China’s Tianqi Lithium Corp said on Thursday it would buy a minority stake in Chilean lithium producer SQM for US$4.07 billion, gaining more global access to a key component in rechargeable batteries that power mobile phones and electric cars.<\/p>\n
The growing demand and production for electric vehicles by auto companies worldwide is fuelling a scramble for the ingredient, which is held mainly by Argentina, Australia, Chile and China.<\/p>\n
Tianqi, which is already building a major lithium processor in Western Australia, will buy 62.5 million SQM A shares for US$65 each from Canadian fertilizer producer Nutrien Ltd.<\/p>\n
Nutrien is selling three-quarters of its around 32 per cent stake in SQM, Laurential Bank analyst John Chu wrote in a note.<\/p>\n
Tianqi not buying the full 32 per cent SQM stake was likely due to a compromise between Nutrien and the Chilean government to remove any possibility for Tianqi to one day control SQM, BMO Capital Markets analyst Joel Jackson wrote in a note.<\/p>\n
Chile’s former government in March had tried to block the deal for the valuable resource as SQM is the second-largest lithium producer in the world after U.S.-based Albemarle Corp .<\/p>\n
Reuters reported earlier this week that Tianqi and SQM were in talks for a deal. Tianqi had been circling SQM since 2016.<\/p>\n
The stake sale is necessary for Nutrien to meet regulatory commitments after it was formed by the merger of Agrium and Potash Corp of Saskatchewan.<\/p>\n
SQM, whose U.S.-listed shares were down 1 per cent at US$57.46 in opening trade, also has a significant fertilizer business.<\/p>\n
Nutrien plans to sell its remaining 20.2 million B shares of SQM in the future.<\/p>\n
Earlier on Thursday, Australia’s Kidman Resources Ltd said it would supply lithium for Tesla Inc’s electric car batteries.<\/p>\n
\u00a9 Thomson Reuters 2018<\/p>\n","protected":false},"excerpt":{"rendered":"
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