Chile’s Codelco to lead negotiation of future lithium exploitation contracts in the Atacama Salt Flat

Chile’s National Copper Corporation (Codelco) was appointed today to lead the negotiation process for future lithium contracts in the Salar de Atacama, the largest salt deposit in the South American country, as part of the national strategy for exploration and exploitation of the raw material.

The highest authorities of Codelco and the Chilean Production Development Corporation (Corfo) met this Wednesday to implement the main announcements contained in the national plan presented last April by the government of President Gabriel Boric.

According to a press release, both entities formalized at the meeting “the beginning of the process that will allow the State of Chile to be directly involved in the productive operations of lithium in the Salar de Atacama” through the state-owned company Codelco.

“Codelco, as a public company with long experience and proven capabilities, has been entrusted to be in charge of seeking the best paths,” said Corfo’s executive vice president, José Miguel Benavente.

He added that incorporating Codelco “is an opportunity to fulfill the objective indicated by President Boric regarding the State’s participation in the exploitation of lithium before the expiration date of the current leases”.

To this end, Corfo established basic conditions for a future lease contract regarding the benefits of the State, environmental issues, relations with the communities and the territory, as well as financing in research and development, and scientific-technological cooperation, among others.

These contracts will also be subject to the approval of Codelco and the corresponding administrative and regulatory authorities.

Benavente pointed out that “the existing contracts will be fully respected, while the ownership of the mining properties will remain in the hands of Corfo to be exploited through leasing contracts”.

For his part, the chairman of the board of the copper company, Máximo Pacheco, stated that the company will promote the formation of public-private alliances to continue productive activities in the Salar de Atacama beyond 2030, with the idea that Codelco will control the companies created for this purpose.

“Today, the actions that the board of directors initiated to enter into the exploitation of lithium in the Salar de Atacama are materializing, as it is a strategic and convenient business for the company and its shareholder, the State of Chile.”

“We will consolidate our global positioning as producers of two of the critical minerals for the world’s energy transition”, said Pacheco in relation to lithium and copper production.

The permits to exploit Chilean lithium are currently in the hands of Chile’s Sociedad Química y Minera (SQM). The company recently announced a long-term strategic agreement with the U.S. multinational Ford Motor Company to ensure the supply of the raw material for producing electric vehicles.

Among the measures of the national lithium strategy presented last month by Boric is the creation of a National Lithium Company, a project that will be sent to the South American country’s Congress, where it must be discussed and approved to enter into force.

Chile currently has one of the largest lithium reserves in the world in its northern salt flats, with which it seeks to consolidate its position as the world’s leading supplier. In 2022, lithium emerged as the most exported non-copper product of the southern country and was expected to be an important source of income in the future.

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