Chile Moves Forward with Codelco-SQM Lithium Contracts for Atacama Salt Flat

Written by Amir Richani for Industrial Info Resources (Sugar Land, Texas)--Chile's Production Development Corporation (Corfo), an economic development authority, has submitted two agreements to Chile's comptroller's office a modified lithium concession contract and lease agreement for Sociedad Quimica y Minera's (SQM) (Santiago, Chile) Atacama salt flat development, which is valid through 2030, and the mining lease contract for the new SQM-Codelco joint venture, which will be valid from 2031 to 2060. Subscribers to Industrial Info's Global Market Intelligence (GMI) Metals & Minerals Plant Database can click here for the plant profile.

The lease payment depends on lithium and product prices. The contract also contemplates investments in local development projects for communities, as well as strengthened environmental restrictions, including reduced use of local water until its full replacement, the adoption of renewable energy sources, and the implementation of sustainable mining processes.

The deal between SQM and Codelco (Santiago) follows the government's lithium strategy, introduced by President Gabriel Boric in 2023. Under the policy, state companies, such as Codelco, would hold majority stakes in key salt flats, including Atacama, leading to partnerships between public and private companies.

The deal includes two phases for the salt flat operations. Initially, Codelco will hold 50% plus one stake in the Atacama asset, while SQM will operate it until its contract ends in 2030.

From 2031 to 2060, once the new contract approved by Corfo begins, Codelco will assume operational control.

The government aims to finalize the SQM-Codelco deal before Boric's term ends in 2026. In July, the companies received approval to extract up to 330,000 tons of lithium metal equivalent annually from 2031 to 2060. However, the deal between the companies has sparked controversy locally and internationally.

Presidential candidates for next year's elections have criticized the deal, vowing to review the agreement once in power. Meanwhile, Tianqi Lithium Corporation (Chengdu, China), which owns 22% of SQM, had also criticized the deal between the companies. The agreement between SQM and Codelco has yet to be cleared by Chinese anti-trust authorities.

SQM expects to see 100,000 tons of lithium hydroxide capacity this year and production of 240,000 tons of lithium carbonate per year by 2026 in Chile.

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