Chile's new critical minerals strategy: Between ambition and execution

Chile activated a national strategy for critical minerals, amid growing demand, to diversify its mining industry and strengthen its role as a supplier in global supply chains.

The policy aims to expand the sector’s production matrix and open new business opportunities, with diversification as the central pillar.

Chile is already the world’s leading producer of copper, rhenium and brine-extracted lithium, the second-largest producer of iodine, the third of boron and the fourth of molybdenum, although there is potential for more. 

The strategy promotes the exploitation of new iron ore, copper, and gold deposits, describes opportunities with titanium, uranium, rare earths, and cobalt, and opens space for mining associated with by-products such as antimony, selenium, and tellurium.

It also proposes initiatives to recover minerals from waste materials, such as tailings, and from the copper concentrate that is exported from Chile. 

While the strategy prepared by ministerial teams from Gabriel Boric's government, professionals from the Chilean Copper Commission and the National Geology and Mining Service, experts from the public, academic, industry and civil society spheres, as well as the support of the IDB, represents a historic opportunity for mining configuration, there are also challenges.

Achieving these objectives requires “incentives and greater professional involvement in the industry, so that germanium and rare earths in the deposits can effectively be taken advantage of, and more rhenium and molybdenum can be produced as byproducts of the value stages of copper extraction,” warns Ramón Rada, president of the innovation commission of the Instituto de Ingenieros de Minas de Chile, to BNamericas.

“Otherwise, we will remain stuck because of strict and obstructionist environmental legislation,” he added.

The strategy considers modernizing the regulatory framework and signing agreements with other countries to promote investment, technological cooperation, and research, through diplomacy focused on positioning a new image of Chile associated with critical minerals. 

Goals that will fall to the bi-ministry of economy and mining defined by Chile’s future president, José Antonio Kast, for his government that will take office on March 11. A decision that local industry associations are questioning.

Walter Muñoz, vice president of the Chilean Mining Chamber, criticizes the merger of two key ministries and the appointment of agronomist Daniel Mas as the next bimminister. 

“Merging the tasks under the supervision of an agronomist is a strategic negligence. Mining is not a seasonal harvest, it is an industry of investments over 10, 20 and 30 years, and of geology and exploration of highly volatile global markets,” said Muñoz regarding the risks of not having an independent ministry and a minister with technical knowledge in mining.

The idea of the bi-ministry aims to speed up decision-making, reduce administrative bureaucracy, and bring coherence to pro-investment policies in strategic industries such as mining.

Nevertheless, Mas faces the dual challenge of reactivating the economy and mining in a context of high copper prices, pressure to unblock projects, and urgency to increase investment and productivity. 

Ambitions that should go hand in hand with a mining agenda based on pillars such as the creation of incentives for exploration, production, and innovation, the promotion of sustainable practices, and the assurance of a reliable and resilient supply of critical minerals from Chile. 

Also read Critical Minerals in Latin America: Objects of Desire

(The original version of this content was written in Spanish)