Inside Codelco and SQM's Strategic Lithium Partnership
Codelco, Chile’s state-managed copper leader, is entering a strategic partnership with SQM to advance lithium extraction in Chile from 2031 to 2060.
The move highlights the increasing importance of lithium in the procurement space, mainly due to its critical role in climate-conscious technologies, particularly lithium-ion batteries that support energy storage and electrification efforts.
Máximo Pacheco, Codelco's Chairman, explains: "Just as we have contributed to making Chile the world leader in copper production, we will now contribute to making our country a leader in the production of lithium, another mineral critical to the energy transition, which will allow us to fight the climate emergency."
“We will do so as partners of SQM, a Chilean company that has the scale, technical and human expertise, financial resources and sales network that we need to avoid missing the opportunities that now open themselves up to us.”
The role of Codelco in procurement
The National Copper Corporation of Chile, Codelco, holds a prominent position as a global player in copper mining.
Established in 1976 and headquartered in Santiago, the enterprise focuses on exploring, developing and exploiting mineral resources, producing refined products and distributing them globally.
In the coming years, the company is committed to reducing its greenhouse gas emissions by 70% by 2030, facilitating this with a 100% clean energy matrix.
Furthermore, Codelco is set to recycle 65% of its industrial waste and cut its inland water usage by 60%. These efforts align with the broader movement towards sustainable sourcing and procurement within the mining sector.
SQM’s expertise in lithium production
SQM (Sociedad Química y Minera de Chile) stands as a distinguished provider of lithium, iodine and industrial chemicals, strategically operating facilities in the Atacama Desert in the Tarapacá and Antofagasta regions.
Its seasoned experience significantly enhances the partnership with Codelco.
SQM CEO Ricardo Ramos adds: “The projects we are going to develop with Codelco will be extraordinarily positive for Chile, the Antofagasta Region, communities, workers and for both companies.
"We are committed to compliance with the highest environmental standards and an ongoing process of dialogue with Atacameño communities to protect the salt marsh’s ecosystem.”
Lithium: A procurement asset
Globally, lithium finds itself at the heart of procurement for energy and transportation sectors.
Primarily used in electric vehicles and energy storage systems, lithium’s applications span to the manufacturing of glass, ceramics and electronic goods.
Its unique properties, including high electrochemical potential and low weight, make it indispensable for lithium-ion batteries that empower electric vehicles, mobile devices and grid-scale energy storage systems.
This importance underscores the need for strategic sourcing practices that carefully balance resource extraction with environmental stewardship, particularly as concerns over water use and carbon emissions continue to rise.
An ambitious joint venture
In their joint effort, Codelco and SQM will cultivate refined lithium production in the Salar de Atacama.
Significant financial investments will be allocated for technologically-advanced and environmentally-sustainable lithium production methods.
During the initial phase, extending to 2030, SQM will manage the project, after which Codelco will assume control from 2031 through to 2060.
Notably, the venture intends to become operational by 2025, marking a significant period for both companies to establish a leadership foothold in the global lithium market.
