CHILE’S antitrust regulator FNE said Friday it would open an investigation into the effects on the market of Chinese miner Tianqi Lithium Corp.’s purchase last month of a 24 percent stake in SQM, one of the world’s top lithium producers.

The FNE’s decision comes three months after Chile’s government under former President Michelle Bachelet requested regulators investigate a potential fusion between the two lithium miners, alleging it would distort the global market for the key ingredient in the batteries that power electric vehicles.

Shenzhen-listed Tianqi Lithium said in May it would buy nearly a quarter of SQM from Canada-based fertilizer company Nutrien Ltd. for US$4.1 billion.

“In our investigation, the FNE will seek to verify, or dismiss, whether anti-competitive risks in Chile ... are plausible, and of a magnitude that makes them relevant,” the FNE said in a statement.

Tianqi Lithium said that it will continue to cooperate with regulators.

“We don’t believe this transaction implies competitive risks, but obviously the FNE needed more time to complete its investigation,” Tianqi Lithium legal adviser Claudio Lizana said.

The sale, if approved by regulators, would leave Tianqi Lithium just shy of a controlling stake in SQM and likely entitle the company to appoint three seats on its board.

Chile development agency Corfo, which oversees SQM’s lithium leases in the Salar de Atacama, said in a complaint filed with the FNE in March that the deal would give Tianqi Lithium and SQM control of 70 percent of the global lithium market.

Tianqi Lithium’s interest in SQM comes as China aggressively promotes electric vehicles to combat air pollution and help China’s domestic carmakers leapfrog the combustion engine to build global brands.

The FNE said information gathering to determine admissibility of the case was insufficient to gauge the antitrust risks, prompting its decision to launch a full investigation.

“There is no time limit to determine the duration of the investigations the FNE conducts,” the statement said.

The timing may prove critical. Chinese and Indian regulators have given Nutrien 18 months from Nov. 2, 2017, to offload its stake in SQM to meet regulatory requirements after its merger with a rival fertilizer company.

If the FNE determines the purchase presents antitrust risks, it can take the case before Chile’s TDLC antitrust court, or reach a settlement with the parties, which would also need the court’s approval. (SD-Agencies)