Codelco sticks to SQM lithium deadline as deal opposition mounts
Chilean State mining company Codelco is on track to finalize a landmark deal with lithium supplier SQM well before the next government takes office next year, a company official said Monday.
Amid mounting political opposition to the transaction heading into presidential elections, Codelco is sticking with its deadline of completing all pending approvals by the end of September, the Codelco official said. Those approvals include a final nod from Chilean nuclear agency CCHEN, community consultation and Chinese antitrust approval. China’s Tianqi Lithium is a key shareholder in SQM.
Under the deal, SQM would relinquish a majority stake in its prized Atacama assets to Codelco in exchange for three more decades of operations. It’s part of President Gabriel Boric’s efforts to boost state involvement in critical minerals while stepping up production despite current global oversupply. Criticism has ranged from the deal being a case of state overreach to terms being overly beneficial to SQM.
Presidential candidate Jeannette Jara, who won a left-wing primary on Sunday, has vowed to respect the Codelco-SQM tie-up if it’s finalized during the current administration, but would seek alternatives if the deal is still pending. Other candidates have criticized the lack of a public bidding process. Last month, an investigative commission in Chile’s lower house voted against the deal in a largely symbolic act.
Tianqi continues to fight the tie-up in court, saying it lacks transparency and should go to a shareholder vote. SQM’s top shareholder is the family of Julio Ponce, the former son-in-law of dictator Augusto Pinochet, who ruled Chile in the 1970s and 80s.
SQM and Codelco are betting on low costs to keep expanding despite prices of the battery metal languishing around four-year lows.
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