Codelco: SQM lithium talks on track, but much still to resolve

The chairman of Chile’s state-run copper giant Codelco said on Monday that he expects to reach a lithium deal with mining company SQM on schedule, while noting many issues remain to be resolved.

“We still have lots of pending issues and we have to work very hard,” said Codelco chairman Maximo Pacheco at an economic development event in the Chilean capital.

The executive added that the agreement with SQM would give 70% of the partnership’s benefits to the government between 2025 and 2030, then rising to 85% from 2031.

Santiago-based SQM, the world’s second biggest lithium producer, has been in talks with Codelco since last year over a potential partnership to mine the key battery metal. The tie-up was mandated by Chile’s government to boost the state role in the lithium industry.

When he announced the plan, Chile’s President Gabriel Boric said he sought to enshrine greater state control over the ultra-light metal needed for future fleets of electric vehicles (EVs) by giving the government a majority stake in lithium projects.

While lithium prices rose dramatically in recent years, they plummeted last year largely due to slowing EV sales in China.

Over half the world’s proven lithium reserves are held South American salt flats in Bolivia, Argentina and Chile.

(By Fabian Andres Cambero; Editing by Sarah Morland)