Codelco is the acronym for the National Copper Corporation of Chile, state-owned autonomous company whose main focus is to explore, develop and exploit mining resources, process them to produce refined copper and by-products, and then market them to customers around the world.
The miner, which is the world’s largest copper producer, has 7 mining divisions: Radomiro Tomic, Chuquicamata, Gabriela Mistral, Minister Hales, Salvador, Andina and El Teniente.
In addition to these operations, Codelco has the Ventanas division, which is focused on refining ore. In 2022, it produced more than 1,445,000 tonnes of copper, generating surpluses of more than $6.5 billion. Throughout its history, Codelco has given Chile some $84 billion, contributing to the country being today among the five largest mining powers in the world.
A key aspect in alliances or associations in the mining industry rests on the legal and ethical track record of the potential partners. Unfortunately, for Chile and Codelco, SQM does not fulfill that fundamental requirement. From its origin as operator in the Salar de Atacama, clearly illegitimate, SQM has been involved in several legal conflicts with the State and Corfo, still in force today.
Worse yet, SQM is simultaneously investing more than $1 billion in lithium deposits in Australia (Azure, Mount Holland and other prospects), thereby becoming an open competitor in its own country of origin, Australia, which is the world’s no. 1 lithium producer.
It is surprising that Codelco needs an partner to operate a lithium mine, since it has 50 years of experience in mega copper deposits that are much more complex than the extraction of superficial brines, where through the natural mechanism of evaporation, lithium is extracted from the salt flat.
Codelco brings half a century of successful experience in the development and leading production of copper (plus molybdenum, rhenium, gold and silver). All carried out by Chilean workers, technicians and professionals with years of experience.
It would be more appropriate to share only 20% of the Salar de Atacama operation with a partner that pays for that privilege and which has, for example, proven experience in the production of electric vehicles (EVS) or, better yet, mining equipment.
Additionally, the drop in the price of lithium suggests it would be better to discard the memorandum of understanding with SQM under study and concentrate efforts on the Maricunga Salar, which would open a new production front with Codelco at the helm.
I invite the National Congress, Corfo, the Chilean Nuclear Energy Commission, the Institute of Mining Engineers, Cochilco,the Geological Society, the College of Geologists, universities and community organizations to debate democratically about this.
We need to give life to a model based on the needs of a country rich in minerals and equipped with experienced workers, technicians and professionals who must overcome an unacceptable inequality, affects even Chile’s native peoples.
Our extraordinary lithium deposits will allow it if we take charge.
José Cabello is a Chilean geologist, head of consulting firm Mineralium.
