Ricardo Ramos, CEO of SQM (left) shakes hands with Codelco Chairman Máximo Pacheco.

Chile’s National Copper Corp. (Codelco) and Sociedad Química y Minera de Chile SA (SQM) have signed a partnership agreement that establishes the terms and conditions of the public-private partnership that will take responsibility for production of refined lithium in the Salar de Atacama from 2025 to 2060.

The partnership, composed of Codelco through its subsidiary Minera Tarar, and SQM through SQM Salar, is expected to begin operations during the first months of 2025, once preliminary conditions are met.

“Just as we have contributed to making Chile the world leader in copper production, we will now contribute to making our country a leader in the production of lithium, another mineral critical to the energy transition, which will allow us to fight the climate emergency,” said Codelco Chairman Máximo Pacheco. “We will do so as partners of SQM, a Chilean company that has the scale, technical and human expertise, financial resources and sales network that we need to avoid missing the opportunities that now open themselves up to us. Codelco will contribute all of its business experience, talent and mining development expertise, in addition to its valuable international prestige, to this partnership.” There are more milestones to be reached before this partnership becomes operational, Pacheco explained.

The main objective of the agreement is to achieve a total additional production of 300,000 metric tons per year (mt/y) of lithium carbonate equivalent (LCE) in 2025-2030, while a production of 280,000-300,000 mt/y of LCE has been defined for 2031-2060. This increase in lithium production will be achieved through improvements in process efficiency, the adoption of new technologies and the optimization of operations and does not entail increased brine extraction or use of continental waters.

“The projects we are going to develop with Codelco will be extraordinarily positive for Chile, the Antofagasta Region, communities, workers and for both companies,” said Ricardo Ramos, CEO of SQM. “This partnership is proof of the confidence we inspire with more than 25 years of experience producing lithium from the Salar de Atacama and refining it at the chemical plant in Antofagasta, our operational efficiency and the business synergies. With the Codelco-SQM partnership, as of 2031 Chile will receive 85% of the operating margin through different channels.”

SQM will manage the operations through December 31, 2030. After that to 2060, Codelco will oversee general management. The partnership will be tasked with designing and developing a new production project that will incorporate new technologies to trend toward water balance while simultaneously increasing lithium recovery through compliance with the highest environmental standards.

The most relevant issues covered by the agreement’s 20 articles include the reorganization of SQM Salar to become the joint venture; the CORFO-Tarar contracts, the indigenous consultation of said contracts, the amendment of CORFO-SQM contracts, the procedure before the Chilean Nuclear Energy Commission among other aspects.

SQM Salar and Minera Tarar will merge.

For production during 2031-2060, the agreement establishes that the companies will submit the project for an Environmental Impact Assessment, including an indigenous consultation process regarding the environmental impacts likely to directly affect indigenous peoples.

Once the indigenous consultation process is completed and a favorable Environmental Qualification Resolution is obtained, the project should begin to be executed before the end of this decade, ensuring uninterrupted production through 2060.