Climate Tech: Why Codelco & SQM are Mining Chilean Lithium
Codelco, Chile’s state-run copper producer, is working with SQM to extract lithium in Chile from 2031 to 2060.
Lithium is vital to a variety of climate technologies, particularly Li-ion batteries used for energy storage and electrification.
“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,” says Codelco Chairman Máximo Pacheco.
“We will do so as partners of SQM, a Chilean company that has the scale, technical and human expertise, financial resources and sales network that we need to avoid missing the opportunities that now open themselves up to us.”
About Codelco
The National Copper Corporation of Chile, Codelco, is one of the largest copper mining companies in the world and was formed in 1976.
Headquartered in Santiago, it aims to explore, develop and exploit mineral resources, produce refined products and market them to clients around the world.
Codelco has seven mining divisions:
- Chuquicamata
- Ministro Hales
- Radomiro Tomic
- Gabriela Mistral
- Salvador
- Andina
- El Teniente
By 2030, the company aims to reduce its greenhouse gas emissions by 70%, in part by implementing a 100% clean energy matrix.
It also aims to recycle 65% of its industrial waste and reduce its consumption of inland water by 60%.
What is SQM?
SQM (Sociedad Química y Minera de Chile) is a Chilean supplier of lithium, iodine and industrial chemicals.
Its main production facilities are located in the Atacama Desert in Tarapacá and Antofagasta regions.
“The projects we are going to develop with Codelco will be extraordinarily positive for Chile, the Antofagasta Region, communities, workers and for both companies,” says Ricardo Ramos, CEO of SQM.
“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.
“We are committed to compliance with the highest environmental standards and an ongoing process of dialogue with Atacameño communities to protect the salt marsh’s ecosystem.”
Why is lithium important?
Lithium is found in rocks and salt flats in the earth’s crust and 85% of the world’s reserves are in South America’s ‘lithium triangle’.
Chile is the world’s second largest producer of lithium behind Australia, responsible for 29% of global production.
Primarily, lithium is used in electric vehicles and energy storage.
It is also involved in the manufacturing of glass, ceramic and electronic goods.
Lithium has high electrochemical potential and low weight, making it useful in lithium-ion batteries that power everything from EVs and mobile devices to grid-scale renewable energy storage systems.
Renewable energy sources, like wind and solar, generate power intermittently so energy storage is needed to capture electricity when production is high and put it to use when demand rises or production falls.
However, there are negative environmental impacts associated with the mining and processing of lithium, such as water use and carbon emissions.
Codelco’s joint venture with SQM
The partnership between Codelco and SQM aims to produce refined lithium in the Salar de Atacama.
The businesses say that significant investment will be made in technology to allow more efficient and environmentally friendly lithium production.
In the first period of the joint venture until 2030, SQM will oversee general management of the project before Codelco takes over from 2031 to 2060.
The project intends to start operations in 2025.
