Chile’s comptroller on Friday approved, with some guidelines, an agreement between state copper giant Codelco and local miner SQM to operate a joint lithium venture in the Atacama salt flat.
The resolution comes hours after the top regulator announced it would launch an “unprecedented audit in response to complaints from members of parliament regarding the Codelco-SQM agreement.”
The regulator said that it was prevented from ruling on most of the claims due to previous court rulings, but listed some guidelines in its official approval, including that Codelco must maintain a stake of more than 50% in the joint venture.
The companies had requested the comptroller’s approval as the final step needed to finalize the agreement after several other national and international regulators cleared the deal.
Chile regulator approves Codelco-SQM lithium tie-up
Codelco and SQM want to create a joint venture to produce lithium in the Atacama salt flat, as part of President Gabriel Boric’s plan to expand state control over the industry and increase production.
Legislators have questioned why the agreement was reached in direct negotiations rather than a public bidding process. They also questioned why Codelco picked SQM, which has pending lawsuits with the tax authorities, among other things.
SQM declined to comment on the audit.
In a statement, Codelco said it would “approach the process with complete transparency and professionalism” and that the audit would help “reaffirm the integrity” of the agreement with SQM.
“The audit will confirm the integrity, rigor, and soundness of the process, especially including the hiring and work carried out by Morgan Stanley, the financial advisor who has played a fundamental role in structuring the partnership,” the statement said.
Codelco said it was still waiting for the Comptroller’s Office to approve the lease agreements for the properties in the salt flats between the state development agency Corfo and its subsidiary, a process that began in September.
China’s Tianqi, a major investor in SQM, has sought to block, so far unsuccessfully, the deal in Chilean courts arguing it should have required shareholders’ approval.
(By Fabian Cambero and Alexander Villegas; Editing by David Goodman, Gabriel Araujo, Tomasz Janowski and Diane Craft)
