December 27, 2023, Codelco
In a historic move for Chile's mining sector, Codelco and SQM have announced a joint venture, forming a public-private partnership to develop business and production activities in the Salar de Atacama over the coming decades. This partnership is set to commence on January 1, 2025, subject to certain conditions. It will be managed through a newly established company, predominantly owned by the Chilean State (holding 50% plus one share).
This new entity will take over the existing contracts between Corfo and SQM until their expiration in December 2030, and then shift to operating under new contracts between Corfo and Minera Tarar (a wholly-owned subsidiary of Codelco). These new contracts will be effective from January 2031 through December 2060, and will be transferred to the joint company. Starting from the partnership's inception, Codelco will initially participate in the profits, receiving 201,000 tonnes of lithium carbonate equivalent from the Corfo-SQM contracts, eventually gaining 50.01% of the total lithium and other substances production from January 2031.
This collaboration secures ongoing production of lithium and other substances, enhancing Codelco's role in addressing the global energy transition challenge by leveraging opportunities in the intensive use of copper and lithium.
This morning, Codelco's board of directors, after unanimous approval, outlined that the foundation of this public-private partnership lies in developing the Salar Futuro Project. This project, starting in 2031, involves exploiting the Salar de Atacama and introducing new technologies to enhance efficiency and achieve hydrological balance in the Salar de Atacama basin, aiming for environmentally sustainable production.
Codelco's early involvement in the Salar de Atacama allows it to participate in all phases of the Salar Futuro Project, including evaluation, development, engineering, feasibility, and permitting processes. This involvement is crucial for maintaining operational continuity and navigating the lengthy timelines typical of major mining projects.
The agreement also includes the operation of a tripartite committee formed in San Pedro de Atacama on December 14, 2023. This committee, comprising representatives from Codelco, SQM, and the Atacameño Peoples Council Association, will set regulations to ensure ecosystem sustainability, early involvement, transparency, and legitimacy of all stakeholders.
This step marks Codelco's fulfillment of its mandate from the Chilean State and Corfo to explore optimal methods for state involvement in the exploitation of lithium and other minerals in the Salar de Atacama. Codelco's board expressed gratitude for the trust shown in the company, acknowledging the efforts of its professionals, advisors, and SQM's cooperation in reaching this mutually beneficial agreement.
Máximo Pacheco, chairman of Codelco's board and lead negotiator, emphasized the agreement's significance. "This marks a pivotal moment for Codelco and its workforce. The company has faced challenging years, striving to maintain copper production and contribute to Chile's progress and well-being. Now, Codelco embarks on a new era, poised to become a global leader in copper and lithium mining. This transformation strengthens our company's robustness and sustainability. We extend our thanks to our shareholder, the State of Chile, and President Gabriel Boric Font for entrusting Codelco with a key role in Chile's journey towards being a leader in the global energy transition.”