Codelco and SQM to Develop Atacama Salt Flat Through 2060
A major joint venture for lithium development, a key material for electric vehicle batteries, is being launched in Chile, one of the world's leading lithium-rich countries.
On December 27 (local time), Chile's state-owned copper giant Codelco and private mining company SQM announced that they have agreed to establish "NovaAndino Litio" through the merger of their respective lithium development subsidiaries, Minera Tarar and SQM Salar. In a statement, Codelco and SQM said, "This partnership concretizes public-private cooperation between Codelco and SQM," and described it as "the most significant governance integration case in the history of Chilean industry."
NovaAndino Litio will conduct lithium exploration, mining, production, and sales activities in the Salar de Atacama (Atacama Salt Flat). Full-scale mining is scheduled to begin in 2031, and related operations will continue for 30 years until 2060. Under this agreement, approximately 70% of the operating profit from new production through 2030, and 85% of the profit from 2031 onwards, will be allocated to the Chilean government.
Chile, along with Bolivia and Argentina, forms what is known as the "Lithium Triangle." The country ranks among the top globally in terms of reserves and, together with Australia, is considered one of the two largest producers.
Lithium is an essential material for the manufacturing of electric vehicles, energy storage systems (ESS), and home appliances. The Chilean government, under President Gabriel Boric in 2023, announced a "National Lithium Strategy" that called for lithium development based on cooperation between state-owned enterprises and private companies. This merger is also known to have been pursued in line with the National Lithium Strategy. Codelco and SQM signed a broad agreement on this initiative in May last year.
The merger process faced opposition from China. Tianqi Lithium, which holds a 22% stake in SQM, argued that the relevant contract specifying the transfer of SQM Salar's assets should be subject to shareholder approval. Tianqi Lithium lost in both the first and second trials. Ultimately, the conflict was resolved last month when China's State Administration for Market Regulation granted preliminary approval for the agreement between Codelco's and SQM's subsidiaries.
Codelco also reported that it has received approval for the agreement from competition authorities in other countries involved in lithium development in the region, including South Korea, the European Union (EU), Japan, Brazil, and Saudi Arabia. As part of the collaboration, SQM has agreed to transfer all mining rights within the Salar de Maricunga to Codelco.
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