#Chile #SQM #TianqiLithium #Codelco #ElectricVehicles #Lithium #CorporateGovernance #Mining
Chile’s SQM, recognized as the world’s second-largest supplier of lithium, has scheduled another extraordinary shareholders’ meeting for April 24, prompted by the requests of Tianqi Lithium Corp., its second-biggest shareholder. This move comes as Tianqi Lithium seeks enhanced transparency over a proposed agreement with Codelco, the copper industry titan. This would be the second meeting of this nature within a span of months, demonstrating Tianqi’s insistence on a shareholder vote concerning any collaboration with the state-owned Codelco. While SQM’s management plans to provide updates on the ongoing negotiations and field questions during the meeting, the company emphasizes that the deal’s finalization predominantly requires the consent of its board.
The relationship between SQM and Tianqi has been marked by increasing strain, highlighted by mutual skepticism regarding each other’s underlying intentions concerning the deal. The significance of this arrangement is underscored by its potential to boost SQM’s lithium production capabilities, a crucial component for electric vehicle batteries. Failure to seal the deal could jeopardize SQM’s operational continuity post-2030, when its current mining contract is due to expire.
Tianqi, which acquired its stake in SQM for $4 billion in 2018, has voiced its dissatisfaction over what it perceives as a lack of comprehensive information regarding the agreement. The proposed partnership outlined in a framework agreement announced the previous year indicates that SQM would relinquish a majority stake in its brine assets to Codelco. This concession is aimed at securing a contract extension allowing SQM to maintain its operations for an additional three decades. At the helm of SQM’s shareholder structure is Julio Ponce, who is notably connected to Chile’s past as the former son-in-law of dictator Augusto Pinochet, adding a layer of historical complexity to the company’s governance and strategic direction.
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