Chile’s state copper giant Codelco and lithium producer SQM have secured the green light from the national competition regulator to form a joint venture in the Salar de Atacama.
This decision, confirmed by Codelco, marks a pivotal step in President Gabriel Boric’s policy to increase state control over the country’s lithium sector, a key supplier to the global battery market.
The agreement gives Codelco a majority stake—50% plus one share—in the partnership, aligning with Boric’s vision of stronger state oversight without full nationalization.
SQM, which already controls a significant share of Chile’s lithium output, will manage operations until 2030. After that, Codelco will take over through 2060.
The deal extends SQM’s mining rights for another 30 years, while the state secures a larger share of future profits. The joint venture aims to boost annual lithium carbonate equivalent (LCE) production to between 280,000 and 300,000 tons.
Codelco-SQM Lithium Alliance Moves Forward After Chilean Antitrust Approval. (Photo Internet reproduction)
Chile’s state copper commission projects national production could reach 305,000 tons in 2025, up from 285,000 tons in 2024. This would help Chile maintain its status as a global lithium powerhouse.
However, its share of world supply is expected to drop from 23% in 2025 to 17% by 2030 as competitors like Argentina and the United States ramp up production.
Chile’s Lithium Market Faces Challenges
Despite rising output, the lithium market faces headwinds. Prices have fallen sharply from $70,000 per ton in 2022 to about $12,000 by late 2024, with only modest recovery expected.
Oversupply and increased competition could pressure Chilean producers, while environmental concerns in the Atacama Desert remain a challenge. The Codelco-SQM deal still requires approval from Chinese regulators and Chile’s nuclear authority.
Indigenous consultation processes are ongoing, as required by law. Political uncertainty lingers, with Chile’s upcoming elections and some lawmakers opposing the agreement.
Tianqi, a major Chinese stakeholder in SQM, has also filed legal challenges. Chile holds some of the world’s largest and highest-quality lithium reserves, with recent studies showing a 28% increase in estimated resources.
The country’s regulatory framework treats lithium as a strategic asset, giving the state a central role in its exploitation. The new partnership model seeks to balance national interests and attract investment.
It also aims to ensure environmental stewardship as Chile navigates a fast-changing global lithium market. All facts, figures, and claims in this article are based on official statements, regulatory documents, and public data.
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