SQM and Codelco's Strategic Lithium Alliance: Reshaping Atacama's Future Through 2060

The lithium sector witnessed a major consolidation as SQM and Chile’s state-owned mining giant Codelco brought their long-negotiated collaboration to completion. The duo established Nova Andino Litio, a unified entity designed to orchestrate lithium exploration, extraction, and market distribution across the Salar de Atacama region through the year 2060. This merger represents a pivotal moment for Chile’s dominance in global lithium supply chains, combining two powerhouses with complementary operational strengths.

Transaction Mechanics and Regulatory Framework

The deal concluded through Codelco’s Minera Tarar subsidiary merging with SQM Salar, with the combined platform taking on its new identity as Nova Andino Litio. This structure was governed by terms finalized in May 2024, and the economic provisions of the arrangement became operative starting January 1, 2025. The partnership framework specifically addresses dividend structures, with Codelco holding Series A preferred shares and SQM holding Series B shares, each with distinct economic rights and distribution methodologies.

Notably, SQM transferred its full portfolio of mining concessions in the Maricunga salt flat to Codelco as part of the agreement architecture. The venture maintained its existing contractual relationships with Chile’s development institution Corfo, preserving operational continuity while establishing new governance parameters for the 2031-2060 operational phase.

Legal and Competitive Pressures

Despite achieving economic fruition, the partnership remains conditionally subject to a Supreme Court resolution regarding an appeal lodged by Inversiones TLC, a subsidiary of China’s Tianqi Lithium. The appellant challenges regulatory clearances granted during 2024. The Santiago Court of Appeals had previously upheld the legitimacy of an exemption determination from Chile’s Financial Market Commission in November, but final adjudication at the higher court remains pending.

This legal complexity underscores the high-stakes competition in the lithium market, where Chinese and international players actively contest major resource consolidations in the Americas’ most productive extraction zones.

Governance and Operational Implications

Nova Andino Litio’s board structure reflects the partnership’s bilateral nature, with three representatives appointed by each stakeholder. The inaugural board session convened on December 29, establishing the governance framework for coordinated decision-making across lithium production operations.

SQM’s leadership, represented by Chief Executive Ricardo Ramos, articulated the venture’s strategic purpose as delivering long-term operational stability while enhancing environmental and efficiency standards. The consolidated entity is positioned to leverage SQM’s technical expertise alongside Codelco’s resource management capabilities, creating an integrated approach to lithium extraction that aligns with Chilean national interests and international market demands.

Financial and Market Positioning

The partnership’s dividend framework and accounting treatments will be formally documented in the partners’ 2025 financial disclosures. SQM and Nova Andino Litio are currently quantifying specific allocations and financial impacts that will appear in respective investor filings.

This lithium collaboration demonstrates how major resource producers are consolidating operations to maintain competitive positioning amid rising global EV adoption and battery technology expansion. By securing lithium production through 2060, the joint venture provides market participants with supply certainty across a critical industrial commodity.