In an era characterised by the urgent necessity to transition to cleaner, more enduring energy systems and to achieve climate-neutral, digitalised economies, both Chile and Indonesia occupy strategic positions on the global stage (IEA 2022). In a context where urgent sustainable shifts must be implemented, the global map of energy and material flows is being redrawn (Post and Le Billon 2025). As leading global suppliers of critical minerals-Chile with lithium and copper, and Indonesia with nickel-these countries have become indispensable to the production chains for the manufacture of low-carbon-emission technologies, such as electric vehicles and renewable energy infrastructure (IEA 2022). Yet they also face a deep paradox. Under what Bringel and Svampa (2023) call the Decarbonisation consensus-a global tacit agreement to substitute fossil fuels with renewable energy sources while preserving the long-term extractive logic of a reformed (green) capitalist system-countries in the periphery risk intensifying the burdens of sacrifice zones while contributing to global decarbonisation.
While framed as sustainable progress, this global shift may be reviving long-standing colonial patterns-now painted green. Thus, for countries like Chile and Indonesia, the energy transition could either reproduce old dependencies or open a window to rewrite them. The question, therefore, is whether they will continue to serve as exporters of raw materials, bearing the socio-environmental costs linked to extractive activity of a transition framed by the Decarbonisation Consensus, or whether they can seize this moment to redefine their roles in the world economy and critically re-examine society’s prevailing social metabolism.
Energy geopolitics encompasses both the geography of supply and demand and the political efforts to secure affordable, reliable, and sustainable energy sources. It highlights interactions between political actors and physical environments. Thus, as the global energy system evolves, so does its geopolitics (Blondeel et al.2024). Authors, such as Hira (2025), have pointed out that, just as the quest to control petroleum resources influenced the twentieth century and early twenty-first century, critical minerals will also influence the geopolitics of the present and coming decades. Moreover, this current transformation offers critical mineral-producing countries a unique possibility to build competitive industries. Experience demonstrates that strategic industrial policies, particularly in research and development (R&D), can enhance the growth of competitive sectors.
In 2024, global demand for critical minerals surged. Lithium demand alone rose by nearly 30%, far exceeding the average 10% growth rate of the 2010s. consumption of nickel, cobalt, graphite, and rare earth elements grew by roughly 6-8%, driven mainly by energy applications such as electric vehicles, batteries, renewables, and power grids. Copper demand also climbed, propelled by China’s large-scale investments in electrical infrastructure (IEA 2025b). While clean-tech developers sit at the core of the world economy, mineral producers remain at the periphery, absorbing the environmental costs of powering someone else’s transition―China is a particular case of a transitioning economy. This dynamic is exacerbating socio-environmental burdens in resource-dependent economies and regions due to mining activities (Poque González 2025a; IEA 2022). It might reinforce global patterns of ecologically unequal exchange under a new (green) colonial frame (Dorninger et al. 2021; Hickel et al. 2022).
Among the new frontiers of extraction, Chile and Indonesia stand out-not only for their mineral wealth, but for the contrasting political strategies they have adopted to govern it. Indonesia produces over 60% of global nickel; Chile dominates copper (24% of world output) and ranks second in lithium (around 30%). Yet their governance models diverge sharply (IEA 2025b; ITA 2023). In Chile, copper mining is dominated by private companies, which control around 72% of production.The State owns the remaining 28% through Codelco. Major private operators come from the United States,Canada,Australia,Europe,and Asia. Lithium extraction is carried out by only two firms: soquimich (SQM)-partially owned by Tianqi-and albemarle Chile, a wholly owned subsidiary of Albemarle Corp. Chile is also a leading producer of iodine, rhenium, sodium, and potassium nitrate (ITA 2023). A current point of controversy involves the alliance between Codelco and SQM for lithium extraction in the Atacama Salt Flat, promoted by the Chilean government as a “win-win, cost-effective, public-private accord”. Though nearing final approval, the partnership has faced int
The Reorganisation of Extractivism: Decarbonisation, Power, and Unequal Ecological Exchange
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These trajectories invite us to reflect on the intensity, timing, and pathways through which the world is pursuing decarbonisation beyond domestic or national policy strategies. They highlight the inseparable relationship between surroundings, matter, energy, and the societies that mobilise them (Poque González 2024). An intensive extractive economy built to satisfy (constantly growing) the material demands of capitalist societies inevitably shifts the burdens onto specific territories, revealing that the “green” transition, as currently configured, does not transcend extractivism – it reorganises it.Questioning the prevailing social metabolism is therefore essential. In this context, it becomes clear that critical minerals are embedded in patterns of unequal ecological exchange and in the emergence of a new geopolitical metabolism.
