ROME (AP) — The head of Latin America's top development bank made an economic case for rare earth mining to Pope Leo XIV this week, arguing that proper governance and private sector partnerships can unlock billions in regional growth while avoiding the environmental mistakes of the past—a message that challenges the Vatican's recent divestment campaign against the mining industry.
Ilan Goldfajn, head of the Inter-American Development Bank, met privately with the pope on Friday and said rare earth mining could be a boon to Latin America if there are safeguards and value is added locally. The IADB has a roughly $4 billion pipeline of critical mineral projects in the region, mostly in Chile, Argentina and Brazil, with three-quarters of that amount involving private companies.
The Economic Opportunity
Goldfajn said in an interview in Rome on June 18, one day before his meeting, that rare earth mining is "a unique opportunity for the region, but you need to do it in the right way with the standards, the labor conditions, with the environmental conditions, the governance." He added, "We have exactly the tools to do that." He had just delivered a presentation on rare earth minerals at a finance conference, with an eye on potential European investors.
Countries have identified dozens of minerals, including copper, cobalt, lithium and nickel, as critical because they are essential for new technologies. The 17 rare earth elements are a subset of them and are used in a wide range of products, including smartphones, semiconductors, electric vehicles and jet engines. There are 75 million tons (82.7 million U.S. tons) of rare earth oxides around the world, more than half in China, and Brazil has the second-largest reserves, according to the U.S. Geological Survey's most recent estimate.
Vatican Resistance
The Vatican has for years taken a firm stand against multinational mining corporations, especially in Latin America and in favor of Indigenous peoples, whose lands and livelihoods are often ravaged when mining projects come to town. Goldfajn's visit followed one earlier this year by mining executives and suggested a desire to sensitize the pope to the possibility of a better way of doing business. Whether Leo can be swayed is another matter, given his own experience in the region and criticism of the often corrupt deals mining companies ink with governments in the developing world.
Leo, who spent two decades working as a missionary in Peru, would be intimately familiar with the plight of Indigenous peoples in mining areas and the environmental impact of extraction industries on the land. He ministered in Chulucanas, in the archdiocese of Piura, which has huge copper mining projects, and in Trujillo, known for its gold deposits. His final Peruvian posting, Chiclayo, is a big logistical hub for northern Peru's extraction industries.
Goldfajn said of Leo's time in Peru, "He must have seen both sides: the promise, the future, but also the challenges." He noted that Leo held a private audience with a group of top mining executives in January, which he heard from them had been "very constructive." But two months later, the Vatican launched a campaign to encourage divestment from mining companies. At a Vatican news conference, top officials held up an ecumenical Christian network, known as the Church and Mining Network, that is active in particular in Latin America. The campaign seeks to encourage local churches to review their investment strategies and divest where needed, and to share information especially with Indigenous groups about the types of extraction occurring on their lands.
Historical Context and Challenges
Mining has a checkered, centuries-long history in Latin America, from forced labor and displacement of Indigenous peoples to deforestation, poisoning of waterways and deadly dam collapses. Foreign companies withdrew much of the wealth from the earth without enriching local populations. In colonial times, silver and gold made its way across the ocean to adorn Catholic churches.
Bryan Harris, managing partner at Sabio, a Latin America-focused strategic advisory firm, said in an email that it makes sense for people like Goldfajn to try to engage Leo, even if the pope alone won't move investment decisions. Harris said, "The decades he spent in Peru give him personal credibility and his messaging on mining sets the tone for how dioceses and parishes across the continent will engage with mining companies and projects." He added, "These groups are often the basis of local opposition movements to mining, so the Pope has considerable sway on whether relations are confrontational or conciliatory." Harris also noted that processing of rare earths can be extremely dirty, involving heavy chemical use that can contaminate water resources without close monitoring of companies' sustainability commitments and enforcement by federal regulators.
Leo's predecessor, Pope Francis, a native of Argentina, singled out the toll of mining in his 2015 environmental encyclical "Praised Be," noting the pollution of underground water systems as a result of runoff, the mercury pollution in gold mining or sulfur dioxide pollution in copper mining. Francis said it was "essential" for Indigenous communities to be the principal dialogue partners when large projects affecting their land are being considered.
Leo is expected to visit Peru in November, including places where he ministered. In each of the three sub-Saharan countries he visited during his April trip to Africa — Cameroon, Angola and Equatorial Guinea — he blasted the "colonization" of Africa's minerals by mining companies.
The Vatican did not provide any readout of Leo's private audience with Goldfajn. In a separate audience Friday, Leo met with participants in a conference at the Vatican's environmental educational center named for Francis' 2015 encyclical. He denounced the profit-at-all cost mentality of those who seek to plunder the earth "at the expense of the most vulnerable and enhances the risk of dehumanization."
Why This Matters:
The debate over rare earth mining in Latin America represents a fundamental tension between economic development and environmental protection. With $4 billion in critical mineral projects in the pipeline and Brazil holding the world's second-largest rare earth reserves, the region faces a choice between capturing wealth from global tech demand or maintaining blanket opposition to extraction industries. The IADB's emphasis on governance standards, private sector involvement, and local value-addition offers a market-based alternative to either unregulated exploitation or complete divestment. Whether proper regulatory frameworks and enforcement can prevent the historical abuses that have plagued Latin American mining—while allowing countries to benefit from their natural resources—will determine if the region can compete with China's dominance in rare earth production. The Vatican's influence over local opposition movements means Leo's stance could significantly affect investor confidence and project viability across the continent.