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Chilean miner SQM’s board chairman challenged what he called the questionable motives of a major shareholder, China’s Tianqi Lithium Corp, the latest jab in an increasingly public spat over SQM’s planned partnership with state copper producer Codelco.
Tianqi, a global lithium rival that holds about 20% of SQM shares, last week raised concerns over transparency in the talks with Codelco, which is slated to take a 50% plus one share stake in the new joint venture beginning in 2025 under a government policy aimed at boosting state control in Chile’s lithium industry.
SQM, the world’s No. 2 lithium producer, and Codelco reached an initial agreement in December and aim to finalize details by May 31.
Tianqi chief executive Frank Ha emphasized the company’s worries over the Codelco deal in comments to Chilean newspaper La Tercera published Saturday.
When asked if Tianqi would be interested in bidding for its own contract to exploit lithium from Chile’s Atacama salt flat, in the case that SQM’s deal with Codelco in the area were to fall through, Ha said Tianqi would be open to “all opportunities that align with the company’s strategic vision.”
SQM board chairman Gonzalo Guerrero singled out the remark in a statement distributed by SQM, arguing that it “raises questions about Tianqi’s real objectives” just as negotiations with Codelco are close to concluding.
“Are these statements in the best interest of SQM, or Tianqi?”
Tianqi did not immediately respond to a request for comment.
Guerrero also rejected Tianqi’s urging to put the Codelco deal to a shareholders’ vote, which he said could potentially give Tianqi veto power.
“It’s worth asking, once the transaction is vetoed, whether Tianqi would try to pursue this business opportunity for itself,” he said.
Guerrero also questioned Tianqi’s plans for the board of directors, after Xu Tieying, who held one of three seats nominated by Tianqi, resigned last week without explanation. The next board of directors meeting is April 25.
Tianqi acquired a near-quarter share of SQM in 2018 for $4.1 billion 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.
(By Daina Beth Solomon, Natalia Ramos and Alexander Villegas; Editing by David Gregorio)
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