Chile's Quiborax Signs First $70 Million Lithium Operating Contract

en.Wedoany.com Reported - On August 25, the Chilean government signed a Special Lithium Operating Contract with Quiborax, authorizing the development of a lithium recovery project at the El Águila plant in the Arica and Parinacota Region. This contract is the first Special Lithium Operating Contract signed by the Chilean government exclusively with a private company. The project is expected to involve an investment of $70 million, with the contract authorizing a total cap of 20,000 metric tons of lithium carbonate equivalent (LCE) in lithium products to be processed and sold.

The project's feedstock comes from mining waste accumulated over the years at the El Águila plant. Quiborax processes ulexite extracted from the Salar de Surire salt flat at this facility. Preliminary analyses estimate that the existing waste contains approximately 19,775 metric tons of lithium carbonate equivalent (LCE) in lithium resources. The contract's authorization scope is limited exclusively to historical waste generated prior to the contract's effective date, and does not include lithium resource exploration or extraction from the salt flat, new waste generated after the effective date, or new mining operations.

The contract is valid until the cumulative processing and sale of authorized lithium products reaches 20,000 metric tons of lithium carbonate equivalent, or until December 31, 2046, whichever comes first. Quiborax may produce technical-grade or battery-grade lithium carbonate and lithium hydroxide, and product sales must comply with the conditions established by the Chilean Nuclear Energy Commission.

The project will proceed sequentially through four stages: evaluation, construction, processing, and mine closure. The evaluation period lasts a maximum of two years, extendable by one year, and primarily involves determining actual reserves, completing technical-economic feasibility studies, and obtaining environmental and industry permits. The construction period lasts a maximum of three years, with one extension of up to one year available, during which detailed engineering design, facility construction, and commissioning will be carried out.

Quiborax will bear all costs for the technology, equipment, capital, and permitting required for the project. The contract also establishes a progressive fiscal contribution mechanism linked to lithium product selling prices and annual sales volumes; when the annual weighted average selling price falls below $10,000 per metric ton, no fiscal contribution is due for that year. Sales of feedstock to downstream lithium product processors within Chile may qualify for a reduced contribution rate under the contract terms.

Following the contract signing, Quiborax will first verify the recoverable reserves in the historical waste and the project's economic viability, and initiate environmental and industry permitting procedures. The project may proceed to the construction stage only after the evaluation is completed and a feasibility report is submitted.