Tianqi buys 23.77% stake at SQM for $4bln
Published: Thursday, 20 December 2018
Tianqi is maintaining its trend of diversification through the purchase and has plans to reach 58.8 million tonnes per year by 2019, while Nutrien sold its shares at $65 a piece
Chinese lithium producer Tianqi Lithium has purchased 23.77%
of A shares in Sociedad Quimica y Minera (SQM), which were
previously owned by Canada’s
A total of 62,556,568 of A shares in SQM were sold for
$4.066 billion at a minimum price of $65 per share on the
Chilean Stock Exchange on Monday December 3.
The Tianqi-SQM deal follows a trend in the past two years in
the lithium industry where major companies are diversifying
their portfolios to include both hard rock and brine
operations. The aim of the diversification is to increase
output to fulfill demand from the battery industry and spread
Most recently Ganfeng Lithium acquired a 37.5% stake in
Lithium Americas’ Cauchari-Olaroz brine project
Meanwhile, SQM reached a joint venture with Kidman Resources
in September 2017, acquiring a 50% stake in the Mount Holland
project in Western Australia.
This deal went through after SQM’s opposition
to the agreement between Chilean national anti-trust regulator
Fiscalía Nacional Económica (FNE) and Tianqi
enabling the Asian company to move forward with the purchase in
October, due to risk to free competition.
SQM requested the interpretation of FNE-Tianqi agreement by
the South American country’s anti-trust court, the
Tribunal de la Libre Competencia (TDLC), under the allegation
that having a direct competitor as a shareholder and board
member presents risks and challenges free competition.
Tianqi is also a majority 51% shareholder in its partnership
with the world’s largest lithium producer,
Albemarle Corp, in the world’s largest lithium
hard rock mining operation, at Greenbushes in Western
Tianqi is one of China’s largest lithium
producers, expected to increase its total production capacity
to 58,800 tonnes per year of lithium carbonate equivalent
(LCE) by 2019 from 34,800 tpy at present.