The agreement with the Chilean state mining company arouses the suspicions of Tianqi, a Chinese-owned company that controls 24% of SQM's shares.
A dispute is taking place in Chile between SQM and Tianqi, a Chinese company that in 2018 bought 24% of the shares of the non-metallic mining company.
The CEO of Tianqi Lithium Corporation, Frank Ha, in an interview with the local media Pulso, reiterated concerns about an alleged lack of information from SQM regarding the agreement with Codelco, by which both Chilean companies seek to create a joint venture for the exploitation of lithium resources in the Salar de Atacama.
Previously, the Chinese-owned company requested an extraordinary shareholders meeting, where they asked a series of questions to learn more about said agreement.
Back then, SQM's general manager of SQM, Ricardo Ramos, concluded that considering "the economic benefits and the associated risks, we are convinced that this is a positive project for the social interests of SQM."
However, Tianqi declared the next day that "the information provided by the administration appointed by the controlling group was, in our opinion, still scarce and insufficient."
The Chinese company even supported AFP Provida's proposal at the meeting to ask for another shareholders meeting, where the alliance between Codelco and SQM is approved or rejected.
TIANQI: "WE ARE VERY INTERESTED IN KNOWING WHAT IS HIDING BEHIND"
In the conversation with Pulso, Tianqi's CEO expressed that “SQM is an important investment for us, representing a significant commitment with more than US$ 4 billion invested.”
“This investment underlines our conviction in both the potential of the lithium market and its sustainable development in Chile and globally, as well as freedom, equity and competition in the country.”
The media asked the Asian executive what would be his company's decision in case a meeting was held today to approve or reject the agreement.
Frank Ha pointed out that their vote will depend on a “thorough evaluation” of the agreement. “At the moment, the lack of transparency and details restricts all shareholders from making an informed decision,” he told Pulso .
For this, Tianqi will ask for more "detailed and specific information that allows us to fully understand the financial and operational effects of the operation (…) At the same time, we are also very interested in knowing what is hidden behind it."
In the event that the Chinese company takes the agreement to a vote, the CEO pointed out that “as a company that has fiduciary responsibilities towards its investors, it is our duty to always evaluate all the alternatives and courses of action required to ensure that shareholder rights are respected and the integrity and transparency of the decision-making process is maintained.”
Furthermore, the company representative stated that they are open to "explore all opportunities that align with the company's strategic vision and its commitment to the sustainable global development of lithium", confirming that they would participate if a tender were opened. through the Salar de Atacama starting in 2031, as told to Pulso .
“We want our relationship with all shareholders within SQM to be based on mutual respect, transparency and the common goal of promoting the long-term success of the lithium sector in Chile. That is our way of relating, although it is not always reciprocal,” concluded Ha, when asked about Tianqi's relationship with the Pampa Calichera group.
CHAIRMAN OF THE SQM BOARD OF DIRECTORS: "WHAT ARE TIANQI'S TRUE INTENTIONS?"
In a public statement following the above, the chairman of SQM's board of directors, Gonzalo Guerrero Yamamoto, said that “it is offensive and not attached to reality when Mr. Ha declares that “we are very interested in knowing what is hidden behind it,” referring to the Memorandum of Understanding signed between SQM and Codelco dated December 27, 2023.
"As SQM has reported on repeated occasions, the negotiation process was unanimously delegated by the Board of Directors to the General Manager of the company with the support of prominent financial and legal advisors. The General Manager has periodically reported to the Board of Directors on the progress of the process," he added.
According to Guerrero, Tianqi's lawyer was present at the extraordinary meeting, held on March 21 to review the SQM's financial advisors opinion that the negotiation was "a great signing."
Regarding the lack of transparency alleged by the Chinese company, the SQM representative affirmed that "the Memorandum, which was made public as soon as it was approved by both parties, was approved unanimously by the SQM Board of Directors (where Tianqi elects three of eight) after analyzing it and receiving the recommendations of the General Manager and the financial and legal advisors".
And although such initial text covers the principles of the agreement, along with the data discussed at the extraordinary shareholders meeting, "while the contracts are being negotiated by two parties with diverse interests, no information can be provided on how certain issues will be resolved."
"In accordance with the ruling of the CMF, this transaction must be approved by the company's Board of Directors. The way in which the transactions are approved according to Chilean law is not optional," emphasized the president of the SQM's board of directors.
Guerrero then threw darts at the Chinese company: "What are Tianqi's true intentions?" cites a document stating that Ha has not requested meetings with the CEO of SQM or with him in his last visits to Chile.
"The statement by Mr. Ha regarding 'Tianqi is open to exploring opportunities' is disconcerting when answering whether they are interested in participating directly in the exploitation of the Salar de Atacama starting in 2031".
"Stating this in the midst of a negotiation in which SQM is a few months away from concluding raises questions about Tianqi's true objectives. Are these statements in the best interest of SQM or Tianqi?" said the president of the board of directors of the company.
