MercoPress. South Atlantic News Agency

Chile's state-owned Codelco strikes deal with SQP for lithium extraction

“We are fulfilling the task of ensuring the state's participation in the extraction of the so-called white gold,” Boric celebrated

Chilean President Gabriel Boric Font Wednesday celebrated a new agreement between the state-owned National Copper Corporation (Codelco) and Sociedad Química y Minera (SQM) to create a public-private partnership to exploit the country's lithium, with the state as the main shareholder, it was reported in Santiago.

 “Today Codelco, as a company of the State of Chile, which has a completely autonomous Board of Directors and therefore belongs to all Chilean men and women, to you, has reached an agreement with SQM,” Boric said in a broadcast message.

He also highlighted the unprecedented milestone in Chile's mining industry, which is a concrete step towards fair and sustainable development. “We are fulfilling the task of ensuring the state's participation in the extraction of the so-called white gold when many sectors raised their voices to demand that this work be left exclusively in private hands and that the government should only dedicate itself to collecting taxes,” Boric also pointed out.

The head of state insisted that the joint venture in the Atacama salt flat, at an altitude of more than 2,300 meters, must meet two conditions: 1. to achieve lithium production with the least possible impact on the ecosystem, and 2. to promote the active participation of the communities surrounding the deposits. To this end, a tripartite round table will be held in San Pedro de Atacama with representatives from Codelco, SQM, and the Association of Atacameño Peoples' Councils. The President also pointed out that the Antofagasta region will begin receiving dividends as a shareholder in 2025. SQM has the permits to exploit and manage these resources, the third largest in the world.

“This, dear compatriots, is an unprecedented milestone in Chilean mining and a concrete step towards the fair and sustainable development we all desire,” said Boric.

“We need a state that not only collects but also participates in the entire effort of exploration, production, and generation of value-added lithium products. We also need a virtuous public-private collaboration that brings out the best in each party and allows us to derive the greatest benefit from this resource that belongs to all Chileans,” he added.

Lithium, “like copper, is strategic in the transition to the use of clean energy throughout the planet,” the leftist leader also noted. “If we, as a whole society, are able to take advantage of this unique opportunity and do it well, we will be able to build a new future for Chile and its people. It is possible to have unified agreements, spaces that unite us all,” he elaborated.

Under the new agreement, SQM will transfer all of its mining concessions in the Maricunga salt flat to Codelco. ”This strengthens the position of the state-owned mining company as a relevant player in world lithium production (...) with pride, Chilean men and women, we can say that lithium is for Chileans,” Boric stressed.

(See also:Chile announces national lithium strategy)

Codelco is Chile's largest state-owned company, while SQM emerged from the old Compañía Salitrera Anglo-Lautaro, which was nationalized in 1971 under President Salvador Allende and later privatized between 1983 and 1986, its shares given to Julio Ponce Leroy, then son-in-law of dictator Augusto Pinochet Ugarte, for far below market value.