The Chilean state-owned copper giant Codelco and the lithium producer SQM have officially sealed their definitive partnership to exploit the world’s richest lithium reserves in the Atacama Desert. This deal marks a significant milestone in Chile’s “National Lithium Strategy.”
Key Highlights of the Agreement
- Establishment of NovaAndino Litio: The partnership has been formalized through a new joint venture company named NovaAndino Litio SpA. This entity is a merger of Codelco’s subsidiary, Minera Tarar, and SQM Salar.
- Operational Timeline: The agreement secures lithium extraction operations through the year 2060. It is structured in two main phases:
- 2025 – 2030: SQM will maintain operational management and leadership due to its technical expertise.
- 2031 – 2060: Control and majority management will transition entirely to the state-owned Codelco.
- Production and Economic Impact:
- The venture aims to increase production by an additional 300,000 tons of Lithium Carbonate Equivalent (LCE) between 2025 and 2030.
- The Chilean state is expected to receive approximately 70% of the operating margin through taxes, royalties, and dividends.
- Global Approvals: The deal successfully navigated international regulatory hurdles, including approval from Chinese authorities, ensuring fair market access for global customers.
- Sustainability Goals: The new venture commits to implementing advanced technologies to reduce water consumption and improve lithium recovery rates, addressing the environmental concerns of the Atacama region and local indigenous communities.
Strategic Significance
This partnership allows Chile to maintain its status as a global leader in the electric vehicle (EV) supply chain while ensuring that the state plays a dominant role in the management and profits of its most strategic mineral resource.
