Well there u Go - WHY
SQM seeks lithium partner to finance internationalexpansion
Bloomberg News | September 27, 2024
SQM is seeking a partner for its international operationsas the world’s second-biggest lithium supplier looks to step up its presenceoutside of home-base Chile, according to people familiar with the matter.
The Santiago-based firmis offering a minority stake in its recently formed international lithiumdivision as a way of financing investments, mainly in Australia, the peoplesaid, asking not to be named as talks are private.
The partner search, which is being run by JPMorgan Chase& Co., is at an early stage and is focused on investment funds andstrategic investors rather than other mining companies, they said.
SQM and JPMorgan declined to comment.
Soc. Quimica & Minera de Chile SA, as SQM is formallyknown, is looking to expand in top-producing lithium nation Australia, and gainfootholds in new frontiers such as Africa, as it prepares to relinquish amajority stake in its prized Atacama brine operations in Chile.
Taking a roughly 15% stake in the division would give aninvestor direct exposure to lithium assets as opposed to a capital increase bythe parent company, which also has iodine and fertilizer operations in Chile.Raising funds with a strategic investor may also be preferable to tappingmarkets at a time when the industry is grappling with low prices in a globalglut.
Fresh funds may help SQM expand its new Mt. Holland mineand develop the Andover project, both in Western Australia, as well as discovernew deposits around the world. In recent months, SQM agreed to join a lithiumproject in Sweden and entered an earn-in arrangement in Namibia.
In May, the company agreed to a deal withCodelco that would see the state copper behemoth take control of its Chileanoperations after 2030, when current licenses expire, in exchange for three moredecades of operations. The tie-up is part of Chile’s agenda to have more statecontrol in key lithium assets while boosting output in the shift away fromfossil fuels.
SQM isplowing ahead with expansions at its low-cost Atacama operations in a bet ongrowing market share as other producers curtail output and spending in responseto slumping prices.
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