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Chile's Corfo agency prepares lithium contracts in advance of SQM and Codelco deal

Chile's Corfo agency prepares lithium contracts in advance of SQM and Codelco deal

Corfo, the Chilean agency for economic development, announced on Monday that it had submitted to the comptroller’s office terms of a modified leasing agreement with lithium producer SQM until 2030 and a new lease 2031-2060 for a joint-venture between SQM ad state copper producer Codelco.

SQM is expected to complete a partnership with Codelco this year on the Atacama Salt Flat in northern Chile, which will be the first significant foray of the state into lithium production.

Corfo, the company that leases mining rights on the Atacama flats, announced in a press release that the board of directors approved the final contracts last week.

Included in these contracts are lease payments and contributions tied to the lithium price. Contributions will be given to local governments, Indigenous communities and other organizations to encourage investment and fund developments. The contracts will also include stronger environmental requirements regarding clean energy and water usage.

Corfo said it will continue to offer its preferred pricing program to companies who wish to produce lithium products in Chile.

Corfo said that it would lead a “monitoring table” for representatives of Indigenous Communities to track the promises made by SQM or Codelco.

In a separate press release, Codelco said that the new Corfo contract will ensure continuity of operations, environmental standards, and respect for local communities.

After other countries have approved the partnership, China's antitrust regulators must still approve it. This is the final condition for the deal to be completed.

(source: Reuters)