In a landmark collaboration, Chilean lithium powerhouses Sociedad Química y Minera de Chile (SQM) and Codelco, have unveiled a major partnership to harness the vast potential of the Salar de Atacama salt flat in northern Chile.
The two companies will establish a new entity called NewCo following their new memorandum of understanding, of which the entity will be responsible for investing in new technologies as well as overseeing the production of lithium carbonate and lithium hydroxide on SQM’s leased properties in the salar.
In early 2025, NewCo will be expected to head various projects along with global sales of lithium. Ownership will see Codelco holding a majority stake of 50% plus one share, while SQM will own 50% minus one share of the operating company.
During the initial term of the partnership (from 2025 to 2030), Codelco will receive an annual supply of 33,500 metric tonnes of lithium carbonate equivalent (LCE). SQM will also receive the same amount, subject to authorization from production company, CORFO, and the Chilean Nuclear Energy Commission.
As part of the agreement, Codelco will contribute 165,000 metric tonnes of LCE, which will be utilized before 2031 and added to SQM’s existing production and sales quota as of year-end 2024. Additionally, NewCo will have access to an extra quota of 135,000 metric tonnes of LCE.
The partnership also aims to carry out the Salar Futuro sustainability project through the new company, pending environmental qualification resolution.
“We believe that the successful development of the Salar Futuro project will make the Salar de Atacama operations the most sustainable lithium operation in the world,” commented Ricardo Ramos, CEO of SQM. “Being able to achieve this in harmony with the well-being of neighbouring communities supports our long-term vision for the mining industry.”
To ensure the participation and input of local Indigenous communities, Codelco and SQM initiated roundtable discussions before finalizing the agreement in early December of last year.
This collaboration comes amid discussions beginning last May and after Chilean president Gabriel Boric’s plans to increase state involvement in the country’s lithium industry. The partnership between SQM and Codelco demonstrates a strategic response to evolving industry dynamics and emphasizes sustainable development in line with Chile’s lithium ambitions.