Tianqi Lithium, one of the "lithium mining giants" with a market capitalization exceeding 80 billion yuan, has recently been active in the capital markets with a series of significant moves. On February 4, the company disclosed multiple announcements concerning equity disposals and fundraising plans, drawing widespread market attention.

Regarding equity disposals, Tianqi Lithium plans to opportunistically divest up to 1.25% of SQM's Class A shares, representing a long-term equity investment with a book value of approximately 1.434 billion yuan, along with its equity stake in CALB valued at 459 million yuan. The total value of these two disposals amounts to roughly 1.9 billion yuan.

Concurrently, Tianqi Lithium intends to raise over 5.8 billion Hong Kong dollars through the placement of new H-shares and the issuance of convertible corporate bonds. These funds are earmarked for the company's strategic development within the lithium sector.

Notably, prior to these announcements, a final ruling was issued in the operational dispute concerning the world's largest lithium salt flat. The Supreme Court of Chile rejected the appeal filed by Tianqi Lithium's subsidiary, Tianqi Chile.

It is understood that in December 2018, Tianqi Lithium became the second-largest shareholder of Chilean company SQM by acquiring a 23.77% stake. The dispute over the operation of the world's largest lithium salt flat began in December 2023.

Amid Chile's policy of lithium resource nationalization, SQM initiated a strategic collaboration with the state-owned Codelco at the end of 2023. They signed a Partnership Agreement in 2024, planning to jointly develop the core lithium business of the Atacama Salt Flat through a newly established joint venture.

Analysis reveals that from 2018 to 2024, Tianqi Lithium recognized substantial investment income from SQM, cumulatively approaching the 10 billion yuan mark.

Following the resolution of the dispute over the world's largest lithium salt flat, Tianqi Lithium faces several risks. These include the risk of SQM losing control over its core lithium operations, potential impacts on SQM's lithium business profits affecting Tianqi's investment returns and economic interests, and risks to Tianqi's rights in participating in SQM's corporate governance.

On the performance front, Tianqi Lithium forecasts a net profit attributable to shareholders of 369 million to 553 million yuan for 2025, representing a significant turnaround from a substantial loss the previous year. However, in the first three quarters of last year, the company's gross profit margin hit its lowest level for the same period since 2015.

According to Tianyancha, Tianqi Lithium's actual controller is Jiang Weiping, known externally as the "Lithium King of China." On the 2025 Hurun Rich List released last October, the Jiang Weiping family was listed again with a fortune of 26 billion yuan.

**Tianqi Lithium Announces Simultaneous Equity Disposals and Fundraising Plans**

On February 4, Tianqi Lithium disclosed an equity disposal announcement, proposing that the board authorize management to opportunistically divest part of its equity stakes in investee companies CALB and SQM.

Specifically, Tianqi Lithium plans to dispose of up to 20.2172 million shares of CALB, representing no more than 1.14% of CALB's total share capital. As of the announcement date, Tianqi Lithium holds these 20.2172 million CALB shares through its wholly-owned subsidiary Tianqi Lithium Hong Kong, indicating a potential full divestment of its CALB stake.

Regarding SQM, Tianqi Lithium also plans to dispose of part of its Class A shareholding, totaling no more than 3.566 million shares, which constitutes no more than 1.25% of SQM's total share capital.

Previously, starting December 26, 2025, Tianqi Lithium had already disposed of 748,500 SQM Class B shares held via Tianqi Lithium Hong Kong, representing 0.29% of SQM's total shares. As of the announcement date, Tianqi Lithium no longer holds any SQM Class B shares. However, through its wholly-owned subsidiary Tianqi Chile, it still holds 62.5566 million SQM Class A shares, representing a 21.9% stake.

Tianqi Lithium emphasized that this partial disposal of SQM Class A shares will not affect its board seats at SQM or substantially hinder its participation in SQM's corporate governance.

Based on closing prices on February 3, 2026, the book value of the CALB shares to be disposed is approximately 459 million yuan. The book value of the long-term equity investment corresponding to the SQM Class A shares earmarked for disposal is about 1.434 billion yuan, though the final proceeds from this portion cannot yet be determined. Rough estimates suggest the total value of these two equity disposals is around 1.9 billion yuan.

