SANTIAGO (Reuters) – A global battle for lithium has landed in the office of a tiny Chilean regulator, which may decide a winner as it reviews a petition to block Chinese firms from buying a stake in top producer SQM SQM_pb.SN.
The scramble for lithium, used in rechargeable batteries for mobile phones to electric vehicles, is pitting the Chilean government against China and, potentially, the independent regulator against the Latin American country’s new business-friendly government.
The National Economic Prosecutor’s office, known by its Spanish initials FNE, is set to review the sale by Canada’s Nutrien Ltd of a 32 percent stake in Santiago-based SQM for more than $4 billion to Chinese bidder Tianqi Lithium or any state-backed firm. Chile’s development agency Corfo said in a complaint on March 9 that the transaction would “gravely distort market competition.”
Together, Tianqi and SQM, the world’s second biggest lithium producer after U.S.-based Albemarle Corp, would control 70 percent of the global lithium market, the document said.
The agency’s petition, filed two days before a new Chilean government was sworn in, has put the spotlight on the FNE, which has an annual budget of $11.5 million and 115 staff.