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Just wrapping up a tremendous week here in Chile with Center on Global Energy Policy's Critical Materials Program, led by Tom Moerenhout, and hosted by our non-resident fellow and former Energy and Mines Minister Juan Carlos Jobet.
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By Jason Bordoff
Just wrapping up a tremendous week here in Chile with the Center on Global Energy Policy’s Critical Materials Program, led by Tom Moerenhout, and hosted by our non-resident fellow and former Energy and Mines Minister Juan Carlos Jobet. I share a few highlights and takeaways in this post.
In Santiago and Atacama, we hosted roundtable discussions with government, academic, legal, industry, and local and Indigenous leaders to explore current community benefit-sharing policies, challenges, and options for improvement.
In addition, enormous thanks to Universidad Adolfo Ibáñez for inviting me to offer a keynote speech on today’s changed US energy and climate policy outlook and the complicated geopolitical landscape, followed by a fireside chat with Juan Carlos Jobet and Tom Moerenhout on cooperation potential for Chile and the US across several energy dimensions.
In a world of rising economic fragmentation and geopolitical competition, countries are increasingly returning to a focus on energy security that includes diversification of not just energy flows but also supply chains for products and technologies. China’s dominance of many of these sectors, particularly critical mineral mining, refining, and processing, is a growing energy security concern for countries around the world, not just in the US but in emerging economies like India, as I wrote about in a post following my visit there a few weeks ago. As one of the world’s largest producers of copper and lithium (24 percent and 20 percent respectively), with a relatively regulatory regime and orientation toward open markets, cooperation between the US and Chile for trade and investment can help diversify critical mineral supply chains.
It’s always immensely valuable to visit energy production facilities in person to understand the vast scale and engineering complexity of the projects needed to supply the materials and energy that are the lifeblood of the global economy. Site visits to Codelco, the National Copper Corporation of Chile, Chuquicamata copper mine and SQM’s lithium production facilities were fascinating and valuable in this regard. Both helped illustrate the enormity of development needed to accelerate the pace of the clean energy transition, which will require massive increases in both copper for electrification and lithium for battery storage. In the International Energy Agency (IEA)‘s net-zero scenario, for example, lithium demand increases more than fivefold from today’s levels.
The massive open-pit copper mine at Chuquicamata is as deep as two and a half Empire State Buildings. The largest open-pit copper mine in the world, New York’s Central Park would fit inside it comfortably. A few years ago, it was then converted into an underground operation with a vast grid system so that trucks with tires taller than I am can move the crushed rocks. In three stages, the new mine will extend another 800 meters below ground. To illustrate the complexity, the project employs three 8 km-long conveyor belts that transport copper ore with the force of three Boeing 747s, powered by the Chilean electricity grid, which is now 70% renewable. This conveyor system is the largest in the world.
The enormity of this project is even more striking when considering that all of this supplies almost three percent of the world’s copper— and global copper is set to double in the next decade according to S&P Global.
At the same time, Chile faces major challenges, particularly declining copper ore grades, which will require about $80 billion in investment just to maintain current copper production. For a resource-rich country like Chile, remaining globally competitive in mining is an economic priority, as more than half of its export earnings come from this sector.
Our visit to SQM underscored the potential of Chilean lithium, as the ore grades in the Atacama are the highest in the world, and SQM’s production and refining costs are among the lowest globally.
As with Chuquicamata, water sustainability is a key challenge. Copper miners are increasingly shifting from groundwater use to desalinated seawater, and SQM is seeking ways to reduce its freshwater use. Regarding the lithium-rich salty brine, the company is seeking technologies to improve its yield. We wrote about the potential for one such technology, Direct Lithium Extraction, in a recent CGEP report.
The future of energy, marked by increased electrification, batteries and renewables, will no doubt require more mining, as Meghan O’Sullivan and I wrote about recently. Yet mining also comes with large potential risks to the environment and to local communities. Our roundtables with local and Indigenous leaders on community benefit-sharing clearly underscored the importance of making more progress on those issues—not only as a matter of equity and justice, but also sound economics as local support helps accelerate permitting of critical mineral mining.
Chile has made notable progress on Indigenous benefit-sharing in mining, though our discussions revealed that practices remain very uneven. There is no unified legal framework around benefit-sharing with outcomes depending on more ad hoc agreements and negotiation dynamics.
In our workshops, we heard that some recent pioneering lithium sector deals have set important precedents, but that achieving these is also not always easy because other projects might have very different project economics. In copper, some companies are moving beyond traditional CSR toward more structured agreements that include long-term development funds and Indigenous participation.
The 2023 mining royalty reform created new funds for subnational governments in mining regions. While this is a positive step, Indigenous leaders we engaged with emphasized that current mechanisms do not guarantee their communities a direct role in how funds are used. Exploring more direct roles for Indigenous communities in governance of royalty revenues is one way to ensure that benefits reflect their needs and priorities.
Capacity building also remains a core challenge. Many Indigenous communities are still developing the governance and financial management capacity needed to oversee large benefit flows. In our discussions, there was a clear call from many stakeholders for more support to improve transparency, prevent elite capture within Indigenous communities, and promote inclusive decision-making, especially with respect to the participation of women and youth.
At CGEP’s Critical Minerals Program, we look forward to continuing to explore opportunities to advance benefit-sharing policies and practices, address geopolitical risks, and ensure the needed materials are available for the global energy transition.
Huge thanks also to our Senior Research Associate Diego Rivera Rivota for his work in our research program and to Adolfo Ibanez’s Mikaela Engell Duarte for her excellent support of our visit. I also want to thank ClimateWorks Foundation for supporting our work on benefit sharing.
New technology that extracts the metal from underground brines has been compared to the shale revolution
Lithium plays a critical role in the global energy transition. It is the core ingredient of lithium-ion batteries that power electric vehicles (EVs) and are used in stationary energy storage systems.
On April 30, 2025, the United States and Ukraine signed a long-anticipated economic partnership agreement establishing the US–Ukraine Reconstruction Investment Fund.
The Rockefeller Foundation and the Center on Global Energy Policy at Columbia University SIPA jointly organized a workshop from December 3rd to 6th, 2024, in Bellagio, Italy, on how to finance responsible critical mineral supply chains.