Chile and Indonesia remind us that the “green” transition is not merely about technology-it is indeed about power,sovereignty,and the enduring question of who benefits from global change. However, climate change is a global threat, and its impacts are perceived differently across societies based on each society’s prior vulnerabilities. This point must be considered when thinking about facing the current global scenario and the potential climate catastrophes, and how peripheral countries manage their own resources. At present, the trade relations between Chile and Indonesia are characterised by the export of copper and agricultural products from Chile to Indonesia, and the import of footwear and automobiles produced in Indonesia into Chile (OEC 2025). South-South cooperation consistently presents itself as an choice to a departure from an extractivist-dependent developmental trajectory, and as an ancient desire in Latin America. However, the current landscape remains opaque when considering China’s prominent role in the development of low-carbon-emissions technology and its geopolitical tensions with the United States and the EU; alternatively, it may represent a strategic opportunity for the resource-rich countries of the Global South.
References
Anindya, Michelle.2025. ‘Indonesia, home to the world’s largest nickel reserves, struggles to achieve its EV dreams’. Rest of World, February 3. https://restofworld.org/2025/indonesia-ev-nickel-ban-global-investors/es/
Aylwin,José,Juan Carlos Cayo,and Santiago correa. 2025. ‘Lights and shadows of the Codelco SQM agreement’. Column. CIPER Chile, August 7. https://www.ciperchile.cl/2025/08/07/luces-y-sombras-del-acuerdo-codelco-sqm/
Blondeel,Mathieu,James Price,Michael Bradshaw,et al. 2024. ‘Global Energy Scenarios: A Geopolitical Reality Check’. Global Environmental
(Guberman et al. 2024).
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Chile and Indonesia: A Growing Partnership in Critical Minerals
The global transition to clean energy is driving unprecedented demand for critical minerals – essential components in technologies like electric vehicles, wind turbines, and solar panels. This demand is reshaping global supply chains and fostering new international partnerships. A particularly noteworthy development is the burgeoning relationship between Chile and Indonesia, two nations rich in key critical mineral resources.
Resource Endowment and Production
Chile is a leading producer of copper and lithium, both vital for electrification.It holds the world’s largest known lithium reserves, primarily in the Salar de Atacama. Copper production is well-established, though facing challenges related to water scarcity and environmental regulations (ITA, 2023). Indonesia, simultaneously occurring, is a major player in nickel, cobalt, and bauxite – crucial for battery production. The country possesses meaningful nickel laterite deposits and is rapidly expanding its processing capacity, aiming to become a major hub for battery materials (ITA, 2024).
Emerging Trade Dynamics
While historically limited, trade between Chile and Indonesia in critical minerals is beginning to expand. currently, Chile primarily exports copper to Indonesia, while Indonesia exports coal and other commodities to Chile (OEC, 2025). However, the potential for increased trade in lithium, nickel, and related battery materials is substantial. Indonesia’s growing battery industry creates a significant demand for Chilean lithium, and Chile could benefit from Indonesian expertise in nickel processing.
Challenges and Opportunities
Several factors could influence the future of this partnership. Environmental and social concerns surrounding mineral extraction are paramount. In South America, the energy transition itself is generating socio-ecological controversies, particularly regarding lithium mining and its impact on water resources and Indigenous communities (Poque González, 2022; Poque González, 2024). Similarly, Indonesia faces scrutiny over the environmental impacts of nickel processing and deforestation related to mining activities. Sustainable and responsible mining practices are therefore crucial.
Geopolitical considerations also play a role. Both countries are navigating complex relationships with major global powers, particularly China, which is a significant investor in both Chilean and Indonesian mining sectors. Diversifying supply chains and fostering greater regional cooperation are key strategies for mitigating risks.
Moreover, infrastructure development and investment in processing capabilities are essential. Chile needs to expand its lithium processing capacity to move beyond raw material exports, while Indonesia requires continued investment to refine its nickel and cobalt processing technologies. Collaboration on research and development could accelerate innovation in sustainable mining and processing techniques (poque González, 2025a).
Looking Ahead
The partnership between Chile and Indonesia in critical minerals represents a significant opportunity for both nations. By addressing environmental and social challenges, fostering sustainable practices, and investing in infrastructure and innovation, they can contribute to a more secure and responsible supply of critical minerals for the global clean energy transition. Strengthening bilateral agreements and promoting knowledge sharing will be vital for realizing the full potential of this emerging partnership.
Publication Date: 2025/11/24 22:12:57
References
IEA. 2025. ‘Global Critical Minerals Outlook 2025’. International Energy Agency. https://iea.blob.core.windows.net/assets/ef5e9b70-3374-4caa-ba9d-19c72253bfc4/GlobalCriticalMineralsOutlook2025.pdf
ITA. 2023. ‘Chile – Mining’. Trade.gov. International Trade Administration, December 7. https://www.trade.gov/country-commercial-guides/chile-mining
ITA. 2024. ‘Indonesia – Mining’. Trade.gov. International Trade Administration,January 9. More on this