Tianqi Lithium stated that the purpose of these disposals is to enhance asset liquidity and usage efficiency, thereby better meeting the company's funding needs for operations and development.

On the same day, Tianqi Lithium also launched two fundraising initiatives. First, it plans to place 65.05 million new H-shares to eligible independent investors at a price of HKD 45.05 per share. Second, it intends to issue convertible corporate bonds with a total principal amount of 2.6 billion yuan.

The announcement shows that if all placement shares are fully subscribed, the gross proceeds are expected to be approximately HKD 5.861 billion. After deducting commissions and fees, the net proceeds from the placement are estimated at HKD 5.829 billion.

Regarding the use of funds, Tianqi Lithium explicitly stated they will be used to support the strategic development of the company and its subsidiaries in the lithium sector. This includes, but is not limited to, capital expenditures for project development and optimization, mergers and acquisitions of high-quality lithium mineral assets, with the remainder for supplementing working capital and general corporate purposes.

**Legal Dispute Over World's Largest Lithium Salt Flat Concludes with Defeat for Tianqi Lithium**

Prior to the announcement regarding the planned disposal of part of its SQM Class A shares, the dispute concerning the Chilean Atacama Salt Flat had reached a new stage.

SQM is a globally significant producer of products like potassium and lithium, headquartered in Santiago, Chile. It holds the mining operating rights for the Atacama Salt Flat in Chile, the world's largest lithium salt flat by reserves.

The Atacama Salt Flat is characterized by high lithium concentration, large reserves, mature extraction conditions, and low operating costs, making it a superior global salt lake resource and a key production area for lithium products.

Public information shows SQM was founded in the 1960s, initially as a Chilean state-owned enterprise, later controlled by the Ponce family, relatives of former President Pinochet. The Ponce family currently holds a 25.76% stake in SQM through Pampa Calichera, making them the largest shareholder.

Tianqi Lithium's connection with SQM dates back to 2016 when it acquired 5.5168 million SQM Class B shares for USD 210 million, representing 4.58% of SQM's Class B shares and 2.1% of total shares, marking its initial entry as an SQM shareholder.

In 2018, Tianqi Lithium significantly increased its investment, spending USD 4.066 billion to acquire 62.5566 million SQM Class A shares, representing approximately 23.77% of SQM's total shares, thereby becoming SQM's second-largest shareholder.

At the time, Tianqi Lithium stated that while it would not obtain control or consolidate SQM's statements, this non-controlling equity investment would provide sustained, stable, and favorable investment returns, diversify revenue sources, enhance overall risk resistance and sustainable competitiveness, helping to consolidate the company's industry position.

However, the calm was broken in December 2023. In that month, SQM and Codelco signed a non-binding Memorandum of Understanding regarding the operation and development of the Atacama Salt Flat from 2025 to 2060.

The two parties planned to establish a joint venture responsible for the mining quota of the Atacama Salt Flat area currently leased by SQM from Corfo, a Chilean government agency, and for project execution and global lithium sales.

In May 2024, Tianqi Chile, a wholly-owned subsidiary of Tianqi Lithium (acting as an SQM shareholder), through Chilean lawyers, submitted a request to the Chilean Financial Market Commission (CMF). It asked the CMF to require SQM to convene an extraordinary shareholders' meeting regarding the aforementioned transaction with Codelco, or take all other preventive or corrective measures the CMF deemed necessary.

In the same month, SQM and Codelco signed the Partnership Agreement, defining their rights and obligations. They planned to establish a partnership by merging Codelco's subsidiary, Minera Tarapacá, into SQM's subsidiary, SQM Salar.

But things did not go as Tianqi Chile hoped. In June 2024, the CMF issued a response disagreeing with Tianqi Chile's request. Subsequently, Tianqi Chile filed an administrative appeal with the CMF against this decision, asking for its revocation, but was rejected again.

