Chilean Congress Questions Transparency of Codelco–SQM Lithium Agreement
SANTIAGO, Chile — In a striking move on Monday night, Chile’s Congressional Investigative Committee voted overwhelmingly to recommend the annulment of the controversial lithium exploitation agreement between state-owned miner Codelco and SQM, citing lack of transparency, unequal terms, and potential economic harm to the public.
With 10 votes in favor, one abstention, and two absentees, the committee concluded that the agreement—signed in May 2024 to jointly exploit lithium reserves in the Salar de Atacama—fails to safeguard public interest. The findings are a serious blow to President Gabriel Boric’s National Lithium Strategy.
“We didn’t vote based on ideology but on facts and truth,” said committee chair and independent-PPD deputy Cristián Tapia. “There are too many hidden elements in this agreement. Key financial details were kept secret, including payments made to [financial advisor] Morgan Stanley.”
While the committee’s conclusions are not legally binding, they will be submitted for a vote by the full Chamber of Deputies in the coming days, potentially increasing political pressure on the Boric administration.
Cross-Party Criticism and Political Fallout
Notably, opposition to the deal spanned across party lines. Deputies from Republican, UDI, Ecologist Green, and Liberal parties joined Tapia in rejecting the agreement. Even government-aligned deputies were absent or abstained, with no direct support offered from the ruling coalition.
“I hope the President takes a clear decision based on this report—that this agreement be declared void,” Tapia added. “We need an international, open tender.”
Transparency and Process Under Scrutiny
One of the central criticisms was the secretive nature of the negotiations. The report notes that Congress was not consulted prior to the announcement, and basic details—such as the representatives of public interest or the terms of profit-sharing—were withheld from public scrutiny.
“This agreement was negotiated in secrecy, without prior approval from Congress, and without clarity on who was defending the state’s interest,” the report states.
Economic Risks: Billions at Stake
The deal grants SQM control over operations until 2030, after which Codelco (and by extension, the Chilean state) would assume operational control. From 2025 to 2060, approximately 990,000 tonnes of lithium are projected to be extracted. Under current terms, Codelco would receive profits only on about 201,000 tonnes (20%), plus 23% of profits from an additional 200,000 tonnes managed by SQM.
This distribution, the committee argues, is grossly unequal and lacks a strong economic rationale. The potential loss to the state over the next decade alone could exceed US$11.2 billion, according to the report.
By comparison, the committee highlighted Rio Tinto’s 2024 acquisition of Arcadium Lithium assets for US$6.7 billion, which covered similar output volumes. The Codelco–SQM agreement, in contrast, involves no upfront payments—only long-term profit shares tied to market fluctuations.
“The state should have received at least US$6.7 billion immediately. Instead, it accepted delayed profit shares subject to lithium price volatility,” the report noted. “This represents a massive fiscal loss.”
Community Relations and Consultation Failures
The report also condemned Codelco’s handling of Indigenous consultations in the Atacama region, citing pressure tactics and lack of transparency. These community-related deficiencies may further complicate the project’s legitimacy and timeline.
What’s Next?
The committee’s vote does not automatically cancel the agreement. However, it significantly ramps up political and public pressure on President Boric’s government to either revise or abandon the deal. Lawmakers are urging the administration to pursue an international bidding process instead of what they describe as a backroom arrangement with a controversial private partner.
The coming weeks will reveal whether the Boric administration is willing to renegotiate—or risk the collapse of a flagship project in Chile’s green energy ambitions.