The agreement is under tight deadlines: if the process is pushed to the next government, the chances of failure increase exponentially.
By C.S. J. Y M. Cominetti
Codelco and SQM are racing against time as they try to approve the agreement that would allow the state-owned company to control lithium revenues and the private firm to secure its operations in the Atacama salt flat until 2060, with a significant increase in lithium extraction.
Pressure continues to rise, as presidential candidates have already made their positions clear—and none favor the alliance in the form it was approved, that is, through direct negotiation. While the right criticizes the process for lacking transparency and calls for a public tender to determine the best candidate to partner with the state in exploiting the mineral, the emergence of Communist Party (PC) candidate Jeannette Jara—representing the ruling coalition—adds a new dimension.
This, especially considering that China’s market regulator has yet to authorize the deal (regulators from other countries have already issued their rulings), a situation that could delay the approval of the alliance during this government. The Chinese government is communist, and Tianqi—a Chinese firm that owns 22% of SQM—has opposed the deal, demanding it be voted on in an extraordinary shareholders’ meeting.
While the company is listed as privately held, it is well known that in China, the state holds the reins. That’s why slow proceedings from the Chinese regulator remain a real possibility, especially considering that the main presidential candidates have expressed reservations about the agreement and Tianqi has already voiced its opposition.
Earlier this week, Jeannette Jara stated that if she were elected president and the agreement had not yet been finalized, she would lean toward a different approach aimed at nationalizing the mineral.
Another unresolved issue in the agreement is the required consultation with Indigenous communities.
Álvaro Merino, executive director of Núcleo Minero, warned that if the process is delayed, “the risk of this operation failing increases significantly, as it would move away from the technical-economic sphere and become politicized.”
Merino recalled that one of the key measures proposed by Jara’s platform is the nationalization of lithium and copper. “It’s clear that with such a proposal, no private investor would be willing to commit resources to fund a mining project,” the expert said.
“If Chile must choose between expropriating lithium or moving forward with this agreement—between these two major mining companies, namely Codelco and SQM—the choice is clear. To benefit from the growing global demand for lithium, driven by electromobility and the development of clean energy, this deal must be finalized as soon as possible. Otherwise, we will lose a valuable opportunity and fail to take advantage of Chile’s competitive edge in lithium extraction.”
Andrés González, head of mining at Plusmining, noted that all four presidential candidates have expressed doubts about the Codelco-SQM deal. Right-wing candidates have criticized the lack of transparency, pointing to the absence of a public tender to select a partner: “If one of them is elected, I wouldn’t be too confident about the political
viability of the agreement if it hasn’t been approved during the current administration,” González said.
Regarding Jeannette Jara, he added, “I wouldn’t go so far as to say there’s coordination between her—being from the PC—and the Chinese Communist Party on this,” but he did note that Tianqi, which holds about 22% of SQM, has opposed the deal.
Other sources, who asked not to be named, said it’s possible “the company is trying to influence the Chinese regulator so that the agreement is not approved or is at least delayed in its review process. A delay could extend beyond the current administration, and regardless of who wins the next election, the alliance might not be able to move forward.”
Kast: If there are responsibilities, they will be pursued
The Republican Party’s presidential candidate, José Antonio Kast, stated that if his party comes into power, “it’s clear that all processes, agreements, and decisions will be subject to review, to ensure they comply with international standards of transparency, legality, effectiveness, and benefit for the country.”
Nevertheless, he added, “What we can guarantee is that under our government, there will be common sense in the state’s role in economic activity. There will be no shady procedures, and if any responsibilities exist—regardless of the name or position of those involved—they will be held accountable.”
Source: El Mercurio