Chile 2022: Lithium and the era of a new Mining Code


Leonidas Osses
Chemical Civil Engineer / Ing. Comercial, president of the Lithium Commission, Institute of Mining Engineers of Chile-IIMCh.


There is no doubt that Chile’s new Constitution will bring great changes in the field of mining. From now on, the ownership of mining resources will be again studied and discussed, mainly in those resources related to copper, gold, silver, iron, lithium, salt, cobalt, rare earths, molybdenum. These minerals represent today, great economic income for their owners, mainly linked to the private sector.

Next the preparation of a new mining code will be done, one that will replace the 1983 Mining Code. The big questions will be: How and who will be able to establish the concession of a mining resource? How will the State of Chile participate in the ownership, development and exploitation of the mineral resources mentioned above? or the first article of the new Code could say “The ownership of mining resources within the geographical territory of Chile belongs entirely to the State of Chile and they may be tendered and exploited in accordance with the following articles.”

In countries such as Canada, New Zealand, Australia, Sweden, Denmark, Finland, Norway and others in Europe, the problem of ownership of mineral resources, water, energy (oil, gas) and other resources and rights, have already been resolved: they belong 100% to the State, and they bid it granting a high percentage of participation to the STATE in the production companies. The private sector participates actively but together with the state sector. Chile is today the only country in the world that delivers to private parties in perpetuity: mining rights and belongings.

The interesting thing about the private-State associations in these countries is that the economic profits that the country receives from these companies go directly to three sectors of the community that are the key axes of social coexistence: 1) Free public education and high quality, including scholarships to a large percentage of university students both in private and State Universities 2) Free and Preventive Public Health hospitals for all inhabitants, despite the existence of private clinics. 3) Direct payments of basic pensions to highly vulnerable sectors of people. In addition, extra financial assistance for the pensions of elderly people who live alone or have physical disabilities, chronic illness, etc.

In summary, this mechanism for the mining resources of Chile (copper, gold, silver, lithium, iron and others) to be exploited by state-private companies is a perfectly viable alternative to finance free Public Education, Public Health and Pensions for the most vulnerable sectors. The most relevant thing is that this policy does not require the increase in taxes, it is the wealth of mining resources that belongs to the State of Chile that could generate income to finance these 3 key social axes mentioned above.


This mining resource deserves a special analysis as Chile owns the largest lithium reserve in the world and the lowest cost, contained in brines (Salar de Atacama, Antofagasta). Other countries with important lithium resources are Australia (exploits spodumene, a solid mineral), Argentina (salt flats with brine, Hombre Muerto, Olaroz, Salar El Rincón), Bolivia (Salar Uyuni). Other countries with Lithium are China, USA, Canada, Brazil. The following table shows the Lithium Reserves in the World.

Next you will find a list of the main saltflats of Chile that are located between the 1st Region and the 3rd Region, together with their size characteristics (basin and salar itself) and showing a first estimate of lithium resources. The Salar de Maricunga is the second most important salt flat after the Salar de Atacama and today it is being studied by Codelco, which owns mining assets in this salt, together with Canadian, Australian and Chilean companies (Proyecto Salar Blanco).

In Chile, lithium carbonate (Li2CO3) production began in the Salar de Atacama in 1984 through the Chilean Lithium Society (CORFO 45%, FOOTE MINERALS 55%). In 1989 CORFO sold its 45% to FOOTE. Today this company is 100% in the hands of ALBEMARLE (USA). The Salar area delivered by CORFO to this Project was 167.2 km2 which has reserves of the order of 1,290,000 tons of metallic lithium. In the 1984-2017 period, metallic lithium in final and commercialized products reached 108,200 tons of lithium in the form of lithium carbonate and lithium chloride, with a total recovery of 48.0%. For the global period 1984 – 2043, a total of 1,012,000 tons of lithium extracted in fresh brine is projected in Albemarle and metallic lithium in final products of 550,000 tons, that is, an overall recovery of 54.4%.

On November 12th, 1993, Soquimich (SQM) joined the Sociedad Minera Salar de Atacama Ltda (MINSAL Ltda) forming an initial structure CORFO 25% and SQM 75% and signing a lease with Corfo, who contributed an area of ​​the Salar de Atacama of 819.2 km2 and a term of the Lease Agreement that ends on 12/31/2030.
Later, in December 1995, SQM bought the remaining 18.18% of CORFO in the company MINSAL Ltda in a tender as the sole bidder for the sum of US $ 7.0 million, remaining 100% SQM. The brine extraction by SQM began in September 1995 with a flow of around 150 liters/sec. Towards the year 1996 the average extraction flow increased to 280 liters/sec. In the years 2015 to 2017, the extraction flow reached levels between 1870 to 1890 liters/sec.

It is precisely these high levels of fresh brine extraction that have caused SQM to have the worst recovery rates percentage of lithium in relation to the final products produced. The following table shows SQM’s operational balance in the Salar de Atacama in the 1996-2030 period.

The figures above clearly indicate the losses of both lithium mining reserves and economic value that Chile faces due to the exploitation of the Salar de Atacama by SQM and the most relevant, without any government authority to date mentioning these facts, be it the Ministry of Mining, Corfo, Sernageomin, the Environment Service, Authorities of the Antofagasta Region, etc. Only in the period 1996-2019, the unrecovered Lithium has been estimated in an amount of 1,527,000 tons Li (see previous table) and if at least 30% had been recovered, this Lithium would have an appreciation of at least US$ 6,000,000 million.

In this way, the SQM company has not clearly and precisely indicated why that lithium is not recovered from the processes and what percentage it is possible to recover in the future. According to what was committed in the Environmental Monitoring Plan and indicated in RCA N° 226/2006, direct reinjection could have perfectly been a useful mechanism for Corfo or another State Agency, to have taken and received this lithium resource already processed and concentrated at the level of 0.8-1.0% Li, and having stored it either in solar evaporation ponds or another scheme. Thus, Chile would have had a high-concentration lithium raw material, already mined and inexpensive to exploit in the future. Unfortunately, no government authority has proposed and demanded this scheme.

In the future, once the SQM Contract with Corfo is terminated in December 2030, the State of Chile through CODELCO and CORFO should by all means continue with the production and administration of a new lithium company in the Salar de Atacama.


It is very possible that a new Mining Code will be drawn up between the years 2022-2023, where the new topics to be defined could be mainly the following:

– Duration of the Mining Resources Exploration and Exploitation Concessions, the terms of which could be between 20, 30 or 40 years. Likewise, the State of Chile could be present or request to be present in the concession company in a percentage between 10% to 60% according to the magnitude or strategic importance of the mining resource.

– In current Projects or Companies already in commercial operation, the State of Chile may request a percentage of new income through the following mechanisms: a) A percentage share is recognized within the company b) Application of percentage to sales c) Another royalty mechanism.

– Given the importance of Lithium, Green Hydrogen, Rare Earths and other resources considered strategic or critical, the State of Chile will consider being present at every event in at least 1/3, in the corporate composition that is formed.

– The technical processes, obligations and deadlines for requesting exploration and exploitation concessions will be maintained, once received and approved by Sernageomin and incorporating the new requirements issued or generally agreed by the new Constitution that’s approved in the future.

Fuente: Chilean Mining.