Rio Tinto signals new interest in SQM stake
Global mining giant Rio Tinto's interest in acquiring a stake in Chilean lithium miner SQM reemerged after having ruled out such a deal earlier this month, reported El Diario Financiero, citing anonymous sources.
The Australian-British multinational is reportedly eyeing again the 32% stake, worth US$5bn, owned by Canad's PotashCorp (today Nutrien). Rio Tinto's plans may have changed after SQM and Chile's economic development agency Corfo have signed an agreement.
But not only Rio Tinto is weighing an investment in SQM, one of the world's largest lithium producers. Chinese Tianqi and US-owned Albemarle are said to have also signaled interest in bidding for the stake.
PotashCorp has until April 2019 to divest its stake as part of its proposed merger with Canadian rival Agrium, which gave birth to Nutrien. This was demanded by the competition regulating authorities of India.
Lower house against SQM-Corfo deal
Meanwhile, in a special session, the lower house approved a resolution to request President Michelle Bachelet to reject the SQM-Corfo agreement. The vote ended a long dispute over royalties in Chile's Salar de Atacama, home to one of the world's richest lithium deposits, and also vastly increased the company's production quotas.
The resolution was backed by 38 politicians and rejected by 17. "This agreement is a renunciation by the state to pursue lithium production by itself through a public company with plenty of ability and financing. At the same time, it constitutes the perpetuation of a relationship between Chile and a company that does not have the necessary probity to sign a new contract for lithium exploitation since it has not complied with the law on several occasions," said the resolution.
Meanwhile, Corfo's executive vice-president Eduardo Bitrán told Financial Times that US-based electric automaker Tesla is in talks with SQM to become a strategic partner in the development of a lithium processing plant in the Salar de Atacama.
Bitrán told Reuters that Chile is open to further increasing SQM's lithium quotas to satisfy demand from the automaker.
The Corfo-SQM agreement inked earlier this month already allows the miner to quadruple lithium output and has raised concerns about oversupply.
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