Chilean Lithium Deal Advances, Eyes Finalization This Year

An agreement between Chilean lithium giant SQM and the state-owned mining firm Codelco is inching closer to completion, with the two parties securing a major regulatory green light. The deal, originally announced in 2023, would see Codelco assume majority control of SQM’s operations in the Atacama salt flat in exchange for extending SQM’s mining rights for another 30 years.

According to Bloomberg, Chile’s national antitrust regulator, the Fiscalía Nacional Económica (FNE), has issued preliminary approval for the transaction. The clearance is conditional on standard corporate governance measures, which Codelco has acknowledged as customary requirements in deals of this scale.

The move brings the venture one step closer to finalization, which Codelco projects could occur in the latter half of 2025. The timeline is significant given Chile’s upcoming elections in November, after which a new administration is set to take office in March. The frontrunner in the race, Evelyn Matthei, has indicated she intends to reassess the agreement if elected, adding a layer of political uncertainty to the timeline.

Per Bloomberg, this collaboration forms part of President Gabriel Boric’s broader agenda to boost state influence in Chile’s lithium sector—a critical component in the global energy transition. Boric has championed public-private partnerships as a model for developing strategic mineral assets, with the goal of increasing national lithium output even as global prices continue to slump due to market oversupply and trade disruptions.

Despite progress, several hurdles remain before the deal can be finalized. Approval is still pending from Chile’s nuclear energy authority, which oversees certain lithium-related contracts due to their strategic implications. Additionally, an indigenous consultation process is still underway, and legal resistance has emerged from Tianqi Lithium Corp., a Chinese shareholder in SQM. The company is challenging the agreement in court, arguing that the process lacks transparency and should involve a broader shareholder vote.

Meanwhile, regulatory bodies in Europe and Asia have already approved the arrangement, per Bloomberg, signaling international acceptance even as domestic factors continue to influence its trajectory.

Source: Bloomberg