China’s leading lithium company, Tianqi Lithium, recently released its financial report, forecasting a loss of 5.45 billion to 5.85 billion RMB in the first three quarters of this year. Behind the poor performance of the company lies the decline in lithium carbonate prices and its joint venture in Chile facing challenges related to “public-private cooperation”.
On the evening of October 24th, Tianqi Lithium issued its third-quarter report for 2024, expecting a loss of 320 million to 640 million RMB in the third quarter; and a total loss of 54.5 billion to 58.5 billion RMB in the first three quarters of 2024.
The financial report indicates that Tianqi Lithium’s performance decline is primarily due to fluctuations in the lithium product market. From the fourth quarter of 2023 to the third quarter of 2024, the market price of lithium products has shown a significant downward trend, leading to a sharp decline in the company’s lithium product sales prices and gross profit compared to the same period last year.
Furthermore, Tianqi Lithium stated that as of the date of the performance forecast announcement, its major affiliate, Sociedad Química y Minera de Chile S.A. (SQM), had not yet announced its financial report for the third quarter of 2024.
Public records show that Tianqi Lithium is China’s largest supplier of lithium new energy core materials and the world’s largest lithium ore producer.
In 2018, Tianqi Lithium acquired a 23.77% stake in the Chilean lithium mining company SQM for $4.1 billion. This company operates the Atacama lithium salt lake project with the world’s largest reserves. Regulatory agencies, competitors, and consumer groups are concerned that this transaction may lead Tianqi Lithium to almost monopolize the global lithium market.
In December 2023, SQM and the state-owned Chilean National Copper Corporation (Codelco) jointly announced that they had reached a memorandum of understanding to establish a government-controlled joint venture company to develop lithium resources together, with SQM’s lithium business being spun off into a joint venture with Codelco, which would hold a 50% plus one share stake. If this deal proceeds, Tianqi’s stake in the lithium joint venture will be diluted, limiting its influence over the company.
In April this year, Tianqi Lithium announced that it expects a net loss of 3.6 billion to 4.3 billion RMB in the first quarter of 2024. Previously, in 2019 and 2020, Tianqi Lithium incurred cumulative losses exceeding 7.8 billion RMB. From 2021 to 2023, Tianqi Lithium recorded profits.