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Tianqi SQM: leave proof



The agreement signed between the National Economic Prosecutor, Tianqi and Albemarle would only be an extraction, as mentioned previously in the Senate Mining Committee. The Court of Defense's Defense Court did not give evidence, because they were not directly interested parties, that is, Tianqi and FNE. Corfu, managed by Salar de Atacama and has to guarantee its economic value, the agreement between Tianqi and FNE did not compete. Despite the concerns of 25% of the government and China's foreign trade, Tianqi's support has been palpable, as can be seen from the explanations given to "control" authorities. And as a forgotten backdrop, our DL 211 has defined it as one of the most important ways of allocating areas or market quotas.

Next Monday, December 3, sales of SQM shares in the 62,556,568 series (23.8% of the total capital of Tianqi to Nutrien, three of eight executives), that is, Canadian Fusion Fertilizer Company, PCS and Agrium, according to a fee of US $ 65 or $ 4,066 million. In the stock market, the value of this shareholding is around US $ 2,600 million, or 35% lower. The bidder Tianqi has reduced the market value by 50% to $ 4.7 billion, as it did the SQM bid for May. Why Tianqi continues to open the Hong Kong Stock Exchange and US $ 3.5 million debt to finance the operation, to set the maximum amount of Nutrition fines, of $ 325 million, according to its prospection?

No presentation

The SQM transaction between Tianqi and Nutrition will not be accepted US Federal Trade Commission (US FTC) for its competitive implications. This was only February February last year, to mention the aforementioned merger in order to sell two fertilizer plants located in that country, but this resolution was not resolved with the problem of lithium, problems that would occur a month later, this May, Tianqi's proposal with SQM this May. Therefore, it could be said that the United States States have freely competing authorities that have accepted this purchase.

Distribution of the global market

Tianqi is a member of American Albemarle, the world's largest lithium reservoir through Talison A joint venture Greenbushes, Australia's lithium extraction agreement, and land distribution in lithium-related lands. This global agreement has been officially announced US Securities and Exchange Commission (US SEC) In the month of 2014, when agreed upon by the Shareholders' Agreement, in the same regulatory body, it was explicitly made two documents available on the official website US SEC.

According to United States loyalty law, a territorial distribution agreement can not be implemented, even if it is outside the country. This law does not impose a type of asset or a minimum level of purity, but essentially, the coordination of the avoidance of competition. When doing the information US SEC Nature agreements, of course, do not accept any responsibility from the point of view of free competition.

Both US Department of Justice (US DOJ) as the US FTC Currently, the lithium is informed of the key information about this territorial treaty regarding the distribution of the market, and the type of action that is being followed is unknown. Both departments are in charge of the rules that are in line with US antitrust rules Sherman Law of 1890 and Federal Trade Commission Act of 1914, Among other provisions, it prohibits the distribution of markets, and Clayton Act of 1914, It reduces the cross-participation and its competitive effects.

The Office of the National Economic Prosecutor's Office (FNE), Tianqi and Albemarle, would only be released, as the Senate Mining Commission said in February. The Court of Defense of the National High Court (TDLC) did not give evidence, because they were not directly interested parties, that is, Tianqi and FNE. Corfu, managed by Salar de Atacama and has to guarantee its economic value, the agreement between Tianqi and FNE did not compete. Despite the concerns of 25% of the government and China's foreign trade, Tianqi's support has been palpable, as can be seen from the explanations given to "control" authorities. And as a forgotten backdrop, our DL 211 has defined it as one of the most important ways of allocating areas or market quotas.

Chinese intervention

Among the holdings of Talison (Tianqi and Albemarle) in Greenbushes (Australia), Salar de Atacama, Chile (SQM and Albemarle exploitation) is the raw material used in the world's lithium, 68% of lithium compounds. and in different concentrations. The union of three major players, through cross-investments and together with businessesBy controlling the two main lithographic reservoirs, not only the negative effects of the latest lithium consumers, it would be the only lithium buyer in Chile to only damage economic interests.

China's impact is evident: 50% of the world's lithium consumes it in that country; In this case, the sale of electric vehicles for 2017 was also up by 49%, which is the great future growth in lithium demand. The latter, in the global automotive market, had a total of 1.2 million units of 97 million euros, although 2027 will reach 20 million. Chinese car sales accounted for 28 million units in 2016, 18 million euros and 5 million euros in Japan.

Tianqi is part of a Chinese state strategy that aims to reinforce the control over raw material that is essential for the development of electromobility. Larger market transparency in the lithium increases the problem.

If we add above above together with businesses China is pushing to enter markets, as it often enters the automobile industry. For this reason, I think Tianqi SQM is not a financial liabilities investment, FNE, Corfo and TDLC. It accepts an agreement with effective behavioral restrictions, which lasts for six years. It is, but the Chinese state in the global strategy of capitalism.

American dream

Corfo Albemarle began an arbitration in Salar de Atacama to stop the planned deployment; Albemarle led a triptych of Talison's production along with Tianqi, and this month, he has approved a new Mineral Resource A joint venture Lithium (Wodjina) in the Australian market; Tianqi SQM would enter as a controller controlling it; All of the above, in the context of China, does not refuse its policies together with businesses Despite the demands of the United States and Europe, largely the main consumer of lithium. Is not it a common strategy for coordinating the lithium market designs?

In particular, the response from the United States authority authorities is expected, particularly in the case of Albemarle, Tianqi and SQM's openness in the United States – in this scenario, contrasting the statements and evidence of all the participants, as provided by the information US SEC. Chile has let go of it in lithium market and find out more about the immunity of antimonopoly and the production of Salar de Atacama's vehicle to establish a lithic cartel. .

The US authorities are expected to intervene soon and expects a 23.77% of the Tianqi SQM to eradicate a purchase, but with the start of the lithium cartel, apparently, with all its consequences, conversely unfortunately in Chile.

In the end, turning to the initial question, why does Tianqi continue? He would surely expect the signing of posters lithium, although the market does not share his expectations.

  • The content expressed in the column of this opinion is the exclusive responsibility of its author and does not necessarily reflect the editorial line or position Counter.

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