Joint venture between first and third lithium actor puts pressure to SQM
Rockwood, which in Chile controls Chilean Society of Lithium, bought 49% of Talison
An operation between the first and the third world player of the lithium industry in terms of production capacity, threatens to put the company at a disadvantage in these terms is second: Chile’s SQM.
Yesterday and after a failed attempt last year, the Rockwood U.S., which in Chile controls the formerly called Chilean Society of Lithium (SCL), announced the signing of a joint venture with China’s Chengdu Tianqui which offers access to 49% of Australian property Talison Lithium, with a capacity of one hundred thousand tons leads this industry and places the local firm linked to Julio Ponce in second place with a capacity of 48 thousand tons.
“This operation involves a consolidation of the industry. Adding the interest in Talison, Rockwood would then be larger than SQM “said Daniela Desormeaux, SignumBOX consultant’s CEO, adding that Rockwood is the main competitor of SQM in lithium carbonate, as both the extracted mainly from the Salar of Atacama benefiting from the lower costs associated with this type of operation, which involves evaporation through the sunlight.-
Diversification
By contrast, in Chile, Talison has a project in development, although it has only increased production capacity has higher costs for lithium obtained from rock ore mined in Australia and further processed in China, resulting in punishment costs.
However, as President and CEO of Rockwood, Seifi Ghasemi said “With this acquisition, we have secured access to another significant lithium reserves, in addition to our current resources in the United States and Chile.”
Indeed, according to analysts this is the factor that puts pressure to SQM, which from the first quarter of 2014, when this operation is completed, would be a limited access to raw materials, before to a possible limitation in the Salar de Atacama , where as Rockwood accessed from a contract with the Corporation for the Promotion of Production (CORFO), which owns the reservations contained in that area of the Atacama Region.
Market Access
Daniela Desormeaux added that the move by Rockwood also ensures access to a market inaccessible not only for them, but has also been complex for SQM.
By partnering with Tianqui Chengdu, which in 2012 blocked the original offer made on Talison, Rockwood ensures a direct route to the Asian giant market, as the Chinese company is currently producing Talison production.
Source: Diario Financiero
