The competition for Latin American lithium resources intensifies: the geopolitical博弈 behind Tianqi Lithium’s marginalization

Epigraph Amid escalating U.S.-led coercive measures openly imposed on Chinese overseas investment projects, such initiatives have recently suffered repeated setbacks. Effectively countering the containment strategy led by the United States has thus become a top priority—not only at present but also for the foreseeable future—in responding to dramatic shifts in the international environment. Main Text On January 27, 2026, local time in Chile, Tianqi Lithium’s wholly owned subsidiary Tianqi Chile received a final ruling from Chile’s Supreme Court rejecting Tianqi Chile’s appeal, which had been filed with the Supreme Court on November 21, 2025, local time in Chile. In response to the Supreme Court’s final ruling, Tianqi Lithium stated: “We reserve all possible avenues to safeguard the company’s rights and will not rule out taking further action—subject to ensuring the protection of relevant shareholders’ interests.” On January 28, local time, Sociedad Química y Minera de Chile (SQM) announced it would establish a joint venture with Chile’s state-owned National Copper Corporation (Codelco), into which the divested Salar de Atacama lithium brine deposit would be transferred. Available information indicates that the Supreme Court’s final ruling marks the conclusion—after more than one and a half years of judicial proceedings—of the dispute over operational rights to the world’s largest lithium brine deposit, the Salar de Atacama. Chile’s legal nationalization process for the Salar de Atacama is now complete, and implementation will follow. First, a brief chronology of the event: SQM was originally established as a Chilean state-owned enterprise in the 1960s. Through subsequent restructuring, SQM came under the control of the Ponce family—the former son-in-law of ex-Chilean President Augusto Pinochet—with the family holding 25.76% of SQM’s shares via its Pampa company, making it the largest shareholder. In 2018, Tianqi Lithium invested USD 4.066 billion to acquire a 22.16% equity stake in SQM, becoming its second-largest shareholder. In April 2023, Chilean President Gabriel Boric announced the launch of a lithium nationalization strategy, mandating that Chilean state-owned enterprises must hold controlling stakes in lithium-related companies. In December 2023, to comply with Chile’s new regulations, SQM signed a Memorandum of Understanding (MoU) with Codelco; the two parties subsequently signed a Partnership Agreement in May 2024, stipulating that, effective from 2031, SQM would relinquish control over and management rights to the Salar de Atacama, and its financial statements would be consolidated with those of Codelco. Once formally effective, this agreement means that, starting in 2031, Tianqi Lithium’s subsidiary—and SQM itself—will lose their existing operational and managerial control. Following the signing of the Partnership Agreement, Tianqi Lithium immediately voiced objections, asserting that the board had exceeded its authority and that Tianqi had cast no affirmative vote. Consequently, Tianqi Lithium embarked on a legal redress process lasting over one and a half years. Prior to the Supreme Court’s final ruling, the Partnership Agreement remained unenforceable. Chile offered compensation and “incentives” to SQM for its integration into the state-owned sector: First, the Salar de Atacama lithium extraction concession was extended from December 31, 2030, to December 31, 2060. Second, SQM’s production quota for lithium carbonate equivalent from the Salar de Atacama between 2025 and 2030 was increased by 300,000 metric tons. Second, the Supreme Court’s final ruling may trigger a chain reaction.

Major progress for Hong Kong’s largest IPO of the year: A major Chinese lithium company secures subscriptions from LG Chem and Zijin Mining—what is the company’s development outlook?

Author / Mango Under the Stars Editor / Liang Watermelon Under the Stars Layout / Youmaicai Under the Stars On June 19, Tianqi Lithium (H00978.HK) passed its listing hearing and updated its offering documents. It is reported that the company aims to raise USD 1–1.2 billion through this IPO—potentially making it Hong Kong’s largest IPO of the year. If financing proceeds smoothly, the debt burden Tianqi incurred from its acquisition of SQM will ease, alleviating the company’s overall funding pressure. I. Love at First Sight—The Price of Falling for SQM Who is SQM? SQM stands for Sociedad Química y Minera de Chile, Chile’s largest domestic chemical enterprise. Today, the global lithium mining market comprises three categories: lithium concentrates; basic lithium salts (including lithium carbonate, lithium hydroxide, and lithium chloride); and inorganic and organic lithium derivatives. SQM primarily produces basic lithium salts—lithium carbonate. In 2021, SQM possessed an annual lithium carbonate production capacity of 120,000 metric tons from salt lake brines—accounting for approximately 34% of global salt lake capacity—and ranked as the world’s largest lithium carbonate producer. According to SQM’s 2021 annual report, its capacity was set to expand further in 2022, targeting 180,000 metric tons of lithium carbonate and adding 30,000 metric tons of lithium hydroxide. Meanwhile, SQM’s total lithium resource sales accounted for 19% of the global market—matching Albemarle Corporation (ALB) of the United States—and placing it among the world’s largest lithium resource suppliers. SQM possesses extensive experience and advanced production technology in extracting lithium from salt lake brines and leads globally in lithium extraction cost efficiency. According to Roskill, SQM’s lithium carbonate production cost is less than half that of Ganfeng Lithium (002460). SQM is, in essence, the ‘beautiful, wealthy, and talented’ belle of the lithium industry. To win SQM’s hand, Tianqi Lithium pursued a two-step courtship: Step One: In 2016, Tianqi acquired 2.1% of SQM’s Class B shares. Step Two: In 2018, Tianqi paid USD 4.066 billion (approximately RMB 25.893 billion at the time) to acquire 23.77% of SQM’s Class A shares. Through these two advances, Tianqi paid roughly USD 4.275 billion in total. Yet, Tianqi still hasn’t secured the prize. According to Tianqi Lithium’s current prospectus: Tianqi Lithium does not receive lithium ore supply from SQM. Moreover, when acquiring SQM, Tianqi committed that its nominated directors to SQM’s board must not concurrently serve as Tianqi’s directors, executives, or employees; that such nominated directors must not assume managerial roles at SQM; and that Tianqi must not proactively seek SQM’s commercially sensitive information. As a result, Tianqi lacks actual control over SQM. In other words, Tianqi’s pursuit of SQM remains at the stage of “giving money and luxury cars”—whether the two will ultimately join hands remains uncertain. Persistently burdened by debt, Tianqi Lithium operates with significantly higher leverage than its peer Ganfeng Lithium. Excluding the industry-wide impact of 2021, and focusing solely on pre-2020 data, Tianqi’s leverage ratio was nearly double that of Ganfeng’s. This high leverage imposes substantial interest-payment pressure: according to its annual reports, Tianqi’s interest expense on individual loans alone reached nearly RMB 2 billion in recent years. Meanwhile, operating cash flow has been shrinking. Cash generated from operations sometimes falls short even to cover interest payments. Adding to this, the company continues to inject capital into its Australian investment projects—causing its cash reserves to dwindle steadily.

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Premier Fund Managers Ltd purchased 142,200 shares of SQM valued at $9.8 million in the fourth quarter. The company also announced a quarterly dividend while analyst consensus remains mixed with a Hold rating.

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