Chile Approves 300,000t Increase in Lithium Output for SQM

Chile SQM

SQM Gains Regulatory Green Light Under Conditional Partnership with Codelco

Chile has authorized a significant lithium production increase for SQM, marking a major step in South America's evolving critical mineral strategy. The Chilean nuclear energy commission (CCHEN) approved an additional 300,000 metric tonnes of lithium production through 2030. This brings SQM’s updated extraction quota to approximately 1.65 million tonnes, or 275,000 tonnes per year, a 22% increase over prior levels.

Output Growth Tied to Efficiency, Not Resource Expansion

To fulfill the Chile lithium production increase, SQM must rely on extraction efficiency and advanced brine processing. CCHEN made clear that the miner cannot extract more brine or use more water than permitted under the 2018 agreement. The company’s ability to implement new processing technologies will be key to meeting its quota without environmental overreach.

Conditional Agreement Hinges on State-Backed Partnership

The increased quota is conditional on finalizing a partnership with Chile’s state-owned Codelco by the end of 2030. Should SQM fail to secure the deal, CCHEN will revoke the 300,000-tonne increase, effectively reducing its lithium rights. Under Chilean law, lithium is classified as a nuclear mineral, requiring miners to partner with state entities. While SQM’s current concession expires in 2030, Albemarle’s U.S.-based operation may continue until 2043 — after which it must also enter a public-private CEOL framework to maintain access.

The Metalnomist Commentary

Chile’s decision to allow a controlled lithium production increase reflects its strategy to balance output growth with national oversight. For SQM, securing the Codelco partnership is not just beneficial—it’s essential for long-term survival in Chile’s lithium sector.