Chile’s competition watchdog, Fiscalía Nacional Económica (FNE), has approved a joint venture between state-run copper major Codelco and SQM, a top lithium producer.
The cooperation, which aims to increase lithium production in the Atacama salt flats, is a key component of Chile’s strategic drive into the thriving battery metal business.
The statement noted that the local FNE regulator’s approval adds to clearances already granted by authorities in the European Union, Brazil, Japan, South Korea, and Saudi Arabia.
However, the deal remains subject to approval from China’s regulator, which is still pending.
Final approvals are still pending from China and the Nuclear Authority
While the FNE’s approval represents major progress, the agreement has not yet been formalised.
Due to lithium’s strategic and radioactive qualities, China’s antitrust authorities and Chile’s nuclear energy commission (CCHEN) continue to demand key regulatory clearances.
Codelco stated that the full agreement is likely to be completed in the second half of 2025, pending the necessary authorisations.
In addition to these challenges, the joint venture has had to negotiate with local indigenous groups, whose lands and resources are inextricably linked to lithium-rich portions of the Atacama Desert.
Codelco chairman Máximo Pacheco expressed hope in the statement, adding that the engagement with Indigenous organisations is “progressing” and that the FNE’s permission verifies that the project is proceeding as planned.
“We’re really satisfied with the decision because it confirms that the tie-up is moving forward as planned,” said Pacheco.
Cornerstone of Chile’s State-led lithium strategy
The joint venture forms the cornerstone of President Gabriel Boric’s bold strategy to bolster state power over Chile’s lithium resources.
The Boric administration has a new public-private lithium production model, with the state front and centre, with companies like Codelco.
It claims this model will allow for environmental supervision and also enable the country to benefit more from increasing global demand for lithium, especially from the electric vehicle and renewable energy storage sectors.
According to a statement released by the company, the joint venture between Codelco and SQM seeks to dramatically increase lithium production in the Atacama salt flats, with a predicted increase of 300,000 tons of lithium carbonate equivalent (LCE) between 2025 and 2030.
From 2031 to 2060, the goal is to maintain annual production levels of 280,000 to 300,000 tons of LCE.
This ambitious growth will be driven by increased process efficiency, the deployment of breakthrough technologies, and operational optimisation—all while adhering to environmental sustainability targets and limiting brine extraction and inland water usage.
Opposition and Legal Challenges from Tianqi
Despite the momentum, the agreement has encountered opposition. Opposition legislators have criticised the state-led strategy as overly interventionist and lacking transparency.
Furthermore, China’s Tianqi Lithium, a key stakeholder in SQM, has filed legal challenges to the transaction, claiming that it will erode shareholder influence and move control from private investors.
These legal and political constraints have threatened to derail or disrupt the deal, but so far, it has continued to go forward.
If completed, the Codelco-SQM collaboration would cement Chile’s position as a prominent player in the world lithium market, second only to Australia in production.
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