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Tianqi seeks shareholder voting power in Chile's SQM-Codelco lithium deal

Published 23/03/2024, 12:27 pm
© Reuters. FILE PHOTO: An aerial view shows the brine pools of SQM lithium mine on the Atacama salt flat in the Atacama desert of northern Chile, January 10, 2013. REUTERS/Ivan Alvarado/File Photo
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By Daina Beth Solomon and Alexander Villegas

SANTIAGO (Reuters) - China's Tianqi Lithium Corp on Friday urged Chile's SQM to hold a shareholders vote over a lithium deal under discussion with state-run copper miner Codelco, and criticized a lack of clarity in the negotiations.

Tianqi holds about a 20% stake in SQM, which is ironing out the details of a joint venture with Codelco as part of a government mandate to boost state control over the lithium industry.

"It is indispensable that the agreement that is reached between SQM and Codelco is approved by the shareholders," the company said in a statement.

Chile is the world's second-largest producer of the metal that powers batteries for electric vehicles, and SQM is the country's top producer.

SQM and Codelco this week extended the deadline for the deal by two months, to the end of May. SQM in a meeting with shareholders on Thursday attributed the delay to complexity in the negotiations, including ongoing audits.

It also reaffirmed the terms set out in a preliminary agreement in December, including the plan for Codelco to take a stake of 50% plus one share once the partnership goes into effect in 2025.

Tianqi said the meeting still left many aspects of the deal unclear.

"There is still a considerable amount of fundamental aspects of the agreement that are not defined or have not been clearly explained," Tianqi said in a statement.

Tianqi called for shareholders, not only the board of directors, to also vote on the final deal to ensure transparency and full participation.

SQM did not immediately respond to a request for comment.

© Reuters. FILE PHOTO: An aerial view shows the brine pools of SQM lithium mine on the Atacama salt flat in the Atacama desert of northern Chile, January 10, 2013. REUTERS/Ivan Alvarado/File Photo

Tianqi bought its share in SQM in 2018 for $4.1 billion, becoming the company's second-largest shareholder, amid concerns from regulators, competitors and consumer groups that the deal could give Tianqi a near monopoly over the global lithium market.

A Chilean antitrust court eventually approved the transaction but set conditions that limited Tianqi's access to SQM business secrets.

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