MercoPress. South Atlantic News Agency

Chinese competition authorities greenlight joint lithium venture in Chile

“This is a very important achievement,” Chile's Mining Minister said

China's State Administration for Market Regulation (SAMR) approved the partnership between Chile's state-owned copper company Codelco and private miner SQM to develop lithium resources in the Salar de Atacama, prompting Chile's Mining Minister Aurora Williams to hail the decision as “good news.”

The Asian giant's consent follows approvals already secured from regulatory bodies in Chile, Brazil, the European Union, Japan, South Korea, and Saudi Arabia, completing all necessary international clearances.

“We are very happy with this approval... this is a very important achievement that confirms what we have said about the National Lithium Strategy,” said Williams in a radio interview.

She also stressed the long-term nature of the mining industry, asserting that it would be “very difficult” for any future administration to back out of an agreement of this magnitude due to technical, political, and labor repercussions. Williams also urged that the agreement be removed “from the political arena” and that discussions shift to “projecting an increase in lithium production over the next decade.”

Following the announcement, SQM's shares on the Santiago Stock Exchange reportedly reached their highest level in over a year, leading the volume of shares traded.

China's SAMR set specific conditions to ensure fair competition and a stable supply, whereby the new joint venture must “make all reasonable efforts” to continue supplying lithium carbonate to Chinese customers and cannot “reject, restrict or delay the supply.” Additionally, supply must be maintained under “fair, reasonable and non-discriminatory” (FRAND) terms, at prices consistent with the commitment. The companies must also prevent the exchange of sensitive information between competitors and reinforce corporate governance practices.

Codelco Chairman Máximo Pacheco said that the agreement, first announced in December 2023, was the result of rigorous work by hundreds of professionals.

As it stands, Chile's Comptroller General of the Republic must approve the lease agreements for the mining concessions in the Salar de Atacama with Minera Tarar, a Codelco subsidiary, after which the joint venture will be formally established. As per the agreement, SQM will manage the new company until 2030, and then Codelco will assume majority control until the concessions expire in 2060.

The partnership projects an additional output of 300,000 tons of lithium carbonate equivalent (LCE) between 2025 and 2030, with stable production maintained throughout the agreement.