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(Bloomberg) — A landmark lithium deal struck a year ago between SQM and Codelco is on course to be finalized before Chile’s general elections after securing a key antitrust approval.
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Chile’s competition agency, known as FNE, gave its preliminary clearance for an agreement that would see SQM relinquish a majority stake in its prized Atacama salt flat mine to state-owned Codelco in exchange for three more decades of operations. The FNE approval is subject to corporate governance measures that Codelco described as “standard.”
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Antitrust consent at home adds to approvals by similar agencies in Asia and Europe and puts the venture on track to be finalized in the second half of this year, Codelco said in a statement Thursday. That’s important given a new government will take office in March after elections starting in November, with the leading candidate, Evelyn Matthei, vowing to review the deal.
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The tie-up is part of current President Gabriel Boric’s policy of requiring state-owned companies to partner with private-sector firms in lithium areas deemed to be strategically important. Boric is also looking to double output.
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But all that is playing out as prices of the battery metal languish around four-year lows in an oversupplied market and amid global trade turmoil.
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In addition, there are key hurdles still to clear for the SQM-Codelco venture. China is yet to make a pronouncement — Tianqi Lithium Corp., a SQM shareholder, is fighting the tie-up in a local court, saying it lacks transparency and should go to a shareholder vote. An indigenous consultation process is also ongoing, while a green-light is pending from Chile’s nuclear energy commission, which must sign off on certain lithium deals.
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