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Codelco expects to reach lithium agreement with SQM this year- chair

Kitco News

(Updates background on lithium projects, comment on rating)

SANTIAGO, Sept 4 (Reuters) - Chilean state-owned mining company Codelco expects to reach an agreement with lithium miner SQM this year, Codelco chairman Maximo Pacheco said on Monday during a public event. Chile's government earlier this year announced plans to strengthen state control of the white metal, only allowing public-private partnerships to participate in lithium exploitation.

The South American country has the world's largest lithium reserves. Pacheco also said he expects the market to maintain its confidence in Codelco, despite rating agency Moody's giving notice last week of a possible ratings downgrade, amid weakened production, rising costs and growing financial pressure. "Moody's could downgrade Codelco... if there is no visible improvement in credit metrics in the next 12-18 months," it said.

(Reporting by Fabian Cambero; Editing by Kylie Madry)

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