A Conflict in Chile Over Minerals Needed for Clean Energy

A mining venture that improves the environment?

That’s the image Aclara Resources, a Peruvian mining company seeking to extract rare earth elements in the BioBio region of Chile, tries to project. Highlighting that the minerals will go into such clean-energy mainstays as wind turbines and electric cars, the company publicizes itself as fighting climate change by advancing a green transition—all while using an extraction process that protects and replenishes resources like water and trees.

Not so, according to residents, who rejected the project by 99 percent in a community vote. They are promoting the creation of a park in the very area where the mining would take place. By organizing walks through the forest and uplifting local cultures, the residents are prioritizing the preservation of nature over the corporation and its plans.

The story of this pitched battle between citizens and a mining company reveals much about the nature of corporate publicity, social movement strategy, and democratic participation amid “green” energy transition

What are Rare Earths?

Central to contemporary electronics are 17 metallic elements known collectively as “rare earth elements” (REE). Although not rare, the elements infrequently appear in their pure form. REE are used to build electronic devices such as smartphones, computer hard drives, and electronic displays. They are also used for military and space equipment such as drones, aircraft, and missile guidance systems.

Currently, China produces 92 percent of the world’s rare earth magnets and accounts for 63 percent of rare earth processing and 85 percent of rare earth mining. With its rare earths dominance, China has considerable leverage in geopolitical conflicts. This monopoly has also caused tensions for well over a decade.

It was therefore noteworthy when in 2014 REE were discovered just one kilometer away from Penco City, in an area with nearly 50,000 inhabitants, along Chile’s long Pacific coast, in the BioBio region. It is very close to Chile’s third largest and most populated area, Concepción.

As the project’s water supply comes from the Penco and El Cabrito estuaries, the mine would impact residents’ access to water. Pollution from open-pit mining would also negatively affect area inhabitants. Local residents have already expressed concern about how the project will adversely affect the environment and their quality of life. Development plans have also led to increased tensions with the local indigenous association, Koñintu Lafken Mapu, and the group has voiced its concerns on social media and has taken action in coordination with other social organizations.

Environmentally, the project will advance deforestation, most significantly threatening a forest of queles, a tree native to Chile that’s in critical danger of extinction. Moreover, the project will disturb the local ecosystem, which is home to unspoiled estuaries that provide water to unique and endangered animals like the four-eyed frog and masked toads.

Environmental Impact Study

Soon after the discovery of REE near Penco, plans were made to produce 1,700 tons of rare earth concentrate annually for 15 years using open-pit mining techniques on an area covering 256 hectares, including 13 hectares of native and endangered flora. The project was initially named BioLantánidos and managed under the company Minera Activa and its subsidiary REE Uno SpA. It involved plans to install a pilot plant with an initial $5 million investment to drill and extract almost two tons of REE a month. In October 2019, the Peruvian company Hochschild Mining PLC acquired BioLantánidos and changed its name to Aclara Resources after registering the REE unit in Canada.

As Chile lacks adequate environmental regulations, BioLantánidos drilled for “simple explorations” without a permit. Subsequently, in 2018, the company submitted its proposal for an Environmental Impact Study to the Environmental Assessment Service. This quest for approval was rocky from the start. The authority issued three Consolidated Reports of Clarifications, Rectifications or Extensions (ICSARA), indicating a very weak proposal. Consequently, the company prepared three addendums. Despite this, many public institutions with a say in the process continued to reject the project. One of them was the regional government, which stated that the project contradicted the Regional Development Strategy.

The last presentation was submitted on January 31, 2022, after which the company claimed that all outstanding issues had been resolved. Still, this wasn’t enough to convince Chile’s Environmental Evaluation Service that there would be sufficient efforts to protect the regional flora and fauna. Faced with an imminent rejection of the project, the company withdrew its application for the environmental impact study on March 2, 2022. Although the company has yet to submit a proposal for another environmental impact study, it has indicated that it is gearing up for resubmission—with a bolstered environmental statement, a community engagement strategy, and an expanded project plan.

So far, the company has tried to make an end run around democracy. According to the  Environmental Impact Assessment framework, community representatives can submit supporting documents with citizen observations – and they did submit 500. However, only a single session was held to gather resident feedback—during the pandemic’s peak period and in just four locations across the area. The low turnout was in part due to the lack of publicity prior to the consultation.

As Maia Seeger, executive director of the Chilean nongovernmental organization Sustentarse points out, this type of “citizen participation” was a mere formality. Even though it provided a mechanism for people to register their concerns, it was not binding on the authorities’ decision-making. Therefore, the community was unable to influence the outcome in a meaningful way. Even elected politicians such as the mayor and town council did not have any decision-making power, diluting the democratic influence of residents.

Company Strategy

The company has touted the benefits of its work, including generating jobs, bringing economic opportunity to the region, and advancing gender equity.

Yet Aclara Resources’ biggest selling point is to position itself as an environmental champion. In the words of CEO Ramon Barua,

We have developed a clean and simple process around our unique ionic clays deposit that allows us to extract its valuable rare earths sustainably. … most importantly, we do not generate any liquid or solid wastes. Our product is 100% free of radioactivity. On top of that, we will have very low water consumption and will recirculate up to 95% of water used in the process. Finally, we will revegetate all extraction areas with native species, seeking to preserve and rehabilitate natural forests. … At Aclara, we are moved by creating environmental wealth in everything we do.

Moreover, the company won a sustainability award and presents at sustainability mining conferences, where it emphasizes its “environmental and social unique value proposition as part of the fight against climate change.” It has gone to great lengths to demonstrate its environmental friendliness. For example, a video on Twitter shows young people distributing pamphlets about REE. When asked about the relation of REE to mining, they say that the project has nothing to do with mining. Instead, they claim that because the presence of rare earths prevents native plants from flourishing, the project’s removal of rare earths, along with predatory trees, and replacement with native trees will improve the environment.

