One of the most promising lithium sites in Chile, located at the Maricunga salt flats, is where copper giant Codelco plans to start production in 2030. This move will mark a major advance in the lithium market. Rothschild & Co., selected as the financial advisor in April, has assisted the company in choosing a strategic partner to pursue this bold project.
The entry of Codelco into the lithium market demonstrates its strategy change to expand its mining activities beyond copper. It is anticipated that the “Paloma” project near Maricunga will start construction in early 2027, with the first stage of production starting in 2030. Following an immense number of expressions of interest from prospective partners, Codelco was able to confirm this schedule, as reported by the local newspaper La Tercera.
The initial phase of the project demands an investment of $1.2 billion and aims to produce 20,000 tonnes of lithium carbonate equivalent (LCE) annually using the traditional evaporation ponds method. The next phase intends to increase production capacity to 30,000 tonnes of LCE per year by adopting Direct Lithium Extraction (DLE), a more efficient but yet commercially unproven technology. This subsequent phase is projected to require an additional capital investment of about $1.1 billion.
Codelco’s exploration into DLE technology is part of a broader effort to innovate within the lithium extraction industry. Máximo Pacheco, Codelco’s Chairman, recently revealed plans to implement this new extraction method by 2033 in collaboration with SQM (Sociedad Química y Minera) in the Atacama salt flat, one of the world’s richest lithium sources.
This new partnership has faced scrutiny and potential legal challenges, particularly from Tianqi Lithium, SQM’s second-largest shareholder. Tianqi has expressed concerns over the transparency of the deal and has sought a stockholder vote to decide on the agreement, which guarantees SQM’s operational continuity in Chile until 2060. Despite these challenges, Pacheco remains confident that the partnership will proceed without disruption.
Tianqi’s grievances also extend to their claim that they were restricted from accessing sensitive information during negotiations with SQM, hinting at the possibility of legal actions. This issue is currently under review by Chile’s financial regulator, which could lead to further legal proceedings.
Apart from the new partnerships, Codelco has been expanding its lithium portfolio actively. Earlier in January, it acquired its first lithium asset within Chile through the purchase of Australia’s Lithium Power International. This acquisition gave Codelco control over the Maricunga project, located in Chile’s second-largest salt-encrusted field in terms of lithium reserves.
The Chilean government has recently opened up new opportunities for lithium mining to private investors, recognizing the strategic importance of the Atacama and Maricunga salt flats. It stipulates that any operations in these areas must involve a majority stake owned by either Codelco or the Chilean miner Enami.
Together with strategic alliances and acquisitions, Codelco’s entry into the lithium market positions it as a major player in the global market, complementing Chile’s position as the world’s second-largest producer of lithium after Australia and the owner of the largest known deposits of this essential battery metal.