In July 2024, Tianqi Chile filed a lawsuit with a Chilean court against the CMF's decision. In November 2025, the court ruled, dismissing Tianqi Chile's claims. Unwilling to accept this, Tianqi Chile promptly appealed to the Supreme Court of Chile.

In December 2025, SQM disclosed that it had completed its strategic collaboration with Codelco, and the joint venture name SQM Salar would be changed to Nova.

On January 27 this year, the Supreme Court of Chile issued a final judgment, upholding the lower court's ruling and rejecting Tianqi Chile's appeal.

On the same day, SQM disclosed that the prerequisite conditions for the merger of its subsidiary Nova with Codelco's subsidiary Minera Tarapacá SpA had been resolved, making the transaction under the previously disclosed Partnership Agreement effective.

Legal experts pointed out that the final defeat means the judicial and administrative avenues for Tianqi Lithium to block the SQM-Codelco cooperation are completely closed. After the final ruling, Tianqi Lithium has virtually no possibility of preventing the Partnership Agreement from taking effect. On one hand, the Supreme Court's judgment is the final decision within Chile's judicial system, leaving no room for further appeal. On the other hand, the prerequisites for the Partnership Agreement have been met, and the cooperation is already being implemented. As SQM's second-largest shareholder without a controlling stake, Tianqi Lithium finds it difficult to reverse the situation through internal governance mechanisms like shareholder votes. Furthermore, with the cooperation backed by Chile's lithium nationalization policy, Tianqi Lithium lacks a realistic basis for external intervention. A more feasible subsequent option would be to negotiate with relevant parties to optimize investment return terms, rather than attempting to block the agreement.

**Forecast Shows Significant Profit Turnaround, But Risks Remain After Dispute Resolution**

On the performance front, Tianqi Lithium recently reported positive news. According to an earnings forecast released at the end of January, the company expects to achieve a net profit attributable to shareholders of 369 million to 553 million yuan for 2025, a major turnaround from a huge loss of 7.905 billion yuan in 2024. Net profit after deducting non-recurring items also showed a significant turnaround, forecasted to be between 240 million and 360 million yuan.

However, behind this seemingly bright forecast, Tianqi Lithium is not without concerns. Data shows that in the first three quarters of last year, Tianqi Lithium's gross profit margin was 38.98%, the lowest for that period since 2015, and significantly lower than the 86.64% recorded in the first three quarters of 2023.

Apart from the pressure from the sharp decline in gross margin, the uncertainty surrounding its core overseas interests presents another major challenge the company must face.

In a progress announcement regarding the lawsuit filed by its subsidiary and the major contract of its investee company released in late January, Tianqi Lithium highlighted the risk of SQM losing control over its core lithium business.

Currently, SQM controls its lithium operations in Chile. According to SQM's public information, the prerequisite conditions for the Partnership Agreement have been met, and the partnership with Codelco is effective.

Although SQM's mining operating rights for the lithium business at the Atacama Salt Flat are expected to be extended from expiration in 2030 to 2060, and the authorized production quota for lithium extraction at the Atacama Salt Flat is set to increase between 2025 and 2030, from the effective date of the Partnership Agreement, the core lithium business of the Atacama Salt Flat will be majority-controlled by Codelco through the joint venture, and Codelco will consolidate the joint venture's financial statements starting from 2031.

Tianqi Lithium stated that, looking ahead, it is expected that from 2031 onwards, SQM will no longer possess control over its core lithium business in the Chilean Atacama region. The lack of control could lead to adjustments in SQM's strategic plans, prevent the effective implementation of existing plans, or affect SQM's sustainable development due to differences in decision-making efficiency and perspectives.

Simultaneously, impacts on SQM's lithium business profits could subsequently affect Tianqi Lithium's investment returns and economic interests.

According to SQM's previous announcements, although the Partnership Agreement stipulates that SQM will sign a revised contract with Corfo to increase the production quota by 300,000 metric tons of lithium carbonate equivalent (LCE) before 2030, there is uncertainty regarding whether this quota can be fully achieved and the potential economic benefits.

