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China tightens grip on lithium in Chile deal

Thu, 05/24/2018 - 15:34 -- John Shepherd
China tightens grip on lithium in Chile deal

China’s Tianqi Lithium is set to become a key shareholder of the world’s second largest producer of lithium— in a move to strengthen Chinese influence on the battery raw materials market.

Tianqi has agreed to buy a 25.9% stake in Sociedad Quimica y Minera de Chile (SQM) from Canada-based Nutrien in a deal worth more than $4 billion.

Under the terms of the deal, which is subject to various regulatory approvals, Tianqi will buy the approximately 62.6 million Class A shares of SQM that Nutrien owns for $65 per share in cash. 

And China has reportedly warned Chilean regulators— who are looking into the deal— not to block the transaction, which is expected to be completed by the end of this year.

Tianqi president Vivian Wu (pictured) said: “This is an attractive investment which fits well within our existing business strategy. Tianqi Lithium's shareholders will greatly benefit from this transaction given SQM's long-term stable financial returns and steady dividends.”

Chinese firms have been on a spending spree to shore up supplies of raw materials to support the country’s drive to dominate batteries production— and cater for the expanding electric vehicles market.

BBB reported earlier this year that China’s largest lithium compounds producer, Ganfeng Lithium, was looking to raise $1 billion from an initial public offering in Hong Kong to expand its battery-related businesses.

Meanwhile, one of China's largest lithium hydroxide and carbonate producers, Sichuan Yahua Industrial Group, confirmed it was boosting its investment in Australian lithium producer Core Exploration.

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