Chile’s competition authority has approved a joint venture between state-owned copper producer Codelco and Sociedad Química y Minera de Chile (SQM), the world’s second-largest lithium supplier, to ramp up lithium production at the Salar de Atacama, as per the several media reports .

According to multiple media reports, the Fiscalía Nacional Económica (FNE) granted the green light after a nine-month review. The partnership will give Codelco a controlling interest—50% plus one share—in line with President Gabriel Boric’s broader strategy to strengthen state oversight of lithium extraction. The metal plays a crucial role in manufacturing batteries for electric vehicles and renewable energy storage systems.

The FNE’s approval follows similar decisions from regulatory bodies in the European Union, Brazil, Japan, South Korea and Saudi Arabia. However, authorization from Chinese regulators remains outstanding.

“This is an important milestone. The regulator examined the transaction over nine months with the necessary scrutiny,” said Codelco Chairman Maximo Pacheco, as quoted in several media reports. He added that dialogue with local Indigenous communities is advancing and noted that the partnership is still awaiting a final sign-off from Chile’s nuclear energy commission, CCHEN, which is expected later this year.

Under the agreement, Codelco and SQM will collaborate to expand lithium extraction operations in one of the world’s richest lithium reserves. The Salar de Atacama currently accounts for a significant portion of global lithium output.

The deal has sparked debate within Chile. Some lawmakers have voiced concern over its implications for environmental sustainability and national resource management. In addition, the joint venture faces legal challenges from Tianqi Lithium, a Chinese company that holds a substantial minority stake in SQM. Tianqi has argued that the agreement could harm competition and marginalize minority shareholders.

Despite the opposition, the Boric administration views the venture as a cornerstone of its national lithium strategy. The government aims to promote sustainable development, increase public-private collaboration and ensure that Chile maintains a strong position in the global clean energy transition.

Codelco, primarily known for its copper mining operations, has been tasked with spearheading the state’s entry into lithium production. The collaboration with SQM represents a critical step in diversifying its portfolio and leveraging its experience in large-scale resource projects.

As the world’s demand for lithium surges, driven by the global push toward electrification, Chile’s role as a leading supplier will likely grow. Final regulatory clearance and successful community engagement will determine how quickly the Codelco-SQM partnership can move forward.