Chile Approves Lithium Expansion Plans with Codelco and SQM Partnership

Chile's Comisión Chilena de Energía Nuclear (CCHEN) has approved Codelco's proposal to expand lithium production in the country. The agreement between Codelco and SQM will increase lithium production to 330,000 tons per year, with a focus on low-cost extraction. However, the deal faces opposition from Chilean politicians and its approval process is tied to the country's electoral cycle.

Chile's Comisión Chilena de Energía Nuclear (CCHEN) has approved Codelco's proposal to expand lithium production in the country. The agreement between Codelco and SQM (NYSE: SQM) will increase lithium production to 330,000 tons per year, with a focus on low-cost extraction. However, the deal faces opposition from Chilean politicians, and its approval process is tied to the country's electoral cycle [2].

The nuclear energy regulator CCHEN approved extraction of 2.5 million metric tons of lithium metal equivalent (LME) from 2031 to 2060. This quota could rise to 3.02 million metric tons if the joint venture secures environmental permits for expanded production. If the higher quota is granted, it would allow for the production and sale of up to 330,000 tons of lithium carbonate equivalent (LCE) a year for the three-decade period [2, 3].

The Codelco-SQM deal, which will bring the state into lithium production in Chile for the first time, still requires two key elements before it can be finalized: consultation with local indigenous groups and regulatory approval from China. A senior Codelco source expects both conditions to be met by September [2, 3].

The approval of this deal marks a significant milestone in Chile's lithium production landscape. Currently, SQM and U.S. firm Albemarle are the only lithium miners in Chile, which is the world's second-largest producer of the metal. The deal's success could further solidify Chile's position as a key player in the global lithium market [2, 3].

However, the approval process is not without challenges. Chilean politicians have expressed opposition to the deal, citing concerns about environmental impact and the potential displacement of local communities. The deal's success will depend on navigating these political and environmental hurdles [2].

References:
[1] https://www.gurufocus.com/news/2946389/sqm-sqm-announces-workforce-reduction-amid-lithium-price-slump
[2] https://www.tradingview.com/news/reuters.com,2025:newsml_L1N3SY0NO:0-chile-s-codelco-secures-new-lithium-quota-for-sqm-partnership/
[3] https://seekingalpha.com/news/4464427-chiles-codelco-obtains-new-lithium-quota-for-sqm-partnership