Chile’s Lithium Strategy: Contracts Signed, Future Uncertain

A pivotal moment

With Chile’s presidential election fast approaching, the Gabriel Boric administration has moved quickly to advance the National Lithium Strategy and secure several major developments. The first Special Lithium Operation Contract (CEOL), a new agreement that allows state-owned companies to partner with private firms, was signed between the National Mining Company (Enami) and multinational Rio Tinto. Another deal is underway for Codelco, Chile’s largest state-owned copper company, and SQM, one of the world’s biggest lithium producers, to form a joint venture in the Atacama Salt Flat, the country’s most important lithium deposit. Chile has also announced its entry into the Extractive Industries Transparency Initiative (EITI), a global standard that promotes transparency and accountability in natural resource governance.

For the first time, the strategy is moving from political promises to binding agreements, with concrete investments and clear timelines. Politically, this represents a significant milestone. After years in a secondary role, the state is now positioning itself as the majority partner, aiming to capture more fiscal revenues and ensure that producing regions benefit. Other measures include the creation of a network of protected salt flats and the formal recognition of indigenous consultation as a condition for approving new projects.

Progress without protection

Despite these advances, the foundations remain weak. Most of the measures rely on presidential decrees or executive discretion rather than legislation, making them vulnerable to political change. Chile has seen this before: the lithium policy launched during Michelle Bachelet’s second administration was dismantled by her successor. The current push to finalize contracts before Boric leaves office reflects both the desire to secure a legacy and the concern that a new government could reverse course.

That concern is not unfounded. Several presidential candidates have already raised questions about the Codelco–SQM agreement, noting issues such as transparency and the absence of an open tender. Others have pointed to risks of excessive market concentration, with a single partnership potentially controlling the Atacama Salt Flat until 2060. Some have even suggested that, if elected, they might review or reconsider the agreement if it does not align with their standards of legitimacy and competition. What is presented today as a milestone could in time be subject to renegotiation or reversal.

Underlying weaknesses

Several governance gaps remain:

• Participation: Indigenous consultations have been more procedural than meaningful, with limited resources and time for effective engagement.
• Transparency: The full terms of the contracts have not been published, reinforcing perceptions of secrecy and discretion.
• Benefit-sharing: There are no clear rules to ensure that producing regions and indigenous communities receive a stable and transparent share of revenues. At present, these depend on ad hoc agreements between companies and communities, without state oversight or public accountability.
• Environmental safeguards: Environmental reviews lack solid hydrogeological baselines, cumulative impacts across projects are not assessed, and monitoring depends largely on company-provided information. The new system of protected salt flats, while presented as progress, currently lacks legal force and is not yet integrated into formal environmental review processes.

Beyond signing deals

The government’s push to deliver results is understandable. But speed cannot replace legitimacy. The relevance of contracts signed in the final months of this administration will depend on whether they endure beyond political transitions and whether they are supported by social and environmental safeguards that generate trust among affected communities.

What is at stake is not only the future of a resource that is critical to the global energy transition. It is also Chile’s credibility as a country able to combine economic ambition with transparent governance, environmental sustainability, and territorial justice. Communities that have long borne the costs of mining without seeing benefits may find it difficult to accept further promises or deals reached behind closed doors.

The real challenge

The signing of the first CEOL is an important milestone. But Chile’s recent history shows that one contract is not enough to establish lasting policy. If the next few months amount only to a rush of signatures without addressing deeper flaws, today’s achievements could in time become the start of a new cycle of conflict, litigation, and mistrust.

The real challenge will be whether these agreements can evolve into the foundation of legitimate and durable governance of lithium.