Chile’s state-owned Codelco, the world’s leading copper producer, and private miner SQM, which features Chinese capital, announced Saturday the creation of a giant company to exploit lithium, a lightweight metal used in batteries for electric vehicles.
The South American country is the world’s second-largest producer of lithium, a key component of EVs and other clean technologies, and has about 40 percent of the world’s lithium reserves.
The partnership between the firms will allow them to jointly ramp up the exploitation of lithium in the Atacama salt flat region of northern Chile.
The public-private partnership will be called Nova Andino Litio SpA, said Codelco, which described the deal as “one of the most significant in the history of Chilean business.”
The Chinese firm Tianqi holds a 22 percent stake in SQM.
The new company “will carry out lithium exploration, extraction, production, and commercialization activities in the Atacama salt flat until 2060,” Codelco said in a statement. Chilean regulators authorized the alliance earlier in December.
The agreement was approved by more than 20 national and international regulatory bodies, including in China, Brazil, Saudi Arabia, and the European Union. Chile was the last of the countries to clear the deal.
Last month, China gave the green light to the planned partnership between Codelco and SQM.
The partnership aims to restore Chile’s leadership in lithium production, a title it lost to Australia nearly a decade ago.
The new company aims to increase production by about 300,000 tons per year in the Atacama salt flat.
In 2022, Chile produced 243,100 tons of the so-called white gold.
“This joint venture makes it possible to plan the development of the Atacama salt flat,” and for the benefit of global markets, said Ricardo Ramos, CEO of SQM, one of the world’s leading lithium producers.
The partnership is part of the National Lithium Strategy announced by the leftist government of Gabriel Boric in 2023, aimed at reclaiming Chile’s global leadership in lithium production.
According to Codelco, with this agreement the Chilean state will receive around 70 percent of the operating margin generated by the new production between 2025 and 2030, and starting in 2031, 85 percent of that margin.
Lithium accounted for three percent of Chile’s exports in 2024.
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© Agence France-Presse
