Chilean regulators have dominated that the settlement can proceed with out investor approvals, clearing the way in which for the transaction to shut early subsequent yr. But Tianqi, which holds a 22% stake in SQM, has pushed again, heading to court docket to drive a shareholder vote. The case is beneath enchantment.
“We don’t rule out pursuing any authorized measures essential to safeguard the reliable rights of shareholders,” chief government officer Frank Ha mentioned in a written response to questions.
Chile’s investor-friendly popularity could be tarnished if the deal handed with out shareholder approval and better transparency, he added.
“A rustic with a sound authorized system, enterprise setting and respect for overseas traders is the cornerstone of our confidence in investing in Chile,” Ha mentioned. If these fundamentals change, “we consider it won’t solely have an effect on Tianqi, but in addition Chile’s worldwide picture and the long-term improvement of its industries.”
Tianqi is one in every of China’s largest processors of the electrical automobile battery steel, and purchased its stake in SQM — the world’s second-largest lithium producer — six years in the past to diversify its provide base. Lithium costs have plunged since late 2022 as a consequence of an growing glut, however demand continues to be anticipated to ultimately take off because the power transition gathers tempo.
The Chinese language agency’s frustrations seem like anchored in boardroom restrictions it has endured since paying $4 billion for its SQM stake. A few of these are set to be lifted by year-end, whereas others will expire in April, the corporate mentioned.
Apart from being SQM’s second-largest shareholder, Tianqi can also be a competitor of the Chilean agency within the world lithium market, SQM CEO Ricardo Ramos instructed lawmakers on Monday. The Chinese language firm is the one shareholder to object to the way in which the transaction was permitted, Ramos was quoted as saying.
SQM’s high shareholder is Julio Ponce, the previous son-in-law of dictator Augusto Pinochet, who dominated Chile within the Nineteen Seventies and 80s.
Whereas Tianqi hopes it might train all of its reliable rights as an SQM shareholder, Ha mentioned the corporate hadn’t obtained a constructive response from repeated approaches to ministerial departments to undertake extra downstream investments in Chile’s lithium trade.
(By James Attwood and Annie Lee)