Codelco roundup: Lithium projects, copper rebound and Ventanas smelter closure

SQM-Codelco agreement

Codelco chairman Máximo Pacheco insisted the public-private partnership with local lithium producer SQM, where the state copper miner will have a majority share from 2025, will generate enormous benefits for the country.

Between 2025 and 2030, the treasury will receive around 70% of the income from lithium production in the Salar de Atacama through taxes and lease contracts with development agency Corfo, and from 2031 to 2060 that figure will rise to 85%, Pacheco told the congressional mining and energy committees.

He refuted criticism that the alliance will mean lower tax revenue and defended the confidentiality of the negotiations.

Maricunga

The Salar de Maricunga project is advancing steadily with an indigenous consultation process led by the mining ministry to expand Codelco's lithium operating contract and add the assets acquired with the purchase of Lithium Power International (LPI).

Codelco is looking for a partner to develop Maricunga and to that end is working with the Rothschild bank, and hopes to have a list of interested parties this half to invite them to make proposals.

A decision will be made in early 2025, Pacheco said about the project in which Codelco will have a 51% stake.

Among Maricunga's advantages is authorization from nuclear authority CCHEN to sell 20,000t/y of lithium carbonate equivalent for 34 years, an environmental resolution, hydrogeological studies, water rights and preliminary electricity supply agreements.

However, Alfonso Domeyko, partner at law firm Larraín & Bascuñán Abogados and former director of geology and mining service Sernageomin, told BNamericas that the project will have to face the challenge of the lack of a solid legal structure for lithium.

On the other hand, "if [Codelco] does not reach an agreement with the other concessionaires [in the salt flat], it will not be able to move forward. We must find ways to avoid legal disputes."

Copper

In a parliamentary session it was highlighted that Codelco, despite a complex 2023, contributed US$1.4bn to the treasury last year, half of what the other 10 largest copper mining companies in the country paid.

This year Codelco’s copper production is expected to start recovering gradually until reaching 1.7Mt/y in 2030, Pacheco said.

Ventanas smelter

Within the framework of the closure of the Ventanas copper smelter, the state company developed a labor transition plan to relocate 350 workers.

Around 60% of the workforce accepted a retirement plan, while 26.9% were retrained to perform functions in other areas of the division, such as the electrolytic refinery or maintenance, and 14.3% were relocated to other Codelco operations, the company said in a statement on Thursday.

The plan also includes measures to help associated companies that were affected by the halt of smelter operations.