Chile's Supreme Court clears the SQM-Codelco lithium JV, ending two years of legal uncertainty

Summary

Chile's Supreme Court on January 26, 2026 cleared the remaining legal challenge to the SQM-Codelco lithium joint venture, ending two years of uncertainty that followed President Boric's 2023 announcement of lithium nationalization. Under the partnership, state copper miner Codelco holds a majority-plus-one share in the new joint company; SQM, the world's second-largest Lithium producer, continues to operate the Salar de Atacama concession until 2060. The 2026-2030 phase is designated for operational integration: aligning production systems, harmonising management, and building Codelco's lithium technical capacity before the 2031 transition when Codelco assumes full management control with a 50%+1 share. The partnership targets an additional 300,000t of lithium carbonate equivalent (LCE) output from the Atacama between 2025-2030, and 280,000-300,000t LCE per year in the 2031-2060 period. The Atacama holds the world's highest-grade lithium brine.

The split

The Chilean government and Codelco frame the JV as a model for maximising public value from a strategic resource, pointing to the long concession horizon and SQM's continued operational role as evidence that nationalisation can proceed without destroying productive capacity. SQM shareholders and the private mining industry read the arrangement as a constrained compromise that averted full expropriation but creates management uncertainty at the 2031 transition when Codelco, with no lithium operating experience, assumes control. Americas Quarterly analysis emphasises the political economy: the Supreme Court ruling removes the last shareholder-protection argument, cementing a nationalization outcome that SQM resisted. The Chilean model is being watched in Bolivia and Argentina, where resource-nationalism frameworks are less settled.

By the numbers

• January 26, 2026, date of Supreme Court ruling clearing the SQM-Codelco JV.
• 50%+1, Codelco's minimum stake in the joint lithium company, as required by Chile's nationalization framework.
• 2060, expiry of the Salar de Atacama concession.
• 300,000t LCE, target additional output from the Atacama between 2025-2030.
• 280,000-300,000t LCE/year, production target for the 2031-2060 period.
• 2031, date Codelco assumes full management control of the JV.
• ~23Mt, Chile's total lithium reserves (world's largest).

Why it matters

Chile holds the world's largest lithium reserves and, along with the Atacama brine, controls some of the lowest-cost lithium production globally. The JV's Supreme Court clearance means the state-control model is now legally settled; Codelco's successful execution of the 2031 management transition will determine whether Chile's lithium output grows to meet the forecast deficit or plateaus under a technically inexperienced operator. The model also sets a precedent that will shape how Argentina and Bolivia approach their own lithium royalty and control frameworks, particularly for the lithium market's structural trajectory into the 2030s.

What to watch

• Whether the SQM-Codelco JV hits its 2025-2030 300,000t LCE production target.
• Codelco's capacity-building for lithium operations in preparation for 2031 management transfer.
• Whether SQM's operational expertise is genuinely preserved or eroded through the integration process.
• Argentina's policy response: Milei's more market-friendly framework may attract capital the Chilean model deters.