Chile is working to decarbonize its mining sector through renewable energy, emissions targets, and regulatory reforms, but significant challenges remain in aligning its mineral-driven economy with its climate goals.

Chile, the world’s largest producer of mined copper, is staking its future on a bold premise: that it can lead the world in mineral output and mining sustainability. The government claims it’s serious about cutting carbon from its extractive industries. But are its actions equal to its ambition?

In 2022, Chile accounted for 24% of global copper production, according to the U.S. Geological Survey. Its mineral wealth doesn’t end there: lithium, iron, and molybdenum have dominated exports in recent years, collectively bringing in $111.89 billion, per S&P Capital IQ. Given the surging demand for lithium—essential to electric vehicle batteries and other green technologies—Chile is a pivotal player. It trails only Australia in lithium production and holds the world’s largest commercially viable reserves. In 2024, Chile contributed 24% of global lithium output—some 235,000 tonnes of lithium carbonate equivalent—much of it extracted from the briny flats of the Atacama Desert.

Mining is not just profitable; it’s a pillar of Chile’s economy. Between March and May 2022, the industry employed 263,000 people in large-scale operations, a 21.4% jump from the year before. In 2020, the sector accounted for 17.73% of GDP, according to the International Council on Mining and Metals. In April 2023, President Gabriel Boric signaled a shift by unveiling a new policy that would place future lithium contracts under public-private partnerships with state oversight—a move seen as an effort to bring strategic minerals under tighter government control.

Yet mining comes with a high environmental cost. Chile’s greenhouse gas (GHG) emissions stood at 124.41 million metric tons (Mt) in 2021, up from 90.61 Mt in 2005, according to the IMF. Climate Watch pegs the country’s 2020 emissions slightly lower, at 106.72 Mt—about 0.10% of global emissions. Industrial processes contribute a mere 4.5% of this figure; energy accounts for 80%. It’s unclear if mining emissions are counted under energy or industry, but Chile’s 6th Biennial Update Report data suggests that mining’s GHG footprint is growing fast.

Between 1990 and 2020, emissions from copper and other mining activities—including lithium—tripled. Rising mineral prices and surging demand helped fuel this spike and greater diesel consumption in mining operations. Coal mining, though in decline, still contributes emissions—mainly from active open-pit and underground mines and the emissions associated with post-mining processes. Still, coal accounts for less than 5% of emissions from copper mining and is expected to fall further.

Amid these challenges, the Chilean mining sector has made progress in greening its power sources. In 2021, 44% of electricity used by the industry came from low-emission sources. That share is projected to climb to 62% by 2025, thanks largely to solar and wind power, according to the government’s 5th Biennial Update Report.

Chile’s climate goals are formally outlined in its Nationally Determined Contributions (NDCs), first submitted to the UN in 2016 and updated in 2020. While the documents treat mining primarily as a subset of the energy sector, they set clear national targets: a hard cap of 95 Mt CO₂ by 2030 (down from 123 Mt in the 2015 version), with peak emissions slated for 2025. The country has pledged carbon neutrality by 2050 and a total emissions budget of no more than 1,100 Mt CO₂ for the 2020–2030 period.

Though most mining decarbonization is framed in terms of energy reform, Chile’s latest NDC includes explicit goals for mining. By 2050, the country aims to cut GHG emissions from open-pit copper mines by 57%, underground copper mines by 74%, and other mining activities by 52%. Achieving this will require a shift to electric vehicles, thermal electrification, and greater use of hydropower—though the NDCs hedge, noting that such measures may or may not appear in sector-specific plans. Chile’s 3rd Biennial Update Report in 2018 set a goal of reducing industry and mining emissions by 2.38 Mt CO₂ by 2030, emphasizing energy efficiency in mine design and operation.

Still, ambition is one thing—execution another. According to the Climate Action Tracker’s 2023 assessment, Chile’s updated 2030 target is “almost sufficient” domestically, but “insufficient” when judged against its fair share of global climate action.

Chile has also pledged to phase out coal mining by 2040, though the NDCs don’t clarify whether this includes coal-fired energy use. The country’s energy mix has evolved over the past 15 years: oil remains dominant, but coal and biofuel use are falling, while renewables steadily rise.

Water use, another sensitive issue, complicates the lithium story. Unlike fresh groundwater, the brine used in Chile’s lithium extraction can’t be repurposed for agriculture or human consumption, limiting direct conflict. But copper mining is far more water-intensive, especially in processing. While Chile’s NDCs mention water sector priorities, they stop short of detailing how they intersect with mining activities.

What gives Chile an edge, at least on paper, is institutional strength. The country’s relatively stable governance has made it a model for the region. Its National Mining Policy 2050 lays out short and long-term goals for sustainable mining. Meanwhile, the Action Plan for Energy Efficiency unveiled in 2013, is being implemented across sectors, including mining.

Several laws—though not mining-specific—support Chile’s climate ambitions. These include the Unconventional Renewable Energy Law (2008), the Carbon Tax Law (2014), the Energy Efficiency Law (2021), and the Climate Change Framework Law (2022). Together, they form a patchwork of regulation aimed at aligning Chile’s economic engine with its environmental goals.

Chile may be a mining powerhouse, but to become a climate leader, it must do more than extract—it must transform. The blueprint exists. Whether it can be built into reality remains the defining challenge.

This article was originally posted in the Canadian Mining Journal.