China’s State Administration for Market Regulation announced that it has granted conditional approval for a lithium joint venture between Chile’s state‑run copper giant Codelco and lithium producer SQM. The approval removes a critical regulatory hurdle, allowing the partnership to move forward with construction and production ramp‑up once the remaining conditions are satisfied.
The joint venture is designed to add 300,000 metric tons of lithium carbonate equivalent (LCE) to Chile’s output between 2025 and 2030, and to maintain 280,000–300,000 t LCE annually from 2031 to 2060. SQM plans to boost its own lithium carbonate capacity to 240,000 t and lithium hydroxide capacity to 100,000 t by year‑end 2025, positioning the company to meet growing electric‑vehicle battery demand.
SAMR’s conditions require that the venture continue to supply Chinese customers on fair, reasonable, and non‑discriminatory terms, prevent the exchange of sensitive information, and adhere to specific corporate governance practices. These safeguards are intended to protect China’s domestic lithium market while allowing the joint venture to operate under a framework that aligns with national security and trade policies.
Financially, SQM posted a net loss of US$655.9 million for the first six months of 2024, a sharp reversal from a US$1,330.1 million net income in the same period of 2023, largely driven by a 36.5% drop in revenue to US$5.18 billion amid falling lithium prices. Codelco’s profit before tax fell to US$429 million in H1 2025 from US$653 million in H1 2024, mainly due to foreign‑exchange losses from a stronger Chilean peso. These results underscore the volatility in the lithium market and the importance of securing stable production channels.
SQM’s CEO Ricardo Ramos emphasized that the approval aligns with the company’s strategy to expand production capacity in response to robust demand from the electric‑vehicle sector. He noted that the conditions imposed by SAMR are consistent with SQM’s existing practices in China and would not materially alter its financial performance. Codelco’s leadership highlighted the joint venture as a key element of Chile’s National Lithium Strategy, which seeks to increase state control and revenue from lithium resources.
The approval is significant for the global lithium supply chain because China controls a large share of lithium chemical production and battery manufacturing. By securing a reliable supply of lithium carbonate and hydroxide, the joint venture is expected to influence pricing dynamics and strengthen the supply of critical materials for electric‑vehicle batteries worldwide. The partnership also commits to Direct Lithium Extraction technologies and closed‑loop water systems, reflecting a broader industry shift toward more sustainable extraction practices.
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