Today, the first board meeting of Nova Andino Litio SpA, the joint venture between Codelco and SQM that will develop lithium production in the Atacama Salt Flat, was held. The board of directors of the new company is composed of Máximo Pacheco M, Josefina Montenegro A and Alfredo Moreno Ch representing Codelco, and Ricardo Ramos R Hernán Uribe G and Manuel Ovalle E. representing SQM.
At the meeting, Máximo Pacheco was elected Chairman and Ricardo Ramos was elected Vice Chairman. Carlos Díaz, the current General Manager of SQM Litio, was appointed GM of NovaAndino Litio and Eduardo Foix was appointed Finance Manager.
The establishment of the joint venture culminates a process that began in May 2023, when negotiations between the two companies formally commenced within the framework of the National Lithium Strategy, which mandated the direct participation of the State in lithium production operations in the Atacama Salt Flat. These discussions resulted in a Memorandum of Understanding announced in December of that year. Subsequently, intensive technical, legal and regulatory work commenced, including the active participation of the Indigenous communities inhabiting the territory. This process was consolidated with the signing of the Partnership Agreement on May 31, 2024, which established a clear roadmap with demanding preconditions aimed at ensuring legal certainty, obtaining regulatory and sustainability approvals, and creating value for the State of Chile.
The agreement was subject to an exhaustive and unprecedented review process, both in Chile and in eight other countries, involving more than 20 public and regulatory authorities and bodies, Codelco says.
At the national level, various aspects of the transaction were reviewed by the National Economic Prosecutor’s Office (FNE), the Financial Market Commission (CMF), the Chilean Nuclear Energy Commission (CChEN) and the Comptroller General of the Republic. This was complemented by extensive judicial scrutiny, with diverse actions including writs of protection, economic protection appeals, claims of illegality and lawsuits seeking annulment. All the actions and appeals filed that have concluded were rejected by the Courts of Appeals or the Supreme Court. There was also extensive analysis in the legislative arena, after the Chamber of Deputies and the Senate were informed of the details of the agreement; in addition, a Special Investigative Commission was formed, whose report raised no objections to its legality.
Internationally, the partnership was reviewed and approved by competition and foreign investment authorities in eight countries in addition to Chile, with favourable rulings from the 10 regulatory bodies that analysed the transaction, mostly without conditions, confirming that the agreement complies with the applicable regulations in the jurisdictions where the joint venture and its subsidiaries operate and will operate. Simultaneously, an Indigenous consultation led by Corfo was conducted, the favorable outcome of which served as the basis for agreements with the communities.
Pacheco said: “This project followed a demanding path, subject to all the requirements that Chilean institutions and international regulatory frameworks provide for initiatives of this magnitude. Having successfully completed this process allows us to affirm that this company is born with solid institutional backing, full legitimacy and a clear vision for the future.”
He added: “Today we are formalising a long-term decision, designed for Chile and for future generations. The new company is born with the mission of transforming a strategic resource belonging to all Chileans, such as lithium, into opportunities and development for the country and a world that needs it for its energy and digital transition. We can assure you that NovaAndino Litio will act with the utmost environmental responsibility, respect for the land and the communities that inhabit it, and a commitment to the sustainable development of our country and the planet.”
For his part, Ramos stated that “this partnership brings together knowledge and operational experience, top-level technical and professional teams, scale and commercial networks in several countries, presence in the territory and commitment to sustainability, as well as a shared long-term vision, which will allow us to contribute from Chile to the global energy transition”.
Pacheco also highlighted the Corporation’s leading role in this milestone. “As we have done on other occasions throughout our history, the men and women who make up Codelco are honoured to be a vehicle for the State to play a strategic role in an industry that is key to the well-being of Chile and the world. For me, it is an honour to have been elected Chairman of the Board of Nova Andino Litio because of the importance of this company for Chile and because it marks Codelco’s entry into the lithium business. From today, Codelco is a company that produces copper and lithium, and with this, we are positioning Chile as a key player in the energy transition and the decarbonisation of the economy,” he stated.
The Partnership Agreement between Codelco and SQM was designed to maximise the public value of lithium, strengthen the role of the State and raise industry standards. Economically, the model stipulates that the Chilean State will capture a majority share of the profits, with an estimated 70% of the operating margin associated with new production between 2025 and 2030. From 2031 onward, this return is projected to reach up to 85% through payments to Corfo, taxes to the Treasury and profits for Codelco.
From an environmental perspective, the joint venture will drive a structural change in how lithium is produced in the Atacama Salt Flat. The plan includes the incorporation of new technologies and process improvements aimed at increasing efficiency, reducing net brine extraction and moving toward a water balance. This approach seeks to lessen the pressure on the salt flat’s ecosystems and address long-term environmental challenges.
In territorial and social matters, the agreement incorporates commitments to permanent engagement with surrounding communities, primarily with indigenous peoples, as well as monitoring mechanisms and contractual requirements that reinforce respect for the territory and the creation of shared value.
With the formation of the joint venture and the start of its corporate governance, Codelco and SQM are moving into the implementation phase, aimed at fulfilling the economic, environmental and social commitments that underpin the agreement and consolidating Chile as a reliable supplier of lithium, key to the energy transition and sustainable development globally, it says.
The post Nova Andino Litio move into Chilean lithium implementation phase appeared first on International Mining.