Investors in the rare earths space may have been hearing a bit more about Chile lately. Privately held mining company BioLantanidos has been making headlines with its rare earths project in the country, which is set to begin producing by the end of 2016. Held by private equity firm Mineria Activa, BioLantanidos has been developing its rare earths project over the past four years. The company says that the project could have one of the lowest cash costs and capex requirements in the world. More importantly, some are saying the company could provide some much-needed competition with China. That's largely due to the fact that the project hosts an ionic clay deposit, and that BioLantanidos is targeting a more environmentally friendly method of extraction. The importance of ionic clays As Jon Hykawy of Stormcrow Capital has previously explained, it's relatively simple to extract rare earths from ionic clay deposits — rare earths can be leached out of the clays using anything from ultrapure sulfuric acid to animal urine. Ionic clay deposits are responsible for much of the cheap (and sometimes illegal) rare earths production in the south of China, but Hykawy has pointed out in the past that such deposits could also exist in South America, Africa and possibly even North America. Ignacio Del Río, CEO of Mineria Activa, said that BioLantanidos' deposit is similar to those in the south of China. "We know it's very similar in grade and composition," he said. "We already have a couple of Chinese entities proving that for us." Still, the company won't be able to use the same extraction methods used in China, as those involve pumping chemicals directly into the ground.