(Yicai) June 4 -- Tianqi Lithium is trying to stop the setting up of a joint venture by Sociedad Química y Minera de Chile, in which Tianqi is a major shareholder, that will transfer control of the development of the Atacama Salt Lake area, to which SQM owns the mining rights, to a third party, impacting the Chinese lithium giant’s economic interests.

Tianqi ordered its Chilean lawyers at the end of last month to request the Chilean Financial Market Commission to instruct SQM to convene a special shareholder meeting over the matter, or to take all necessary preventative and corrective measures, Chengdu-based Tianqi said on June 2. SQM have been given until June 3 to reply but no feedback has been received so far.

SQM, in which Tianqi purchased a 23.7 percent stake in 2018 for USD4 billion, is linking arms with copper mining firm National Copper Corp. of Chile, also known as Codelco, to set up a JV that will develop the Atacama Salt Lake area, which is the third-largest salt flat in the world.

According to the non-binding deal penned on May 31, Codelco will own a majority stake of 51 percent in the JV, with SQM holding the rest, meaning that Santiago-based SQM would lose control of its core lithium business, Tianqi said. It also means that Tianqi’s returns from its investment in SQM will be reduced and its voting rights in the company will be affected.

Transactions related to the non-binding deal are due to be finalized by Jan. 1, 2025 at the earliest, it added.

Tianqi, whose holdings in SQM are now around 22.1 percent, said that it will continue to strive for SQM to hold a shareholders’ meeting to discuss its partnership agreement. But, if there are no responses from SQM and the commission, it is not ruling out other forms of legal action that it may take to protect its rights as a shareholder.

Tianqi’s share price [SHE: 002466] closed up 0.2 percent today at CNY36.30 (USD5). Yesterday it finished the day up 0.4 percent.

Editor: Kim Taylor