In the case of the State Economic Prosecutor's Office, the agreement signed between Tianqi and Albemarlu would be limited to the extractive industry, as mentioned above by the Senate Mining Commission, which has proved to be incorrect. The evidence submitted by the competition court was not taken into account as it came directly from the interested parties, namely Tianqi and FNE. Corfo, which manages Salar de Atacama and ensures its economic value, the agreement between Tianqi and FNE did not compete with it. Regarding the government and its concerns about 25% of the total amount of Chilean foreign trade with China, Tianqi's support has been evident, as is evident from the explanations given to its authorities for the "verification" of this operation. And, as a forgotten background, our own DL 211 is defined as one of the most severe types of behavior that gives zones or market shares.
On the following Monday, December 3, Tianqi sells 62,556,568 series shares SQM (23.77% of its total capital with three directors of eight) Nutrien – a company born of the merger of Canadian fertilizers PCS and Agrium – at USD 65 per one shares or USD 4,066 million. At the stock exchange, this membership value is currently around $ 2,600 million, or 35% lower. The tenderer, Tianqi, has downgraded its market value by 50% to US $ 4,700 million since it offered SQM last May. Why does Tianqi continue to open on the Hong Kong Stock Exchange and USD 3.5 billion to finance this operation, with a maximum fine for Nutrien for non-implementation, amounting to $ 325 million, according to its prospectus, is temporary?
The final transaction between Tianqi and Nutrien for SQM was not submitted for approval US Federal Trade Commission (US FTC) the effects of competition. It was expressed only last February in relation to the abovementioned merger to demand the sale of two fertilizer factories located in the country, it should be noted that this resolution has nothing to do with the lithic problem, which will become apparent a few months later, in May of this year, with Tianqi SQM proposal. Therefore, it could be said that the United States Free Competition Authorities have approved this purchase.
Global market breakdown
Tianqi is a joint partner of the American Albemar in the largest lithium deposit in the world with Talison joint venture related to the lithium mining contract in Greenbush, Australia, and one of the global distribution markets for the lithium market associated with this extraction. This global agreement was officially announced US Securities and Exchange Commission (US SEC) when in 2014, and then there was an agreement on the same regulatory authority, by agreeing on a Shareholder Agreement that clearly articulated it, both documents available official website US SEC.
Under United States antitrust law, a market-based territorial distribution agreement, even out of state, can not be implemented. The subject matter of this law does not apply to the type of goods agreed upon by a territorial or mineral purity, but the fund concerned: coordination to avoid competition. The fact that he was informed US SEC Such agreements are obviously not covered or can not be considered as confirmation from the point of view of free competition.
Both US Department of Justice (US DOJ) as US FTC they are now officially aware of this territorial agreement on the distribution of the global lithium market, and the actions they will take will not be known. Both departments are responsible for complying with the US antitrust rules, which were born with Sherman's Law in 1890 and Federal Trade Commission Act, 1914, which inter alia prohibits market sharing, and The Clayton Act of 1914 which limits cross-border participation due to its anti-competitive effects.
In the case of the State Economic Prosecutor's Office (FNE), the agreement signed by Tianqi and Albemarle would only be mining, as stated by the Senate mining commission in October last year, and this is flawed. Evidence submitted by the TDLC was not taken into account as it came directly from the interested parties, namely Tianqi and FNE. Corfo, which manages Salar de Atacama and ensures its economic value, the agreement between Tianqi and FNE did not compete with it. Regarding the government and its concerns about 25% of the total amount of Chilean foreign trade with China, Tianqi's support has been evident, as is evident from the explanations given to its authorities for the "verification" of this operation. And, as a forgotten background, our own DL 211 is defined as one of the most severe types of behavior that gives zones or market shares.
Between Greenbush, Australian deposits (using Tianqi and Albemarle Talison and Salar de Atacama, Chile) (used by SQM and Albemarle), 68% of the world's lithium is produced as a raw material used in various lithium compounds and in different concentrations. A possible union of three key players through mutual investments and joint venturesBy controlling the two largest global lithium deposits, it would not only blend oligopolies with negative consequences for end users, but would also become the only buyer of lithium in Chile, which could only harm its economic interests.
China's influence is evident: 50% of the world's lithium consumption is in the country where 49% of electric vehicles were sold in 2017, which is a place where there is strong litian demand in the future. Although in the last world automotive market it was 1.2 million units more than 97 million, by 2027 they reach almost 20 million. In 2017, automobile consumption in China was 28 million, followed by 18 million dollars and Japan 5 million passengers.
Tianqi is part of China's national strategy, which aims to strengthen control over raw materials that can be key to the development of electric mobility. The lack of transparency in the lithium market only raises the problem.
If we add the above role joint ventures the conditions that China is trying to access its markets that accidentally include the car industry, then it would clearly be clear that this Tianqi operation SQM does not have a passive financial contribution as a whole, as FNE, Corfo and TDLC seem to believe in accepting an agreement with ineffective behavioral restrictions that also expires after six years. Rather, it is part of China's global strategy of state capitalism.
Corfo was forced to open an arbitration court with Albemarl on its lease agreement, Salar de Atacama, which will stop its planned expansion; Albemarle, in parallel with Tianqi, has led the triple production of Talison products and agreed with Mineral Resources, a new joint venture from Lithium (Wodjina) in Australia, bearing in mind their commercialization; Tianqi enters SQM as de facto co-regulatory, stating that it is not in control; all of the above with regard to China, which does not abandon its policy joint ventures which is in spite of the requests of the United States and Europe, and is by far the main consumer of lithium. Is not it a common strategy to better coordinate the design of the lithium market?
It is precisely this response that is expected from the United States anti-monopoly authorities, since Albemarle, Tianqi and SQM's company play a key role in this scenario, taking into account all the relevant and contrasting serious evidence as well as the information provided US SEC. Chile actually abandoned in practice to really investigate what is going on in the lithium market and, moreover, gives antitrust immunity and lends the Salar de Atacama a productive vehicle in order to eventually consolidate a genuine Lithian cartel around the world.
It is hoped that the US authorities will soon interfere and not only impose an obligation to withdraw Tianqi's potential acquisition of 23.77% of SQM, but will face a lithium cartel at an initial stage, as obviously with all its consequences, as opposed to what was saddened in Chile.
Finally, returning to the original question, why does Tianqi continue? Because he probably expects a litian ban to be combined, although the market does not meet his expectations.