Chile’s comptroller on Friday granted conditional approval to a landmark joint venture between state mining giant Codelco and lithium producer SQM to develop the prized Atacama salt flat, cementing the government’s strategy of asserting majority state control over the strategic battery metal.
The final regulatory green light mandates that Codelco must hold more than 50% in the partnership, ensuring the state retains ultimate control over operations in the world’s richest lithium deposit. This condition is a cornerstone of President Gabriel Boric’s policy to increase state participation in the lithium industry, a resource deemed vital for the global energy transition.
The JV aims to consolidate operations in the Atacama and boost output to between 280,000 and 300,000 metric tons of lithium carbonate equivalent annually. This would solidify Chile’s position as a top global lithium producer while allowing the nation to capture more value from the critical mineral supply chain.
The approval came amid significant controversy. Just hours before the announcement, Chile’s top audit authority revealed it would launch an “unprecedented audit” into the negotiation and signing process of the deal, following complaints from lawmakers. Legislators had questioned the lack of a public bidding process and the choice of SQM as a partner, given its past legal disputes with tax authorities.
In a statement, Codelco said it would cooperate with the audit “with complete transparency and professionalism,” asserting the review would confirm the “integrity, rigor, and soundness” of the process. SQM declined to comment.
The deal has also faced legal challenges from China’s Tianqi Lithium Corp, a major shareholder in SQM, which argued the partnership required shareholder approval. Its unsuccessful court efforts underscore the keen international investor interest in Chile’s shifting lithium governance.
Analysts view the state-controlled JV model as a new paradigm for critical mineral investment, reflecting a broader trend where resource-rich nations seek greater sovereignty and control over strategic commodities essential for electric vehicles and renewable energy storage. The move is expected to have long-term implications for global lithium supply, pricing, and the strategies of battery manufacturers worldwide.
