Codelco and SQM reach agreement for a public-private partnership for the development of lithium in the Salar de Atacama
Agustín de Vicente / December 27, 2023 | 18:00
In an unprecedented milestone for the Chilean mining industry, Codelco and SQM announced a public-private partnership to jointly develop productive and commercial activities in the Salar de Atacama for the coming decades. This association, to the extent that certain conditions are met, will materialize as of January 1, 2025, and will be structured through a common company with a majority participation of the State of Chile (50% plus one share).
The new company will assume the current contracts between Corfo and SQM until December 2030 (their original expiration date), to then transition to an operation governed by the new contracts signed between Corfo and Minera Tarar (100% subsidiary of Codelco), which will be contributed to the common company and will be effective from January 2031 to December 2060. From the beginning of the association, Codelco will have an early participation in the profits of the common company, amounting to 201,000 tons of lithium carbonate equivalent obtained from the contracts between Corfo and SQM, which will increase to 50.01% of the total production of lithium and other substances as of January 2031.
This agreement ensures the continuity of the production of lithium and other substances and expands the scope of Codelco's participation in the global challenge of energy transition, taking advantage of the opportunities generated by the intensive use of copper and lithium.
The Memorandum of Understanding, prepared by Codelco and SQM and unanimously approved by Codelco's board of directors this morning, establishes that the basis of this public-private partnership will be the development of the Salar Futuro Project (the exploitation of the Salar de Atacama as of 2031), which will incorporate new technologies to improve efficiency and advance towards the water balance of the Salar de Atacama basin, in order to move towards an environmentally sustainable production.
Codelco's early entry into the Salar de Atacama will allow its involvement in all stages of evaluation, development, engineering, feasibility and permitting of the Salar Futuro Project with the necessary anticipation to ensure operational continuity and considering the development timings involved in large mining projects.
The agreement also incorporates the operation of the tripartite table established in San Pedro de Atacama on December 14, 2023, with representatives of Codelco, SQM and the Asociación Consejo de Pueblos Atacameños. This table will establish a common regulation to guarantee ecosystem sustainability, early participation, transparency and legitimacy of the actors involved.
With this step, Codelco fulfills the mandate of the State of Chile and Corfo to seek the best paths to achieve State participation in the exploitation of lithium and other mineral substances in the Salar de Atacama. Codelco's board of directors thanked the trust placed in the company, the work of its professionals and advisors, and SQM's willingness to reach this beneficial agreement for both parties.
Máximo Pacheco, Chairman of the board of directors and leader of the negotiations on behalf of Codelco, highlighted the importance of this agreement. “This is a historic moment for Codelco and for each of its workers. These have not been easy years for the company, which has had to make enormous efforts to sustain its copper production and continue contributing to the well-being and progress of Chile. Today Codelco begins a new cycle. From now on we will be a leading copper and lithium mining company worldwide. This makes us a more robust and sustainable company. We thank our shareholder, the State of Chile, and the President of the Republic, Mr. Gabriel Boric Font, for having trusted Codelco to make Chile a key player in the planet's energy transition."
For more details on this agreement, the text of the memorandum of understanding will be available at www.codelco.com.
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