SANTIAGO - Chile's President Gabriel Boric hailed the formation of a new government-controlled lithium partnership that fuses assets of State-run Codelco with private miner SQM, as the leftist leader advances his push for greater public control over the battery metal.

Chilean lithium miner SQM said on Wednesday it would partner with copper giant Codelco for the future development and production of the metal in the Atacama salt flat, in a tie-up set to kick off in 2025 and run through 2060.

The deal gives Codelco majority control in line with the president's plans announced in April to strengthen state control of lithium to generate more broad-based benefits from surging demand and to allow only public-private partnerships to participate in its exploitation.

"This is an unprecedented milestone in Chile's mining industry and a concrete step towards achieving fair and sustainable development," Boric said in a televised address praising the public-private venture.

For much of the year, the firms had been locked in talks over the future of lithium mining and production in the salt flat, located in Chile's north and the home to 90% of the nation's lithium reserves. The South American country has the world's largest proven lithium reserves.

As part of the memorandum of understanding announced on Wednesday, both firms agreed to form a new public-private partnership company in which copper miner Codelco will have a 50% plus one share stake that will begin a first phase of operations in January 2025, the companies said in statements.

Both companies said the agreement would facilitate a "transition" between SQM's current lease, which expires at the end of 2030, and Codelco's lease over the same area that runs from 2031 to 2060.

The new company will be responsible for the production of lithium carbonate and lithium hydroxide - the two main processed lithium products used to make rechargeable batteries - on the properties that SQM currently leases from Chile's state development office, SQM said.

SQM said it would provide the fixed assets, knowledge and employees from its lithium business, while Codelco would contribute the lease and an additional production and sales quota.

"This is a significant milestone in public-private partnerships in Chile," SQM CEO Ricardo Ramos said in a statement.

As part of the deal, Codelco will provide the sales authorization for an additional 165 000 metric tons of lithium carbonate equivalent (LCE) to be used by 2031.

Codelco will also authorize an additional 135 000 tons of LCE for the new public-private entity during its initial phase, but conditioned on increased production, according to the SQM statement.