Chile’s Ministry of Mining will submit five new Special Lithium Operation Contracts (CEOLs) to the Office of the Comptroller General in March 2026. This move comes just days before President Gabriel Boric leaves office, marking a critical final step in implementing the country’s National Lithium Strategy and expanding lithium production capacity. It has once again drawn global attention to the policy and capacity dynamics of a core player in South America’s “Lithium Triangle.”
The five contracts cover the lithium resource areas of Salar de Ascotán, Quillagua Sur, Hilaricos, Salar de Piedra Parada, and Salar de Agua Amarga — all salt flats and mining districts within Chile that possess large-scale development potential. According to local authoritative media outlet Emol.com, in addition to these five contracts, three other projects — Quillagua Norte, Quillagua Este, and Planta El Águila — remain under regulatory review and have not yet completed compliance approval.
Meanwhile, Chile’s Ministry of Mining is separately advancing two directly awarded contracts involving the Ollagüe and Laguna Verde mining areas. These arrangements are entirely separate from the public tender contracts submitted in January this year and represent strategically targeted development initiatives. Just last month, Chilean regulators halted the Quillagua Norte and Quillagua Este contracts on the grounds of “legal defects,” ruling that the Ministry of Mining lacks the authority to independently establish award criteria — a power reserved exclusively for the President. This regulatory dispute highlights the broader challenge Chile faces in balancing state leadership with procedural compliance in lithium development.
At the center of the controversy are the approval and award rules governing Special Lithium Operation Contracts (CEOLs). These contracts serve as the core vehicle for implementing Chile’s National Lithium Strategy and differ fundamentally from traditional cooperation agreements between state-owned enterprises (such as Codelco and Enami) and private companies (including SQM and Rio Tinto). The CEOL model emphasizes stronger state control over lithium resources and revenue distribution, requiring private capital to participate within a state-defined framework rather than under conventional concession models.
Reclaiming Global Leadership in Lithium: Strategic Ambitions and Industrial Reality
The collective submission of this batch of contracts signals Chile’s full-speed implementation of its National Lithium Strategy released in 2023. Centered on “strengthening government participation, reshaping development models, and enhancing resource sovereignty returns,” the strategy sets a clear quantitative target: increasing annual lithium production from 280,000 metric tons in 2024 to approximately 430,000 metric tons by 2034. The goal is to reverse the passive erosion of market share in recent years amid competition from Argentina and Australia.
Although Chile remains the world’s second-largest lithium producer and holds nearly 41% of the world’s proven lithium reserves, its share of global supply has continued to decline due to rapid capacity expansion in Argentina and Australia. Manuel Viera, President of Chile’s Mining Chamber, stated in an interview with MINING.COM that Chile’s loss of lithium leadership stems from political constraints rather than geological limitations. Under the Mining Code, lithium is classified as a state-owned resource, and strict development restrictions have significantly dampened private investment enthusiasm. Despite possessing some of the world’s highest-quality salt flat resources, development progress has fallen short of expectations.
Viera emphasized that if Chile relaxes investment restrictions and establishes a more investor-friendly policy framework, it could reclaim its position as the world’s largest lithium producer within a decade. He also noted that more than 40 undeveloped salt flats remain in Chile, indicating resource development potential far exceeding current production capacity and significant room for future growth.
In terms of industrial cooperation, Viera highlighted two landmark developments. First, the joint venture Nova Andino Litio, established by Codelco and SQM, along with the Salares Altoandinos project, has become a model of collaboration between state capital and private industry leaders. Second, the Maricunga lithium project between Codelco and Rio Tinto — the world’s second-largest lithium brine project — is currently awaiting final approval from Chilean and Chinese antitrust authorities. Upon approval, the parties will formally sign a shareholder agreement under which Rio Tinto plans to invest USD 900 million for a 49.99% stake, while Codelco will retain board control. Once fully operational, the project is expected to reach an annual production capacity of 50,000 metric tons of lithium carbonate equivalent (LCE), becoming a key contributor to Chile’s future lithium capacity growth.
In addition, the Codelco–SQM joint venture has entered substantive operational stages. The newly formed Nova Andino Litio will oversee operations at the Salar de Atacama through 2060. The government is expected to receive approximately 70% of profits before 2030, rising to 85% after 2031. Through the adoption of Direct Lithium Extraction (DLE) green technology — aimed at reducing water consumption and improving recovery rates — annual production capacity at Salar de Atacama is planned to increase from 210,000 to 300,000 metric tons LCE, further consolidating the region’s strategic advantage.
Dual Impact on Policy and Market
The contract push before the Boric administration leaves office represents both the implementation of the National Lithium Strategy and a framework-setting for the next government. State leadership, public–private partnerships, and compliance-driven capacity expansion，which remain to be the long-term direction of Chile’ s lithium industry. For the global lithium market, accelerated capacity releases from Chile may help ease medium- to long-term supply tightness. However, under the CEOL model, development pace and revenue-sharing mechanisms will continue to influence the actual timeline of production ramp-up. For companies on the supply chain, clearer cooperation thresholds and approval rules in Chile’s mining sector provide more transparent policy guidance for global lithium resource deployment.
Conclusion
BICHEM believes that Chile’s accelerated advancement of CEOL lithium contracts is fundamentally the combined result of implementing Chilean National Lithium Strategy and meeting its capacity expansion demands. Direct Lithium Extraction (DLE) technology represents the optimal solution to CEOL contractual requirements concerning water consumption, recovery efficiency, and environmental protection, and serves as the core technical support for achieving Chile’s planned lithium output growth.
