Chilean Panel Recommends Scrapping Codelco-SQM Lithium Deal

Codelco-SQM

Codelco-SQM lithium deal under fire amid political and transparency concerns

Chile’s lithium sector faces political turbulence as a congressional commission urges rejection of the Codelco-SQM lithium deal.

The panel, led by Congressman Cristian Tapia, found inconsistencies and transparency issues in the agreement. The proposed joint venture between state-owned Codelco and private miner SQM would take effect after 2030 but lacks clear implementation timelines. Tapia emphasized conflicting projections among key stakeholders.

Codelco’s Maximo Pacheco estimated a five-year delay without the SQM deal, while Eduardo Bitrán cited three years and Economy Minister Nicolás Grau claimed just 18 months. This disparity, according to Tapia, reveals an absence of strategic alignment.

Questions of credibility and indigenous consultation cloud the project

The commission also questioned SQM’s corporate integrity. Tapia referenced past corruption allegations and over $1 billion in unpaid mining taxes. The panel criticized the lack of financial transparency, particularly regarding payments to consulting firm Morgan Stanley, and opposed SQM receiving 50% of future profits under current terms.

Out of 13 commission members, 10 voted against the deal. Concerns were also raised about insufficient consultation with local indigenous communities in San Pedro de Atacama. The agreement must still pass reviews by CCHEN and Corfo before being finalized.

The Metalnomist Commentary

Chile’s ambitions to become a global lithium leader are at odds with political distrust and corporate skepticism. If the Codelco-SQM lithium deal collapses, it may delay national production but could lead to more equitable and transparent industry frameworks. The path to lithium sovereignty requires public trust as much as technical execution.