Chilean lithium mine shareholder blocks sale of stake to China's Tianqi Lithium

The controlling shareholder of Chilean lithium producer SQM has launched a legal battle to stop the sale of nearly a quarter of the company to China's Tianqi Lithium.

Pampa Calichera, Potasios de Chile and Global Mining said the Chilean regulator’s decision to allow the deal violated competition rules.

SQM operates one of the world's largest lithium mines on the Atacama Salt Flat in northern Chile. Lithium is used in batteries and is in high demand due to the booming electric vehicle industry.

Tianqi Lithium, which already has interests in direct rivals of Albermarle and SQM, the world's largest lithium battery producers, estimates that if the deal goes through, Tianqi Lithium would have the potential to control about 70% of the global lithium market.

The case, filed on Wednesday in Chile's Constitutional Court, asks the antitrust regulator to revoke its decision to approve the deal because it would allow a market player to partially own and participate in the management of its direct competitor. It would also allow a direct competitor to gain access to some confidential and economically sensitive information on the global lithium market.

In May, the Canadian Nutrien group sold a 24 per cent stake in the group for $4.1 billion. Regulators then launched an investigation in June into whether the deal broke competition rules.

Chile is the country with the largest lithium reserves in the world, and its combined lithium production with Australia accounts for about 80% of the global total.

(New Energy Network Comprehensive)