Chile’s state-run copper miner Codelco and lithium producer SQM have reached an agreement to jointly exploit the vast lithium deposits in the Salar de Atacama salt flat.

The partnership is in line with Chile’s strategy to ramp up the government’s involvement in lithium production.

Codelco’s subsidiary Minera Tarar will merge with SQM unit SQM Salar to establish a joint venture.

This agreement, which grants Codelco a majority stake, is set to replace the previous contract SQM had with the Chilean economic development agency (Corfo), due to expire in 2030.

The collaboration between the two parties is scheduled to commence in 2025 and will extend through 2060, with Codelco taking over general management, starting in 2031.

SQM said it also will sell properties in the Salar de Maricunga to Codelco for their book value of around $18,000.

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However, before the partnership can be fully implemented, it must undergo several additional steps.

In an effort to ensure governance and independence, the agreement stipulated that board members of the new venture cannot have served as directors of either Codelco or SQM for more than ten years.

Opponents have expressed concerns to El Ciudadano, a local news site, arguing that the government had six years to prepare either Codelco or the national mining company (Enami) to manage the operations but has instead chosen to maintain SQM’s involvement, according to a report.

Codelco chairman Máximo Pacheco said: “Just as we have helped make Chile the global leader in copper production, we will now contribute to making our country a leader in lithium production, another mineral essential for the energy transition.”

In April this year, Codelco was looking to select a partner for its lithium project in the Maricunga salt flat by the first quarter of 2024.

The move was part of the company’s efforts to expand its lithium mining operations, a critical component of the green energy transition.