SQM’s Atacama lithium operation secured to 2060 with Codelco partnership approval

Chilean regulators approved the deal between SQM and state-owned miner Codelco to operate a lithium joint venture, named NovaAndino Litio, in the Atacama salt flats. This deal resolves a long-standing uncertainty surrounding what would happen when SQM’s existing mining license expired in 2030.

NovaAndino Litio will take over operations of SQM’s Salar de Atacama site – the world’s second-largest lithium operation, forecast to produce 12% of global mined lithium in 2026, according to Benchmark’s Lithium Service. The Atacama is also home to Albemarle’s Chilean operations.

The deal effectively secures production at the site through to 2060. The operation currently has a capacity of ~210,000 tonnes of lithium carbonate per year, with capacity due to ramp up to 300,000 tonnes per year by 2030.

What does the partnership mean for Chile’s lithium industry?

President Gabriel Boric’s administration released a National Lithium Strategy in 2023. Central to this was the formation of public-private partnerships such as that between SQM and Codelco. Codelco will have a majority 50% +1 share stake in the joint venture, with SQM accounting for the rest. Crucially, this does not constitute expropriation; rather, it formalises a renewal mechanism that guarantees operational certainty under a new governance model.

SQM will retain operational control until 2031, at which point Codelco will take control.

The announcement follows a period of political and legal tension. The Chilean Supreme Court’s recent rejection of appeals from Tianqi Lithium (which holds a 22.1% stake in SQM) removed a key obstacle to the partnership, clearing the path for implementation and ending months of speculation over control and compliance. However, the Chilean regulator also launched an audit on the partnership around the same time as approving the deal.

Although the partnership was first announced in 2024, its formalisation provides greater certainty for Chile’s lithium industry and supports long-term planning across the battery sector.

Chile’s lithium sector is losing share to growing supplies from China. In 2020, Chile was the second largest lithium producer, accounting for 29% of supply. By 2025, it had fallen to third position with 18%, whilst China accounted for 21%.

What does the partnership mean going forwards?

Although President-elect José Antonio Kast has questioned the absence of a fresh tender process, the incoming administration could use the new framework to attract private investment and accelerate project approvals.

Chile is expected to open tenders (CEOLs) to new salars to rival Argentina’s RIGI (Incentive Regime for Large Investments), which has recently channelled significant capital to developers such as Rio Tinto.

A potential challenge going forward for the partnership will be the integration of different styles of business: SQM’s private-sector agility may conflict with Codelco’s state structure, raising the risk of bureaucratic friction.