A long-anticipated lithium joint venture between Chilean state-owned copper producer Codelco and local miner Sociedad Química y Minera de Chile (SQM) has received approval from China’s antitrust authority, removing the final major obstacle before the deal can take effect. The Chinese regulator’s decision, announced Monday, concludes nearly two years of international reviews and sets the stage for the partnership to begin operations in the country’s key lithium-rich Atacama salt flat.

The agreement, first unveiled in late 2023, is part of Chile’s broader effort to expand state participation in the lithium sector and increase production of the metal, a key input for electric vehicle batteries and energy storage systems. Chile is currently the world’s second-largest lithium producer, after Australia, and the Atacama salt flat is one of its most productive resources.

Beijing’s Conditions on Supply and Pricing

China’s State Administration for Market Regulation (SAMR) said it granted its approval on condition that the companies guarantee access to lithium for Chinese customers. The regulator required Codelco and SQM to maintain a minimum supply to China at “fair” terms, specifying that prices should not exceed a certain percentage of benchmark market prices. While the specific terms remain confidential, SAMR emphasized that the two firms must avoid any action that restricts or delays supply to Chinese clients.

“In the event of a major supply change, both sides should make reasonable and best efforts to continue the supply of lithium carbonate products to Chinese customers… they should not turn down, restrict or delay supply to Chinese clients,” SAMR said in its statement.

The regulator added that its decision was based on feedback from various sources, including government agencies, industry associations, competitors, and downstream buyers. It also directed both companies to uphold strict corporate governance standards and to avoid sharing commercially sensitive information with other lithium producers.

SQM said in a regulatory filing that the Chinese conditions were consistent with its current business practices in China, one of its key export markets.

International Reviews and Local Oversight

China’s approval was the final regulatory step needed after a series of reviews in multiple jurisdictions. Competition regulators in Chile, the European Union, Brazil, Japan, South Korea, and Saudi Arabia had previously granted clearance for the deal.

In Chile, the country’s comptroller’s office must still sign off before the partnership can take effect. Codelco said in a separate statement that it expects this final domestic approval to be granted soon, describing it as a procedural formality. A company source indicated that the process should be completed before the end of the year.

The new alliance is expected to formalize joint operations between Codelco and SQM in the Atacama region, aligning with Chile’s national lithium strategy, which seeks to increase state influence over strategic natural resources while maintaining private-sector partnerships.

Political Context and Industry Reaction

Chile’s recently appointed economy minister, Álvaro García, stated in August that the government anticipates the Codelco–SQM deal will be finalized before the current administration leaves office in 2026. The partnership has drawn attention both domestically and internationally due to its potential to reshape the structure of Chile’s lithium sector.

However, the deal also faced opposition from some lawmakers and from China’s Tianqi Lithium, which holds a significant stake in SQM. Tianqi had raised concerns about the structure and transparency of the agreement but has not publicly commented since the Chinese approval was announced.

Toward Implementation

With the final regulatory hurdle cleared, Codelco and SQM can now move toward implementation of their joint venture, marking a new phase in Chile’s lithium industry. The companies plan to increase production capacity in the Atacama salt flat while meeting the government’s objectives for greater state participation in critical mineral projects.

Once the Chilean comptroller’s sign-off is secured, the partnership will formally commence operations, potentially before the end of 2025.

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