SQM(US:SQM) Zhi Tong Cai Jing·2025-12-30 02:57Core Viewpoint - Codelco and SQM have formed a joint venture, NovaAndino Litio, aiming to become the world's largest battery metal producer while focusing on low-cost and low-impact production methods to meet rising demand [1][2]. Group 1: Joint Venture Details - The joint venture, NovaAndino Litio, is a public-private partnership that will allow Codelco to enter the lithium production sector [1]. - Codelco will acquire a majority stake in SQM's lithium operations in Chile, while SQM's operational period will be extended by 30 years [1]. - The companies plan to implement new direct extraction technologies to enhance production at the world's largest lithium salt flat complex while minimizing environmental impact [1]. Group 2: Strategic Context - The joint venture is part of outgoing President Gabriel Boric's initiative to increase national control over strategic lithium assets and boost supply to support the global transition away from fossil fuels [2]. - Chile aims to reclaim market share lost to Australia and Argentina in recent years [2]. - NovaAndino is set to expand production from the current annual output of approximately 230,000 metric tons as the global lithium market begins to recover from a long-term oversupply [2]. Group 3: Ownership and Regulatory Challenges - By 2030, Codelco will hold 50% plus one share of the joint venture, while SQM will retain operational control until that time [3]. - SQM's major shareholder, Tianqi Lithium, is attempting to block or suspend parts of the partnership through the Chilean Supreme Court, arguing that the deal should have been subject to a shareholder vote [3]. - Chinese antitrust regulators have conditionally approved the partnership, requiring both companies to fulfill existing contracts and supply products to Chinese customers on a fair and non-discriminatory basis [3].