Decarbonizing mining: Can Chile Succeed?

Chile’s government claims to be making big moves to decarbonize the mining sector. What actions has it been taking?

Chile is the world’s biggest producer of mined copper, with 24% of global production in 2022 (according to the U.S. Geological Survey’s report of 2023a). Over the last 2 years, copper, lithium, iron, and molybdenum were Chile’s main export products, with a total value of US$111.89 billion (according to S&P Capital IQ’s reporting in 2023).

Considering the rising global demand for lithium, Chile is an important player, as the world’s second-largest lithium producer after Australia, and the host of the largest known quantity of commercially viable lithium reserves in the world (USGS, 2023b). The country accounts for 24% (equal to 235,000 tonnes lithium carbonate equivalent) of global lithium production (S&P Capital IQ, 2024). In Chile, lithium is produced from brine in the Atacama Desert in the salt plains bordering Bolivia. In terms of employment, Chile’s mining industry provided 263,000 direct jobs in large-scale mining between March and May 2022; an increase of 21.4% compared to the same period in 2021.

In 2020, the mining sector contributed 17.73% to national GDP according to the study published by the International Council on Mining and Metals. These numbers show the importance of the mining sector for the Chilean economy. In April 2023, Chile’s newly elected president announced the first wave of a new government plan to exert greater central government control over the country’s increasingly important lithium industry. This would mean that future lithium contracts would only be issued as public-private partnerships with state control.

Looking at economy-wide greenhouse gas (GHG) emissions, according to the IMF, Chile’s total GHG emissions in 2021 were 124.41 Mt (excluding land use, land-use change, and forestry, which according to the IMF is up from 90.61 Mt in 2005). The data slightly differs according to Climate Watch, which also puts Chile’s GHG emissions at 106.72 Mt in 2020, representing 0.10% of global emissions (according to the 2024 research report published by Climate Watch). Historical data on GHG emissions, derived from Climate Watch data, show that Chile’s total emissions have grown rather moderately over the past decade. Only 4.5% of GHG emissions are generated as a result of industrial processes. Energy accounts for 80% of emissions in Chile. It is unclear whether that includes mining. Overall, GHG emissions in Chile have increased by 114.7% since 1990 and 20.0% since 2007. Data on emissions in Chile’s mining sector are included as part of a sectoral focus in the country’s 6th Biennial Update Report (as published in 2023 by the national government’s Department of Mitigation and Transparency).

GHG emissions from mining, especially copper mining and other mining activities (including lithium), have tripled between 1990 and 2020. The reasons for that are the increase in mining activities, largely owing to rising copper prices as well as rising demand over that period, and increased consumption of diesel for mining other minerals on the other hand.

Another set of emissions caused by the Chilean mining sector is a result of coal mining and coal handling. This includes active open pit (surface) and underground mines, as well as GHG emissions caused in the post-mining process, referring to processes related to mine closure. However, they only make up less than 5% of the GHG emissions from copper mining. As coal mining has been decreasing in Chile for a few years, these numbers are expected to continue to decline.

As communicated in the 5th Biennial Update Report published by the government in 2022, the Chilean mining industry is making significant progress in the use of renewable energy. In 2021, 44% of mining electricity consumption is from low GHG emissions sources, and in 2025, it is expected that 62% of the industry’s electricity demand will come from solar and wind energy sources.

A look at Chile’s “Nationally Determined Contributions” (NDC) and its international climate change commitments

The Chilean government published its first “Nationally Determined Contributions” (NDC) commitments in writing in 2016. The document was updated and submitted to the United Nations Framework Convention on Climate Change (UNFCCC) in 2020. The 5th BUR was communicated by the Ministry of the Environment in December 2022 and offers extensive information on Chile’s way forward in reducing GHG emissions.

Even though Chile is such a large mining country, the country’s updated NDC treats emissions reductions in the mining sector mainly as part of its ambitions in the energy sector. In its official NDC document, Chile sets an absolute annual emissions target of 95 Mt CO2 unconditionally by 2030 — and committed to peaking emissions in 2025. This is a much harder target than the one set in Chile’s 2015 NDC, where the country committed to an annual emissions target of 123 Mt CO2. According to its most recent NDC report, Chile aims to be carbon neutral by 2050 and intends to use a GHG emissions budget of no more than 1,100 Mt CO2 from 2020 to 2030.

Since mining emissions reduction targets are a key concern, Chile’s latest NDC includes the following mining-specific GHG emissions reduction targets by 2050:

• Reduction by 57% in open pit (surface) copper mines.

• Reduction by 74% in underground copper mining.

• Reduction by 52% in other mining activities.

Reductions in GHG emissions should be achieved using electric vehicles in mining operations to reach carbon neutrality. Other potential measures in mining include thermal electrification and hydropower. However, it needs to be pointed out that it is clearly stated in the NDCs that these measures might or might not be reflected in sectoral mitigation plans. The 3rd BUR (Government of Chile, 2018) sets as its objective a reduction of GHGs in the sector of industry and mining of 2.38 Mt CO2 by 2030. Furthermore, the Chilean government aims to incorporate energy efficiency in assessments and designs of future mining operations to reduce GHG emissions caused by fuel consumption in mining.

According to the Climate Action Tracker’s 2023 report, Chile’s updated 2030 NDC target is rated as “almost sufficient” when compared to modelled domestic pathways and “insufficient” when compared to its fair share contribution to climate action.

Coal exit

Another important factor to mention is that Chile pledged to exit coal mining by 2040. This is also mentioned in their NDCs as one of their strategies to reduce GHG emissions. There is no mention of whether this also includes a pledge to end the use of coal as part of the energy mix. The evolution of Chile’s energy mix shows that oil is the largest energy source, almost stable for the last 15 years, and that coal and biofuel use is dropping while renewable energy is experiencing steady growth.

Lithium and the water sector

Given that lithium in Chile is primarily found in the Atacama Desert, one of the driest places on earth, water potentially plays a role in Chile’s lithium production. Yet, it needs to be noted that direct conflicts over water use associated with lithium mining in Chile are limited, as the brine from which lithium is extracted cannot be used for either human consumption or agricultural purposes. Much more water is used in copper mining, especially processing. Prioritizing the water sector in the NDC is thus related to the mining sector. The documents do not spell out how and to what extent this would impact mining activities.

Chile’s rather robust national institutions, which provide stability to mining activities, make it comparatively advantaged and position it as a reference or benchmark for other countries in the region to emulate or learn from when it comes to mining. As presented in Chile’s 5th BUR, the recently launched National Mining Policy 2050 sets short (2025), medium (2030), and long- term (2050) goals for the mining sector and the government. The objective is to achieve a responsible mining sector that provides the minerals needed for the global energy transformation (according to the Ministry of the Environment in 2022). The Action Plan for Energy Efficiency policy imposes efficiency actions in different sectors, including the mining sector. It was disclosed in 2013 and is currently in the implementation phase. Further laws supporting the implementation of the Chilean contribution to the Paris Agreement include the Unconventional Renewable Energy Law (Law no. 20.257/2008), the Carbon Tax Law (Law no. 20.780/2014), the Energy Efficiency Law (Law no. 21.305/2021), and the Climate Change Framework Law (Law no. 21455). None of these focuses on the mining sector, but they touch upon the mining sector as a contributing sector on the path to climate neutrality. This is in line with the NDC mentioning mining as one factor for GHG emissions reduction; however, the assigned measures are related to energy and electrification. 

Gordon Feller is a freelance mining writer.

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