Chile Implements New Lithium Policies, Approves Landmark SQM-Codelco Partnership

Chile Unveils National Lithium Strategy

Chile has formally introduced a new National Lithium Strategy, a comprehensive policy framework designed to reshape the country's lithium mining sector. Launched by President Gabriel Boric on April 20, 2023, the strategy aims to increase national wealth, promote sustainable development, and solidify Chile's position as a global leader in lithium production. The initiative underscores a shift towards greater state involvement, mandating public-private partnerships where the state holds a majority stake in strategic projects.

Key objectives of the strategy include:

• Sustainable exploration and extraction practices.
• Emphasis on social and environmental responsibility, including protecting 30% of salt flats by 2030.
• Development of technological and value chains, moving beyond raw material extraction.
• Creation of a National Lithium Company and a Public Technological and Research Institute for Lithium and Salt Flats.
• Promotion of public-private partnerships with state majority ownership in strategic ventures.

The government projects that these new policies could lead to a 70% increase in lithium production by 2030 and a doubling of capacity within the next decade.

Landmark SQM-Codelco Partnership Approved

A cornerstone of Chile's new lithium framework is the recently approved partnership between state-owned Codelco (National Copper Corporation of Chile) and private chemical producer SQM (Sociedad Química y Minera de Chile SA). This joint venture, operating in the vast Salar de Atacama, received final clearance from Chile's Comptroller General's Office in December 2025.

The agreement, formally signed on May 31, 2024, establishes a long-term operational structure:

• Codelco will hold a 50% plus one share majority stake in the joint venture.
• SQM will manage operations from 2025 to 2030.
• Codelco will assume general management from 2031 to 2060.

This partnership is projected to yield an additional 300,000 tons of Lithium Carbonate Equivalent (LCE) between 2025 and 2030, and maintain an annual production of 280,000-300,000 tons of LCE from 2031 to 2060. The state is expected to receive 85% of the operating margin from 2031 onwards through various mechanisms.

Reshaping the Investment Landscape

Chile's new policies fundamentally alter the investment landscape for lithium. The country, which holds the world's largest proven lithium reserves and is the second-largest producer, is now prioritizing projects that align with its strategic goals.

The government has categorized its salt flats to guide future development:

• Atacama and Maricunga salt flats are designated as strategic, requiring state majority participation.
• 26 other salt flats are open for private investment, where the private sector can lead.
• 38 salt flats are designated as protected areas, prohibiting development.

The framework also favors the adoption of advanced technologies like Direct Lithium Extraction (DLE) and mandates commitments to renewable energy and value-added processing within Chile. This strategic approach aims to balance attracting international capital and expertise with maintaining national control over critical mineral resources.