China’s Tianqi Lithium is buying a 24% stake in Chilean producer SQM from Canada’s Nutrien (TSX:NTR) for $4.07bn, further expanding the Asian nation’s increasing hold over the market for the key component needed in the making of batteries that power electric vehicles.
“This is an attractive investment for Tianqi Lithium which fits well within our existing business strategy,” Vivian Wu, president of Tianqi Lithium, said. “Tianqi Lithium’s shareholders will greatly benefit from this transaction given SQM’s long-term stable financial returns and steady dividends.”
The sale process has been plagued with controversy. In March, Chile’s development agency Corfo filed a complaint to block Tianqi from acquiring the stake in SQM, arguing that would give China an unfair advantage in the global race to secure resources to develop electric vehicles.
Beijing criticized the move, saying any efforts to block the deal could harm bilateral relations. The Chinese Ambassador Xu Bu’s remarks were followed by comments from China’s trade and economic representative to Chile Liu Rutao. Last week, he said he suspected other countries, racing to secure lithium supplies, had lobbied Chile to block Chinese firms from purchasing Nutrien’s coveted share in the Chilean firm.
Tianqi already has a 50% stake in the Greenbuses lithium mine in Australia, one of the world’s largest lithium mines. It also owns lithium assets in Sichuan and Tibet.
More to come…
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