Strategic Lithium Partnership: Rio Tinto and ENAMI's Salares Altoandinos Project
Rio Tinto and ENAMI (Empresa Nacional de Minería) have formed a significant partnership that promises to reshape Chile's lithium landscape. This strategic alliance focuses on developing the Salares Altoandinos lithium project in the mineral-rich Atacama region, combining Rio Tinto's technological expertise with ENAMI's regional presence. The binding agreement establishes a framework for what could become one of Chile's most important lithium operations in the coming years.
What is the Salares Altoandinos Lithium Project?
The Salares Altoandinos project represents an ambitious lithium brine operation situated in Chile's Atacama region, home to some of the world's highest-grade lithium resources. This project aims to extract lithium from subsurface brine deposits using advanced technology rather than traditional methods, positioning it as a potential game-changer in the lithium production landscape.
Project Overview and Location
Located in Chile's northern Atacama region, the Salares Altoandinos project sits in the heart of South America's "Lithium Triangle," which contains approximately 58% of the world's lithium resources. The Atacama's unique geology creates ideal conditions for lithium accumulation, with high evaporation rates (over 3,500mm annually) and minimal rainfall (less than 15mm yearly) contributing to exceptional lithium concentration levels.
The project targets several salt flats (salares) in the region, where lithium-rich brine exists in underground aquifers. These brines typically contain between 800-1,500 mg/L of lithium, making them significantly richer than many competing resources globally. The high-altitude Andean setting (approximately 2,300 meters above sea level) creates distinctive operational challenges but also contributes to the resource's exceptional quality.
"The Salares Altoandinos project represents a significant opportunity to develop a large-scale, long-life, low-cost lithium brine resource," stated Sinead Kaufmann, Rio Tinto Minerals Chief Executive.
Strategic Importance in Global Lithium Market
This development comes at a pivotal moment in the global lithium market. Demand projections indicate a potential tripling of lithium requirements by 2030, driven primarily by electric vehicle battery production. Current market estimates suggest lithium demand could reach 1.5 million tonnes of lithium carbonate equivalent (LCE) by 2030, up from approximately 500,000 tonnes in 2021.
The Salares Altoandinos project could emerge as a crucial supplier in this rapidly expanding market. Chile currently ranks as the world's second-largest lithium producer after Australia, contributing approximately 26% of global supply. However, while Australia primarily produces lithium from hard-rock sources, Chile's Argentina lithium brine insights typically offers cost advantages and different product characteristics.
For Chile, the project represents an opportunity to maintain its competitive position in lithium markets while evolving beyond the traditional evaporation pond model that has dominated its lithium industry for decades. For global supply chains, the project could introduce a significant new source from a politically stable jurisdiction with established mining infrastructure.
How Does the Rio Tinto-ENAMI Partnership Work?
The partnership structure reflects both commercial priorities and Chile's strategic approach to lithium development, balancing private investment with national interests in this critical resource.
Ownership Structure and Investment Details
Under the binding agreement, Rio Tinto will acquire a controlling 51% interest in the project, with ENAMI maintaining a 49% stake. This ownership split ensures Rio Tinto can consolidate the project in its financial statements while giving ENAMI significant influence in a strategic national resource.
The financial framework includes Rio Tinto providing up to $425 million in combined cash and non-cash contributions. This investment package incorporates:
- Cash funding for pre-feasibility studies
- Cash for subsequent development studies if initial results prove promising
- Contribution of Rio Tinto's proprietary Direct Lithium Extraction (DLE) technology
- Technical expertise and operational capabilities
The non-cash component—specifically Rio Tinto's DLE technology—represents a significant value proposition, though the companies have not disclosed its specific valuation within the $425 million total package.
Financial Commitment and Development Timeline
The investment follows a staged approach with built-in decision points:
- Initial funding: Full financing for pre-feasibility studies to evaluate resource potential
- Stage-gate decisions: Further investment contingent on achieving predetermined technical and economic milestones
- Development funding: Additional capital for feasibility studies and potential construction if earlier phases demonstrate viability
This structure protects both partners from overcommitment while providing a clear pathway to development if initial results prove promising. The transaction timeline extends to the first half of 2026 for completion, reflecting the complex regulatory process for lithium projects in Chile.
