Tianqi Lithium to trim SQM stake after governance tensions

Tianqi Lithium Corp. said it plans to trim its SQM holding — and opened the door to a complete exit — after years of frustrations over limits on its influence on strategic decisions at the Chilean lithium giant.

The Chinese company will offload as many as 3.57 million Class A shares in Soc. Quimica & Minera de Chile SA “at an appropriate time,” it said in a filing to the Hong Kong exchange Wednesday. The 1.25% stake has a book value of $206 million.

The decision follows a doubling of SQM shares over the past six months and Tianqi’s failed efforts to have a say in the Chilean firm’s tie-up with Codelco — a partnership that will give the state-owned miner control over one of the world’s biggest and most profitable lithium operations. Tianqi had argued that the proposed partnership should go to a shareholder vote, but Chile’s top court rejected its appeal last month.

The bitter and protracted dispute over the Codelco deal followed boardroom and governance restrictions required by Chilean antitrust authorities to allow Tianqi’s initial $4.1 billion investment in SQM in 2018.

That stake, which currently stands at almost 22%, ebbed and flowed in value along with volatile lithium prices. A recovery in the past several months has taken prices back to similar levels as when Tianqi bought the shares.

Wednesday’s disclosure, however, came with a twist. In an initial filing, Tianqi said its board had authorized management to sell its full holding of SQM shares “within one year and at an appropriate time.” It later canceled that filing without explanation. A revised statement didn’t mention the additional sale.

Tianqi didn’t immediately provide a comment when contacted by Bloomberg. SQM declined to comment.

Tianqi’s long-term holding in SQM faces a significant risk of impairment after the deal with Codelco, according to Bloomberg Intelligence. Divesting its stake as Codelco’s control of the lithium project approaches would allow Tianqi to mitigate governance risk in the medium term, BI said in a note.

The company’s shares fell 1.4% on its main listing in Shenzhen. Trading was halted in Hong Kong. Tianqi has been asked for additional information after announcing a share and convertible bond sale.

SQM’s shares slumped as much as 6.7% in New York on Wednesday. In the past six months, the stock has surged more than 100%, the best performance among peers tracked by Bloomberg.

Tianqi said the sale of a portion of its SQM stake would help provide funds for existing and future operations, and would have a positive impact on its financial position. Tianqi posted preliminary net income for 2025 in a range of 369 million yuan to 553 million yuan ($53 million to $80 million), swinging from a loss the previous year.

(By Annie Lee and James Attwood)