These claims have been contested. The company’s assertions of no radioactivity have not been proven; there will necessarily be waste deposits following the use of “highly corrosive chemical substances.” The project will also draw a lot of fresh water from the basin, which may “affect the natural water courses of the area.” Soil as well as subsoil will be removed, and endangered species of trees will be imperiled. For this reason, civic groups have denounced the efforts as part of a “crude disinformation campaign” designed to “manipulate the perception towards the project.” In this sense, says Lucio Cuenca, director of the Latin American Observatory of Environmental Conflicts, “these actions violate the human rights of the community, access to reliable information and freedom of opinion. Without a doubt, it seeks to damage the social fabric.” Because Aclara Resources does not currently have an Environmental Impact Assessment application submitted, its assertions are not backed up evidence presented through official channels.

Beyond its greenwashing campaign, Aclara Resources is allegedly behind a survey company contacting local residents. The callers ask respondents how they feel about three projects, two of which are irrelevant. The last option, and the rest of the survey, is about rare earths. Although the process is far from transparent, organizers suspect that gathering opinions from the people allows the company to claim that it has consulted with the population, enables it to amass information on residents’ perceptions, and provides a platform to turn public opinion in favor of the project.

This process has only intensified, with Aclara Resources speaking with pride about its “transparency, honesty and dialogue” with communities and public institutions. Its Instagram and Twitter posts show the company hosting open houses as part of “Early Citizen Participation” before reapplying for approval in the Environmental impact Assessment. According to the Latin American Observatory of Environmental Conflicts, these open houses have been met by protest in the communities, who have already voiced opposition to the project.

Community Strategy

The struggle against rare earth elements extraction in Chile has been built on a history of social conflicts around capital projects in the BioBio region, one of Chile’s most active areas for mobilization. Most prominently, the community had already organized, beginning in 2013, against GNL Penco-Lirquén, known as Octopus, which aimed to create a maritime terminal for ships transporting natural gas. The network of contacts created back then served as a basis for a new configuration to oppose REE mining that has involved women’s groups, business representatives, Mapuche associations, various neighboring comunas, and more.

One innovative community strategy against the REE project has been “Parque Para Penco,” a proposal to occupy the place where the mining is supposed to occur and recuperate it for the benefit of the local population. Community members organize hikes in the space, with families going out walking, appreciating and preserving nature, and valuing the local culture. In January and February 2023, organizers generated “Summer in the Park” with a variety of activities—cultural, athletic, environmental—that have strengthened people’s connection with the land.

Local groups have also established an expert committee—lawyers, environmentalists, NGO members, communicators, architects, geographers, anthropologists, hydraulic engineers—to point out irregularities in the project and draw public attention to what was happening.

In February 2022, led by these same social organizations, communities in Penco called for a consultation to see if the population was for or against the mining. It was a transparent process, with plenty of publicity and with votes counted openly. The legitimacy that the clear procedure provided was vital, since the vote itself was not binding. This referendum was a very innovative move, as there hadn’t previously been another community-led process of this type around mining. Twenty percent of Penco’s population (almost 10,000 people) participated in the process, a very high turnout. Ninety-nine percent of them voted against the project.

Soon afterwards, the company withdrew its application for an environmental impact study, saying they wanted to improve community participation and environmentalism. Although neighbors celebrated the apparent victory at interrupting the company plans, they knew to remain alert.  In October 2022, the company announced an expansion of the project. The initial investment of $40 million would grow to $130 million, and the surface area of land occupied by the project would increase from 256 hectares to almost 600 hectares.

Recommendations to Global Social Movements

The fight to prevent REE mining in Penco is far from over. Yet even now, the story has many lessons to offer social movements against mining around the world. Javier Arroyo Olea, of the Latin American Observatory of Environmental Conflicts, draws four recommendations from Penco’s experience.

First, communities gain strength by challenging companies’ and governmental institutions’ presentation of the project’s benefits. Although promises of employment, environmental preservation, and gender equity may be attractive in some regards, citizens and politicians should demand that the company prove its claims, for example that the project won’t impact the water supply.

There is indeed a need for an energy transition from fossil fuels to low-carbon energy sources globally. But a just energy transition requires that the environmental and social costs don’t fall on the most vulnerable communities and territories in the Global South.

Second, it’s essential to hold standards for authentic participation. When official processes gather the opinions of only a small segment of the population and are participatory in name only, residents should demand real citizen input and indigenous consultation. A referendum, even if it’s not official or binding, can generate political pressure and thereby make an impact. In that process, alliances with local politicians and established organizations may give a citizen vote additional legitimacy. Accordingly, it may be advantageous to pressure local elected officials to publicly declare their position on the mining, take actions to back up their statements, and follow through on what they say they will do.

Third, it’s beneficial to reclaim spaces for people, the way Penco residents are doing by creating a park where families can gather, nature can be conserved, and local and indigenous culture preserved. The company will also have a more difficult time mining in a place that’s already defended by the people.

Finally, coordination among groups around the world seeking to prevent REE mining can help mobilize international pressure and provide information about the bigger picture of trade and investment. Such a network of contacts can strengthen ongoing local efforts as well as prevent projects that haven’t yet come to pass.

“Obviously, the environmental evaluation mechanisms must be strengthened,” says Javier Arroyo Olea. “The communities have knowledge about the territories they inhabit. More than being taken into consideration, the voice of the people who inhabit those places must be binding so that this transition be seen with critical eyes and be activated from that perspective as well.”

Originally published on Foreign Policy in Focus