White Petroleum in the Carbon-Neutral Era: ALB, SQM, and LTHM—A Timely Revaluation of Lithium Mining Value

SQM’s products primarily originate from the Caliche nitrate deposits and the Salar de Atacama salt flat brine deposits in northern Chile. The Caliche nitrate deposits contain the world’s largest reserves of iodine and nitrates, while the Salar de Atacama brine deposits are rich in lithium and potassium. SQM extracts raw materials from the Caliche nitrate deposits in northern Chile to produce specialty plant fertilizers and nitrate-based products for various industrial applications, as well as iodine and iodine derivatives. From the Salar de Atacama brine deposits, SQM extracts potassium-, lithium-, and sulfate-rich brine to produce potassium chloride, potassium sulfate, lithium solution, and carnallite (magnesium chloride). Carbonate and hydroxide lithium are produced at SQM’s facility near Antofagasta, Chile. Through its global distribution network, SQM sells products to over 100 countries worldwide, with the majority of its revenue generated outside Chile. To expand resources and operations beyond Chile, in 2016 SQM entered into a 50/50 joint venture agreement with Lithium Americas to develop the Cauchari-Olaroz salt flat project in Jujuy Province, Argentina, targeting an annual production capacity of 50,000 tonnes of lithium carbonate equivalent. In 2017, SQM and its subsidiary SQM Australia Pty acquired a 50% stake in the Mount Holland lithium project in Western Australia, forming a 50/50 joint venture with Kidman Resources Limited. The Mount Holland project plans to commence mining and construct concentration and refining facilities starting in 2021, with an expected annual output of 40,000 tonnes of lithium carbonate and lithium hydroxide. From an equity structure perspective, Tianqi Lithium—a Chinese company—holds a 25.86% stake in SQM, making it SQM’s second-largest shareholder. SQM’s exploration rights, mining rights, and other mineral rights include: (1) exploration and mining rights over the Caliche nitrate deposit in northern Chile; (2) lease-based mining rights over the Salar de Atacama brine deposit in northern Chile, along with adjacent mining and exploration rights surrounding the salt flat; (3) mineral rights over the Cauchari-Olaroz salt flat project in Jujuy Province, Argentina, held via the 50/50 joint venture with Lithium Americas; and (4) mineral rights over the Mount Holland lithium project in Western Australia, held via the 50/50 joint venture with Kidman Resources Limited. The Caliche nitrate deposit lies within protected areas in the Tarapacá and Antofagasta regions of northern Chile and contains abundant resources of nitrates, iodine, and high-concentration potassium.

China’s Lithium King: Defeated Abroad

Goldman Sachs also believes that SQM will soon become a minority shareholder in a state-owned enterprise, rendering this agreement “not an outstanding deal.” A Hidden Risk Planted Six Years Ago Tianqi Lithium’s passivity stems from risks embedded in its 2018 “high-stakes bet” on SQM. In March of that year, Chile’s Production Promotion Bureau submitted a complaint to Chile’s National Economic Prosecutor’s Office (FNE), arguing that the proposed transaction between Tianqi Lithium and SQM would severely undermine free competition in the lithium market and related markets, and urging the FNE to investigate and block the deal. By June, the FNE issued an official investigation notice to Tianqi Lithium. Subsequently, both parties signed an “out-of-court agreement,” whose terms included: Tianqi Lithium would not nominate or vote for any director of SQM who was also a director, executive, or employee of Tianqi Lithium; and Tianqi Lithium would neither request nor obtain commercially sensitive information related to SQM’s lithium business. To win the trust of SQM, local communities, and the Chilean government, Tianqi Lithium signed the above agreement with the FNE and further pledged not to consolidate SQM’s financial statements into its own. Although this out-of-court agreement with the FNE was originally scheduled to expire in June 2024, SQM announced in its April 2024 disclosure that the agreement would be extended until October 2024. A series of “unreasonable and unfair” clauses ultimately left Tianqi Lithium in an awkward “outsider” position during negotiations over SQM’s nationalization—depriving it of initiative from the outset. With no alternative, Tianqi Lithium attempted remedial measures. Since 2024, it has repeatedly requested that SQM convene a general shareholders’ meeting to vote on the public-private partnership (PPP) agreement between SQM and Codelco, aiming to alter SQM’s nationalization trajectory. Tianqi Lithium’s primary legal argument is that the PPP arrangement would affect SQM’s critical assets. Citing relevant provisions of Chile’s Companies Act, Tianqi Lithium contends that extraordinary matters of significant importance—beyond ordinary management scope—fall under the authority of the general shareholders’ meeting. Tianqi Lithium even engaged three Chilean legal scholars and experts to assess whether the approval procedures for establishing the joint venture complied with local law. All three concluded that, under applicable Chilean laws and regulations, the transaction between SQM and Codelco must be approved by a special shareholders’ meeting of SQM. Nonetheless, SQM’s board rejected Tianqi Lithium’s request to convene such a meeting. Thereafter, Tianqi Lithium made a final attempt: in March of this year, it filed an application with Chile’s Financial Market Commission (CMF), requesting that SQM convene a shareholders’ meeting to vote on its cooperation agreement with Codelco—and stipulating that the transaction could only be approved upon receiving a two-thirds majority vote. However, on June 18, the CMF rejected Tianqi Lithium’s application. In its announcement, the CMF stated that the content of the PPP agreement between SQM and Codelco did not meet the threshold requiring a shareholders’ meeting vote. Its rationale was that SQM does not sell 50% of its assets under the agreement, thus failing to satisfy the statutory condition mandating a special shareholders’ meeting requiring a two-thirds shareholder majority. The CMF’s decision signifies the definitive failure of Tianqi Lithium’s final effort to halt SQM’s public-private partnership arrangement.

Legal & General Group Plc Buys 285,668 Shares of Sociedad Quimica y Minera S.A. $SQM

Jun 1, 2026

Legal & General Group Plc increased its stake in Sociedad Quimica y Minera S.A. by purchasing 285,668 shares in Q4, totaling approximately $19.9 million. Institutional ownership stands at 12.41% with a consensus analyst rating of "Hold".

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