Chile’s First Private CEOL: US$70 Million Lithium-From-Waste Project
Chile · MINING
Key Facts
- —Milestone first CEOL lithium contract the Chilean state signs exclusively with a private company, and the first granted under the Kast administration
- —Company Quiborax S.A., controlled by the Fosk family and one of the world’s largest boric acid producers
- —Project recover lithium from historical tailings at the El Águila plant, fed by ulexite mined at the Salar de Surire
- —Scale US$70 million investment and up to 20,000 tonnes of lithium carbonate equivalent (LCE)
- —Term until about 20,000 tonnes of LCE are processed and sold, or December 31, 2046, whichever comes first
Quiborax’s US$70 million contract turns decades of mining waste into lithium and marks the first time the state has signed a CEOL with a fully private operator.
Chile on Tuesday, August 25, 2026, signed the state’s first CEOL lithium contract with an exclusively private company, authorizing Quiborax S.A. to recover lithium from historical mining waste at its El Águila plant in the Arica y Parinacota Region. Economy and Mining Minister Daniel Mas signed the special lithium operating contract, known by its Spanish acronym CEOL, at a morning ceremony in the northern region, calling it a pioneering step in the government’s push to revive the country’s lithium industry and attract fresh private capital.
A first-of-its-kind signing in Arica y Parinacota
The contract was signed in the Arica y Parinacota Region by Daniel Mas, who holds the combined economy and mining portfolio in President José Antonio Kast’s cabinet. Also present were the region’s presidential delegate Cristián Sayes, Parinacota provincial delegate Sebastián Huerta, regional governor Diego Paco Mamani and Quiborax general manager Allan Fosk. The agreement empowers the Fosk family company to develop what the ministry called a pioneering lithium processing and beneficiation project built on circular-economy criteria, turning industrial liabilities into a strategic resource for the energy transition.
From the government we have been analyzing different alternatives to dynamize the development of the lithium industry and attract private investment to explore and exploit this resource, which is key for the energy transition, for the benefit of all Chileans, Mas said at the ceremony. Chile has to prepare to take advantage of the next lithium cycle, because the previous one was not taken advantage of, he added, arguing that opportunities do not automatically turn into progress without solid, predictable institutions. We need private players to have a normative framework that delivers guarantees so that there is real interest in developing this industry, the minister said.
What the CEOL lithium contract allows, and what it forbids
The CEOL lithium contract authorizes Quiborax exclusively to process lithium contained in the company’s historical tailings, known in Spanish as ripios, accumulated at the El Águila plant, where the company processes ulexite extracted from the Salar de Surire. The contract expressly excludes exploration and exploitation of lithium in salt flats, rules out the use of mining discards generated after the contract starts, and bars the opening of new extractive operations. It will run until close to 20,000 tonnes of lithium carbonate equivalent have been processed and sold, or until December 31, 2046, whichever condition is met first.
During the initial stage, Quiborax must determine effective reserves, economic and technical feasibility, and obtain the environmental and sectoral permits the project requires. After signing, the project can move into engineering, environmental assessment and construction within a five-year window. The ministry estimates the plan implies an investment of US$70 million, roughly CLP 63.9 billion at an exchange rate of CLP 912.82 per US dollar, and an increase of more than 20 percent in Quiborax’s workforce, a significant boost for formal employment in Chile’s far north, where the El Águila plant is one of the area’s established industrial employers.
Why the CEOL lithium contract matters for the national lithium strategy
Chilean law treats lithium as non-concessionable, meaning the state can only authorize its exploitation through a special operating contract granted by the president of the republic. The CEOL is therefore the central instrument of the National Lithium Strategy launched in 2023 under former president Gabriel Boric and continued, with adjustments, by the current administration. Until now, the strategy’s signed contracts had all involved state-owned companies: Enami signed a binding partnership agreement with Rio Tinto for the Salares Altoandinos project in July 2025, and Codelco received an updated CEOL for the Salar de Maricunga, where Rio Tinto is its partner, in February 2026, while the Salar de Atacama operation runs through the Codelco-SQM venture NovaAndino Litio.
