Performance explodes, yet stock price plummets! Why are lithium-mining stocks collectively suffering a 'post-announcement slump'?

In the risk disclosure sections of their respective semi-annual reports, all three companies list overseas operational risks as a core risk. Tianqi Lithium even devotes two full pages to detailing its litigation defeat in Chile—a blow likely unmatched in severity among Chinese lithium-mining firms’ overseas investment history. Tianqi Lithium: Transfer of SQM control rights in Chile; final court ruling against Tianqi In the 'Geopolitical Factors and Risks of De-globalization' section of its semi-annual report, Tianqi Lithium discloses that on May 31, 2024, its investee company SQM signed a 'Partnership Agreement' with Chile’s state-owned copper company, Codelco. Under the agreement, SQM’s lithium extraction and operating rights at the Salar de Atacama will be extended from expiration in 2030 to 2060; meanwhile, SQM’s authorized lithium production quota at the Salar de Atacama for 2025–2030 is set to increase. However, upon the agreement’s entry into force, Codelco will hold majority equity in the joint venture overseeing the Salar de Atacama’s core lithium operations—and will consolidate the joint venture’s financial statements starting in 2031. As of 2031, SQM will no longer retain control over its core lithium business at the Salar de Atacama in Chile. Tianqi Lithium holds approximately 21.90% of SQM’s shares, making it SQM’s second-largest shareholder. SQM’s Salar de Atacama operation is one of the world’s lowest-cost, highest-reserve lithium brine assets. After the 2031 transfer of control, SQM’s strategic planning, decision-making efficiency, and profit distribution will all change—and Tianqi’s rights as a minority shareholder will be diluted. Tianqi has long attempted to block this transaction through legal means. On July 26, 2024, Tianqi’s wholly owned subsidiary Tianqi Chile filed a lawsuit before a Chilean court challenging the decision by Chile’s Financial Market Commission (CMF). On November 21, 2025, Tianqi Chile appealed to the Supreme Court of Chile. On January 27, 2026 (Chilean local time), Tianqi Chile received the Supreme Court’s judgment upholding the lower court’s ruling and rejecting Tianqi Chile’s appeal. Under Chilean law, this judgment is final and unappealable. The final adverse ruling means Tianqi can no longer prevent the transfer of SQM’s control via judicial channels. This incident sends a stark signal to all Chinese lithium-mining enterprises: even equity acquired legally and through market-based mechanisms may be diluted amid host-country policy shifts amid rising resource nationalism. Ganfeng Lithium: Mexican mining rights revoked; Argentine project progress sluggish In the 'Overseas Business Expansion and Operational Risks' section of its semi-annual report, Ganfeng Lithium states: 'The Company has intensified its acquisition and development efforts for overseas resources, operating and investing across multiple countries—including Australia, Argentina, Mexico, Ireland, and Mali… Host-country government equity policies may adversely affect the equity structure of our local investment projects.' The semi-annual report does not explicitly name or detail progress on the Mexican project. Public information shows that Ganfeng’s Sonora lithium clay project in Mexico (total lithium resource base approx. 8.82 million tonnes LCE) has suffered a major setback. In 2022, Mexico revised its Mining Law, formally classifying lithium as a strategic national resource subject to special regulation—and cancelling all private lithium mining concessions.

Has 'Tianqi Lithium' finally turned the corner?

I previously detailed its pricing mechanism and mismatch issues—now, those problems appear largely resolved. The cyclical pattern of hoarding inventory when lithium prices are high, then selling at a loss when prices fall, is unlikely to recur. As for the mine segment’s 74.19% gross margin—that’s Tianqi’s true bedrock strength. Globally, only the Greenbushes mine achieves such a lithium concentrate gross margin—and it also leads the world in output and boasts the lowest production cost. According to the report, Talison extracted 1.81 million tonnes of spodumene ore and produced 738,000 tonnes of lithium concentrate in the first half of the year. Other lithium chemical plants must source ore from multiple suppliers; Tianqi’s lithium chemical plants sit directly behind an exclusive mine. That’s why, at identical lithium prices, Tianqi turns a profit while competitors barely break even. One figure in the profit statement deserves separate attention: net profit stood at RMB 6.957 billion, while attributable net profit was RMB 4.242 billion—the difference of RMB 2.715 billion went to minority shareholders, accounting for 39% of total net profit. The recipients are IGO and Albemarle. During Tianqi’s debt crisis, its debt-to-asset ratio peaked at 82%. To survive, Tianqi split the equity of Talison—the parent company of Greenbushes—Albemarle acquired a 49% stake in Wodgina, while IGO gained an indirect interest via its investment in TLEA. Altogether, Tianqi’s actual economic interest in the world’s premier lithium mine stands at only about 26%. Thus, Wodgina’s attributable net profit to Tianqi in the first half was RMB 959 million—though the mine earned over RMB 3 billion in half a year, Tianqi captured less than one-third; the remainder flowed into IGO’s and Albemarle’s pockets. At this pace, annual profit leakage exceeds RMB 5 billion—a steep price paid to survive that crisis. It truly hurts. That said, who doesn’t have a past? Without that deal, Tianqi might not have survived to today. In cyclical industries, survival trumps profit—so this ledger defies precise calculation. Fortunately, today’s Tianqi is no longer yesterday’s Tianqi: its debt-to-asset ratio stands at 28.46%; cash on hand totals RMB 10 billion; in February it placed a placement of over 6.5 million H-shares and issued RMB 2.6 billion in convertible bonds; it has also registered a RMB 6-billion debt financing instrument quota, ready for issuance anytime. What the patriarch left his daughter is a company financially immune from being cornered again—a thought that still tugs at the heartstrings for the 'princess'. Turning to SQM: Tianqi confirmed RMB 1.407 billion in investment income from SQM in the first half—versus just over RMB 200 million for the same period last year. With soaring lithium prices, SQM’s earnings surged, and Tianqi recognized its share—21.90%—of those gains. This is the long-awaited return on the RMB 30-billion asset acquired years ago. Yet SQM’s challenges have dominated headlines over the past year. Its Chilean litigation ended in a final adverse ruling. As I wrote previously in 'Tianqi Lithium Loses a Key Stronghold', SQM and Codelco’s joint venture plan allocates 70% of the JV’s profits to Codelco from 2025 to 2030—and 85% thereafter, starting in 2031. Now the joint venture is officially operational—and even renamed: Nova. In other words, SQM is now in its final golden window. The higher lithium prices climb, the more investment income Tianqi confirms over the next two years—but after 2030, that income will shrink by roughly two-thirds.

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