Chile is pioneering a new path for strategic resource development, moving from strategy to concrete action with the formation of a landmark public-private partnership for lithium extraction. This initiative, the most significant step in Chile’s National Lithium Strategy, aims to create a sustainable and equitable model for developing one of the world’s most critical minerals.
A Landmark Partnership: The Chilean lithium joint venture
In a historic move, Chile’s state-owned mining giant Codelco and private powerhouse SQM have formalized a joint venture named NovaAndino Litio SpA. Announced in late December 2025, this partnership will manage the exploration, production, and sale of lithium from the resource-rich Atacama Salt Flat until 2060.
This venture is not just another business deal; it’s the creation of one of Chile’s largest public-private enterprises. By merging Codelco’s Minera Tarar SpA with SQM’s SQM Salar SpA, the new entity establishes a structure where the state holds a majority stake. This approach allows Chile to maintain sovereign control over its resources while leveraging the operational expertise and efficiency of the private sector. The agreement, which required approval from over 20 national and international bodies, sets a new precedent for how strategic resources are managed.
Chile’s National Lithium Strategy in Action: The Chilean lithium joint venture
The formation of NovaAndino Litio is the flagship implementation of the National Lithium Strategy, a comprehensive plan designed to balance economic growth with environmental protection and social inclusion. The strategy recognizes lithium’s crucial role in the global energy transition.
Lithium is a key raw material for the high-capacity batteries needed for electric vehicles and, crucially, for storing energy from renewable sources like solar power. As the world shifts towards cleaner energy, understanding the basics of manufacturing for these technologies highlights why securing a stable and sustainable lithium supply is a global priority. This joint venture positions Chile, which holds the world’s second-largest lithium reserves, to meet this surging demand responsibly.
Balancing Environmental and Social Priorities in the Chilean lithium joint venture
A central tenet of the National Lithium Strategy, and a core principle for the NovaAndino venture, is a profound commitment to sustainability. Traditional lithium extraction from salt flats can have significant environmental consequences, including high water consumption. The new partnership operates under strict regulations designed to minimize this footprint.
The government is also promoting investment in new technologies, such as direct lithium extraction (DLE), which promises a more efficient and less environmentally harmful extraction method. The entire manufacturing process for clean energy solutions is under scrutiny, and sourcing materials responsibly is a critical component. Furthermore, the strategy mandates meaningful consultation with the Indigenous communities living in the Atacama region, ensuring they are included in and benefit from the industry’s development. While the deal has been widely approved, it is not without some controversy, underscoring the complexities of balancing national interests with local concerns.
Economic Impact and a New Global Model: The Chilean lithium joint venture
The economic implications of the Codelco-SQM partnership are vast. It is expected to significantly boost Chile’s lithium production, solidify its position as a top global supplier, and deliver a positive financial impact for the state-owned Codelco. This new model is also designed to attract further foreign investment into projects that align with Chile’s sustainability goals.
The success of NovaAndino Litio will be watched closely around the world. It represents a potential blueprint for other nations seeking to manage their natural resources in a way that maximizes national benefit, protects the environment, and leverages private sector capabilities. The investment required for such large-scale operations is immense, reflecting a complex plant cost breakdown that public-private partnerships are uniquely positioned to handle.
By creating this new model, Chile is not just extracting a mineral; it is building a more sustainable and equitable future for its people and contributing critically to the global transition to clean energy.
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