The Quiborax deal is the first CEOL lithium contract in which the state signs alone with a private operator, and the first granted under Kast. It lands while ten further CEOL decrees sit before the Comptroller General’s Office for review, covering projects in the regions of Arica y Parinacota, Tarapacá, Antofagasta and Atacama, including the Codelco-Quiborax consortium at the Salar de Ascotán, Wealth Minerals and Coal India at Ollagüe, and CleanTech Lithium at Laguna Verde, alongside public tenders planned for the Agua Amarga and Piedra Parada salt flats. Mas said his ministry is working with CEOL holders whose contracts are under comptroller review so they can be corrected and reach port, a nod to industry complaints that the process has been slow and cumbersome.
A circular-economy bet: lithium from mining waste
According to the Mining Ministry, the CEOL lithium contract marks one of the first regulatory advances aimed at extracting lithium from industrial liabilities, widening productive diversification beyond conventional salt-flat brine extraction toward secondary sources and circular-economy models. Quiborax, one of the largest boric acid producers in the world, has operated in the area for decades, and the tailings at El Águila contain lithium that was never recovered when the material was first processed for boron.
The approach also sidesteps some of the most contested aspects of salt-flat mining, since it requires no new brine pumping, no fresh extraction sites and no expansion of the industry’s territorial footprint in fragile high-altitude wetlands. Officials framed the signing as evidence that the state and private companies can jointly promote initiatives that integrate sustainability, innovation, efficient resource use and responsible engagement with the territory, themes that have been central to the social and environmental debate around lithium in Chile. For Arica y Parinacota, a region better known for boron than for batteries, the project would add a new product line to a local industry built over decades around the Salar de Surire, which is protected as a national monument within the Lauca Biosphere Reserve in the Andean highlands.
Next steps and the road to production
We believe there is little investment, that the process has been cumbersome, and what we diagnose is that certainty is lacking, Mas said, adding that the government wants as many salt flats as possible to be exploited so they generate jobs and improve living conditions for Chileans. The minister stressed that the project must still clear environmental evaluation before construction, and that the state expects the CEOL model to deliver legal certainty to an industry where Chile risks losing ground to Argentina and other regional producers that have moved faster to license new capacity.
If permitting advances on schedule, engineering, environmental review and construction would unfold over roughly five years, with lithium output from waste ramping up toward the 20,000-tonne LCE ceiling before the end of 2046. For the government, this first private CEOL lithium contract is a down payment on a broader promise: to turn some of the world’s largest lithium reserves into new production after years in which, by the minister’s own admission, Chile failed to capitalize on the metal’s last price boom. Whether the El Águila model can be replicated at scale, and whether the ten pending contracts survive comptroller review, will determine how much of that promise is kept. For now, officials are presenting the Quiborax signing as proof that the state’s lithium opening can reach beyond the big state-miner alliances and into the private mid-sized sector.
Frequently Asked Questions
What is a CEOL lithium contract?
CEOL stands for Contrato Especial de Operación de Litio, a special lithium operating contract. Because Chilean law declares lithium non-concessionable, the state can authorize private or mixed lithium operations only through a CEOL signed by the president. The CEOL lithium contract signed with Quiborax on August 25, 2026 is the first granted exclusively to a private company, and the first awarded under the government of José Antonio Kast.
Where and how will Quiborax produce lithium under the contract?
Under the CEOL lithium contract, production happens at the El Águila plant in the Arica y Parinacota Region, by processing historical mining tailings left over from decades of ulexite extraction at the Salar de Surire. The contract does not allow exploration or exploitation in salt flats, only recovery of lithium from waste accumulated before the signing.
How much is Chile’s first private CEOL lithium contract worth?
The CEOL lithium contract contemplates an estimated investment of US$70 million, about CLP 63.9 billion, and targets production of up to 20,000 tonnes of lithium carbonate equivalent. It runs until that volume is processed and sold or until December 31, 2046, whichever comes first.
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