"The cash contributions will fund the pre-feasibility study and further studies, contingent on the joint venture progressing through investment stage-gates."
The extended timeline also acknowledges the technical complexity of implementing DLE technology at commercial scale in the unique high-altitude, high-salinity conditions of the Atacama region, where traditional approaches have dominated historically.
What Technology Will Drive the Project?
The technological approach represents perhaps the most innovative aspect of the Salares Altoandinos project, potentially establishing a new model for lithium extraction in Chile.
Direct Lithium Extraction (DLE) Technology
Rio Tinto's proprietary DLE technology stands at the center of the project's value proposition. While specific technical details remain confidential, DLE systems typically use selective adsorption or ion exchange processes to extract lithium directly from brines without extensive evaporation.
Compared to traditional evaporation ponds, DLE technology offers several significant advantages:
- Accelerated production timeline: Extraction in hours/days versus 18-24 months for evaporation ponds
- Reduced water consumption: Up to 90% less freshwater usage in water-stressed regions
- Smaller physical footprint: Typically 90% less land disturbance than evaporation methods
- Higher recovery rates: Potential to extract 70-90% of available lithium versus 40-50% in traditional methods
- Improved purity profiles: More consistent lithium quality with fewer impurities
- Weather independence: Production unaffected by seasonal rainfall or temperature variations
The technology represents Rio Tinto's strategic bet on next-generation lithium production methods. The company has been developing and testing various DLE approaches since acquiring the Rincon lithium project in Argentina for $825 million in 2022, where it has been piloting geothermal brine extraction technology.
Environmental and Technical Considerations
The implementation of DLE technology directly addresses key environmental concerns that have plagued traditional lithium operations in the Atacama region. Conventional evaporation pond methods consume approximately 2,000 liters of water per kilogram of lithium produced—a significant burden in one of the world's driest deserts.
Several technical challenges must be overcome for successful implementation:
- Brine chemistry compatibility: Ensuring the DLE system works efficiently with the specific ionic composition of Atacama brines
- Altitude adaptation: Modifying equipment to function optimally at high elevations where atmospheric pressure is lower
- Scaling challenges: Successfully transitioning from pilot plant to commercial-scale operations
- Reagent management: Ensuring chemical additives used in the process are properly contained and recycled
- Energy requirements: Optimizing power consumption, which is typically higher for DLE than passive evaporation
While DLE technologies have shown promise in laboratory and pilot settings, few have been deployed at commercial scale, making the Salares Altoandinos project a potential industry benchmark if successful.
What Are the Strategic Benefits for Both Partners?
The partnership offers complementary advantages to both Rio Tinto and ENAMI, aligning corporate objectives with national development goals.
Rio Tinto's Global Minerals Strategy
For Rio Tinto, the Salares Altoandinos project represents a cornerstone in its strategic pivot toward "future-facing commodities" essential for decarbonization. The company has explicitly positioned this investment within its broader objective of building a world-class lithium portfolio alongside its established Rincon project in Argentina and Jadar project in Serbia.
Several strategic benefits accrue to Rio Tinto through this partnership:
- Portfolio diversification: Reducing reliance on traditional iron ore and copper revenue streams
- Technology validation: Demonstrating commercial viability of its DLE technology investment
- Geographic balance: Establishing presence in all three major lithium-producing regions (Australia, South America, North America)
- Value chain positioning: Securing upstream supply for potential downstream battery material production
- ESG credentials: Showcasing more sustainable extraction methods compared to competitors
Rio Tinto's entry into the Chilean lithium sector also represents a strategic counterbalance to competitor BHP, which has historically maintained a stronger presence in Chilean mining through its copper operations.
