How Codelco and SQM are Powering the EV Future With Lithium
Chile’s state-run copper miner Codelco is set to produce lithium alongside Sociedad Química y Minera de Chile (SQM), in a move expected to fuel EV battery production well into the mid-century.
The joint venture will focus on lithium extraction in the Salar de Atacama between 2031 and 2060, with SQM managing operations until the end of 2030.
Lithium, a critical component in lithium-ion (Li-ion) batteries, is essential for powering EVs and enabling grid-scale renewable energy storage.
Lithium’s role in EV and energy storage
Lithium is primarily used in Li-ion batteries, which are found in electric vehicles, mobile phones, laptops and large-scale energy storage systems.
These batteries benefit from lithium’s low weight and high electrochemical potential.
Such features make lithium the ideal choice for clean transport and energy storage, two key technologies in the shift away from fossil fuels.
Electric vehicles rely on these batteries to deliver performance and range without petrol or diesel engines.
But the batteries are also central to balancing intermittent renewable power from wind and solar energy.
As these renewables generate electricity only when weather conditions are right, batteries store surplus electricity for later use, helping maintain a reliable power supply.
“Just as we have contributed to making Chile the world leader in copper production, we will now contribute to making our country a leader in the production of lithium, another mineral critical to the energy transition, which will allow us to fight the climate emergency,” comments Máximo Pacheco, Codelco Chairman.
While lithium enables cleaner technologies, its extraction and processing raise environmental concerns.
The process requires large amounts of water and generates carbon emissions.
Both companies acknowledge this and commit to better practices.
“We are committed to compliance with the highest environmental standards and an ongoing process of dialogue with Atacameño communities to protect the salt marsh’s ecosystem,” says Ricardo Ramos, CEO of SQM.
Codelco’s clean energy ambitions
Founded in 1976, Codelco is one of the world’s top copper producers.
It has its headquarters in Santiago and operates across seven mining divisions: Chuquicamata, Ministro Hales, Radomiro Tomic, Gabriela Mistral, Salvador, Andina and El Teniente.
The company’s environmental targets are ambitious.
By 2030, it aims to cut greenhouse gas emissions by 70%.
It also plans to shift to a fully clean energy matrix, recycle 65% of industrial waste and reduce inland water use by 60%.
These efforts are part of its broader commitment to sustainability while maintaining global production levels.
As Máximo explains, the new lithium partnership fits with that approach. “We will do so as partners of SQM, a Chilean company that has the scale, technical and human expertise, financial resources and sales network that we need to avoid missing the opportunities that now open themselves up to us.”
SQM, with more than 25 years of lithium experience in the Salar de Atacama, brings operational knowledge and global reach.
Ricardo adds: “The projects we are going to develop with Codelco will be extraordinarily positive for Chile, the Antofagasta Region, communities, workers and for both companies.”
Chile’s strategic place in lithium production
Chile is central to the global lithium supply chain.
The country holds a major share of global reserves and is second only to Australia in total production, accounting for 29% of the world’s output.
Most of this comes from the lithium triangle—a region spanning Chile, Bolivia and Argentina.
Lithium is found both in hard rock and salt flats.
The Salar de Atacama is a salt flat that has become a key location for extracting lithium-rich brine.
Here, SQM and Codelco plan to refine lithium for export, contributing directly to the global EV battery supply chain and to the world’s energy transition efforts.
The project will begin operations in 2025, with SQM managing the first phase. Codelco takes full control from 2031 through to 2060.
During this time, both companies intend to invest in technology that improves lithium extraction and reduces environmental impacts.
The combined expertise of the two firms is expected to strengthen Chile’s position not just in copper but also in the fast-growing lithium market.
In doing so, the partnership supports rising EV demand while responding to environmental concerns with commitments to cleaner production.
