News
Chile aims to increase domestic mineral processing capacity to reduce reliance on Chinese smelting
Saturday, January 3, 2026 at 08:42 PM
Chile seeks to expand domestic smelting and processing capacity for copper and lithium to move up the value chain, as currently two-thirds of its mined output is sent to China. While Chinese firms like Tianqi Lithium hold significant stakes in Chilean producers like SQM, they do not own major copper mines.
Context
Chile is accelerating its "processing sovereignty" to decouple from Chinese industrial dominance. In October 2025, the state mining firm ENAMI secured an environmental permit for a $1.7 billion copper smelter at Paipote, designed to triple domestic refining capacity to 850,000 metric tons annually. This infrastructure push specifically targets the 2/3rds of minerals currently shipped to China for processing, aiming to insulate the global semiconductor and AI supply chains from geopolitical bottlenecks.
The January 2026 launch of NovaAndino Litio, a joint venture between SQM and state-owned Codelco, further consolidates national control over lithium resources. Despite aggressive legal challenges from Tianqi Lithium, which holds a 22.1% stake in SQM, the partnership grants Codelco a "golden share" and operational authority over the Atacama salt flats starting in 2031. Combined with potential regulatory reforms targeting State Grid’s 57% share of the electricity distribution network, these moves signal a decisive pivot toward reducing foreign influence over Chile’s critical mineral stack.
Related Companies
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