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China’s Tianqi moves closer to lithium deal

Lithium production in Chile

Chinese company Tianqi will secure a vital lithium supplier if it gets the stake in Chile’s SQM

Chinese company Tianqi Lithium Corp. aims to buy a 24% stake in Chilean lithium producer SQM, the second largest lithium producing company in the world.

The deal, if it goes ahead, will cost Tianqi US$4.1 billion.

This comes alongside Tianqi’s move to build a processing plant and double the size of its mine in Western Australia, another major lithium producing country.

Chile produces 12,000 tonnes of lithium per year, making it the second biggest lithium producer in the world. Sitting on a large swathe of South America’s lithium triangle, its lithium reserves are second only to Bolivia’s, coming in at a might 7.5 million tonnes.

This compares to third place China’s relatively meagre 3.2 million tonnes.

Since lithium is a core component of Li-ion batteries, gaining access to supplies is of vital importance to all battery makers. With China pushing EVs as a way to bring down pollution in one of the world’s most polluted countries, the country will need all the lithium it can get.

However, the sale is not final. Since the sale will bring Tianqi close to a controlling stake in SQM, and let it appoint three seats on the company’s board, the deal will come under scrutiny by Chilean anti-trust authorities.

However, earlier this year Chilean development agency Corfo filed a petition to block Tianqi buying a 32% stake in SQM, arguing it would distort completion in the world lithium market and give China an unfair advantage.

A decision by the FNE is expected in August. Chile has promised to respect the decision from antitrust body the FNE once it makes a decision.

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