Chilean state-owned company Codelco, the world's leading copper producer, and private mining company SQM are jointly establishing a giant company for the extraction of lithium.
Lithium is a light metal that is used in batteries for electric cars, among other things.
Chile is the world's second-largest producer of lithium and has around 40 percent of the world's lithium reserves.
The partnership between the two companies will make it possible to extract lithium in the Atacama salt desert in northern Chile, it says.
The new partnership will be called Nova Andino Litio SpA, Codelco said, describing the agreement as one of the most significant in Chile's business history.
The new company will be responsible for the exploration, extraction, production and commercialization of lithium in the salt desert until 2060, Codelco said in a statement.
Chilean authorities approved the alliance earlier in December.
The deal has been approved by more than 20 national and international regulators, including in China, Brazil, Saudi Arabia and the EU. Chile was the last country to give the green light to the deal.
Last month, China approved the planned partnership between Codelco and SQM. The Chinese company Tianqi owns 22 percent of the mining company SQM.
The partnership aims to regain Chile's leading position in lithium - a title the country lost to Australia almost a decade ago.
The new company aims to increase lithium production by about 300,000 tons per year in the Atacama salt desert.
In 2022, Chile produced just over 243,000 tons of the so-called white gold.
Lithium accounted for three percent of Chile's exports in 2024.
/ritzau/AFP
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