Chile’s Greener Lithium Strategy Signals Major Market Shift

A $3B Chile - Rio Tinto lithium project aims to cut costs and emissions, redefining how producers meet rising global EV demand.

4 Jun 2025

A major lithium development in Chile is setting a new tone for the global battery supply chain. State miner ENAMI and Rio Tinto have partnered on a $3 billion initiative to commercialize direct lithium extraction (DLE), a low-impact, high-recovery technology that could shift the economics of lithium production worldwide.

The project focuses on the Altoandinos salt flats, Chile’s largest undeveloped lithium deposit. Recent pilot tests using DLE delivered recovery rates of up to 92 percent while drastically reducing water consumption, addressing two of the industry’s biggest cost and sustainability hurdles.

Under the agreement, ENAMI will manage local operations and regulatory coordination, while Rio Tinto brings capital and DLE know-how. The venture plans to begin production by 2032, with an initial capacity of 35,000 tonnes of lithium per year, ramping up to 75,000 tonnes. This would position it as a key supplier in the fast-growing electric vehicle (EV) battery market.

The move aligns with Chile’s National Lithium Strategy, introduced in 2023, which aims to modernize extraction methods and preserve at least 30 percent of the country's salt flats. Traditional evaporation ponds, which are water-intensive and land-heavy, are being phased out in favor of scalable, tech-driven approaches like DLE.

Though DLE has yet to be proven at scale in Chile’s high-altitude terrain, its market potential is drawing attention from across the Lithium Triangle. If successful, this model could lower production costs, shorten development timelines, and mitigate ESG risks, which are key metrics for investors and manufacturers alike.

Global lithium demand continues to surge, driven by automakers racing to meet zero-emission targets. Chile’s pivot to advanced extraction methods could not only boost its share of the market but also influence pricing dynamics and supply chain strategies for years to come.

For investors and industry players, the ENAMI and Rio Tinto project marks more than a technological trial. It is an early signal of where the lithium market is heading: toward cleaner, faster, and more competitive production models.