Risks of corruption in the bidding process for lithium production in Chile
Chile holds some of the world’s largest lithium reserves and is a leading global producer. Unlike most minerals in the country, lithium falls outside the ordinary mining concession regime, and its development is governed by special legal and contractual arrangements. China is a major trading partner and investor, and the leading destination for Chilean lithium carbonate exports. Chinese companies have also sought to enter the sector through proposed processing projects and competitive bidding to develop additional salt flats.
This case study analysed corruption risks in Chile’s lithium award process using the Mining Awards Corruption Risk Assessment (MACRA) methodology. The research combined documentary analysis with semi-structured stakeholder interviews. It examined the stages through which access to lithium resources is granted, including the selection of salt flats, the determination of access mechanisms, proposal evaluation, Indigenous consultation, contract formalisation and environmental assessment.
The study identified ten corruption risks across nine stages of the award process. The three highest-rated risks involved excluding Indigenous communities from decision-making, designing access mechanisms to favour specific actors, and politically capturing environmental assessments. Other risks included excluding competitors, favouritism based on non-technical criteria, arbitrary award decisions without verifiable records, manipulation of contractual terms, and circumvention of controls due to fragmented institutional responsibilities. The study also highlighted differentiated impacts on Indigenous women, including pressures on traditional livelihoods and increased unpaid care responsibilities.
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