Chilean Indigenous Groups Challenge Lithium Partnership Review Process

Two Indigenous groups in Chile's Antofagasta region have requested a court to suspend a state-led community review process for a lithium partnership between Codelco and SQM. The groups accuse Chilean economic development agency Corfo of not properly carrying out a consultation process. The court has accepted their challenges and ordered Corfo to respond within 15 days. The Indigenous consultation process was due to conclude in late July, but its outcome remains uncertain.

Two Indigenous groups in Chile's Antofagasta region have requested a court to suspend a state-led community review process for a lithium partnership between Codelco and SQM. The groups, Coyo and the Atacameno Association of Irrigators and Farmers of San Pedro de Atacama, have accused Chilean economic development agency Corfo of not properly carrying out the consultation process [1].

The court accepted their challenges and ordered Corfo to respond within 15 days. The Indigenous consultation process, led by Corfo and involving several community groups, was due to conclude around late July. However, the outcome remains uncertain due to the legal challenges [1].

The partnership between Codelco and SQM is a significant development in Chile's lithium industry. The deal, which is one of the final conditions for Codelco to take a majority stake in SQM's lithium mining operations in the Atacama salt flat, has faced growing scrutiny ahead of Chile's elections in November [2].

The Indigenous groups have requested more information and time to provide informed consent on the plan, arguing that the consultation's timeline between November 2024 and July 2025 was too fast to allow for detailed analysis. They also allege that Corfo did not act in good faith and did not meet the standards set out by the International Labour Organization [1].

The court's decision to accept the challenges comes as SQM and Codelco are separately holding talks with communities near the salt flat to discuss a model for Indigenous oversight over lithium extraction. The Indigenous consultation process was one of the final conditions for the deal to go into effect [1].

Corfo, however, maintains that the consultation process is still in progress and has been carried out in accordance with the regulations [1]. Codelco and SQM have not yet provided comments on the court's decision.

The Codelco-SQM deal is part of Chile's broader strategy to accelerate lithium production and boost government revenue. However, the deal has faced criticism for lacking transparency and for potentially foregoing more rent through a competitive tender [2].

The court's decision to suspend the consultation process adds another layer of uncertainty to the deal. The outcome of the legal challenges could significantly impact the timeline and terms of the partnership between Codelco and SQM.

References:
[1] https://www.investing.com/news/stock-market-news/indigenous-groups-ask-chile-court-to-pause-community-review-of-codelcosqm-lithium-deal-4136756
[2] https://www.americasquarterly.org/article/chiles-embattled-lithium-king/