SQM just made it very difficult for Tianqi to access company secrets
Chile’s Chemical and Mining Society (SQM), the world’s second largest producer of lithium, used in batteries that power electric cars and high tech devices, has taken measures to protect sensitive information from China’s Tianqi Lithium, which recently acquired almost a quarter of the company.
The deal, which took months to get approved by Chile’s antitrust regulators, received the okay in October, but under certain conditions. These included preventing Tianqi from naming any of its executives or employees to SQM's board. The company was also told it would have to notify regulators of any future lithium-related deal with either the Chilean producer or its rival Albemarle.
SQM believes a previous extrajudicial agreement preventing Tianqi from naming any of its executives or employees to the Chilean miner's board, did not go far enough to limit the rival's access to corporate secrets.
SQM had objected to the extrajudicial agreement on the grounds it did not go far enough to limit Tianqi's access to corporate secrets. On Wednesday evening, the miner revealed its board had approved additional measures to protect corporate data considered confidential. All requests by a board member “appointed by a shareholder who is also a competitor” must now be directed first to the company’s chief executive, and then shared with Chilean anti-trust regulators, it said.
The company’s CEO has the right to deny access to the information requested, but can only do so if ordered by the watchdog.
SQM’s board also plans to form a new, internal Lithium Committee to review documents circulated by the board of directors and related to lithium, including contracts and agreements.
Chile, which holds about 52% of the world’s known lithium reserves, last year lost its top lithium producer crown to Australia. But SQM, Albemarle and the government are working hard to reverse that.
SQM recently finished the first stage of a lithium carbonate ramp-up in Chile’s Salar del Carmen, reaching a capacity of 70,000 tonnes a year. This year, it expects to increase it to 120,000 tonnes a year.
The firm actually believes it will soon overtake US-based competitor Albemarle as the world's top lithium miner by 2022. SQM expects to boost its production capacity that year to 28% of the world's total versus Albemarle's 16%.
Chile expects lithium to soon become its second largest mining asset, just behind copper. It's currently the country's fourth biggest export.