Rio Tinto abstained from its $5 billion stake in SQM on its Jadar project, which could meet 10 per cent of global lithium demand

SMM1: Rio Tinto Group (Rio Tinto Group) has withdrawn from Soc., one of the world's largest lithium producers, according to people familiar with the matter With a bid for a stake in Quimica & Minera de Chile SA (SQM), the company is looking for other ways to catch up with the boom in electric vehicles.

Rio Tinto, after studying the SQM database, decided not to be Nutrien Ltd., according to a person familiar with the matter, who declined to be named The SQM Information Research Database, which owns 32 per cent of the shares, offers, but other strategic bidders are still interested in holding. It is understood that Nutrien's stake in SQM is priced at about $5 billion.

Representatives of Rio Tinto, Nutrien and SQM have yet to comment on the news.

By PotashCorp (Potash Corp. of Saskatchewan Inc.) Recent and Agrium Inc. Nutrien, the Canadian company formed by the joint venture, is currently selling the stake in SQM to meet the conditions imposed by Indian regulators in approving the joint venture portfolio. Earlier, people familiar with the matter said in November that Rio had sought feasible advice from companies such as (Credit Suisse Group AG), the Credit Suisse group, on the feasibility of bidding for a stake in the company.

Lithium, a key element in electric car batteries, has tripled in price since 2015. BHP Billiton (BHP Billiton Ltd.), the world's largest mining company, approved a $43 million project in September 2017 to produce nickel sulfate, one of the elements of lithium-ion batteries. Glencore also plans to double cobalt production over the next two years.

Rio Tinto shares rose 1.1 per cent to 4138 cents in London on Jan. 11, their highest level in more than six years. Over the same period, rival BHP Billiton (BHP Billiton Ltd.) followed Australia's benchmark index down and closed Thursday in Sydney at A $79.25. In addition, the share prices of lithium-ion producers, including Galaxy Resources, have fallen.

London Sanford C. Bernstein Ltd. Analyst Paul Gait said: "this is a good move and welcomed by shareholders. Discipline is maintained and shareholder money does not move to the top of another cycle of acquisitions. "

Jean-Sebastien Jacques, the company's chief executive, told investors at a forum in Sydney last month that Rio's copper and aluminium products were benefiting from the burgeoning electric car industry, but were still evaluating other opportunities. The company is currently studying and developing the Serbian lithium mine project, known as Jadar), which can meet 10 per cent of the world's lithium demand and is scheduled to start production in 2023.

"Rio Tinto may have learned more about the lithium industry after seeing the data room, and the results of this exercise will also contribute to the development of Jadar," Gait said.

Rio Tinto's venture capital division, led by Andrew Latham, a former trader in Xstrata's (Xstrata Plc), is evaluating investments and partnerships outside Rio's core portfolio and is also exposed to green technology. Nutrien's CEO Jochen Tilk said in October that it had a "strong interest" in SQM shares because investors were looking to invest in lithium-ion assets in anticipation of a sharp increase in electric vehicles.

Evy Hambro, who runs BlackRock's (BlackRock Inc.) World Mining Fund (World Mining Fund), said in September that electric vehicles were booming and mining companies needed to be wary of buying assets at exorbitant prices.

Sanford C. Bernstein Ltd. In a January 5 report, investors are urging the biggest miners not to repeat the mistakes of the past after the acquisition failed, with lithium prices likely at the top of their price cycle. Adding major deals to lithium mines could increase the crisis of confidence.

In addition, although Nutrien is SQM's largest shareholder, Chilean businessman Julio Ponce gained control of SQM through a series of voting shares held by holding companies. Ponce is also in a bitter contract dispute with Chilean authorities, who are urging it to relinquish control. Last month, Ponce agreed to certain conditions by the Chilean authorities in order to restart negotiations on a mining licence for SQM at the (Atacama) Salt Farm in Atacama.

Translated by SMM Xu Huimei from Bloomberg