Beijing: China has granted conditional approval to the proposed lithium joint venture between Codelco, Chile’s state-owned copper giant, and Sociedad Química y Minera de Chile (SQM), one of the world’s leading lithium producers. The move marks a crucial regulatory milestone for a project that could reshape global lithium supply chains and strengthen Chile’s role in the rapidly growing battery market.
According to the State Administration for Market Regulation (SAMR), the approval follows a detailed antitrust review involving consultations with multiple stakeholders including industry competitors, government departments, and consumer representatives. The regulator emphasized that the venture must guarantee fair access to lithium carbonate products, especially during market disruptions.
Under the conditions imposed by SAMR, the joint venture is required to make “reasonable and best efforts” to ensure that Chinese customers continue receiving stable supplies of lithium carbonate. The company is forbidden from imposing discriminatory restrictions, delays, or rejections against Chinese buyers. This clause underscores China’s strategic focus on maintaining an uninterrupted flow of lithium, a key raw material in electric vehicle (EV) batteries and energy storage systems.
The proposed venture lies at the heart of Chile’s new state-led lithium policy, introduced by President Gabriel Boric to give the government a larger stake in the nation’s booming lithium sector. The Codelco–SQM collaboration aims to expand operations in the Atacama salt flats, one of the world’s richest sources of lithium brine.
Through this joint venture, Chile seeks to strengthen its national control over strategic resources while promoting sustainable extraction and technological advancement. Codelco’s participation gives the state a direct role in managing lithium production, aligning with Boric’s broader economic vision of ensuring that natural resources benefit the Chilean people rather than solely private corporations.
Before China’s nod, the joint venture had already cleared major regulatory hurdles across multiple jurisdictions. Competition authorities in Chile, the European Union, Brazil, Japan, South Korea, and Saudi Arabia had all approved the deal. China’s approval was the final major barrier, given its central role as the world’s largest consumer of lithium for its vast EV and electronics industries.
This approval paves the way for the venture to proceed, although full implementation will depend on satisfying the operational and financial conditions set by regulators in both countries.
Despite its promise, the partnership has not been without controversy. In Chile, lawmakers and environmental groups have raised concerns about the potential environmental impact of expanded lithium extraction in the fragile Atacama ecosystem. Critics also warn of over-centralization of control and potential inefficiencies in a state-managed model.
Meanwhile, in China, Tianqi Lithium, a major shareholder in SQM, filed legal action challenging aspects of the venture, reflecting broader corporate tensions within the global lithium sector. Nevertheless, Chile’s new Economy Minister, Álvaro García, has expressed optimism that the deal will be finalized before the end of the current government’s term in 2026.
For China, this conditional approval is not merely a regulatory formality it is a calculated step to secure access to lithium at a time when the global race for clean energy minerals is intensifying. The country’s EV boom and dominance in battery manufacturing make lithium a strategic resource akin to oil in the industrial age.
For Chile, the venture represents an opportunity to solidify its position as the world’s second-largest lithium producer, after Australia, and to diversify its economy beyond copper. By integrating state oversight with private sector expertise, Chile aims to achieve a balance between national interest and industrial competitiveness.
The Codelco–SQM partnership could have ripple effects across global commodity markets. As governments tighten control over critical minerals, the lithium industry is shifting from a private-driven sector to a geopolitically strategic one. Analysts predict that such joint ventures will become increasingly common as nations seek to secure long-term access to essential minerals.
The immediate next steps involve finalizing project terms, addressing environmental compliance, and setting production timelines. Industry observers will also watch how the supply commitments to Chinese customers influence global lithium prices and trade patterns.
If successful, the Codelco–SQM collaboration could become a model for state-private partnerships in critical mineral management and a defining example of how resource diplomacy is shaping the clean energy future.