Chile's Lithium Sector Gets a Major Consolidation Push as SQM and Codelco Form Industry-Reshaping Alliance

The lithium industry in Chile has just witnessed a transformative moment. SQM (Sociedad Quimica y Minera) and state-owned miner Codelco have officially completed their strategic merger, creating Nova Andino Litio—a joint venture that will dominate lithium operations across Chile’s Salar de Atacama through 2060. This marks the culmination of a partnership framework negotiated since May 2024, fundamentally reshaping how the world’s largest lithium salt flat manages its most valuable resource.

What Changed on the Ground

The deal involved the absorption of Codelco’s Minera Tarar subsidiary into SQM Salar, which was subsequently rebranded as Nova Andino Litio. This new entity consolidates exploration, production, commercialization, and environmental stewardship across the Atacama region. The structure preserves SQM’s and Codelco’s complementary strengths while establishing clear governance protocols for the next four decades.

The economic framework of this arrangement became operational on January 1, 2025. At that point, the dividend distribution methodology and share preferences outlined in the partnership agreement took immediate effect. Both companies are now working through the accounting implications, which will surface in their 2025 financial reports.

The Legal Backdrop

Despite the operational completion, the deal remains technically subject to a Supreme Court decision on an outstanding appeal filed by Inversiones TLC, a Chinese firm connected to Tianqi Lithium. That appeal challenges regulatory approvals the Financial Market Commission granted earlier in 2024. A November ruling from Santiago’s Court of Appeals had already rejected illegality claims against the exemption resolution, but the higher court appeal continues to wind through the system.

Importantly, this legal uncertainty hasn’t frozen the venture. Both partners have proceeded with implementing the economic arrangements, signaling confidence in the partnership’s ultimate viability.

Governance and Long-Term Positioning

Nova Andino Litio’s board will operate on a balanced structure: three seats for Codelco, three for SQM. The board held its inaugural meeting shortly after the merger concluded. This parity arrangement reflects the partnership’s emphasis on shared stewardship of Atacama’s lithium resources.

The venture also maintains contractual relationships with Corfo, Chile’s development agency, preserving existing agreements and establishing frameworks that will govern operations beyond 2031. As part of the broader arrangement, SQM transferred its Maricunga salt flat mining concessions to Codelco, demonstrating a willingness to consolidate rather than fragment lithium assets across competing jurisdictions.

What This Means for Global Markets

SQM’s leadership framed the joint venture as a pathway to strengthen operational standards and sustainability practices in one of the world’s most strategically important lithium regions. The Salar de Atacama supplies a disproportionate share of global lithium, making governance decisions here ripple through battery supply chains worldwide.

By combining Codelco’s state resources and SQM’s operational expertise, Nova Andino Litio positions both companies to weather future market volatility and regulatory scrutiny. The forty-year commitment signals that neither partner views this as a short-term play—lithium demand projections justify long-term, capital-intensive infrastructure in the Atacama.

This consolidation also reflects a broader trend: lithium-producing nations increasingly insist on domestic stakeholder involvement in resource extraction. The Chile-based partnership model may become a template for how other countries negotiate with international miners over critical mineral access.