Sociedad Quimica y Minera (SQM) (NYSE:SQM) and Codelco have finalized their long-awaited partnership, forming a new joint venture that will oversee lithium production in Chile’s Salar de Atacama through 2060.
SQM announced on Saturday (December 27) that it has completed its strategic partnership with state-owned miner Codelco through the merger by absorption of Codelco subsidiary Minera Tarar into SQM Salar.
Following the transaction, SQM Salar has been renamed Nova Andino Litio, the new vehicle that will consolidate lithium exploration, production, commercialization and related community and environmental initiatives in the Atacama.
The merger was carried out under the terms of a partnership agreement that was signed in May 2024.
While the transaction has been completed, it remains subject to a resolutory condition tied to a pending Supreme Court decision on an appeal filed by Inversiones TLC. The appeal challenges regulatory approvals granted earlier this year, and Inversiones TLC is a subsidiary of China’s Tianqi Lithium (SZSE:002466,HKEX:9696,OTC Pink:TQLCF).
The appeal comes after a November ruling by the Santiago Court of Appeals that rejected a claim of illegality against an exemption resolution issued by Chile’s Financial Market Commission.
Despite the unresolved litigation, the economic framework of the partnership has already taken effect. SQM confirmed that the preferences and economic rights attached to the Series A shares held by Codelco and the Series B shares held by SQM became effective on January 1, 2025, including the dividend distribution methodology set out in the agreement.
SQM and Nova Andino Litio are currently determining dividend allocations and other accounting effects, which will be reflected in their respective 2025 financial statements.
The new company preserves contractual continuity with Chilean development agency Corfo, both under existing agreements and those that will govern operations from 2031 onward.
SQM Chief Executive Ricardo Ramos also said the joint venture provides long-term stability for lithium operations in Atacama, while raising operational and sustainability standards.
“This joint venture allows us to project the development of the Atacama Salt Flat and continue advancing with standards of operational excellence, sustainability and shared value creation, combining complementary capabilities for the benefit of Chile and global markets,” Ramos said in a press release issued by Codelco.
As part of the agreement, SQM has also transferred all of its mining concessions in the Maricunga salt flat to Codelco.
Nova Andino Litio’s board will be evenly split between the partners, with three representatives from each company. Its first board meeting is scheduled for Monday (December 29).
Securities Disclosure: I, Giann Liguid, hold no direct investment interest in any company mentioned in this article.