Chilean miner SQM and state-owned mining giant Codelco have formally merged their lithium subsidiaries despite legal challenges by SQM's second-largest shareholder.
SQM and Codelco have created NovaAndino Litio, Chile's first lithium miner founded under its national lithium strategy, a staple of exiting President Gabriel Boric's administration.
The 50:50 joint venture includes a "golden share" for Codelco, meaning that it will control operations at the Atacama salt flats, the largest brownfield lithium resource in Chile, starting in January 2031. Until then, SQM will remain in control.
Since the joint venture materialized before the end of 2025, SQM secured an overall quota increase of 300,000 metric tonnes (t) of lithium carbonate equivalent (LCE) by the end of 2030, increasing its extraction allowance to 1.65mn t LCE until its current mining lease expires.
NovaAndino's quota will rise to 2.5mn t LCE from 2031-2060, enabling average production of 330,000 t/yr.
The Chilean government will capture 85pc of the project's operating profit margins starting in 2031, it said, a 15 percentage point increase from the 70pc it is capturing through 2030. The state will earn its share through taxes, Codelco's profits and payments made to Chile's economic development agency, which owns the land where SQM's — and soon to be NovaAndino's — project is located.
Codelco chief executive Maximo Pacheco will double as NovaAndino's president for the next two years. He will vacate his post at Codelco in May, when his term ends. SQM chief executive Ricardo Ramos will be the joint venture's vice-president.
China's Tianqi fighting venture
Chinese miner Tianqi Lithium, SQM's second-largest shareholder, has once again reaffirmed its legal dispute against the joint venture before Chile's supreme court.
Following the creation of NovaAndino, Tianqi's lawyers urged the court to suspend the project's implementation while a ruling on its legal challenge remains pending. They argue that the joint venture has now entered its execution phase and could become irreversible before the judges rule on Tianqi's case.
Tianqi acknowledges that the court rejected its earlier request to suspend the deal on the grounds that there was nothing to suspend at the time, as the joint venture had not yet formed.
Tianqi now argues that the SQM–Codelco agreement has been cleared and is moving into implementation, with Codelco saying it expects to sign the closing documents in the coming days and the board is already appointed without any direct representatives from Tianqi.
Tianqi, with a 22.1pc stake in SQM, objects to the partnership being approved behind closed doors solely by SQM's board of directors, rather than through a special shareholders' meeting — a requirement that Tianqi says is mandated by Chile's Corporations Act.
Its dispute hinges on Chilean financial market regulator CMF's approval of the joint venture. It claims that the way the joint venture's approval process was carried out violates the CMF's own corporate law framework.
Tianqi argues that under the framework of the Salar de Atacama joint venture SQM will no longer control its "core lithium operations" in the region, which could affect its investment returns and dividends. The company says it has been "deprived of its right to access key information of the partnership, the possibility of voting on it at a shareholders' meeting, and, eventually, to exercise the right of withdrawal that the law recognizes".
There is no indication that the supreme court will freeze or delay the deal, as Tianqi has been losing its challenges in several different courts.
