Chile has awarded its first special lithium operating contract (CEOL) to a fully private company, Quiborax, greenlighting a US$70 million project to extract up to 20,000 tonnes of lithium carbonate equivalent from historical mining waste at the El Águila plant in the Arica y Parinacota Region. The deal marks the first test of Chile’s new private-participation framework for lithium – previously reserved for state firms Codelco and Enami – and signals a shift toward supply from secondary sources rather than virgin brine or hard rock. If the project meets its targets, it would add roughly 1.5% of current global lithium supply from a waste stream that otherwise carries environmental liabilities.
Chile’s CEOL Framework Opens to Private Capital
The special lithium operating contract (Contrato Especial de Operación de Litio, or CEOL) was created under Chile’s National Lithium Strategy, unveiled by President Gabriel Boric in April 2023. That strategy declared lithium a strategic resource and mandated state majority control over new production in salars deemed strategic, while opening a narrower path for private participation in non-strategic areas or through value-added processing. The first two CEOLs, awarded in late 2024, went to the state mining company Codelco and the state mining enterprise Enami (Empresa Nacional de Minería), both for projects in the Atacama and Maricunga basins respectively.
Quiborax’s award breaks that pattern. The company, a subsidiary of Bolivia’s Non Metallic Minerals S.A., has operated in Chile since the 1990s producing ulexite and boric acid from the Salar de Surire, also in the Arica y Parinacota Region. Its El Águila plant has accumulated decades of mining waste – tailings and process residues – that contain lithium concentrations too low for economic recovery under older technology but increasingly viable with modern direct lithium extraction (DLE) methods. The CEOL granted to Quiborax covers approximately 14,000 hectares and runs for 30 years, with a commitment to invest US$70 million in a new processing facility adjacent to the existing operation.
What distinguishes this contract is its feedstock: not brine pumped from a salar, but solid waste already on the surface. The El Águila residues stem from boron extraction, where lithium reports to the tailings stream because traditional boron processing does not recover it. Quiborax has not disclosed the specific DLE technology it will deploy, but the economics only work if the process can achieve high lithium selectivity against magnesium and other impurities typical of these tailings, at a capital intensity well below greenfield brine or hard-rock projects. The 20,000-tonne LCE target implies a plant sized roughly on par with the first phase of many DLE pilot-to-commercial projects globally – large enough to matter to offtakers, small enough to de-risk.
Waste-Sourced Lithium Gains Traction as Primary Supply Tightens
That points to a broader inflection: lithium from waste streams – tailings, geothermal brines, oilfield produced water, and clay deposits – is moving from laboratory curiosity to commercial pipeline. Globally, the project pipeline for non-conventional lithium sources has expanded from a handful of pilots in 2020 to over 40 announced projects today, according to benchmarking by S&P Global and Fastmarkets. The driver is simple: conventional brine evaporation in the Lithium Triangle and hard-rock spodumene in Australia together supply over 90% of the market, but both face permitting delays, water constraints, and grade decline. Meanwhile, global lithium demand reached approximately 1.3 million tonnes LCE in 2024 and is projected to exceed 2.5 million tonnes by 2030 under most net-zero scenarios.
Chile’s share of that supply has slipped from roughly 37% in 2019 to around 30% in 2024, as Atacama brine operations hit regulatory and hydrological limits. The Quiborax project, at 20,000 tonnes per year, would not reverse that trend on its own – it represents about 1.5% of 2024 global supply – but it establishes a replicable model. Dozens of legacy mining sites across Chile’s north contain lithium-bearing residues from copper, boron, and iodine operations. If the CEOL framework proves workable for private firms on waste feedstocks, the cumulative potential could reach 50,000-100,000 tonnes LCE annually within a decade, based on rough inventories of tailings volumes and lithium grades published by Sernageomin (Chile’s geological survey).
The carbon footprint argument strengthens the case. Life-cycle analyses for DLE-from-tailings typically show 5-10 tonnes CO₂ per tonne LCE, versus 15-25 tonnes for spodumene conversion in China and 5-15 tonnes for Atacama brine (depending on allocation method). For battery makers and automakers under Scope 3 pressure, waste-derived lithium carries a credible “avoided emissions” narrative: the mining disturbance has already occurred, and the project remediates an environmental liability while producing critical mineral. That ESG profile may command a green premium in offtake negotiations, though no public pricing data exists yet for this category.
Technology risk remains the swing factor. DLE processes – whether adsorption, ion exchange, solvent extraction, or membrane-based – have yet to demonstrate consistent commercial recovery above 80% at scale on complex, impurity-laden feedstocks like boron tailings. Most announced projects target 2026-2028 startup; few have reached final investment decision. Quiborax’s 2026 target implied by the CEOL announcement is aggressive. If the company has already run pilot tests at El Águila – which the contract terms likely required – the risk profile improves materially. But until a plant operates continuously for months at nameplate recovery, the 20,000-tonne figure remains a design target, not a guarantee.
Who This Affects
- Storage developer: A new, potentially lower-carbon lithium source enters the supply chain map; track offtake terms for waste-derived LCE as a benchmark for future ESG-linked contracts.
- Policy analyst: First private CEOL tests whether Chile’s state-majority framework can attract private capital without majority ownership – watch for amendments to the CEOL model contract in response to investor feedback.
- Project finance investor: US$70 million for 20 ktpa implies ~$3,500/tonne annual capacity, well below greenfield brine ($8,000-12,000) or spodumene ($10,000+); if recovery and opex hold, returns could exceed 20% IRR at current carbonate prices (~$11,000/t).
- Utility procurement lead: Waste-sourced lithium may qualify for IRA critical mineral credits in the U.S. if processed in an FTA country – Chile qualifies – creating a traceability advantage over Chinese-converted spodumene.
What to Watch Next
- Environmental qualification (Resolución de Calificación Ambiental) for the new DLE plant – the RCA process typically takes 12-18 months and is the critical path to the 2026 target.
- Disclosure of the DLE technology provider and pilot-scale recovery data; the choice between adsorption, ion exchange, or membrane systems will signal technical maturity.
- Offtake term sheets: whether Quiborax secures long-term contracts with battery-grade specs (≥99.5% Li₂CO₃) at fixed or indexed pricing, and whether offtakers include automakers directly.
- Follow-on private CEOL awards: Sernageomin has identified at least six other non-strategic salars and waste sites eligible for private CEOLs; the next 12 months will reveal if Quiborax is an outlier or a template.
Bottom line: Chile’s first private CEOL is less about the 20,000 tonnes Quiborax targets and more about proving that the state’s new lithium framework can unlock private capital for secondary sources – a model that could eventually contribute 5-8% of global supply from waste streams alone if replicated across the Andean mining belt.
Read the full report at The Rio Times
Note: facts and figures attributed above to The Rio Times (English-language Brazil news) reflect that outlet's original reporting. Broader context, cross-sector connections, and forward-looking scenarios reflect independent analysis by our editorial team.
About this article: Drafted by Energy Ai with AI-assisted research and writing based on public reporting, then reviewed under our editorial process before publication.
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