Giant lithium partnership created in Chile
Chilean copper giant Codelco signed a deal with SQM on Friday to nearly double the private mining company’s current extraction of lithium, a key mineral for the global transition to cleaner energy.
Codelco is the world’s largest copper producer, and SQM is a leader in lithium, also known as “white gold.”
The agreement provides for the creation of a public-private partnership “that will take responsibility for the production of refined lithium in the Salar de Atacama from 2025 to 2060,” the companies said in a statement.
The Salar de Atacama, in the desert of the same name, is a salt flat with the most important deposits of the mineral in Chile, part of the Latin American ‘lithium triangle’ with Argentina and Bolivia.
Demand for lithium has grown significantly in recent years as the world tries to transition away from fossil fuels to combat global warming.
It is mainly used in electric car batteries.
The companies will work together to extract an additional 300,000 tons of lithium from 2025 to 2030, with a production target of 280,000-300,000 tons per year from 2031 to 2060, the statement said.
In 2023, SQM produced 169,000 tons.
Chile’s left-wing President Gabriel Boric came to power with plans to create a national lithium company, similar to the state-owned Codelco, which was created in the 1970s from nationalized mining companies.
According to the press statement, Codelco will own 50 percent of the shares, plus one, in the new partnership.
The Chilean state will receive approximately 70 percent of the operating margin generated by the new production between 2025 and 2030, and 85 percent from 2031.
Until 2016, Chile was the world’s largest lithium producer with 37 percent of the market, but by 2022 the country was second only to Australia with 243,100 tonnes produced – about 34 percent of the global total.
