VI. Implementation: Strategic Milestones 2023-2024

The strategic pillars outlined above, in line with the objectives of this strategy, must be implemented through a range of specific actions.

The main actions to be implemented include:

1. The creation of a Strategic Committee for Lithium and Salt Flats, led by the Ministry of Mining with the participation of several other ministries (Finance, Economy, Foreign Affairs, Environment, and Science) and Corfo, in order to oversee the implementation of the various actions contained in the strategy. This committee will also establish the means of coordination with other ministries, public institutions, regional governments, and the private sector.

For this purpose, this committee will hold the status of a Corfo committee, enabling the promotion of policies for scientific-technological and industrial development that facilitate the advancement of new upstream and downstream lithium production activities, and the identification and harnessing of local supply chain and added-value opportunities in the industry.

2. Initiation of a stakeholder engagement and participation process with stakeholders, including representatives of local communities and indigenous peoples, regional governments, academia and scientific institutions, private-sector companies, and civil society, as well as the central government and other public agencies. This process will enable us to better understand the expectations and proposals of different stakeholders, including indigenous communities, regarding the industry’s development. The results of this process will contribute to decisions that must be made in relation to institutional modernization to ensure the sustainable development of the lithium industry, including the creation of the National Lithium Company and the specific activities to be undertaken by the Public Technology and Research Institute for Lithium and Salt Flats.

International agreements ratified by Chile (ILO Convention 169, Escazú Agreement), international standards for stakeholder engagement in the mining industry, and the Ministry of Mining and Ministry of the Environment’s regulations on public participation processes and human rights plans will be used as a framework for designing this process.

3. Creation of the National Lithium Company, which will be able to participate in the entire lithium production cycle, from exploration and operation to processing and downstream industrial stages such as battery cell assembly and recycling. The National Lithium Company will be a state-owned company that will seek private-sector partners for the sustainable development of exploration, operation, and added-value projects. It will also promote technological development in all areas of the value chain.

4. Creation of a Network of Protected Salt Flats and, in salt flats with current lithium mining operations, guaranteeing the use of technologies that have a low environmental impact. Salt flats are complex, unique, and highly biodiverse ecosystems that are suffering from significant degradation, both globally and in Chile, highlighting our obligation to ensure the long-term environmental sustainability of these ecosystems.

For that reason, the strategy includes the creation of a Network of Protected Salt Flats composed of at least 30% of these ecosystems by 2030, in line with the international obligations established in the Convention on Biological Diversity’s Global Biodiversity Framework.

To achieve this goal, the Strategic Committee for Lithium and Salt Flats, will commission studies on the ecosystem potential of each salt flat and salt lake to determine whether they should be authorized for industrial activity or preserved. These studies will be conducted by the competent State agencies, including the recently created Natural Capital Committee. The Public Technology and Research Institute for Lithium and Salt Flats will be responsible for centralizing the information contained in these records.

In those salt flats with ongoing lithium mining operations, the implementation of technologies that minimize the environmental impact will be required and the reduction of freshwater use. The biogeochemical effects of these techniques will also be monitored.
 
Additionally, proceedings will be initiated to incorporate Chile in the Extractive Industries Transparency Initiative (EITI), to guarantee the highest possible level of transparency and probity in all mining industries, including lithium, in line with the most stringent international standards.

5. Modernization of the institutional framework. A proposal will be prepared to modernize the institutional framework to facilitate the industry’s development and growth, reduce the impacts on salt flats and communities, provide coherence to existing and new public bodies, and govern the relationship between decisions made by the central government and regional and local governments, in accordance with the objectives of this strategy. The report prepared by the National Lithium Commission in 2015 and the Interministerial Task Force led by the Ministry of Mining in 2022 will be reviewed as part of this proposal, in addition to the results of the dialogue processes.

6. Creation of a Public Technology and Research Institute for Lithium and Salt Flats, whose main objective is the generation of knowledge and technologies that enable extraction, production, added-value, applications, and recycling processes to be improved, as well as increasing the understanding and protection of salt flats through the generation of public ecosystem baselines.

This institute will combine these efforts with the development of research capabilities in ecology, geology, and social sciences related to salt flats and their communities, contributing to the proper conservation, oversight, and regulation of the industry, and efficient and informed decision-making by the State.

The Public Technology and Research Institute for Lithium and Salt Flats will also collaborate in the registration of resources and other environmental requirements for private-sector and state-owned companies. Furthermore, it will be responsible for collecting and making available information on natural resources and exploration and operation projects, both in their formulation and design as well as implementation phases, in accordance with the provisions on access to environmental information contained in the Escazú Agreement.

7. Involvement of the State in Atacama Salt Flat production activities. As the lease agreement for a large part of the Atacama Salt Flat to private-sector players will expire in 2030, the State can immediately initiate negotiations to participate in lithium mining activities through public-private coordination for the benefit of Chile and its development.

Within this framework, Corfo will ask Codelco to assess the most effective ways for the State to participate in lithium extraction in the Atacama Salt Flat, firstly through negotiations with SQM, whose contract expires in 2030.

Two key considerations have been established in that regard: firstly, the State will hold a majority share in any public-private partnerships created for lithium mining operations in the Atacama Salt Flat; and secondly, the Chilean State is committed to fully respecting the provisions of current contracts. That is, State participation in the Atacama Salt Flat prior to the expiration of current contracts will only be possible through an agreement with the companies that currently hold lithium mining rights.

Finally, the new lease agreements will take the conditions of current contracts as minimum requirements, considering the revenue currently obtained by the State and the benefits provided to regional governments, local governments, and communities living in close proximity to the Atacama Salt Flat; Research and Development contributions; and reserved quotas at a preferential price for the development of added-value projects in Chile. They will also establish new social and environmental standards.

8. Prospecting in other salt flats. The resources available in other salt flats must be identified, and the conditions necessary for potential lithium extraction to be carried out in a responsible and sustainable way must be generated, provided that the deposits are not located in the Network of Protected Salt Flats.

For lithium mining projects that are of strategic value to the country, public-private partnerships will be established with the State controlling production decisions.

The conditions and benefits for the State and local communities that are established in the current contracts entered into by Corfo in the Atacama Salt Flat (resources for communities, regional governments, local governments, and research and development) will be considered as minimum requirements for all projects, in addition to environmental and technological requirements, and quotas for added-value projects, among others.

Under this framework:

1. Special lithium exploration and operation contracts will be granted to subsidiaries of state-owned companies Codelco and Enami in salt flats where projects are currently ongoing in different phases of development.
2. For other salt flats that are eligible for lithium extraction (in accordance with conservation restrictions), a transparent public tender process will be initiated with private-sector companies for exploration contracts. If the results of this exploration indicate potential for lithium extraction, the private-sector player that was awarded the exploration contract will have first refusal to partner with a state-owned company for the operation phase. In the case of projects of strategic value for the country, the State will hold a majority share in these partnerships.
3. This process will accelerate exploration of Chile’s salt flats, and provide an opportunity for various domestic and international players that are interested in entering the industry. The bids submitted in exploration tenders must also include a proposal for a local and supply chain value creation plan that will be implemented in the subsequent lithium mining project, to prioritize initiatives that offer greater benefits for local supply chains, technological development, and added value.