By Amy Lv and Daina Beth Solomon
BEIJING/SANTIAGO (Reuters) -A planned tie-up between Chilean state copper giant Codelco and local producer SQM to produce lithium has won approval from China’s antitrust regulator, the entity said on Monday, paving the way for the joint venture to go into effect.
China’s green light was the last major remaining condition for the companies to close a deal, first announced nearly two years ago, to produce lithium in Chile’s Atacama salt flat as part of a government push to widen state control of the industry and expand output.
The agreement required multiple government regulators to sign off because the companies operate in global markets. Chile is the world’s second-largest producer of lithium, a critical component for electric vehicles and battery storage.
BEIJING SETS TERMS FOR VENTURE TO SUPPLY CHINESE CUSTOMERS
China required Codelco and SQM to agree to provide minimum supply to Chinese customers on fair terms, at prices that do not exceed a certain percentage of the benchmark market price. Its statement marked the details as confidential.
The Chinese regulator also asked Codelco and SQM to refrain from sharing sensitive information with other lithium players, and to abide by certain corporate governance practices.
“In the event of a major supply change, both sides should make reasonable and best efforts to continue the supply of lithium carbonate products to Chinese customers… they should not turn down, restrict or delay supply to Chinese clients,” China’s State Administration for Market Regulation said in a statement.
It added that its decision was based on feedback from government bodies, industry associations, rivals and downstream consumers.
In a regulatory filing, SQM said the conditions were in line with the company’s existing commercial practices in China.
DEAL EXPECTED TO CLOSE BY YEAR-END
Codelco in a separate statement said the partnership can go into effect following approval from Chile’s comptroller’s office, which is widely seen as a formality. A Codelco source said that is expected by the end of the year.
Chile’s newly appointed Economy Minister Alvaro Garcia said in August he expected Codelco and SQM to close the deal before the current administration leaves office in 2026.
Competition regulators in Chile, the European Union, Brazil, Japan, South Korea and Saudi Arabia have already signed off on the deal.
The joint venture faced pushback from legislators and China’s Tianqi, a major investor in SQM. Tianqi did not immediately reply to a request for comment.
(Reporting by Amy Lv in Beijing and Daina Beth Solomon in Santiago. Additional reporting by Fabian Cambero, Ethan Wang, Xiuhao Chen and Joe Cash; Editing by Jacqueline Wong, Kate Mayberry and Jan Harvey)
