SANTIAGO, April 15 (Reuters) - Chile's state-run miner

Codelco plans to select a partner for a future lithium project

in one of the country's top salt flats, Maricunga, in the first

quarter next year, Chairman Maximo Pacheco said on Monday.

Codelco, Chile's top copper producer, is entering the

lithium business under the mandate President Gabriel Boric's

government announced last year to boost the state's role in

Chile's lithium mining, the world's second-largest after

Australia.

The new project in Maricunga comes after Codelco boosted its

presence in the salt flat to about 65% after completing its

purchase of Australia's Lithium Power International in March.

Pacheco said in an interview that Codelco hired Rothschild

to scout for interested companies through the end of the year,

and that the selected partner will get a 49% share of the

project.

Codelco is also pursuing a joint venture with Chile's SQM

in the Atacama salt flat, the best of its type for

lithium in the world due to its high concentration of the

ultralight metal, which is key to the green energy transition.

Pacheco said the companies will "definitely" meet a May 31

deadline after the date was pushed back two months, and said the

negotiation had been complicated by extensive due diligence and

dialogue with communities concerned over the local water supply.

Several local groups on Monday said they were pulling out of

the talks, in which 18 communities participate, because they did

not perceive a good faith effort by the companies to negotiate,

and did not see eye-to-eye with the other indigenous groups.

As part of a preliminary deal, SQM agreed to hand over its

concessions in the Maricunga to Codelco, and Pacheco said SQM

would not be in the running for the Marciunga project due to its

focus in the Atacama.

The winner, Pacheco said, would not necessarily need to

offer a strategy for direct lithium extraction (DLE) - the

technologies that provide an alternative to water-intensive

evaporation ponds, and that are still largely unproven.

"We realize that we have to transition from traditional

evaporation technologies to other technologies with less

environmental impact. And we know that we have to do it

gradually," he said.

"We can't start with full DLE on the first day."

Speaking at the CRU World Copper Conference and CESCO Week,

which comprise the largest annual gathering of industry

executives and analysts, Pacheco said the company is also

devoting $4 billion this year to boost copper production, which

in 2023 hit a quarter-century low.

At the Teniente complex, work to open the Andesita mine is

40% complete with production expected to begin at the end of

October, while at Chuquicamata, Codelco expects its request for

an environmental permit for upgrades, submitted in January, to

take a year to be approved.

"We're building and developing four mega-projects to be able

to sustain and increase our production, that obviously has all

the risks you can imagine," he said.

Whether Codelco will need to seek more debt financing will

depend on the strength of copper prices, he said. Although he

declined to offer an estimate for pricing this year, Pacheco

said market fundamentals look strong, particularly as the energy

transition pushes demand for copper.