ENAMI's National Development Objectives
For ENAMI, Chile's state-owned mining enterprise, the partnership delivers several critical benefits aligned with national economic development goals:
- Technology access: Gaining exposure to advanced DLE technology without funding extensive R&D
- Investment leverage: Attracting substantial foreign capital while maintaining significant ownership
- Capability development: Building technical expertise through collaboration with a major mining company
- Revenue diversification: Expanding beyond its traditional focus on supporting small and medium-scale copper mining
- Implementation of national strategy: Advancing Chile's lithium industrialization policy with private sector participation
The structure also reflects Chile's evolving approach to lithium development, moving beyond the historical model where only two private companies (SQM and Albemarle) dominated production through special operating agreements.
What Environmental and Community Commitments Are in Place?
Environmental and social considerations feature prominently in the partnership's public communications, reflecting both regulatory requirements and stakeholder expectations.
Environmental Standards and Sustainability Goals
The project partners have emphasized their commitment to "the highest environmental standards" in developing the Salares Altoandinos project. While specific targets remain undisclosed, several key environmental considerations will likely shape the project's development:
- Water stewardship: Implementing closed-loop water recycling systems to minimize consumption in the water-stressed Atacama region
- Energy sourcing: Utilizing Chile's expanding renewable energy capacity, particularly solar resources abundant in the Atacama
- Biodiversity protection: Developing monitoring and mitigation measures for the fragile high-altitude ecosystem
- Carbon footprint: Minimizing emissions through electrified equipment and efficient processing
The use of DLE technology itself represents an environmental commitment, as it typically reduces both water consumption and physical disturbance compared to traditional methods. However, the specific environmental performance metrics for Rio Tinto's proprietary system have not been publicly disclosed.
"We are committed to the highest environmental standards and to ensuring any potential development is guided by transparent, respectful, and ongoing engagement with local communities in Chile's Atacama region," emphasized Kaufmann.
Community Engagement Framework
The partnership has signaled a strong commitment to community engagement, particularly with indigenous communities in the Atacama region. This focus acknowledges the complex history of resource development in the area, where previous lithium operations have faced criticism for impacts on local water resources and insufficient consultation with indigenous stakeholders.
Key elements of the community engagement approach likely include:
- Early consultation: Engaging communities before major development decisions
- Benefit-sharing mechanisms: Establishing programs to ensure local economic participation
- Cultural heritage protection: Identifying and preserving sites of cultural significance
- Transparent communication: Regular reporting on environmental performance and project impacts
- Local employment priority: Training and hiring programs focused on nearby communities
The emphasis on community relations reflects lessons learned from previous mining developments in Chile, where social license challenges have caused significant delays and complications for major projects.
What Are the Market Implications of This Development?
The Salares Altoandinos project enters a dynamic global lithium market characterized by rapidly evolving supply-demand dynamics and technological change.
Impact on Global Lithium Supply Chain
When operational, the Salares Altoandinos project could significantly impact global lithium markets, though the timeline and production scale remain unspecified. Several market implications merit consideration:
- Supply diversification: Introducing a new major producer reduces concentration risk in a market currently dominated by five major players
- Technology differentiation: Commercial-scale DLE deployment could accelerate industry-wide adoption if successful
- Product quality: DLE typically produces higher-purity lithium products suitable for advanced battery applications
- Pricing dynamics: Additional supply from a low-cost producer could influence regional pricing benchmarks
- Contract structures: Rio Tinto may leverage the project to establish long-term supply agreements with battery metals investment and automotive manufacturers
Industry analysts estimate that new DLE projects could achieve production costs between $3,000-4,500 per tonne of lithium carbonate equivalent (LCE), potentially positioning them in the lower half of the global cost curve if technology performs as expected.
Strategic Positioning in Energy Transition Materials
This partnership reinforces Chile's position as a critical supplier of energy transition materials while expanding Rio Tinto's footprint in the battery metals sector. The development comes amid intensifying competition for lithium resources globally, with major mining companies and automotive manufacturers seeking to secure supply chains for battery materials.
