Highlights
- Germany’s Ministry highlights three Chilean mineral projects as potential strategic resources for reducing EU dependence on China.
- Projects include:
- Aclra Resources’ rare earths
- Southern Hemisphere’s manganese
- Copper tailings reprocessing
- Each project faces significant technical and regulatory hurdles.
- Early-stage ventures show promise but require substantial de-risking and investment before becoming commercially viable.
A recent webinar hosted by Germany’s Ministry for Economic Affairs and Climate Action (opens in a new tab) spotlighted Chilean rare earth, manganese, and copper tailings projects as strategic opportunities for Europe’s critical mineral security. While the presentation emphasized geopolitical urgency and green transition goals, it overlooked key investment risks and project uncertainties.
Three projects were emphasized: Aclara Resources’ Penco rare earths project, Southern Hemisphere’s Los Pumas manganese initiative, and the massive but technically challenging potential of recovering critical metals from Chile’s copper tailings. Germany’s resource agency, DERA, and investment promotion arm, GTAI, have framed these as “must-watch” ventures in the EU’s race to reduce its dependence on China.
Aclara’s Penco Project was pitched as a future cornerstone of EU magnet supply, with DERA claiming it could meet 70% of EV magnet demand. However, operations are not expected to begin until 2027, and the project still faces environmental, permitting, and infrastructure hurdles. Aclara’s 2023 alliance with Germany’s VAC Magnetics is promising, but lacks clarity on binding offtake volumes or financing for scale-up.
Los Pumas, targeting battery-grade manganese, was promoted as a near-term opportunity; however, the project is still in the partner-seeking phase, with limited drilling in key zones. Despite the resilience of the manganese price, it trails lithium, nickel, and cobalt in market liquidity and lacks downstream processing infrastructure in the region.
Copper tailings reprocessing—potentially rich in cobalt and other critical minerals—was framed as a circular economy solution. Yet, with 795 tailings sites across Chile, only 128 of which are active, the challenge lies in achieving economic recovery rates, managing environmental liabilities, and ensuring technological readiness to scale the extraction of low-concentration elements, such as cobalt sulfide.
REEx View
Germany’s strategic interest in Chile is genuine, but retail investors should exercise caution. These are early-stage, capital-intensive ventures, many years from revenue and still navigating complex geotechnical and regulatory barriers. While demand fundamentals are strong, none of these projects are currently bankable without major de-risking, permitting, or offtake milestones. EU enthusiasm is encouraging, but investors must demand transparency, not headlines.
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