Chile moves to fast-track new lithium deals

[Ben Graham]

Chile’s mining ministry will submit five new lithium contracts to the national comptroller in March, just days before President Gabriel Boric leaves office, as it pushes to expand production under the country’s national lithium strategy.

The contracts cover Salar de Ascotán, Quillagua Sur, Hilaricos, Salar de Piedra Parada and Salar de Agua Amarga. Three others — Quillagua Norte, Quillagua Este and Planta El Águila — remain under regulatory review, local outlet Emol.com reported. 

The ministry is also advancing two direct-award contracts, Ollague and Laguna Verde, separate from the tender contracts it submitted in January. Regulators blocked last month the Quillagua Norte and Quillagua Este contracts over “legal deficiencies” in how the ministry set award requirements, ruling that only the President has the authority to establish such criteria.

The dispute centres on how Special Lithium Operation Contracts, known as CEOLs by their Spanish acronym, are processed when private companies or consortia submit applications. 

That framework differs from agreements between state-owned companies such as Codelco and Enami and private partners including SQM (NYSE: SQM) and Rio Tinto (ASX: RIO).

Regaining lost ground

The new submissions signal a broader push to accelerate Chile’s 2023 national lithium strategy, which increased state involvement and reshaped project development. The country aims to lift annual lithium output from 280,000 tonnes in 2024 to about 430,000 tonnes by 2034.

Although Chile remains the world’s second-largest lithium producer, it has ceded market share to faster-growing rivals. Manuel Viera, president of the Chilean Mining Chamber, told MINING.COM the country could reclaim its position as the top producer within a decade if it repeals restrictions and adopts a more pro-investment framework.

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Viera pointed to Nova Andino Litio, a joint venture between Codelco and SQM (NYSE: SQM), and Salares Altoandinos as positive developments, but said more than 40 salt flats across the country remain untapped.

He also highlighted Codelco’s Maricunga lithium partnership with Rio Tinto (ASX: RIO), which is awaiting antitrust approvals in Chile and China before the companies can sign a shareholders’ agreement.

Viera argued that Chile’s loss of lithium leadership reflects political constraints rather than geological limits, citing Mining Code provisions that reserve lithium for the state and, in his view, deter private investment despite high-quality reserves.