Washington is seeking to reduce its dependence on China. Penco leads the Chilean options, NeoRe is planning a modular plant, and three older prospects are located in Atacama.
The contest over rare earths is beginning to show up in commercial shipments. According to the Financial Times, China shipped 512 tonnes of rare earth magnets to the United States in August, 20% less than in July. These components are used in electric vehicles, technology equipment and defense systems. As Washington looks for suppliers to reduce its dependence on China, South America presents two different situations: Brazil already produces these minerals, while Chile is still trying to bring its projects into commercial operation.
GEM Mining Consulting, led by Juan Ignacio Guzmán, identifies five assets or prospects in Chile. Two have seen recent business activity: Aclara Resources’ Módulo Penco in the Biobío Region, and NeoRe, whose concessions are mainly in Ñuble and Maule. The other three—Cerro Carmen, Sierra Áspera and Veracruz—are older prospects in Atacama linked to the National Mining Company and the Chilean Nuclear Energy Commission. They are at different stages of development.
Matías Marañón Luco, head of consulting at Plusmining, uses another criterion: he considers the cases that are furthest along or have the most publicly available information. That produces a list of three Chilean initiatives: Penco; Verónica Norte, another Aclara project about 45 kilometers to the south that is still in exploration; and NeoRe. The latter holds Esperanza 7 in Cobquecura, Ñuble Region, where it plans to install its first modular extraction plant.
Penco takes the lead
“Today, Penco (Aclara’s project) is the only one with a clearly advanced path toward production,” Marañón says. The project has an economic assessment, environmental approval and strategic investors.
Aclara Resources is listed on the Toronto Stock Exchange in Canada. According to Marañón, its main shareholders are the Hochschild Group—through Hochschild Mining and New Hartsdale Capital, with a combined stake of about 58%—and CAP, with approximately 12%.
For Penco, GEM records 27.5 million tonnes of measured and indicated resources at a grade of 2,292 parts per million total rare earth oxides, equivalent to 62,900 tonnes of contained oxides. It adds 1.7 million tonnes of inferred resources containing a further 3,400 tonnes. The consultancy makes a distinction: resources are not the same as reserves and do not, on their own, show that the deposit can be mined profitably.
Álvaro Merino Lacoste, executive director of Núcleo Minero, puts the project’s investment at US$130 million. He says it could produce 1,700 tonnes of concentrate at full capacity and generate around 2,200 direct and indirect jobs. In his view, domestic obstacles to bringing projects to fruition explain the slow pace of the industry in Chile. He also sees potential in mining tailings in Atacama and Coquimbo and clay deposits in Maule, Ñuble and Biobío..
NeoRe and its connections
NeoRe SpA is a Chilean company controlled by Madesal SpA, according to a September statement by US-based Chilean Cobalt Corp. The US company has a binding agreement to work toward acquiring 100% of NeoRe, although the purchase has not yet closed.
Chilean Cobalt reported that NeoRe completed about 2,500 meters of drilling across more than 250 drill holes in 2026, collected more than 1,700 surface samples and processed around 500 kilograms of clay in pilot tests. The parties also sent batches of concentrate to potential US partners for analysis.
NeoRe’s next target is to obtain the first mixed rare earth carbonate from its modular plant in early 2027. To do so, it needs permits, construction, financing and commissioning. The company expects to reach an annualized rate of around 50 tonnes during 2027, 300 tonnes in 2028 and, subsequently, between 500 and 1,000 tonnes.
In its central scenario, GEM expects a commercial producer first—probably Penco—with NeoRe at the demonstration stage or operating at an initial modular scale. A second operation would depend on NeoRe publishing resource estimates, securing permits and successfully scaling up its process.
Brazil’s advantage
Outside Chile, Marañón identified 13 advanced projects: ten in Brazil, one in Colombia, one in Mexico and one in Paraguay. “Brazil is clearly further ahead,” he says. Serra Verde already operates Pela Ema in Goiás. In the same state, Aclara is developing Carina in Nova Roma. The EMA project, owned by Australia’s Brazilian Critical Minerals, is located in Amazonas. Meteoric Resources’ Caldeira and Viridis Mining and Minerals’ Colossus are in the Poços de Caldas area of Minas Gerais; Araxá is in the area of the same name, also in that state. Marañón places Carina and EMA at the feasibility stage, while the other projects mentioned are going through various stages of evaluation.
“Chile has advantages in mining experience, institutions, infrastructure, access to capital and the ability to develop projects with traceability and demanding ESG standards,” the consultant says. Brazil, however, is ahead in the size and maturity of its project pipeline. Chile does not yet produce rare earths commercially or have demonstrated industrial capacity for separation and refining.
“For Chile, the central point is that having the resource is not enough. For projects of this kind, access to processing, capital, buyers, traceability and contracts are essential,” Marañón says. In his view, Penco is Chile’s most concrete offering for that supply chain. NeoRe, meanwhile, is seeking to connect with US processors and potential buyers through Chilean Cobalt.
Agreements and the political outlook
Chile and the United States signed a joint declaration on March 12 to consult on critical minerals and rare earths. The mechanism provides for identifying projects of interest, examining supply gaps and exploring financing. It does not establish purchase commitments or preferences for Chilean production.
In the domestic debate, Erich Grohs, a member of the Mining Commission and the National Libertarian Party, questions the timelines: “Chile cannot keep losing strategic investments because of suffocating permitting requirements.” Deputy Patricio Briones links the industry to employment in Biobío, although he calls for information and oversight for communities: “This is a medium-term undertaking. It cannot be taken lightly, because guarantees and certainty must ultimately be provided to the population.”
The gap with Brazil already has a concrete expression: Brazil has a mine in production. In Chile, Penco must resolve appeals, permits and financing, while NeoRe needs to demonstrate that it can move from pilot tests to a modular operation.
Source: La Segunda