(Bloomberg) -- China’s Tianqi Lithium, the country’s largest producer, proposed a deal to purchase a 23 percent stake in Soc. Quimica & Minera de Chile SA, one of its biggest competitors.
Tianqi has signed a non-binding offer with Soc. de Inversiones Oro Blanco SA to bid for its stake in Soc. de Inversiones Pampa Calichera SA, which in turn holds 23 percent of SQM, the Chinese producer said Thursday in a statement. It didn’t disclose the value of its planned offer.
Santiago, Chile-based SQM, which also produces fertilizers, has a market value of $7.2 billion and is the world’s second-biggest lithium producer, according to data compiled by Bloomberg Intelligence. Tianqi is the third-largest supplier in the $1.4 billion market, the data show.
Tianqi, based in Shehong, Sichuan province, saw its shares advance as much as 4 percent in Shenzhen before closing 0.7 percent higher.
SQM didn’t immediately respond to an e-mailed request for comment. Oro Blanco flagged in December it was inviting bids for its interest in Pampa Calichera. Li Bo, secretary at Tianqi Lithium, wasn’t immediately available for comment.
Lithium producers are seeking to expand production amid booming demand driven by rising sales of electric vehicles, which require the metal for rechargeable batteries. Tianqi this week approved plans to construct a A$400 million ($305 million) plant in in Australia to process output from Greenbushes, the world’s largest hard rock lithium mine.
“They are trying to address a problem which a lot of lithium producers have at the moment, which is the lack of access to raw material,” Andrew Miller, an analyst at London-based Benchmark Mineral Intelligence, said by phone from Melbourne. They’re also trying to benefit from the growth of the battery business, Miller said.