Sinochem denies bidding for US$4b stake in Chilean lithium giant SQM
Canada’s Potash Corp expected to sell its 32 per cent stake in SQM
Sinochem Group, China’s state-owned chemical major, denied on Tuesday it has any plans to bid for a US$4 billion stake being potentially offered in Chile’s SQM, one of the world’s largest lithium producers, a critical ingredient in electric-car batteries.
Canada’s Potash Corp of Saskatchewan (PotashCorp) has been widely reported to have employed banks to handle the sale of its 32 per cent stake in SQM (Sociedad Quimica y Minerva de Chile).
A spokesman for PotashCorp, appearing to confirm that a sale might be imminent, said: “We won’t be able to comment on this [Sinochem’s interest], as the sales process is confidential.”
Sinochem was previously reportedly by Financial Times to be set to bid for the stake.
But a Sinochem spokesman said in a response to the South China Morning Post on Tuesday: “Up until now, neither Sinochem Group nor our subsidiaries have any such intentions or plans.”
The Post sought a response from SQM, but it failed to reply.
In a recent exclusive interview with the Post, Sinochem chairman Frank Ning Gaoning said the firm is eyeing overseas merger and acquisition opportunities and wants to become a multinational company that is competitive on the global market.
Ning said Sinochem will be focused on bulk petrochemical and downstream products, developing high value-added materials and life science products, and investing in properties and financial services over the next few years.
China is already the world’s largest electric car market. The government has an aggressive target of having electric or hybrid cars make up at least a fifth of the country’s car fleet by 2025, which would mean a huge boost in demand for lithium batteries.
Last month, sales of electric cars in China soared nearly 80 per cent year on year, from a 76 per cent increase in August, thanks in part to the government’s accelerated efforts at advancing the country’s capabilities in the new technology and promoting the formation of joint ventures with foreign builders.
In 2016, China sold 507,000 electric vehicles, around 45 per cent of the world’s total sales, according to statistics from the China Association of Automobile Manufacturers.