Maricunga evaporation ponds
Codelco will undertake due diligence on Australia's Lithium Power International, the Chilean copper miner said on Thursday, but added that there is no certainty the discussions will lead to a definitive deal.
State-owned Codelco has been tasked to lead the initiative to kick-start Chile's lithium industry as demand is set to boom with the uptake of electric vehicles.
Chile in April had announced plans to nationalize its lithium industry through a model in which it would hold a controlling interest in all projects, partnering with mining firms.
Lithium Power owns Chile's largest permitted brine project Maricunga, among other projects in Pilbara, Western Australia and Argentina.
Shares of the Australian lithium developer were up 21.2% at A$0.32 in early trade.
Lithium Power had earlier in the day confirmed that it had opened its books to Codelco in a statement to Australia's stock exchange in response to media speculation.
Codelco has been looking for lithium deals across the globe, and is likely to reach an agreement with lithium chemical maker SQM SQMA.SN this year.