Chile rejects Tianqi’s appeal for vote in SQM-Codelco lithium deal
Chile's financial regulator had allowed a planned lithium joint venture between SQM and Codelco to proceed without a vote by SQM shareholders.
SQM, the world’s No. 2 lithium producer, expects to reach an agreement to continue producing the battery metal under the Chilean government’s new public-private model for the industry.
The company is “convinced” that its technology and experience “will make it possible to reach reasonable agreements in the interest of the Chilean state as well as our diverse shareholders,” it said in a statement Monday after executives met with officials at state development agency Corfo.
SQM, the fertilizer-turned-lithium giant, runs the planet’s biggest and most profitable brine operation in Chile’s northern desert with a contract that expires in 2030. Under the government’s new policy, SQM can either keep full control of the operation for the rest of the contract and then risk losing it or let the state take a majority stake with the understanding it could keep operating longer. Copper producer Codelco will represent the state in negotiations with SQM.
SQM has budgeted more than $2 billion on technologies that enable it to eliminate the use of underground fresh water, make its brine evaporation process more efficient and introduce direct extraction. That would bring it in line with sustainability practices laid out in the government’s new strategy, it said in the statement.
Shares in Soc. Quimica & Minera de Chile SA, as the company is known formally, fell by a record on Friday after the new development model was announced, before regaining some ground Monday. The stock was down 1.7% at 9:34am in New York on Tuesday.
(By James Attwood)
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