Chile backs lithium, rare earth tech with $5.8M funding

Staff Writer | January 13, 2026 | 3:46 am Battery Metals Critical Minerals Latin America Copper Lithium Rare Earth

Lithium facilities in northern Chile. (Image courtesy of SQM.)

Chile’s state-owned development agency Corfo has awarded up to $5.8 million to two research projects focused on direct lithium extraction (DLE) and rare earth recovery to boost mining innovation and create new business lines.

The first project will receive up to $1.9 million over a maximum of two years to identify and validate direct lithium extraction technologies suited to brines from Chile’s salt flats and saline lagoons. The program aims to design a testing platform and generate early technical evidence under Chilean operating conditions.

A second initiative will receive up to $3.9 million over three years to develop sustainable solutions for recovering rare earth elements. The project will test leaching and bioleaching processes under the supervision of the same piloting centre. Corfo said Chile holds at least 46,000 tonnes of vanadium, 16,000 tonnes of cobalt and hundreds of tonnes of rare earths in mining liabilities, making the recovery of value from tailings, waste dumps and slags a strategic priority.

Lithium momentum

Both projects fall under Corfo’s R&D Challenges program, launched more than a year ago, which co-finances up to 80% of total project costs using funds generated from leasing mining concessions in the Salar de Atacama. The agency said the work supports a circular economy approach by turning environmental liabilities into economic assets through reprocessing and technology.

The funding comes as activity around lithium extraction accelerates in Chile. Late last year, Codelco and SQM agreed to form Nova Andino Litio, a joint venture that will operate in the Atacama Salt Flat until 2060 and consolidate lithium exploration, production and marketing under existing and future contracts with Corfo.

Albemarle (NYSE: ALB) also completed testing of its own DLE technology in Chile in December, reporting lithium recovery above 94% after more than 3,000 hours of pilot operation and water reuse of up to 85%. The company invested $30 million in the pilot plant and a further $216 million in a salt recovery facility at Atacama. While industry experts say DLE could be more efficient and environmentally friendly than conventional methods, the technology has yet to be proven at commercial scale in Chile.