BEIJING, March 8 (Reuters) - China’s Tianqi Lithium Corp plans to appoint three members to the board of Chilean miner SQM who will be “fair” and “responsible toward shareholders”, Tianqi Chairman Jiang Weiping said on Friday.
Tianqi’s $4.1 billion purchase of a 23.77 percent stake in SQM, the world’s second-biggest producer of lithium, a metal used in electric vehicle batteries, went through in December. The purchase drew scrutiny from Chilean regulators and opposition from SQM’s majority shareholder Pampa Group after it was announced in May 2018.
Tianqi, based in Chengdu, is not entitled to any of SQM’s lithium production but has secured three seats on the eight-member SQM board.
“We have to put the interests of the shareholders first,” Jiang said in an interview in Beijing, declining to identify the chosen board candidates, who will be announced next month.
Under a deal with anti-trust regulators, Tianqi cannot appoint any of its executives or employees as SQM directors.
Jiang, a delegate from Tianqi’s home province of Sichuan at the ongoing National People’s Congress, also revealed he had been in contact with former SQM chairman Julio Ponce Lerou, who controls Pampa Group, “a few times” but had yet to sit down for formal discussions over SQM’s strategy.
“Now we are all in one company, all in the same boat. I believe we will get along with one another,” said Jiang.
Since peaking at $15,750 per tonne in June last year, lithium carbonate prices LIC-FOBSA-BMI have fallen some 17.5 percent to around $13,000 a tonne, but Jiang, who remains bullish on growth in the electric vehicle sector in China, said this had not changed his view on the SQM stake purchase.
“I think last year and the year before the lithium price may have been too high,” Jiang said. “It’s impossible for extremely high profits to last,” so it’s natural that prices have since returned to a more sustainable level, he added.
Tianqi’s Shenzhen-listed shares have shed more that 40 percent since the acquisition of the SQM stake, while SQM’s shares have fallen more than 30 percent.
Jiang attributed the share decline to uncertainty stemming form the ongoing trade war between China and the United States and other external factors.
$1 = 6.7221 Chinese yuan renminbi Reporting by Tom Daly