(Adds Tianqi reaction and context)
SANTIAGO, Oct 11 (Reuters) – Chile’s Constitutional Court on Thursday suspended a deal allowing the sale of a coveted stake in lithium producer SQM to China’s Tianqi Lithium Corp after agreeing to hear arguments in a lawsuit filed by the Chilean miner’s controlling shareholder.
The lawsuit, filed the previous day by SQM’s controlling shareholders, alleges that Chile’s antitrust court failed to follow due process when it approved a settlement between Tianqi and regulators allowing the Chinese miner to purchase a 24 percent stake in the world’s No. 2 producer of lithium.
Tianqi said in a statement that the court’s decision to review the appeal by SQM’s controlling shareholders was “purely a formality.”
“What comes now is a discussion about the admissibility of the lawsuit, in which we will put forward solid arguments to see the suit thrown out,” Tianqi said in the statement.
The Constitutional Court said it would hear arguments in the case on Oct. 22.
Pampa Calichera, Potasios de Chile and Global Mining – which together control a majority stake in SQM – asked the court on Wednesday to “urgently suspend” the agreement between regulators and Tianqi, saying the deal had been struck “practically in secret.”
The settlement, approved last week, is intended to limit the exchange of commercially sensitive information between Tianqi and SQM.
Before its approval, SQM had objected to the deal on the grounds it did not go far enough to limit Tianqi’s access to corporate secrets and sensitive information.
Tianqi’s interest in acquiring the stake in SQM comes as Beijing is aggressively promoting electric vehicles to combat air pollution and help China’s domestic carmakers leapfrog the combustion engine to build global brands.
The agreement between Chile’s antitrust regulator and Tianqi stipulates that the Chinese miner cannot name any of its executives or employees to SQM’s board, and requires it notify regulators of any future, lithium-related deal struck with either SQM or rival and top lithium producer Albemarle.
Chile’s antitrust regulator launched an investigation in June, shortly after Tianqi said it would buy one fourth of SQM for $4.1 billion, giving it a stake in one of the world’s top producers of lithium, a key ingredient in the batteries that power everything from cellphones to electric vehicles.
(Reporting by Fabian Cambero, writing by Dave Sherwood; editing by Jonathan Oatis)