FEBRUARY 12, 2025

Hello,

In Cipher this week:

• Bill Spindle has two dispatches from recent travels in Chile: One on a project to mine rare earth elements and improve the already degraded landscape and another on efforts to extract lithium from a salt lake in the Atacama Desert while supporting the local community.
• Bill also shares this week’s Data Dive, with two charts on rising demand for critical minerals. 

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A view of the coast near Concepción, Chile from Aclara’s Penco rare earth mining project site. Photo by Bill Spindle.

On Chile’s coast, a rare earths mining operation seeks to uplift locals and counter China

BY: BILL SPINDLE & PATRICIA GARIP

Garip is a Santiago-based journalist who writes about natural resources and geopolitics in Latin America.

CONCEPCIÓN, Chile — While the hilltop overlook here boasts a splendid view of the Pacific coast, the land all around us is far less impressive.

Municipal garbage trucks rumble along gravel roads to an adjacent landfill. Stumps and branches of dead eucalyptus trees form huge piles, refuse left behind by a former commercial forestry operation.

Aclara Resources, the Toronto-listed company that brought us here, has a new plan for the site: sustainably mining “rare earth” elements, essential ingredients in the energy transition. Once these elements are removed, the company plans to revegetate the area with native trees, a state it has not existed in for many decades, part of a process it calls “circular mineral harvesting.”

The plan would generate jobs and underpin a whole new local industry at a time when other aging industries have closed down, according to Aclara.

“This could turn us into a pillar of the regional economy,” said Nelson Donoso, who heads Aclara’s operations in Chile.

What’s more, Aclara says its project in Chile and a twin project in Brazil have the potential to produce an amount equivalent to 16% of China’s official heavy rare earths production. That’s significant given China’s dominance of the industry and growing demand for these materials.

The company’s high hopes for the project — that it will leave the landscape better than they found it, stimulate the local economy and help wrest some control of the critical minerals industry away from China — reflect broader attempts to acquire materials for the global energy transition without mining’s often traditionally destructive impact.

Realizing Aclara’s dream requires extensive environmental evaluations and community consultations under Chilean law, even though the land has been used intensively as a municipal dump and for commercial forestry for many years.

Aclara, which is hoping to receive an environmental permit this year, says it will do things better than a previous mine proposal would have done. 
Nearly all of the water used by the project will be recycled, for example, and structural works will mitigate any risk of land erosion or contamination of a local waterway.

Some locals, as well as government officials, are still wary of any industrial project deemed “extractivist,” a derogatory term used to describe projects that exploit resources without care for the environment or surrounding communities.

But so far, there seems to be little local opposition to Aclara’s new proposal.

As the industry stands today, Chinese companies almost entirely dominate rare earths, from mines to magnets. That has given it a big edge in manufacturing clean energy technologies — and provided a geopolitical stick to wield against other countries.

Not surprisingly, the United States is stepping up its own rare earths mining and magnet manufacturing. Aclara aims to be a key part of the trend with a planned U.S. processing facility and a new alliance with European rare earths magnet manufacturer Vacuumschmelze.

Aclara is also partnering with a Chilean company called CAP, the Compañia de Acero del Pacífico, which recently closed its masive steel mill near Aclara’s mining site because it couldn’t compete with cheap Chinese steel.

Now, Aclara and CAP want to work together to transform rare earths.
Back on the hilltop, gulls squawk over the nearby landfill as Aclara engineer Denis de la Fuente grabs a twig to trace the plan for excavation into the gravel at our feet.

The project will scoop up a layer of the earth already degraded by commercial forestry, he says.

“Once we’re gone, this site will be better than before,” he asserts. “There won’t be more harvesting.”

Read this article and share it on Cipher’s website.

Lunchtime Reads and Hot Takes

Ford’s CEO to Warn Lawmakers of ‘Devastating’ Tariff Impact — Bloomberg

Amena’s take: CEO Jim Farley sums it up well: “President Trump has talked a lot about making our U.S. auto industry stronger, bringing more production here. So far, what we’re seeing is a lot of cost, a lot of chaos."

Here’s who’s losing out as Trump freezes the Inflation Reduction Act — The Washington Post

Bill’s take: Court challenges are sure to result, but the uncertainty and delay will dampen climate and renewable energy programs and likely sink many of them before the funds they need actually arrive.

Here’s every Biden-era energy loan — now all under threat from Trump — Canary Media

Jillian’s take: The fate of those loans and guarantees is up in the air as Trump's appointee, John Sneed, takes over the office. Even finalized loans face uncertainty.

GOP Lawmakers Seek to Roll Back Methane Fee — Inside Climate News

Amena’s take: The U.S. is ceding its competitive edge in LNG. The methane fee would help ensure that U.S. LNG exports meet low methane intensity import standards on fuels that will take effect in the EU in 2030.

Most countries miss UN deadline for new climate targets — Reuters

Anca’s take: Reading through this story, we learn most countries are still committed to submitting their plans before COP30 in Brazil, but it's fair to wonder how ambitious these will be.

