Landmark Lithium Partnership: SQM and Codelco Reshape Atacama Production Through 2060

A transformative alliance has officially materialized in Chile’s premier lithium-producing region. SQM and state-owned Codelco have completed their strategic merger, creating Nova Andino Litio—a new entity designed to dominate lithium operations across the Salar de Atacama through 2060. The transaction, which consolidated Codelco’s Minera Tarar subsidiary into SQM Salar, represents one of the most significant structural shifts in Latin America’s lithium sector.

The Partnership Structure Takes Shape

The December 27 completion marks the finalization of an agreement originally signed in May 2024. Rather than operating as separate competitors in the Atacama region, SQM and Codelco now operate as integrated partners with clearly defined economic frameworks. The new entity inherited SQM Salar’s legacy operations while absorbing Codelco’s operations, consolidating exploration, production, commercialization, and environmental stewardship under one banner.

Ownership is equally distributed: Nova Andino Litio’s board comprises three representatives from each partner company, with the first board session scheduled to commence immediately post-completion. This balanced governance structure reflects both parties’ commitment to the venture’s long-term viability and shared value creation across Chile and global lithium markets.

Economic Framework and Financial Mechanisms

Though the merger formalized in late December, the financial architecture activated on January 1, 2025. SQM’s Series A shares and Codelco’s Series B shares became economically active on New Year’s Day, enabling the agreed dividend distribution methodology to commence. The dividend allocation process and associated accounting treatments will flow through both partners’ 2025 financial statements, providing market transparency on the venture’s economic performance.

The partnership maintains contractual continuity with Chile’s development agency Corfo, preserving existing agreements while establishing a new framework for operations extending beyond 2031. This ensures regulatory stability and government alignment throughout the 35-year operational horizon defined through 2060.

Legal Considerations and Operational Continuity

An outstanding Supreme Court appeal, filed by an investment firm contending with the regulatory approvals granted earlier in 2024, remains technically unresolved. However, this legal proceeding has not impeded the transaction’s completion or operational commencement. The Santiago Court of Appeals previously dismissed illegality claims against the Financial Market Commission’s exemption resolution, affirming the pathway forward.

Strategic Implications for Atacama Lithium Production

SQM Chief Executive Ricardo Ramos emphasized that the joint venture stabilizes long-term lithium operations while elevating operational and sustainability standards across the Atacama region. The consolidation enables both parties to leverage complementary capabilities—combining SQM’s extensive operational expertise with Codelco’s state-backed resources and stability mandate.

As part of the broader arrangement, SQM transferred its mining concessions within the Maricunga salt flat to Codelco, signaling a deliberate rationalization of operational footprint. This reallocation underscores the partnership’s focus on concentrating resources and expertise where extraction potential is highest: the Salar de Atacama.

The completion of this landmark alliance reshapes competitive dynamics in global lithium markets, with implications extending far beyond Chile’s borders.