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Codelco will lead lithium negotiations in the Atacama Salt Flat

InvestChile - May,25,2023

Chilean economic development agency Corfo’s executive vice-president delivered a document to the chairman of Codelco which formalizes the state-owned copper mining company’s role as the State’s representative in future lithium mining contracts with interested parties. 


In order to initiate the implementation of the National Lithium Strategy that was launched in April by President Gabriel Boric, Corfo and Codelco’s senior executives met to formalize the start of proceedings that will enable the Chilean State to participate directly in lithium production operations in the Atacama Salt Flat. 

In its capacity as owner of the lithium deposits in the Atacama Salt Flat and the organization responsible for facilitating the development of lithium mining operations that generate the greatest possible benefits for local communities and the country as a whole, Corfo established the minimum conditions for a future lease agreement, subject to approval by its board of directors and the corresponding administrative and regulatory authorizations. 

“As we have stated publicly and discussed directly with the representatives of the companies involved, the conditions of existing contracts will be fully respected as long as the lithium reserves remain under the control of Corfo and are extracted through lease agreements”, said Corfo's Executive Vice-President, José Miguel Benavente. 

According to Benavente, the initiation of this negotiation process with companies currently operating in the Atacama Salt Flat or other parties constitutes “an opportunity to achieve the objective set out by President Boric regarding the State’s participation in lithium mining operations prior to the expiration of the current lease agreements. As such, in its capacity as a state-owned mining company with extensive experience and a proven track record, Codelco has been entrusted with finding the best way to achieve this goal”. 

Meanwhile, Codelco’s Chairman, Máximo Pacheco, noted that the company will initiate negotiations to enter into public-private partnerships that will provide continuity to lithium mining activities in the Atacama Salt Flat beyond 2030, ensuring that, as a state-owned company, it holds a majority share in any partnerships created for this purpose. 

“Today, we have taken the initial steps to enter into lithium mining operations in the Atacama Salt Flat, as it is a strategic business for the company and its owner, the Chilean State. We will consolidate our position as a leading producer of two crucial minerals for the global energy transition”, Pacheco highlighted. 

The minimum conditions established by Corfo for a future lease agreement to extract its lithium reserves include maintaining benefits for the State; environmental, community relations, R&D financing, and scientific-technological cooperation requirements; and offering preferential prices on lithium products for companies that establish added-value operations in Chile, specifically: 

  • Maintaining the benefits currently received by the State through the proceeds of Corfo’s lease agreements, and other contributions provided by SQM to the regional government, local governments, and indigenous communities in close proximity to the Atacama Salt Flat. 
  • Maintaining and improving the application of clauses that enable financing of R&D activities in Chile, especially in regions where lithium mining operations are carried out, in order to generate knowledge, technology, and capacities that promote economically and socially sustainable development. 
  • Maintaining and updating the application of clauses that stipulate the sale of a percentage of lithium produced at preferential prices to companies that agree to develop high-added-value industrial activities in Chile. 
  • Updating and strengthening environmental commitments, in accordance with Chile’s current regulations and international standards that serve as a framework for the implementation of the National Lithium Strategy, in order to ensure the industry’s long-term sustainability. 
  • Engaging in the technical assessment and subsequent implementation of new lithium extraction technologies and, in general, environmentally friendly production processes, especially in areas such as hydrogeology, water and energy use, which also contribute insofar as possible to improving the living conditions of communities close to the Atacama Salt Flat and in the Antofagasta Region in general. 
  • Implementing the most stringent stakeholder relations, transparency, and public participation standards with indigenous communities living in close proximity to the Atacama Salt Flat. 
  • Engaging in the development of scientific-technological cooperation and knowledge transfer activities. 

Source: Ministry of Economy 

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Topics: Lithium



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