities will be included, with a focus on achieving a cross-cutting strategy, mining undersecretary Suina Chahuán told a seminar hosted by the ministry.

The creation of the new state policy arises in a context where more and more nations are concerned about ensuring solid and resilient supply chains, and avoiding interruptions so as not to risk national security.

The critical nature of the situation is observed in countries where there is a deficit in the supply of minerals, Cochilco market analyst Víctor Garay told the event.

Chile produces several critical minerals, as defined by the European Union, such as copper, lithium, boron, molybdenum, rhenium and potassium and iodine but could increase supply.

In particular, there is potential for producing cobalt, rare earths, titanium, tungsten and manganese, said Claudia López, president of Chile’s college of geologists.

Of the 90 natural elements in the periodic table, not counting synthetic ones, Chile's encompasses almost 30%, said Felipe Espinoza, head of the geological department at Sernageomin, who called for increased exploration to add new minerals to those already identified, such as vanadium, uranium, arsenic and barite.

There is consensus that the economic benefit for the country would be considerable. "Demand for minerals for clean energy technologies will triple by 2030 and quadruple by 2040, reaching almost 40Mt," the International Energy Agency (IEA) says in a report on critical minerals.

The market for minerals, including copper, lithium, nickel, cobalt, graphite and rare earths, is expected to grow from US$325bn to US$770bn by 2040, the IEA added.

This is because green technologies require significantly more minerals than those based on fossil fuels. An electric vehicle needs six times more minerals than a conventional one and a wind farm needs nine times more than a gas-powered plant.

Global copper demand is projected to increase 1.4-fold between 2023 and 2040, requiring an additional 10Mt compared to current production of 25Mt. However, "there are not that many projects in the world, which would make way for recycling and even then it may not be enough," Garay said.

Global problems

In addition, supply is concentrated in just a few countries. China, Australia, Canada, Russia and the United States produce more than 90% of the world’s critical minerals, although Chile leads in copper and rhenium and is the second largest producer of lithium, molybdenum and boron.

Given this situation, Chile has related agreements with the United States, the EU and the United Arab Emirates, among others.

A transnational partnership was created in 2022 by the EU and 14 countries, including Australia, Canada, Finland, France, Germany, India, Japan, South Korea, the UK and the US to catalyze public and private investment in supply chains.

Miguel Sainz, head of Capital Project Delivery for Argentina and Chile at consulting firm ERM, believes it is crucial that mining countries in Latin America, which are seen as an essential source of resources, join forces to encourage a fair transition.

"It is essential to align positions [at a regional level] to contribute to responsible mining, not only considering extraction, but also closure plans, in order to be able to negotiate better with states and large corporations," he told BNamericas.

The presentations by Cochilco and Sernageomin on the strategy can be seen in the Documents box in the top-right corner of the screen.