China’s Tianqi acquires stake in lithium miner SQM from Nutrien for $4.1b

Lithium mine. Photo: Reuters

China’s Tianqi Lithium Corp has purchased a 23.77 percent share in Chilean lithium miner SQM from Canadian fertilizer giant Nutrien, the Chilean stock exchange said on Monday, for a total sale price of $4.066 billion.

The sale to Tianqi comes as Chinese companies increasingly scour the globe for the raw materials necessary to ramp up Chinese production of electric vehicles.

Lithium is a key component in the batteries that power everything from cellphones to electric vehicles.

“A minority stake in SQM is great from our perspective, especially when we look at long term growth and expectations for the lithium industry,” said Ashley Ozols, business development manager for Tianqi, after the deal closed.

Tianqi struck a deal earlier this year to buy the stake from Nutrien, the company formed by the merger of Agrium and Potash Corp of Saskatchewan. As part of that deal, Nutrien was required to sell the stake.

But the Tianqi deal immediately met with scrutiny from regulators, competitors and consumer groups.

Chilean authorities initially expressed concerns that a tie-up between Tianqi and SQM would give the Chinese company a near monopoly over the global lithium market and unprecedented pricing power.

Tianqi, through Talison Lithium which it controls, is also in a joint venture with SQM’s top competitor, No. 1 lithium producer Albemarle Corp in Australia, that owns the world’s biggest lithium mine, Greenbushes.

A Chilean antitrust court eventually approved the transaction, placing conditions on the sale that limit Tianqi’s access to SQM business secrets and sensitive information.

Ozols said Tianqi would nominate three directors to SQM’s board following the Chilean miner’s shareholder meeting in April.

Several groups, including SQM itself, filed appeals against the antitrust court’s decision to authorize the deal, but each was struck down, allowing it to proceed.

The country’s Constitutional Court in late October also rejected a last-ditch lawsuit by former chairman Julio Ponce Lerou, who controls SQM’s majority shareholder Pampa Group, to overturn the antitrust court’s decision.

“We will reach out to the Pampa Group and others and obviously form a good relationship so we can work together for the benefit of all SQM shareholders,” Tianqi’s Ozols said.

Nutrien has said it plans to use proceeds from selling stakes in SQM and two other companies to expand its network of farm retail stores in the United States and establish one in Brazil.

Also Read:

China’s Tianqi gets Chilean court nod to buy stake in lithium firm SQM

China’s Ganfeng Lithium shares plummet in HK trading debut

Reuters

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In Singapore, we are looking to double our reporting team by this year-end to comprehensively cover the fast-moving world of funded startups and VC, PE & M&A deals. We want reporters who can tell our readers what is really happening in these sectors and why it matters to markets, companies and consumers. The ability to write precisely and urgently is crucial for these roles. Ideal candidates must have to ability to work in a collaborative, dynamic, and fast-changing environment. We want our new hires to be digitally savvy and ready to experiment with new forms of storytelling. Most importantly, we are looking for hard-hitting reporters who work well in a team. Collaboration and collegiality are a must.

Following vacancies can be applied for (only in Singapore).

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  • A reporter to track companies/startups that have raised private capital, and have the potential to become unicorns. SEA currently has over 40 companies with a valuation of over $100 million and under $1 billion.
  • A reporter who can get behind the scenes and reveal how funding rounds are put together, or why they’ve failed to materialise. She/he in this role will largely focus on long-format stories. 
  • A journalist to track special situations funds, distressed debt and private credit (from the PE angle) across Asia.