Chile Rewrites the Rules of the Lithium Game

Chile launches a landmark lithium venture as China sets supply terms and domestic audits sharpen focus on governance

13 Jan 2026

Chile has moved to strengthen its position in the global lithium market with the launch of a new joint venture between state-owned miner Codelco and private producer SQM, as rising demand from electric vehicle makers brings sharper scrutiny of supply, governance and trade conditions.

NovaAndino Litio, the partnership formed by Codelco and SQM, has formally begun operations after establishing its board. The venture is intended to advance lithium development in the Salar de Atacama, one of the world’s largest and lowest-cost lithium brine resources, with production growth expected to take place between 2025 and 2031.

The start of operations comes as battery makers seek long-term contracts with suppliers that can offer scale, stability and compliance with environmental and social standards. By combining Codelco’s state backing with SQM’s operational experience, Chile is aiming to secure its role as a key supplier to the global energy transition.

International considerations have played a central role in shaping the partnership. China’s competition regulator approved the deal subject to conditions requiring fair and non-discriminatory supply to Chinese customers. The requirements underline China’s influence as the world’s largest battery manufacturing centre and highlight how downstream demand is increasingly shaping upstream investment structures.

At the same time, domestic oversight has intensified. Chile’s Comptroller General has opened an audit into the agreement, focusing on transparency issues related to the direct negotiation process and the selection of SQM as a partner. The review is running alongside regulatory approvals and does not suspend the venture’s operations.

The audit reflects a broader shift in how lithium projects are assessed in Chile. Beyond production targets, authorities are placing greater emphasis on governance standards, public accountability and the role of the state in managing strategic resources.

For battery and materials buyers, NovaAndino Litio could provide a more predictable source of supply if it delivers output over the coming decades. For rival producers across South America, the project raises expectations around regulatory alignment and execution.

Chile’s lithium strategy is entering a more controlled phase, shaped by global market power and tighter domestic oversight, as the country seeks to balance investment, transparency and long-term supply security.