Chilean lithium giant plans to expand production by 70%! Novandino sets annual lithium production target at a maximum of 470k tons.

Chilean mining company SQM and Codelco are advancing their large-scale lithium joint venture project to expand production, betting on long-term battery demand growth for the world's most important lithium-producing region.

According to an environmental impact study involving a $3 billion operational transformation, the joint venture company Novandino, owned by both firms, has set a target annual lithium production of up to 470k tons, more than 70% higher than the company's production guidance of around 270k tons this year. Novandino has not disclosed a timeline for reaching this production level.

The backdrop for this expansion plan is double-digit growth in global lithium consumption, driven by energy storage battery demand and the electric vehicle market. Analysts point out that if the plan is implemented, it will put pressure on higher-cost competitors—especially as the global oversupply situation gradually dissipates.

However, market consulting firm Benchmark Mineral Intelligence stated that the 470k-ton target is surprising, as the project was previously mainly positioned as an environmental upgrade initiative rather than a significant expansion of capacity.

The path to capacity expansion still requires years of groundwork

According to a filing submitted on Friday, Novandino plans to proceed in phases. Under the current framework, production is expected to gradually climb to around 300k tons, followed by a seven-year transition period during which new technologies such as direct lithium extraction (DLE) will be introduced to build an integrated production system, ultimately reaching the 470k-ton target.

Benchmark Mineral Intelligence analyst Federico Gay pointed out that achieving this capacity level will require further research and engineering work, as well as adjustments to production quotas and whether direct extraction technology can deliver the expected results in reducing water consumption. He stated:

"Achieving this capacity will certainly take years, and it is absolutely impossible within this decade."

The partnership between Codelco and SQM is a core measure of the previous Chilean government's push for lithium nationalization, aimed at increasing state control over lithium resources while expanding supply from the world's highest-grade brine deposits.

Novandino's long-term expansion plan means that this national strategic asset will play an even more significant role in the future global lithium market landscape.

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