SANTIAGO (Reuters) – A Chilean court on Thursday suspended the sale of a coveted stake in lithium producer SQM SQM_pb.SN to China’s Tianqi Lithium Corp, saying it will consider a lawsuit filed by the Chilean company’s controlling shareholders, who oppose the deal.
The lawsuit, filed on Wednesday, alleges a previous anti-trust court decision did not give shareholders adequate time to review the agreement between Tianqi and regulators, allowing the Chinese miner to purchase a 24 percent stake in the world’s No. 2 producer of lithium, a metal used to make batteries for electric vehicles.
The agreement is intended to limit the exchange of commercially sensitive information between Tianqi and SQM, though detractors say it does not go far enough. It would give Tianqi the right to have at least three of the company’s eight board seats, fueling concerns that Tianqi would have access to internal SQM documents that it would then use to its own advantage.
Pampa Calichera, Potasios de Chile and Global Mining – which together control a majority stake in SQM – asked Chile’s constitutional court on Wednesday to “urgently suspend” the agreement, saying the anti-trust court had approved it last week “practically in secret.”
The shareholders, known collectively as the Pampa Group, are controlled by SQM’s former chairman, Julio Ponce, who has been a driving force behind SQM since it was privatized in the 1980s under his former father-in-law, dictator Augusto Pinochet.