SANTAIGO - Chilean Comptroller's Office said on Friday that it will launch an "unprecedented" audit of the lithium agreement between state copper giant Codelco and local producer SQM.

In a statement, the Comptroller's Office said it "will initiate an unprecedented audit in response to complaints from members of parliament regarding the Codelco-SQM Agreement."

The regulator said that it was prevented from ruling on most of the claims due to previous court rulings.

Legislators have questioned why the agreement was reached in direct negotiations rather than a public bidding process. They also questioned why Codelco picked SQM, which has pending lawsuits with the tax authorities, among other things.

SQM declined to comment on the audit.

In a statement, Codelco said it would "approach the process with complete transparency and professionalism" and that the audit would help "reaffirm the integrity" of the agreement with SQM.

"The audit will confirm the integrity, rigor, and soundness of the process, especially including the hiring and work carried out by Morgan Stanley, the financial advisor who has played a fundamental role in structuring the partnership," the statement said.

The companies had requested the Comptroller's approval as the final step needed to finalize the agreement after several other national and international regulators cleared the deal.

Codelco and SQM want to create a joint venture to produce lithium in the Atacama Salt Flats, as part of President Gabriel Boric's plan to expand state control over the industry and increase production.

Codelco said it was still waiting for the Comptroller's Office to approve the lease agreements for the properties in the Salt Flats between the state development agency Corfo and its subsidiary, a process that began in September.

China's Tianqi 002466.SZ, a major investor in SQM, has sought to block, so far unsuccessfully, the deal in Chilean courts arguing it should have required shareholders' approval.