Chile’s state copper company Codelco and lithium producer SQM have agreed to establish a roundtable with indigenous communities amid talks over a possible partnership between the two companies in the Atacama salt flat, Codelco said on Friday.
The announcement, which refers to an “eventual alliance” between the two companies, signals movement in Codelco’s efforts to reach an agreement with Santiago-based SQM to form a new state-controlled public-private partnership.
Chilean President Gabriel Boric in April tasked Codelco, the world’s largest copper producer, to lead efforts to increase state control over strategic lithium projects as demand grows for the white metal, which is a key component in electric car batteries.
The Council of Atacameno Peoples, made up of 18 Indigenous communities, has been pushing for greater participation in the government’s lithium strategy.
The roundtable seeks to ensure “the participation of Indigenous communities with a focus on the protection and sustainability of the Salar de Atacama, within the framework of the eventual alliance between Codelco and SQM,” Codelco said in the statement.
Codelco said representatives from the local communities, SQM and Codelco will chart out a framework over the next month for the communities’ participation.
Codelco’s chairman, Maximo Pacheco, as reported by Mining.com, on Thursday said that he maintains his prediction that the state company will reach an agreement with miner SQM this year.
Why The Atacama Salt Flat Matters
The Atacama salt flat is the world’s largest and richest lithium reserve, with an estimated 8.6 million tonnes of the metal. It also contains significant amounts of copper, potassium and other minerals.
Lithium is essential for the production of batteries that power electric vehicles, laptops, smartphones and other devices. The global demand for lithium is expected to grow by 25% annually, reaching 1.4 million tonnes by 2024, according to the International Energy Agency.
Copper is also a vital metal for the transition to a low-carbon economy, as it is used in renewable energy generation, electric grids, motors and wiring. Chile is the world’s top copper producer, accounting for nearly 30% of the global supply.
Both copper and lithium are considered strategic resources by the Chilean government, which aims to boost its revenues and create more value-added products from its natural wealth.
The Opportunities of A New Partnership
The proposed partnership between Codelco and SQM could offer a new opportunity to address these challenges and create a more sustainable and inclusive model of mining in the Atacama salt flat.
By joining forces, the two companies could share their expertise, technology and infrastructure, as well as reduce costs and risks. They could also leverage their combined market power and influence to negotiate better prices and contracts with buyers and suppliers.
The partnership could also contribute to the development of the region and the country, by generating more jobs, income, taxes and social projects, as well as promoting the production of value-added products, such as battery cells and modules, that could enhance Chile’s competitiveness and innovation in the global green energy market.
