Chile’s Codelco–SQM Lithium Deal Clears Legality Review, Audit Follows

Key Points

• Chile’s top watchdog cleared the Codelco–SQM lithium partnership, but added instructions that tighten legal control before closing.
• The same office also opened an “unprecedented” audit after lawmakers’ complaints, keeping political risk alive even as the deal advances.
• The structure locks in majority state control and aims to keep Atacama output flowing past 2030, with long-run plans stretching to 2060.

Chile is trying to pull off something many resource countries talk about but rarely execute cleanly: take firmer state control of a strategic mineral without blowing up production or scaring off global buyers.

The Codelco–SQM partnership for the Salar de Atacama is the centerpiece of that strategy. And now it has crossed a major hurdle—while stepping into a harsher spotlight.

On Friday, the Comptroller General (Contraloría) granted the required legality review known as “toma de razón” for the resolution linked to the deal. It was not a blank check.

The watchdog approved it “with scopes and instructions,” warning that a Codelco subsidiary must not take actions that could undermine legal oversight before the transaction formally closes.

It also reinforced a key political promise: Codelco must keep a stake above 50%, ensuring state control. Hours earlier, the Contraloría said it would launch an “unprecedented” audit after complaints from members of Congress.

Chile’s lithium bet meets scrutiny

The office noted that Codelco is typically supervised by Cochilco, but said the law allows the Comptroller to intervene in special situations.

It also signaled limits: it cannot rule on many claims already addressed by courts or on matters that hinge on policy judgment rather than legality.

Codelco’s response was confident. It framed the audit as a chance to validate the process, highlighting Morgan Stanley’s role as financial adviser and arguing there were no substantive objections left unresolved.

Behind the legal language sits the real story: Chile is trying to avoid a cliff in Atacama’s lithium production after 2030.

The government has said amended Corfo–SQM contracts cover operations until 2030, while new Corfo–Codelco arrangements—via Minera Tarar—would run from 2031 to 2060.

Officials have pointed to a pathway toward roughly 280,000–300,000 tons a year of lithium carbonate equivalent before 2030.

Codelco has also said Chile’s nuclear regulator approved a long-run extraction quota of 2.5 million tons of lithium metal equivalent for 2031–2060, with a potential rise to 3.02 million if environmental permits allow expansion—up to about 330,000 tons a year in LCE terms at the higher level.

For the world beyond Chile, this matters because it tests whether a state-led model can expand supply in a market that punishes uncertainty. The deal is moving. The audit makes sure it won’t move quietly.

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