Body challenges CEOL process due to procedural deficiencies led by the Ministry of Mining.
Incoming authorities are concerned about the process through which these contracts were handled and the implementation of the National Lithium Strategy. They plan to review the background of the case and consider adjustments—such as reducing the requirement that private companies hold at least 80% of the mining concessions in the requested area.
“Lithium is not concessionable. Chile must create an environment that encourages investment and facilitates project development. Today, lithium reserves are concentrated in only two producers under a framework that does not promote the entry of new players. Our approach focuses on reducing regulatory and tax burdens and ensuring legal certainty in order to enable a competitive market and attract new investment.”
This was one of the few references to lithium made by José Antonio Kast during his presidential campaign. The mineral had not been a central element of the economic program of the incoming President of the Republic, although in recent days its relevance within the future administration’s agenda has changed.
What triggered this shift? The rejection by the Comptroller General of the Republic (Contraloría) of two Special Lithium Operation Contracts (CEOLs) requested by private companies for the exploitation of the mineral—an instrument that forms part of the National Lithium Strategy promoted by the current government. The oversight body identified procedural deficiencies in the process conducted by the Ministry of Mining, generating significant concern among both domestic and international investors and raising alarms among the incoming authorities in the sector.
“What happened is serious; there is concern. With this development, lithium has moved onto the agenda and will become a priority issue,” sources close to the incoming government emphasize.
The matter has not yet been discussed with the current authorities, although an opportunity for such discussions may have arisen. Last Friday, Minister of Mining Aurora Williams departed for Toronto, Canada, accompanied by the Ministry’s Head of International Affairs, Francisca Bastías. The minister will lead the Chilean delegation—estimated at more than 300 participants—to the Prospectors & Developers Association of Canada (PDAC) 2026 convention, the world’s most important mining exploration conference, taking place between March 1 and 4.
At this event, Minister Williams could have met with the incoming Minister of Mining, Daniel Mas, who had considered attending but ultimately decided not to travel for two reasons. One was the possibility of participating in an upcoming bilateral meeting between Kast and President Gabriel Boric, scheduled for Tuesday, March 3, which will include an expanded group of future sectoral authorities. The implementation of the National Lithium Strategy could be one of the topics discussed between the current and incoming presidents.
The second reason, according to sources familiar with the matter, is that Mas is currently working against the clock to finalize the team that will accompany him once the new administration takes office on March 11. He therefore chose to remain in Chile to complete key appointments in the Mining and Economy ministries he will oversee. Nevertheless, Mas plans to send a video message with greetings and remarks to attendees at the conference in Canada.
Sources close to the incoming administration emphasize the seriousness and importance of the Comptroller’s ruling for the future Minister of Mining. They reiterate that there is “concern regarding the way these contracts were processed and the implementation of the National Lithium Strategy, which ultimately resulted in the Comptroller’s rejection.”
Accordingly, the new authorities will review the background of the contracts to ensure that their granting complies with the current legal framework and with the conditions required to develop this strategic mineral while fostering the industry for the benefit of the country.
Sources linked to the incoming administration indicate that there are preliminary ideas under evaluation to improve the structure of these contracts. For example, if by March 11, when the new government takes office, the Comptroller has not yet approved the contracts currently under review, they could be withdrawn from the oversight body. Likewise, authorities may consider introducing modifications to CEOL contracts that have not yet entered the Comptroller’s review process. “This is a decision that could be taken, provided that it does not introduce additional obstacles,” sources state.
Other proposals have also emerged in recent days aimed at accelerating the approval of special contracts for lithium exploitation, a mineral classified as non-concessionable in Chile.
One proposal involves relaxing the requirement that private companies hold at least 80% of the mining concessions within the requested area. “That threshold could be reduced,” sources within the incoming government suggest. Another issue highlighted by some members of the future administration is the requirement to conduct two Indigenous consultations.Currently, one consultation is required when applying for a CEOL, and another when processing the project’s Environmental Impact Assessment (EIA). “To accelerate the approval process for these contracts, it could be evaluated whether only one consultation should be carried out—once the project is defined and its environmental and social impacts can be assessed—similar to what occurs in other industries.”
In any case, the focus will be on eliminating unnecessary regulations, administrative barriers, and bureaucratic obstacles in order to encourage investment and the development of new private lithium projects. “The new government intends to improve the efficiency of the permitting process in general, and lithium projects will be no exception. Following recent events, there will be particular attention to this matter,” says a source linked to Kast’s team.
Concerns from the private sector
Within the private sector, senior executives anticipate that foreign and domestic mining companies will use Minister Aurora Williams’ trip to Canada to raise concerns following the Comptroller’s ruling. “This process, led by the Ministry of Mining, has been underway for more than a year since the CEOL was awarded. Tens of millions of dollars have already been invested in preliminary stages, along with a lengthy Indigenous consultation process.
The recent ruling by the Comptroller creates an uncertain outlook for the future of these projects and for the investors involved. This is very negative news and will delay the entire project,” said an executive from a foreign mining firm.
