Chile would not block a foreign takeover of lithium and potash producer SQM, Mining Minister Aurora Williams said on Sunday.
A stake in Chile-based SQM is up for grabs after an indirect shareholder, Oro Blanco, invited buyers in December to make an offer for its entire holding in Pampa Calichera.
Oro Blanco holds a little over 88 percent of Pampa Calichera, which in turn owns around 20 percent of SQM, a major producer of battery ingredient lithium and an important supplier of iodine and potash.
“Those are decisions to be made specifically by the company,” Williams said in an interview through an interpreter in Toronto during the annual Prospectors & Developers Association of Canada (PDAC) convention.
“In no way would we indicate to them or give our intentions as to how the company should be structured.”
The sale process comes after Julio Ponce, a former son-in-law of late dictator Augusto Pinochet, was forced to resign as SQM chairman last year after two separate scandals.
Canada’s Potash Corp of Saskatchewan already owns about 30 percent of SQM and adding a one-fifth stake may give it control, something Chief Executive Jochen Tilk has said he wants in Potash’s equity holdings.
Potash Corp was rebuffed before by political opposition to a foreign takeover when it attempted in 2013to gain majority control of ICL Israel Chemicals Ltd.
SQM’s access to vast nitrate and lithium reserves in northern Chile is expected to attract a number of suitors. SQM says it is the world’s largest lithium producer.
China’s CITIC CLSA Capital Markets Ltd and ICL are also believed to have interest in the Chilean company.
Any company operating in Chile would simply be expected to follow environmental, safety and labor standards, Williams said.
Chile, also the world’s biggest copper producer, sees meaningful recovery in prices in 2018, Williams said.
Chile’s copper output fell in January as the year-long rout in prices forced miners to scale back. Even so, Williams said the government continues to forecast Chile’s copper output level with last year’s 5.76 million tonnes.
By Rod Nickel in Toronto; Editing by Alan Crosby
Source: Reuters
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