Chris Berry, a New York-based energy metals analyst and founder of House Mountain Partners LLC, said surging lithium prices will fuel a multibillion-dollar rush of deals, with China expected to lead the way, Bloomberg News reported March 21.
"You'll see elevated activity this year driven mainly by the Chinese," Berry said, adding that consolidation in the sector is starting.
A source familiar with the matter told Bloomberg that China's Ganfeng Lithium Co. could raise about US$1 billion from its planned Hong Kong listing and use the proceeds for an acquisition spree. A company official, however, told Bloomberg that the IPO remains subject to regulatory approvals and the number of shares and proceeds are not yet finalized.
Another potential Chinese lithium deal is Tianqi Lithium Industries Inc.'s planned acquisition of a 32% stake in Sociedad Quimica y Minera de Chile SA, or SQM, though the deal is being blocked by Corfo on the grounds that it may give China an unfavorable advantage in securing resources for developing electric vehicles and would "gravely distort market competition." Sources said Tianqi is also looking at a Hong Kong share sale that could rake in up to US$500 million for the company.
The sale of the SQM stake is part of the conditions Chinese and Indian regulators set to approve the merger of Potash Corp. of Saskatchewan with Agrium Inc., now held by the merged entity Nutrien Ltd. Chile is seeking to block the divestment to any Chinese company amid fears of Chinese domination in the lithium sector.