SANTIAGO – China's Tianqi Lithium has come to an agreement over the governance of Chilean miner SQM with key shareholder Pampa Group, easing away from hostilities over control of the world's second-biggest producer of lithium.
Tianqi's $4.1-billion purchase of a 23.77% stake in SQM, which mines lithium used in electric vehicle batteries, went through in December, but the Chinese firm has faced push back from Pampa Group and its head Julio Ponce Lerou.
The agreement established that SQM board decisions and the company's operations would be independent of both parties, the two sides said in a joint statement.
"We hope with this agreement we have left our differences in the past and we can focus our energies on the future supporting SQM, its administration and its board," Patricio Contesse, vice president of Pampa Group, said in the statement.
Pampa Group had tried to block Tianqi taking its stake in SQM, raising concerns that the move would allow Tianqi to access strategic information from the miner.
Tianqi Chairman Jiang Weiping heralded Pampa Group and Ponce in the statement as having "vision and talent". Ponce has been a key figure in SQM since it was privatized in the 1980s under his former father-in-law, dictator Augusto Pinochet.
The Chinese miner also said on Thursday it aimed to raise up to seven-billion yuan ($1.04-billion) in a share placement to repay loans taken out for its purchase of the SQM stake.
The new agreement includes various technical elements including around the substitution of board members, veto rights, financial statements and support for dividend policy.