China’s Tianqi cleared to purchase $4.1 billion stake in SQM by Chilean court

Chile Constitutional Court has rejected a lawsuit to block Chinese miner Tianqi Lithium’s acquisition of a US$4.1 billion stake in SQM, after the two global lithium heavyweights clashed over the deal.

A suspension of the sale was lifted after a majority ruling found that the lawsuit was ‘inadmissible’, thereby allowing Tianqi to finalise the deal for a 24% holding in the world’s second largest lithium miner SQM.

The initial lawsuit was brought by SQM’s majority shareholder Julio Ponce Lerou, whose lawyers argued the deal had been struck ‘practically in secret’ and that it failed to protect SQM’s corporate secrets from rival firm Tianqi.

The decision will be welcomed by the selling party – Canadian fertilizer producer Nutrien – who must sell its 24% stake in SQM by April 2019 to comply with regulatory requirements put in place by Indian and Chinese authorities, following a prior merger.

For Tianqi, the acquisition strengthens its position in the global lithium market at a time when China is aggressively promoting electric vehicles (EVs) to combat air pollution.

The high-grade lithium mined by SQM in Chile’s Salar de Atacama is a primary ingredient in the batteries that power EVs and other electronic devices.

Tianqi and SQM are part of a lithium oligopoly that also includes US-based firms Albemarle and FMC Lithium. Together, these four companies are said to control up to 85% of the world’s lithium production.