Tianqi Considers Action to Protect Its Stake in Chilean Lithium Mining Firm

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An aerial view of the processing plant of the lithium mine, in Del Carmen salt flat, in the Atacama Desert, northern Chile

China’s Tianqi Lithium Corp. (002466.SZ) is contesting a deal put forward by the Chilean government to enhance state control in key lithium assets.

Tianqi, the lithium producer which owns a 22% stake in Chilean lithium miner Sociedad Quimica y Minera de Chile SA (SQM), said in a Monday filing that “it may consider action to protect its interests,” after SQM entered a definitive agreement that will give Chile’s state-owned copper giant Codelco a majority stake in its lithium assets.

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China’s Tianqi Lithium Corp. is contesting a deal by the Chilean government regarding state control in lithium assets involving a 51% stake given to state-owned Codelco.
SQM and Codelco formed a joint venture to develop the Atacama salt flat, increasing production and operations until 2060, with Chile receiving 70-85% of proceeds from new production.
Tianqi is concerned about potential dividend dilution and loss of control, and has urged for a shareholder vote to ensure transparency.

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Who’s Who

Tianqi Lithium Corp.: Tianqi Lithium Corp. owns a 22% stake in Chilean lithium miner SQM. The company is contesting a deal that gives Chile's state-owned Codelco a majority in SQM's lithium assets, citing concerns over transparency, dividend dilution, and loss of asset control. Tianqi reported a net loss of 3.9 billion yuan in Q1 2024, down from a 4.9 billion-yuan profit the previous year.

Sociedad Quimica y Minera de Chile SA: Sociedad Quimica y Minera de Chile SA (SQM) is the world's second-largest lithium producer. It recently entered a joint venture with Chile's state-owned copper giant, Codelco, to develop its Atacama salt flat assets. Under the agreement, Codelco will hold a 51% stake, with operational control shifting from SQM to Codelco in 2030, continuing until 2060. The deal aims to boost Chile's lithium output and enhance state control over this key mineral.

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What Happened When

2024-05：: Tianqi's Chilean subsidiary filed a request with Chilean securities regulators in late May asking them to rule on whether the partnership requires a shareholder vote.

2024-05-31：: SQM announced a joint venture with Codelco to develop its Atacama salt flat assets, giving Codelco a 51% stake in the venture and enabling a production increase and a 30-year extension of operations.

2024-06-03：: Tianqi said in a Monday filing that it may consider action to protect its interests after SQM entered a definitive agreement giving Codelco a majority stake in its lithium assets.

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