The partnership between Codelco and SQM aims to produce refined lithium in the Salar de Atacama while ensuring the care and protection of the environment and communities. To achieve this goal, significant investment will be made in technology allowing more efficient and environmentally friendly production.
Codelco-SQM Partnership
Public-private partnership:
Codelco and SQM will form a joint venture that will operate in two periods:
- First period (until 2030): SQM will oversee general management.
- Second period (2031-2060): Codelco will take over management.
This partnership, composed of Codelco through its subsidiary Minera Tarar and SQM through SQM Salar, will become effective once contractual, technical and environmental legal requirements, including an indigenous consultation process with the intention of starting operations in 2025.
Production targets:
- 2025-2030: An additional production of 300,000 tons of lithium carbonate equivalent (LCE) is projected.
- 2031-2060: The plan is to maintain an annual production of between 280,000 and 300,000 tons of LCE. This increase will be achieved through process efficiency enhancements, the adoption of new technologies and optimization of operations, without increasing brine extraction or inland water use.
Production targets:
Partnership Agreement:
On 31 May 2024, the agreement regulating the partnership between Codelco and SQM to produce lithium in the Salar de Atacama was signed, ensuring environmental protection and the well-being of local communities. This agreement establishes the steps, rights, obligations and conditions that will govern the partnership.
What must happen for the partnership to enter into effect?
Several preliminary conditions must be met to form the joint venture.
- Indigenous consultation in Corfo.
- Permits from the Chilean Nuclear Energy Commission (CCHEN) and the Comptroller General of the Republic.
- Antitrust approvals in Chile and abroad.
The partnership is scheduled to begin in 2025, once all these conditions have been met.
Process stages
Discover the stages of the Codelco-SQM project to sustainably produce lithium in the Salar de Atacama.
Timeline
There were three key milestones in 2023:
- President Gabriel Boric presented the National Lithium Strategy in April.
In May, the Corfo executive vice president gave Codelco the mandate to exploit lithium. - The Memorandum of Understanding between Codelco and SQM was signed in December.
In addition, a process of dialogue and exploration of alternatives between the two companies was begun at the same time.
Five important milestones are expected in 2024:
- Signing of Partnership Agreement on 31 May.
- Nuclear Energy Commission authorization of CORFO-SQM contracts and CORFO-TARAR contracts.
- Comptroller General of the Republic’s approval to formalize the contracts necessary to implement the partnership.
- Notification of the National Economic Prosecutor’s Office regarding the concentration transaction in the context of the partnership.
- Subsequent submission of the official document to the Comptroller General of the Republic.At the same time, SQM submitted the Environmental Impact Assessment for the Salar de Atacama Extraction Reduction Plan project. In addition, CORFO ordered an Indigenous Consultation Process to be held regarding the draft CORFO-SQM and CORFO-TARAR contracts.
SQM will manage the joint venture under the current lease agreement between 2025 and 2030. The following milestones are expected:
- Codelco-SQM Partnership.
- Codelco-SQM Project Environmental Impact Assessment.
- Indigenous Consultation process on Codelco-SQM Project Environmental Impact Assessment.
In this stage, Codelco will take over management of the joint venture until 2060.
