China tightens grip on global battery metals with Chile deal
Tianqi Lithium Corp strikes US$4.1 billion deal for a stake in Chilean rival SQM, which gives the Chinese company an opportunity to shape the direction of the lithium industry amid the global growth of electric vehicles
China tightened its grip on the global supply chain for battery raw materials as Tianqi Lithium Corp struck a deal to take a US$4.1 billion stake in Chilean rival SQM, the world’s second-largest lithium producer.
Chengdu-based Tianqi is seeking to almost triple production capacity through 2020, part of an aggressive expansion by Chinese companies to tie up sources of the metals and chemicals that are key to meet rising demand for rechargeable batteries and electric vehicles.
Tianqi will buy all of Nutrien’s voting shares in SQM, giving it a 24 per cent stake in the Santiago-based company. Confirmation of the deal followed months of speculation that prompted Chilean government agency Corfo to request an antitrust review on the grounds it would give the two companies too much sway in the global lithium market. Corfo’s former head said the deal opens the door for Tianqi to take control of SQM.
The deal “makes the lithium oligopoly even stronger than it already is”, Chris Berry, a New York-based analyst on energy metals, and founder of House Mountain Partners, said in an email. “This affords Tianqi a unique opportunity to shape the direction of the lithium industry.”
Competitor Ganfeng Lithium Co is aiming to raise about US$1 billion from a planned Hong Kong listing to extend its own global acquisition spree, while southeast China’s Contemporary Amperex Technology is adding capacity under a plan to become the world’s top battery cell maker.