Can Rare Earth Elements Drive Latin America’s Next Mining Boom?

The industrial landscape of Concepción, Chile, is undergoing a potential revival with the proposal of a mining venture called Penco by Toronto-listed Aclara Resources. The project aims to extract rare earths, essential elements for various modern technologies. With the global demand for these rare earths predicted to surge in the coming years, the Penco project offers a “quick win for the West” in terms of securing a sustainable source of critical minerals.

The venture is part of a larger trend in South America to break China’s near-total control over rare earths and establish reliable Western supply chains. Countries like Chile and Brazil are being explored for their potential in rare earth mining, with automakers and magnet manufacturers showing interest in alternative supply sources outside of China.

Despite the current low prices of rare earths due to China’s market dominance, Western governments are stepping in to support domestic production and reduce reliance on Chinese imports. The Biden administration, for example, is imposing tariffs on Chinese high-tech goods to promote local manufacturing. In Brazil, companies like Neo Performance Materials and Energy Fuels are planning to ramp up rare earth production for supply to global markets.

Overall, rare earth mining in Latin America offers the region a chance to diversify their economies and contribute to the growing demand for green technologies. With the potential to establish a complete mine-to-magnet supply chain, Western manufacturers and investors have a strategic opportunity to tap into the region’s rare earth resources for a sustainable and prosperous future.