SANTIAGO – The controlling shareholder in Chilean lithium producer SQM on Wednesday filed suit with Chile's Constitutional Court to block a deal allowing the sale of nearly one-fourth of the miner to China's Tianqi Lithium.
The lawsuit alleges that Chile's antitrust court last week failed to follow due process when it approved a settlement between Tianqi and Chilean regulators allowing the Chinese miner to purchase a coveted 24 percent stake in the world's No. 2 producer of lithium. The court said the agreement would limit the exchange of commercially sensitive information between the two companies.
But Pampa Calichera, Potasios de Chile and Global Mining - which together control a majority stake in SQM - allege the five-member court had approved the deal "practically in secret."
"The opportunity given to my clients to learn, understand and then opine on a deal worth more than $4-billion, which generates enormous competitive risks for SQM, was five days, and nothing more," lawyers for the shareholders wrote in the lawsuit.
The three shareholders, known collectively as the Pampa Group and controlled by SQM's former president, Julio Ponce, asked the court to "urgently suspend" the agreement between regulators and Tianqi.
Tianqi did not immediately reply to requests for comment.
Tianqi's interest in acquiring the stake in SQM comes as Beijing is aggressively promoting electric vehicles to combat air pollution and help China's domestic carmakers leapfrog the combustion engine to build global brands.
The agreement between Chile's antitrust regulator and Tianqi stipulates that the Chinese miner cannot name any of its executives or employees to SQM's board, and requires it notify regulators of any future, lithium-related deal struck with either SQM or rival and top lithium producer Albemarle.
Prior to its approval, SQM had objected to the deal on the grounds it did not go far enough to limit Tianqi's access to corporate secrets and sensitive information.
Chile's antitrust regulator launched an investigation in June, shortly after Tianqi said it would buy 24% of SQM for $4.1-billion, giving it a stake in one of the world's top producers of lithium, a key ingredient in the batteries that power everything from cellphones to electric vehicles.