The strategic timing aligns with several market trends:
- Battery technology evolution: Growing demand for high-purity lithium compounds suitable for next-generation batteries
- Regionalization of supply chains: Automotive manufacturers seeking geographically diverse supply sources
- ESG performance emphasis: Increasing scrutiny of environmental and social impacts in lithium production
- Value chain integration: Trend toward closer connections between mining companies and battery manufacturers
By positioning early in a more environmentally responsible production model, the Salares Altoandinos partners may gain competitive advantages as modern mine planning regulations and market preferences increasingly favor lower-impact production methods.
What Regulatory and Political Factors Influence the Project?
The project operates within a complex and evolving regulatory landscape that significantly shapes its development timeline and operational parameters.
Chilean Lithium Governance Framework
Chile classifies lithium as a strategic mineral, subjecting it to special regulatory treatment distinct from other mining activities. The Salares Altoandinos project must navigate this specialized framework, which has undergone significant evolution in recent years.
Key regulatory considerations include:
- Special lithium operating contracts: Unlike conventional minerals, lithium extraction requires special agreements with the state
- Chilean Nuclear Energy Commission oversight: This agency maintains regulatory authority over lithium as a strategic material
- Water rights adjudication: Securing access to brine requires navigating complex water rights regulations
- Environmental impact assessment: Rigorous review process through Chile's Environmental Evaluation Service
- Indigenous consultation requirements: Mandatory consultation with indigenous communities under ILO Convention 169
Chile's National Lithium Policy, announced in 2023, emphasizes public-private partnerships and greater state participation in lithium development—a model that the Rio Tinto-ENAMI structure appears designed to accommodate.
International Investment Considerations
The transaction structure reflects the complexities of international investment in strategic minerals. Several international factors influence the partnership:
- Foreign investment protections: Chile's bilateral investment treaties providing legal certainty for Rio Tinto
- Critical minerals strategies: Alignment with consumer country initiatives to secure battery material supply chains
- ESG reporting requirements: Increasing disclosure expectations from investors and regulators in Rio Tinto's home jurisdictions
- Technology transfer implications: Managing intellectual property protection while satisfying Chile's technology access objectives
- International market access: Ensuring products meet evolving purity and sustainability standards in target markets
The staged investment approach and extended timeline for transaction completion (H1 2026) reflect the partners' recognition of these complex regulatory considerations.
FAQs About the Rio Tinto-ENAMI Lithium Partnership
What makes the Atacama region significant for lithium production?
The Atacama region contains some of the world's highest-grade lithium brine deposits, with average concentrations between 800-1,500 mg/L compared to global averages of 200-600 mg/L. The region's exceptional natural conditions—including intense solar radiation (>3,500mm annual evaporation), minimal rainfall (<15mm annually), and unique geology—create ideal conditions for lithium accumulation and traditional extraction. These natural advantages typically translate to production costs 30-50% lower than hard-rock lithium sources, though the specific economics of DLE methods may differ from this historical pattern.
How does Direct Lithium Extraction differ from traditional methods?
Traditional lithium extraction from brines relies on large evaporation ponds that gradually concentrate lithium through solar evaporation over 18-24 months. This process requires approximately 2,000 liters of water per kilogram of lithium produced and extensive land use (10-15 square kilometers of ponds for a typical operation).
DLE technologies use selective adsorption or ion exchange processes to extract lithium directly from brines in hours or days rather than months. These systems typically reduce water consumption by 50-90%, decrease land requirements by up to 90%, and can achieve lithium recovery rates of 70-90% compared to 40-50% for traditional methods. However, DLE systems generally require more energy and chemical reagents than passive evaporation systems.
What are the next development milestones for the project?
Following the binding agreement, key milestones include:
- Regulatory approvals: Securing permissions from Chilean authorities, including environmental permits
- Transaction completion: Finalizing the partnership structure by first half of
Ready to Spot the Next Major Mining Discovery?
Discover significant ASX mineral discoveries in real-time with Discovery Alert's proprietary Discovery IQ model, which transforms complex geological data into actionable investment insights. Visit our discoveries page to understand how major mineral discoveries can lead to substantial market returns, and begin your 30-day free trial today to gain a market-leading advantage.
