Codelco, Chile's state-owned copper producer, announced on Tuesday that it has received regulatory approval for a new lithium quota, advancing its plans to begin lithium production through a joint venture with SQM. The approval, granted by Chile’s nuclear regulator CCHEN, allows for the extraction of 2.5 million metric tons of lithium metal equivalent (LME) from 2031 to 2060.

The logo of Codelco, the world's largest copper producer, is seen at their headquarters in downtown Santiago, Chile March 29, 2018.

Codelco stated that the approved quota could increase to 3.02 million metric tons during the same 30-year period if the joint venture obtains the necessary environmental permits. If the higher limit is granted, the venture would be authorized to produce and sell up to 330,000 tons of lithium carbonate equivalent (LCE) per year.

CCHEN has been responsible for authorizing lithium extraction and export since 1979. Lithium was initially classified as a strategic resource due to its nuclear relevance. Today, it is a key component in electric vehicle batteries and energy storage systems.

This agreement marks Codelco’s entry into Chile's lithium sector. It is the first time the state will participate directly in lithium production. However, the joint venture still requires two more steps to be finalized: regulatory clearance from China and the conclusion of a consultation process with local indigenous communities. A senior source at Codelco told Reuters that both are expected to be completed by September.

Due to SQM’s international market involvement, the transaction needed approval from authorities in several countries. Once finalized, the partnership will expand Chile’s lithium production capacity and strengthen its role in the global battery supply chain.

Currently, lithium mining in Chile is limited to two companies—SQM, based in Santiago, and U.S.-based Albemarle. Chile is the second-largest producer of lithium globally. SQM’s current production quota is valid until the end of 2030, aligning with the timeline for the new joint venture to begin operations.

The joint venture represents a significant step in Chile’s broader strategy to increase its participation in the lithium value chain. With demand for lithium expected to rise in the coming decades, the new quota positions the country to support global energy transition efforts while enhancing its domestic industry.

Codelco emphasized that all operations will comply with environmental standards and regulatory frameworks, and that community engagement will remain a central part of the process.