In the race toward a greener future, rare earth elements (REEs) — a group of 17 critical minerals — have become central to the development of cutting-edge technologies. From solar panels and wind turbines to electric vehicle batteries, consumer electronics, and defense systems, these elements are indispensable. For Chile — already a global leader in copper and lithium — the growing global demand for REEs presents a strategic economic opportunity.
A New Frontier for Chile’s Mining Industry
Recent geological studies have revealed promising rare earth deposits in Chile, often linked to iron and copper ores, particularly in the Andes and other mineral-rich regions. According to Chile’s National Geology and Mining Service (SERNAGEOMIN), the country is emerging as a potential player in a market currently dominated by China, which controls over 80% of global rare earth production and processing. This heavy reliance on a single supplier has triggered global concern and prompted many economies to seek alternative, stable sources.
For Chile, stepping into this space could mean more than just exporting raw materials. It could diversify its export matrix, currently heavily dependent on copper (nearly 50% of national exports), and reduce global supply chain vulnerabilities — particularly for partners in Europe and the Americas.
Economic and Strategic Gains on the Horizon
The economic potential of rare earth development is substantial. Beyond diversifying mining exports, the sector could attract significant foreign direct investment and position Chile as a reliable supplier of materials essential to the clean energy transition. The World Bank forecasts a 300% increase in demand for critical minerals like REEs by 2050, driven by the rise of renewables and energy storage technologies.
Chile’s entry into this sector could also mark a shift in its technological capabilities. Rare earths are essential for manufacturing permanent magnets used in wind turbines and electric motors — high-value components that could stimulate domestic innovation and industrial development. Rather than merely exporting raw materials, Chile could embed itself deeper into the global high-tech value chain, fostering partnerships with research centers and advanced technology companies.
The Environmental Imperative
However, this potential comes with serious environmental considerations. Rare earth extraction and processing are notoriously polluting if not managed responsibly. The use of toxic chemicals and the release of radioactive elements such as thorium and uranium have caused severe environmental degradation in China’s mining regions — a cautionary tale for Chile.
To avoid repeating these mistakes, strict environmental regulations and robust waste management systems must be established from the outset. Sustainable development in this sector is non-negotiable if Chile wants to protect its ecosystems and maintain its global credibility.
Social Inclusion: A Pillar for Success
The social dimension of mining cannot be overlooked. While REE exploitation could create jobs and revitalize local economies, particularly in remote regions, it also carries risks of social conflict — especially if indigenous territories are affected. Chile has already seen firsthand how poor consultation practices in the mining sector can lead to unrest.
A transparent, participatory governance model, with free, prior, and informed consent of local communities, will be essential. Equitable distribution of benefits and meaningful local involvement must be the norm, not the exception.
A New Geopolitical Role
From a geopolitical standpoint, Chile has a real chance to become a strategic supplier in a rebalancing global market. As Western economies strive to reduce their dependence on China for critical minerals, Chile’s emergence as a rare earth source could enhance its influence in international trade negotiations and open the door to strategic alliances with developed nations seeking secure, ethical supply chains.
Conclusion
Chile stands at a crossroads. The development of a rare earth industry could serve as a powerful lever to diversify its economy, stimulate technological advancement, and support the global energy transition. But realizing this potential requires more than resource extraction.
Chile must embrace sustainable policies, invest in research and development, enforce rigorous environmental standards, and ensure inclusive community participation. Only by striking a balance between economic growth, environmental stewardship, and social cohesion can Chile fully harness the promise of rare earths — and lead the way in building a more sustainable and resilient future.