Coupled with the uncertainty of costs associated with potential additional lithium business quotas for the joint venture from 2031 to 2060 after the transaction's completion, and considering Codelco will obtain over 50% of the interests in SQM's Chilean Atacama Salt Flat assets, SQM's future profit changes might decrease, thereby affecting Tianqi Lithium's investment income and dividends from SQM. There is a possibility that impairment provisions for this investment might be required in the future.

Additionally, Tianqi Lithium's corporate governance rights in SQM could be weakened. Based on the initial investment agreement, Tianqi Lithium could appoint three independent directors to SQM's board.

However, according to the Partnership Agreement disclosed by SQM, SQM intends to transfer assets, contracts, employees, and resources related to the business (but not currently part of the joint venture) to the joint venture. It plans to establish the joint venture with Codelco at the subsidiary level and agree on relevant governance arrangements for the joint venture.

Under these circumstances, it cannot be ruled out that the legitimate rights and oversight power of the directors appointed by Tianqi Lithium at the SQM corporate level might be diminished. This could potentially prevent the effective protection of the interests of Tianqi Lithium as the second-largest shareholder, and possibly other minority shareholders.

Indeed, SQM's importance to Tianqi Lithium is evident. According to company annual reports and announcement data, from 2018 to 2024, Tianqi Lithium recognized investment income from SQM as follows: 536 million yuan, 403 million yuan, 175 million yuan, 760 million yuan, 5.641 billion yuan, 2.931 billion yuan, and -885 million yuan, respectively. For the first half of 2025, it recognized 235 million yuan, bringing the cumulative income to 9.796 billion yuan.

Notably, in 2022, when lithium prices were at a peak, the 5.641 billion yuan investment income from SQM accounted for 23% of Tianqi Lithium's net profit attributable to shareholders that year. This proportion increased further to 40% in 2023.

Conversely, during the lithium price downturn in 2024, SQM reported revenue of 32.315 billion yuan and a net loss of 2.885 billion yuan. Tianqi Lithium recognized an investment loss of -885 million yuan from SQM, which became one of the primary reasons for Tianqi's loss that year.

In its 2024 annual report, Tianqi Lithium mentioned that SQM disclosed in its Q1 2024 results that the Santiago Court in Chile had ruled in April 2024 on tax litigation for the 2017 and 2018 fiscal years, overturning the conclusion of a previous ruling by the Tax and Customs Court in November 2022. This led SQM to recognize approximately USD 1.1 billion in income tax expenses, correspondingly reducing its net profit by about USD 1.1 billion. Consequently, Tianqi Lithium's recognized investment income from this associate saw a significant decline in 2024 compared to 2023.

Looking back, Tianqi Lithium has previously taken measures to address funding pressures. In 2019, to alleviate financial strain, Tianqi Lithium's subsidiary Tianqi Hong Kong entered into a Variable Prepaid Forward (VPF) contract with Morgan Stanley. Under the contract, Tianqi Hong Kong pledged a portion of its SQM Class B shares to Morgan Stanley to secure a three-year loan. It also purchased put options equivalent to the pledged shares as a guarantee for loan repayment and sold call options on the same number of shares to hedge part of the financing costs.

Facing geopolitical factors and risks associated with deglobalization, Tianqi Lithium mentioned in its 2025 interim report that the company would proactively identify, adapt to, and seek changes. It aims to enhance risk awareness and forecasting capabilities while continuing to comprehensively gather information and improve analytical integration skills to firmly make management decisions and adaptive strategies representing the company's interests. Furthermore, the company will continue seeking compatible, mutually beneficial strategic partners to expand its layout of high-quality lithium resources and explore strategic collaborations. Simultaneously, it will continue cooperating with leading global mining companies to explore new lithium resource development opportunities, thereby expanding its portfolio of high-quality lithium assets. While ensuring ecological safety, the company will also accelerate the pace of domestic lithium resource development and further optimize its industrial chain layout.

With the dispute over the Chilean Atacama Salt Flat concluded, the question remains whether Tianqi Lithium can achieve sustainable development in a complex and volatile market environment.