The companies directly affected by the ruling are Llamara Group SpA, which seeks to exploit lithium in the Quillagua Norte area located in the Tarapacá and Antofagasta regions, and Quillagua Minerals SpA, which aims to extract lithium from the Quillagua Este area in the Antofagasta Region. The latter company is a joint venture formed by three Chilean mining companies—Sociedad Minera Aspromin SpA, Alto Exploradora SpA, and Inversiones Valeska Minerals SpA—together with the Canadian firm Wealth Minerals.
The chairman of the Quillagua Este project, Armando Araya, told El Mercurio this week: “We are confident that we have fully complied with each of the requirements established by the Ministry of Mining to obtain a CEOL.”
However, the Comptroller’s decision also casts doubt on the future processing of other CEOL applications, as it questions the mechanism designed by the current government to allow private companies access to resources in priority salars, such as Coipasa, Ollagüe, Ascotán, Piedra Parada, Agua Amarga, and Laguna Verde, among others. These initiatives involve both Chilean and international companies.
Industry sources note that last week—following the Comptroller’s ruling—Simón Accorsi, head of the Lithium and Salars Unit at the Ministry of Mining, met with private companies whose CEOL applications had not yet entered the Comptroller’s review stage to warn of possible delays. “He informed us that the Comptroller had issued a rejection and that they were working to resolve the issue. He also indicated that we would likely be asked to introduce certain modifications according to a new format before resubmitting the CEOL to the Comptroller.”
Two rulings issued on January 16 had already identified procedural deficiencies in the process conducted by the Ministry of Mining for granting CEOL contracts to private companies.
According to the Comptroller’s report: “The Ministry of Mining (…) established the internal procedure for the submission and processing of CEOL applications in the identified deposits, regulating the format, stages, and deadlines.” The report further states that the “simplified procedure” implemented by the ministry conflicts with Article 19, No. 24, paragraph ten of the Political Constitution, which establishes that only the President of the Republic, through a Supreme Decree, may determine the requirements and conditions for granting exploration, exploitation, or processing rights for non-concessionable substances such as lithium.
The Comptroller concluded: “There is no legal basis to interpret that the Strategic Council of the Lithium and Salars Committee, in its advisory or technical capacity, nor the Ministry of Mining, has the authority to establish procedures, conditions, or requirements to select private parties interested in obtaining a CEOL.”
When consulted by El Mercurio, the Ministry of Mining stated that new Supreme Decrees had already been submitted in line with the Comptroller’s guidance. “The Comptroller’s Office has contributed to improving the administrative process for special operation contracts, providing greater legal certainty both for companies currently involved and for future consortia interested in participating.”
The ministry added that three CEOL decrees are currently under review by the Comptroller: Quillagua Norte, Quillagua Este, Planta El Águila. In the coming days, the ministry plans to submit seven additional CEOL decrees for administrative processing, including three to be awarded through direct negotiation and four through public tender. These projects aim to enable private-sector-led initiatives in the following salars: Ascotán, Ollagüe, Laguna Verde, Quillagua Sur, Hilaricos, Piedra Parada, Agua Amarga.
Criticism from the private sector has intensified. A senior executive from a mining company stated: “One company warned the Ministry months ago—through its representatives and advisors—that there was a risk of rejection by the Comptroller, but that warning was ignored.” A partner in another company interested in lithium exploitation added: “This demonstrates the lack of rigor with which the process was conducted.”
Experts have also questioned the scrutiny applied to private-sector CEOL contracts compared with projects involving state-owned companies partnered with private firms, such as: Salares Altoandinos (Enami–Rio Tinto), Salar de Maricunga (Codelco–Rio Tinto), Salar de Atacama (Codelco–SQM). These projects have already received formal approval from the Comptroller.
“This suggests that CEOL contracts involving private companies are being analyzed differently from those involving state-owned enterprises, which raises concerns about asymmetric treatment,” says Gustavo Lagos, academic at Pontificia Universidad Católica de Chile.
Juan Carlos Guajardo, Executive Director of Plusmining, adds: “The Comptroller’s ruling is a warning signal. It implies delays in investment and higher costs for private companies. It also reflects what has happened in recent years: many announcements but few concrete developments.” However, he notes that it also represents an opportunity for the incoming authorities to address the issue through a faster and simpler mechanism.
Industry representatives also warn that delays in projects further erode Chile’s position in the global lithium market, where the country’s share has declined from around 40% to approximately 24% over the past decade. Chile has already been surpassed by Australia, displaced by China, and now faces increasing competition from Zimbabwe and Argentina.
“This rejection by the Comptroller will have a direct impact on Chile’s production in the medium and long term, affecting the country’s relative position in the global market,” warns Juan Ignacio Guzmán, CEO of GEM Mining Consulting. “The main risk introduced by this ruling relates to project timelines—what is commonly referred to as ‘permitting complexity.’”
Source: El Mercurio