Codelco & CQM: Chile’s Secret Weapon to Power Electric Cars
Chile is preparing to take centre stage in the global lithium market as two of its most powerful mining companies come together.
The state-run copper giant Codelco is forming a joint venture with Sociedad Química y Minera de Chile (SQM) to extract and refine lithium, a mineral at the heart of today’s energy transition.
The partnership plans to operate from 2025 with SQM taking charge until 2030, after which Codelco will lead operations until 2060.
Codelco Chairman, Máximo Pacheco, says: “Just as we have contributed to making Chile the world leader in copper production, we will now contribute to making our country a leader in the production of lithium, another mineral critical to the energy transition, which will allow us to fight the climate emergency.”
Who are the mining partners?
Codelco, or the National Copper Corporation of Chile, is a mining heavyweight formed in 1976. Headquartered in Santiago, its operations stretch across seven divisions: Chuquicamata, Ministro Hales, Radomiro Tomic, Gabriela Mistral, Salvador, Andina and El Teniente.
It remains one of the largest copper producers in the world.
But the company is also committing to ambitious sustainability goals. By 2030 it aims to cut greenhouse gas emissions by 70%, source 100% of its power from clean energy, recycle 65% of industrial waste and reduce inland water use by 60%.
SQM, meanwhile, is one of Chile’s leading producers of lithium, iodine and other industrial chemicals. Its operations are concentrated in the Atacama Desert across Tarapacá and Antofagasta regions.
Chief Executive, Ricardo Ramos, emphasises the role of experience and trust in the company’s contribution: “This partnership is proof of the confidence we inspire with our over 25 years of experience producing lithium from the Salar de Atacama and refining it at the chemical plant in Antofagasta, our operational efficiency and the business synergies.”
For Ricardo, the partnership has benefits that stretch beyond the companies themselves.
He adds: “The projects we are going to develop with Codelco will be extraordinarily positive for Chile, the Antofagasta Region, communities, workers and for both companies.”
Why lithium matters for energy
Lithium is a light metal found in rocks and salt flats within the earth’s crust.
Around 85% of reserves are located in South America’s so-called lithium triangle. Chile is already the world’s second-largest producer after Australia, responsible for 29% of global supply.
Its importance stems largely from lithium-ion batteries. These are the storage units powering electric vehicles, mobile phones and renewable energy grids.
Lithium has a high electrochemical potential and low weight, making it especially suited for battery use. As wind and solar generate electricity intermittently, energy storage allows power to be captured when supply is high and deployed when production dips or demand grows.
Beyond batteries, lithium is also vital in manufacturing glass, ceramics and electronic goods. Its versatility keeps demand strong and rising.
Yet mining comes with environmental costs. Extracting lithium often consumes large quantities of water and creates carbon emissions, issues both Codelco and SQM say they plan to address through investment in cleaner technologies and dialogue with Atacameño communities near the Salar de Atacama.
The venture’s timeline and vision
The new venture is structured in two phases. SQM will lead management until 2030, drawing on its decades of lithium production in the Atacama salt flat.
From 2031, Codelco will take control through to 2060. Together they will focus on refining lithium to meet surging global demand while promising higher efficiency and stronger environmental standards.
The businesses believe this cooperation gives Chile an edge in supplying a mineral essential to climate solutions.
By committing to long-term production in one of the world’s richest lithium reserves, Chile’s mining sector is positioning itself as a core supplier for global electrification. The challenge lies in balancing growth with environmental responsibilities.
With both companies committing to higher standards and community engagement, the venture reflects the central role of mining in shaping the path towards cleaner energy.
