In a historic move that promises to reshape Chile’s mining landscape, Codelco and SQM have unveiled plans for a pioneering public-private partnership to revolutionise productive and commercial lithium activities in the Salar de Atacama for decades.
The Salar de Atacama collaboration, contingent on meeting specific conditions, is slated to commence on January 1, 2025, and will take shape through a jointly established entity predominantly owned by the Chilean government with a majority stake of 50% plus one share.
Central to this alliance is the handover of current contracts between Corfo and SQM until their initial expiry in December 2030. After that phase, operations will transition to a framework governed by fresh contracts between Corfo and Minera Tarar—a wholly-owned subsidiary of Codelco.
These new agreements will take effect from January 2031 and extend through December 2060, propelling the partnership forward. At the onset, Codelco is poised to claim an early share of joint venture profits, securing 201,000 tons of lithium carbonate equivalent from the existing Corfo-SQM contracts.
This share is set to escalate to 50.01% of the total lithium production and associated substances by January 2031.
This landmark pact not only ensures the uninterrupted production of lithium and related elements but also widens Codelco’s role in addressing the global energy transition challenge. Leveraging the demand for copper and lithium, the agreement signifies a strategic move in amplifying Codelco’s involvement in the global lithium market.
Commenting on the deal, Máximo Pacheco, chairman of the board and leader of the negotiations on behalf of Codelco, said: “This is a historic moment for Codelco and for each of its workers.
“These have not been easy years for the company, which has had to make enormous efforts to sustain its copper production and continue contributing to Chile’s well-being and progress. Today, Codelco begins a new cycle. From now on, we will be a leading copper and lithium mining company worldwide.
“This makes us a more robust and sustainable company. We thank our shareholder, the State of Chile, and the President of the Republic, Mr Gabriel Boric Font, for having trusted Codelco to make Chile a power in the planet’s energy transition.”
Abundant lithium reserves of Salar de Atacama
The Salar de Atacama houses one of the world’s most significant lithium resources. This expansive salt flat contains extensive lithium-rich brine deposits beneath its surface.
Lithium, a crucial component in batteries for electric vehicles and renewable energy storage systems, has positioned the Salar de Atacama as a pivotal global resource hub.
The salar’s unique geological conditions contribute to its lithium abundance. The region experiences extremely low precipitation levels, which results in the accumulation of minerals, including lithium, over thousands of years. Additionally, the presence of underground hot springs aids in concentrating lithium within the brine pools.
The Salar de Atacama stands as a vital source of lithium, playing a pivotal role in the world’s transition towards cleaner energy, albeit amidst ongoing discussions regarding responsible and sustainable resource management.
Goals of the partnership
The Memorandum of Understanding, meticulously crafted by Codelco and SQM and unanimously endorsed by Codelco’s board of directors, underscores the focal point of the public-private partnership—the Salar Futuro Project.
This ambitious endeavour, slated to kick off in 2031, will integrate cutting-edge technologies aimed at enhancing operational efficiency and steering towards a balanced water ecosystem in the Salar de Atacama basin. The ultimate objective is to drive production towards sustainability without compromising environmental integrity.
Codelco’s early integration into the Salar de Atacama operations affords the company the opportunity to engage across all project phases, from evaluation and development to engineering, feasibility, and permitting for the Salar Futuro Project. This proactive involvement is vital, considering the intricate timelines intrinsic to large-scale mining ventures.
The agreement further encompasses the operation of a tripartite committee, established in San Pedro de Atacama in December 2023, comprising representatives from Codelco, SQM, and the Association Council of Atacameño Peoples.
This committee is mandated to establish a coherent framework, ensuring ecosystem sustainability, early stakeholder involvement, transparency, and legitimacy in the collaborative project.
By embarking on this strategic alliance, Codelco fulfils the directive of the State of Chile and Corfo to explore optimal avenues for state participation in the extraction of lithium and other mineral resources in the Salar de Atacama.
The Board of Directors expressed gratitude for the trust vested in the company, acknowledging the contributions of its professionals and advisors, as well as SQM’s commitment to reaching this mutually advantageous agreement.
This groundbreaking partnership marks a pivotal moment in Chile’s mining history, setting the stage for sustainable resource extraction while fostering technological innovation and responsible environmental stewardship.