New DOE boss Chris Wright lays down a marker — Axios

Jillian’s take: In his first Secretarial Order, Wright expressed support for LNG exports and nuclear power and skepticism over “net-zero policies.”

More of what we're reading:

• Trump administration approves sustainable aviation fuel refinery loan — Reuters

• India, France sign declaration for modular nuclear reactor partnership — Reuters

• Baltic nations cut ties to Russian power grid, prepare to link with EU — Reuters
• EU considers exempting most companies from carbon border levy — Reuters

Miles high in the Andes, a lot depends on this lithium partnership

A developer and an Indigenous leader aim for a better way to mine

The Laguna Verde salt lake, more than 14,000 feet above sea level in northern Chile’s Atacama Desert. Photo by Bill Spindle.

BY: BILL SPINDLE & PATRICIA GARIP

Garip is a Santiago-based journalist who writes about the global energy industry from the perspective of Latin America.

LAGUNA VERDE, Chile — On a bright spring afternoon, the waters here display an emerald-green tinge true to the lake’s Spanish name, Laguna Verde. Blistering winds kick up white caps. It’s taken four hours to drive here, and we’ve gained 14,000 feet in dizzying altitude along the way.

We’re surrounded by barren rocky peaks flecked with patches of lingering winter snow.

This is a salt lake. Winter snows sustain it, their meltwater transporting sediment down the slopes, concentrating minerals in the lake body. White crystallin-laced shores betray the saltiness of the water.

As well as salt, some 78,000 tons of lithium have washed down into Laguna Verde over the ages. Lithium is a critical ingredient in batteries.

This confluence of geology, chemistry and opportunity has made Chile an important player in the global energy transition — and spawned some unlikely partnerships, the likes of which will probably be necessary around the world to move to cleaner energy and sufficiently tackle climate change.

Aldo Boitano, 57, our guide to Laguna Verde, is a thin, wiry mountaineer and advisor for CleanTech Lithium, a London-listed mining company he founded. Ercilia Araya, 58, is a sturdy spiritual leader to a group of Indigenous families, the Colla Pai-Ote, part of a larger people whose ancestors have lived here for many generations.

Boitano and Araya share a goal critical to the energy transition: extracting lithium in a way that produces profits and supports local communities without unduly disrupting the pristine landscape and its natural ecosystems.

Straight shooters and blunt talkers both, Boitano and Araya are each from Chile but come from different worlds.

The son of a nuclear engineer, Boitano was raised in Chile’s mountains but went to high school in Ohio and spent years living and working in the United States and has been a globetrotting CEO.

Araya is an equally resilient, sometimes stubborn, child of the Andes. She was designated before birth to lead the Colla Pai-Ote, a group of two dozen or so families who live in a mountain enclave near Laguna Verde and another, bigger salt flat nearby.

At Laguna Verde, CleanTech is attempting to prove the effectiveness and viability of a new technique called Direct Lithium Extraction. Water would be sucked from below the floor of the salar and the lithium immediately filtered out through a proprietary process at a facility near the shore. The lithium-free water would then be injected back into the salar.

Araya’s Colla Pai-Ote is one of several local communities CleanTech has agreed to work with and pay substantial sums of money under Chile’s mining laws. The group uses some of the payments from CleanTech and other companies to operate a weekend and summer program for Colla who live in the nearby city, Copiapó. Araya wants to build a local health clinic and schools here so families can stay more easily.

Boitano recalls Araya telling him her aim is to preserve her people’s “ongoing, ever-changing way of life.”

“We’re migrant herders,” she told him.

“Mines always have an impact,” he says. “We are helping sustain their ever-changing way of life … we all agree their way of life is changing.”

Read the full article and share it on Cipher’s website.

Looking at critical mineral demand

Source: International Energy Agency.

BY: BILL SPINDLE

Demand for critical minerals for the energy transition is expected to climb steadily for decades, as data from the International Energy Agency’s clean minerals tracker shows.

Lithium, used for batteries, and magnetic rare earth elements, used for electric motors and wind turbines, will be two of the major focus areas.

AND FINALLY...
Solar boost

Cipher reader and an electric vehicles analyst at BloombergNEF Huiling Zhou snapped this photo of Thai longtail boats (Rua hang yao) topped with solar panels while on holiday on Koh Lipe, a remote island in Southern Thailand. While fully electrified boats remain expensive, Zhou said solar panels have become increasingly common to charge onboard batteries used to start the engines and for other functions.

Each week, we feature a photo that is somehow related to energy, the thing we all need but don’t notice until it’s expensive or gone. Email your ideas and photos to news@ciphernews.com.

Editor’s note: In addition to supporting Cipher, Breakthrough Energy also supports and partners with a range of entities working to tackle climate change, including nonprofits, corporations, startups and research firms. For more information on Cipher’s editorial policy, click here.