TIANQI Lithium Corp. is happy for now with its stake in rival SQM and is working to deepen business ties with the Chilean lithium producer, the Chinese company’s CEO said.

Tianqi, which lists shares in Shenzhen, last December bought a 23.8 percent share in SQM from Canadian fertilizer company Nutrien for US$4.1 billion, the largest deal in history for a lithium asset. Lithium is a key material used to make electric car batteries.

“We are happy for now. We are still trying to understand the business better and find a better way to help,” Tianqi CEO Vivian Wu said Tuesday.

Wu said she traveled earlier this month to Chile’s Atacama desert, visiting SQM’s lithium brine operations and meeting with the company’s executives. During that trip, Wu met with representatives from Pampa Group — SQM’s largest shareholder — including its head, Julio Ponce Lerou, who initially opposed the Tianqi-SQM deal.

The Pampa relationship “has come a long way in the last six months,” Wu said. “We feel very good about it.”

SQM said last month it would delay a key expansion of production capacity from the Atacama until the end of 2021 amid a slump in prices for the battery metal. Wu called the delay “understandable.”

“We understand for any new project expansion, it takes time,” Wu said, adding she “fully supports” SQM’s plans to sell more lithium in Chile’s domestic market.

The London Metal Exchange (LME) on Monday said it would partner with Fastmarkets to provide a reference price for its planned new lithium contract.

Wu said the contract is “going to be helpful for us” and should bring more clarity to the market. “This is going to help reduce [lithium] price volatility,” said Wu.

Spot lithium prices in China have dropped double digits since January as the country moves to phase out electric vehicle subsidies. Despite the drop, Wu said she believes Chinese prices will stabilize, benefiting Tianqi.

“The lithium industry is solid and strong,” she said. “The industry is just taking its time to adapt.” (SD-Agencies)