SAMR clears Chilean lithium joint venture subject to supply security remedies

On 10 November 2025, China’s State Administration for Market Regulation (“SAMR”) announced its conditional approval of the proposed joint venture between Corporación Nacional del Cobre de Chile (“Codelco”) and Sociedad Química y Minera de Chile S.A. (“SQM”). The SAMR decision reflects the Chinese antitrust regulator’s continued focus on transactions involving strategic resources – in this case, products based on lithium, a critical input for the energy transition. The SAMR procedure took over a year from receipt of the notification, including around five months during which the clock was stopped.

China was the last jurisdiction to clear the transaction and the only jurisdiction that imposed remedies to its clearance. The Chilean antitrust authority – the Fiscalía Nacional Económica (“FNE”) – unconditionally cleared the transaction in April 2025, as did the antitrust authorities in Brazil, Japan, Saudi Arabia, and South Korea, as well as the European Commission.

The transaction

The transaction involves the creation of a joint venture (“JV”) through the injection of assets – essentially, the rights to extract, produce, and commercialize minerals – primarily lithium carbonate – from the Atacama Salt Flat mine, the world’s largest lithium mine operation. SQM currently operates the mine under rights that expire in 2030, while Codelco holds mining rights from 2031 to 2060. The JV is meant to ensure continuity of operations before and after the transfer in 2030/2031 by placing the mining operations under shared control from now on.  

Codelco was Chile’s state-owned copper producer with lithium concessions at Maricunga and Pedernales, mines that are, however, not yet operational. SQM is a major global producer and supplier of lithium, iodine, and potassium products.

Background

The SAMR review of the transaction has been closely watched in China, not only because of the country’s heavy reliance on Chilean lithium but also due to the role of Tianqi Lithium, one of China’s top lithium producers, in relation to the transaction.  

Back in 2018, Tianqi acquired approximately 22% of shares in SQM, a transaction which was conditionally approved by the FNE. As a condition of its approval, the FNE required Tianqi not to acquire any joint controlling rights in SQM or any decision rights in relation to SQM’s lithium business, and take measures to prevent it from accessing competitively sensitive information (“CSI”) on SQM’s lithium business.  The condition also restricted Tianqi's senior officials and key employees from being appointed as SQM board members.

Back in April 2023, Chile’s President had announced a new lithium strategy aimed at obtaining state control in the lithium sector through public-private partnership models. According to SQM’s original contract with the Chilean government, SQM’s mining rights in the Atacama Salt Flat lithium project were set to expire in 2030.  Against this background, in May 2024, SQM and Codelco agreed to form a joint venture to develop the mine beyond 2030, with Codelco taking control of the development rights from 2031 to 2060.

Feeling that its USD 4 billion investment into SQM lost value as a result of the lack of extension, in July 2024, Tianqi filed a lawsuit. However, the Santiago Court of Appeals dismissed Tianqi’s lawsuit in November 2025. Tianqi has filed an appeal against the court’s decision.

SAMR’s decision

In its decision, SAMR defined two relevant product markets: lithium carbonate and lithium hydroxide. For lithium carbonate, the authority determined that imported lithium carbonate constitutes a standalone market, given China’s reliance on imports from Chile and Argentina and the limited substitutability of higher-cost domestic produce. For lithium hydroxide, SAMR adopted a global market definition, noting that China has sufficient domestic capacity and significant export activity.

SAMR expressed concerns that the transaction could restrict competition in the Chinese market for lithium carbonate imports. The SAMR decision highlighted China’s significant dependence on imports, with approximately 60% of lithium raw materials sourced from abroad. According to the decision, Chilean products accounted for 75-90% of China’s lithium carbonate imports between 2021 and 2024, and SQM held between 45-70% market share of total imports. SAMR further reasoned that by consolidating SQM and Codelco’s mining rights, the creation of the JV would reduce rivalry between the two companies and strengthen the JV’s control over supply from Chile. SAMR also noted the risk of coordinated effects, given the transparency of pricing, the limited number of suppliers, and the structural links between major players (without mentioning their names).

