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Chile antitrust regulators asked to block China attempt to buy SQM

Metal News - Published on Fri, 16 Mar 2018

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Reuters reported that Chile’s government has asked antitrust regulators to block the sale of a 32% stake in Chilean lithium company SQM to a Chinese firm on the grounds it would give it an unfair advantage in the global race to secure resources to develop electric vehicles.

Chile development agency Corfo, which oversees SQM’s lithium leases in the Salar de Atacama, claimed in a 37 page complaint filed that the purchase of a stake in SQM by “Tianqi Lithium, or any entity related to it directly or indirectly (including companies controlled by the government of China)” would “gravely distort market competition.”

It was unclear if Corfo’s complaint, if upheld, would block all potential Chinese bidders for the stake. But it certainly seeks to block Tianqi Lithium, one of China’s top lithium producers.

SQM and Tianqi are “extremely close competitors and were one to acquire an interest in the other even minority it would have serious anti-competitive impacts on the market,” Eduardo Bitran, the now former head of Corfo, wrote in the complaint.

Together, Tianqi and SQM, the world’s second biggest lithium producer after US based Albemarle Corp, would control 70 % of the global lithium market, the document said.

A combined Tianqi-SQM would be in a strong bargaining position, given the companies’ outsized control of the lithium supply, for everything from prices to royalty payments, a source close to SQM said.

Tianqi, through Talison Lithium which it controls, is also in a joint venture with Albemarle in Australia where they own the world’s biggest lithium mine, Greenbushes.

Mr Chris Berry, an independent energy metals analyst based in New York said jthat “The natural obvious buyer are the Chinese it does tend to make an industry that is already an oligopoly even stronger to the detriment of potential new entrants.”

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Posted By : Rabi Wangkhem on Fri, 16 Mar 2018
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