PotashCorp CEO confirms Chinese interested in lithium producer SQM
Canada’s Potash Corp. of Saskatchewan (TSX, NYSE:POT), the world’s largest producer of the fertilizer by capacity, confirmed Wednesday rumours pointing at Chinese firms hoping to buy the miner’s stake in Chilean lithium producer SQM.
SQM became a target of international firms after PotashCorp announced it would sell its 32% stake in it, worth about $4.5 billion at current market values. The move was made to comply with some of the conditions imposed by regulators to let PotashCorp merge with smaller rival Agrium (TSX, NYSE:AGU).
Canada’s PotashCorp must sell its interest in Chile's SQM — worth about $4.5 billion at current market values — within 18 months of merging with Agrium.
“You can imagine the broad interest of potential bidders and actual bidders is coming from those who are interested in lithium,” Potash Corp chief executive Jochen Tilk told Reuters. “And many of them are in China,” he added, declining to name interested parties or the number of bids the company has received.
Last week, sources familiar with the matter mentioned Chinese private equity firm GSR Capital and Canada's Wealth Minerals (TSX-VE:WML) as the latest firms to be weighing an investment in SQM, the world's largest lithium producer.
A few days earlier, news reports had said world’s second largest mining company Rio Tinto (ASX, LON:RIO) was also considering to bid for PotashCorp’s stake in SQM.
SQM, which has a market value at just over $15 billion, produced roughly 44,000 tonnes of lithium carbonate last year and is developing new projects in Chile and Australia.