To address these concerns, SAMR imposed a series of behavioral remedies. In particular, the JV must continue to honor existing contracts with Chinese customers and maintain minimum annual supply volumes and price caps. The JV is required to supply Chinese customers on fair, reasonable, and non-discriminatory terms, and may not refuse or delay supply, or impose unreasonable conditions. In the event of major supply disruptions, the JV must establish a problem-solving mechanism and report it to SAMR within a short time frame.

In addition, the JV and its parents are prohibited from exchanging information that would impact market decisions among them or with other market participants. The last remedy is redacted as confidential in SAMR’s public decision. These remedies are binding for 10 years from closing.

Analysis

This decision underscores SAMR’s heightened scrutiny of transactions involving strategic resources – in particular minerals and metals, like in this transaction or in the Glencore/Xstrata deal a few years ago, or food-related products, like in the two potash cases, in Marubeni/Gavilon and in Bunge/Viterra. Clearly, as a critical input for electric vehicle batteries and power storage batteries, lithium and its downstream products remain a priority for merger control enforcement.

Like in many of these cases involving strategic resources, in the Codelco/SQM case too, SAMR’s antitrust theory of harm is on relatively shaky grounds. In particular, in order to find high market shares, SAMR adopted a narrow market definition – focusing on lithium carbonate imports, excluding domestic production. This approach conflicts with the market definition approach for lithium carbonate described in the public notices for several prior transactions (e.g., SQM/Hancock Prospecting/Azure Minerals, Rio Tinto/Arcadium Lithium, and Zijin Mining/Zangge Mining) filed under the simple case procedure, which were published on SAMR’s website.  

Furthermore, apart from very briefly mentioning coordinated effects (more like an add-on), SAMR’s theory of harm focused on the overlap between the JV parents. However, as the SAMR decision itself attests, there is no temporal overlap, as Codelco is scheduled to take over the mining rights from SQM in 2030/2031.  SQM appears to hold few, if any, other operational lithium carbonate assets than those in the Atacama Salt Flat mine. The Mt Holland lithium mine in Australia, in which it holds a stake, produces lithium hydroxide (not lithium carbonate), and the few other lithium mines, in which it holds mining rights, are not yet operational.  Although Codelco holds further mining rights in large lithium mines such as Maricunga and Pedernales, the mines are not operational yet either. This approach indicates SAMR’s tendency to take into consideration even undeveloped mine reserves in critical mineral deals. 

Throughout the decision, SAMR stressed on several occasions China’s high dependence on imports of lithium carbonate, so it seems clear that supply security considerations were a main driver behind the imposition of remedies. Against the background of international trade tensions, supply security is increasingly becoming one of the key considerations in SAMR’s merger review.

The SAMR decision in Codelco/SQM is also a reminder for merging parties that SAMR uses its stop-the-clock powers quite liberally. In this procedure, the procedure remained suspended for close to five months, and the clock restarted just one day before the clearance date.  Against the backdrop of these numbers, it is possible to imagine a situation where the authority would use the stop-the-clock mechanism as a lever in the remedies negotiations with the merging parties.

At the same time, the SAMR decision contains helpful guidance for companies when engaging in cooperation among competitors. One of SAMR’s remedies in Codelco/SQM was to prohibit the exchange of information that impacts market decisions (mainly CSI related to sales and marketing) among the JV, its parents, and their competitors. This learning is not new, but important for parties to future JV projects where one or more parents continue to compete with the JV. For example, JV partners may themselves set up protocols to contain CSI flows to eliminate the need for SAMR to impose remedies in that regard. The published remedies plan also outlines the implementation mechanism, which may provide helpful guidance for joint ventures in similar situations.

In the end, the likely most positive learning from the Codelco/SQM deal is that SAMR eventually cleared the transaction—despite its prior history with Tianqi’s minority investment in SQM turning sour precisely because of the transaction.