Ilan Goldfajn, president of the IDB, used the meeting to present the case that rare earth and other strategic mineral projects can generate economic benefits for Latin America if environmental protections, labor standards and governance safeguards are properly enforced.

The discussion comes against the backdrop of longstanding Vatican criticism of multinational mining operations, particularly in Latin America, where extraction projects have frequently sparked disputes over environmental degradation, Indigenous land rights and unequal distribution of economic gains.

Goldfajn acknowledged those concerns but said the region has an opportunity to avoid the mistakes that have historically accompanied resource extraction.

“It’s 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 and the governance,” Goldfajn said in an interview before the meeting.

The IDB currently has a pipeline of approximately $4 billion in critical mineral projects, primarily in Chile, Argentina and Brazil, with roughly three-quarters of the financing involving private-sector participation.

Demand for minerals such as lithium, copper, cobalt, nickel and rare earth elements has surged as manufacturers expand production of electric vehicles, semiconductors, renewable energy systems and advanced defense technologies.

Latin America possesses some of the world’s largest reserves of these resources, positioning the region as a key supplier in increasingly competitive global supply chains.

Pope Leo, who spent two decades as a missionary and church leader in Peru before his election, is widely viewed as deeply familiar with both the economic promise and social consequences of mining activity.

His ministry included assignments in regions associated with major copper and gold extraction projects, exposing him directly to the concerns of local communities affected by industrial development.

Goldfajn said the pope’s experience gives him a nuanced understanding of the sector’s challenges and opportunities.

The Vatican has consistently advocated stronger protections for Indigenous populations and communities impacted by extractive industries. Earlier this year, Church officials promoted initiatives encouraging religious institutions to review investments in mining companies and increase support for communities affected by resource extraction.

The campaign followed years of criticism from the late Pope Francis, who frequently highlighted environmental damage linked to mining operations and called for affected Indigenous groups to be central participants in decisions involving their territories.

The Vatican did not release details of Friday’s private meeting between Goldfajn and Pope Leo.

Analysts say the pope’s views carry significant influence across Latin America, where Catholic institutions often play an important role in shaping local responses to major mining projects.

The debate comes as countries seek to balance economic development and growing global demand for critical minerals against environmental concerns and social opposition.

According to the latest estimates from the U.S. Geological Survey, more than half of the world’s known rare earth oxide reserves are located in China, while Brazil holds the second-largest reserves globally, underscoring Latin America’s strategic importance in future mineral supply chains.

The lithium industry in Africa’s top producer has rapidly expanded, buoyed by about $1 billion of investments during the past two years by Chinese companies including Zhejiang Huayou Cobalt (603799.SS), Sinomine Resource Group (002738.SZ), Chengxin Lithium Group (002240.SZ) and Yahua Group (002497.SZ).

The Chinese companies, faced with production constraints at home, have focused on Zimbabwe to lock-in future lithium supplies.

The investments could boost capacity to 192,000 tons of lithium carbonate equivalent (LCE) per year of petalite and spodumene in 2027, from 13,000 tons per year LCE in 2022, Cameron Hughes, a battery markets analyst at CRU said in a report.

“These investments will place Zimbabwe as the fifth largest primary producer of lithium by 2025, after Argentina, contributing more than either Canada or Brazil,” Hughes said.

While Zimbabwe holds some of the world’s biggest lithium deposits, the metal has only being mined at Bikita Minerals, producing petalite – a form of lithium used in ceramics, aluminium smelting and glass – since in the 1950s.

Sinomine paid $180 million for Bikita Minerals last year and has spent $300 million to expand the petalite and spodumene capacity to over 90,000 tons LCE per year from 6,000 tons LCE per year in 2020.

Investments by Sinomine and others mean Zimbabwe’s capacity could rise to about 11% of global LCE production in five years from just 2% in 2020, said Martin Jackson, head of battery raw materials at CRU.

Still, while the capacity is “significant”, full utilization would depend on lithium demand and prices, Jackson added.

“I doubted the speed of the ramp up of many of those operations but those Chinese investors have brought lithium to market much quicker than I ever expected,” he said.

Chinese manufacturers’ ability to blend petalite and spodumene concentrates into battery grade material has made the Zimbabwean deposits more attractive, Jackson said.

“One thing we know is there is more investment coming through, we know there is more Chinese interest.”

Despite the huge potential, softening prices might not support investments on marginal projects, Jackson added.

India, among the world’s top greenhouse gas emitters, has been pursuing overseas pacts to secure key minerals in resource-rich countries such as Australia, Argentina and Chile.

“Right now, we are concentrating on copper, cobalt and lithium among critical minerals and looking for collaborations with other countries,” the source said on condition of anonymity.

KABIL, short for Khanij Bidesh India Ltd, was formed in August 2019 to identify, acquire, develop and process strategic minerals overseas for use in India.