SQM expects to close Codelco lithium deal by May 31 deadline
SANTIAGO - Chilean mining company SQM, the world's second-largest lithium producer, expects to meet a May 31 deadline to finalise a joint venture with state-run miner Codelco, SQM's CFO, Gerardo Illanes, said on Thursday.
Some analysts had cautioned the deal could be delayed after an earlier deadline was extended two months due to complexities in the negotiation, and flagged a high-profile dispute between SQM and shareholder Tianqi Lithium as a risk.
"There's no particular sticking point, it's just that it is a complicated transaction," Illanes said in a call with analysts to discuss first-quarter results, when asked if there was a final obstacle. He noted that work was still in progress to handle a number of details.
The deal would give Codelco a 50% plus one share stake in a SQM's lithium production in Chile's Salar de Atacama, as the government seeks to boost its role in the industry that provides a key metal for electric vehicle batteries.
When asked if SQM was preparing for potential legal action from China-based Tianqi, which holds about a 22% stake in the company, Illanes said SQM was following the steps outlined by Chile's financial regulator to finalize the deal.
"We're not planning for anything else, as the process should go as the regulator instructed," he said, without directly addressing Tianqi.
Tianqi has called for a shareholders' vote to approve the deal, which SQM says is subject only to a vote by the board of directors.
"Once the contracts are ready, the board will meet, will review the details of the contract, and will take a decision," Illanes said.
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