Tianqi Lithium’s battle to defend its lithium assets has ended in failure—how should Chinese companies respond to resource nationalism?

The wave of resource nationalism has surged once again, compounded by across-the-board price hikes in critical mineral resources, requiring Chinese enterprises to promptly and swiftly adjust and adapt.

 

The world is bidding farewell to the “Great Oil Era” and entering the “Great Minerals Era,” with critical metal minerals emerging as a new battleground for strategic competition among nations. The focus of future energy geopolitics is also shifting from oil and gas resources to critical metal mineral resources.

 

From lithium batteries to wind turbines, and from transmission lines to energy storage systems, every stage of the global energy transition relies on critical metals such as silver, copper, lithium, cobalt, and nickel. These materials not only serve as carriers of energy and cornerstones of the industrial value chain but also play a decisive role in shaping the success or failure of the energy transition through price volatility and shifts in supply dynamics.

 

In 2025, the metals market began to show early signs of strength, and at the start of 2026 it entered a “boiling point” with no apparent buildup, ushering in an unprecedented historical rally as silver, copper, and aluminum successively surged to record highs.

 

Meanwhile, lithium carbonate—often dubbed “white oil”—also saw a volatile price trajectory at the start of 2026, with its main contract surging to as high as RMB 190,000 per ton before swiftly retracing to below RMB 150,000 per ton.

 

Against the backdrop of rising protectionist trends and a deteriorating geopolitical environment worldwide, the robust rally in critical metals has intensified competition for these resources, ushering in a resurgence of resource nationalism. This, in turn, poses new challenges to Chinese mining companies as they pursue global expansion.

 

On the evening of January 28, Tianqi Lithium announced that, on January 27 local time in Chile, its wholly owned subsidiary, Tianqi Chile, received a judgment from the Supreme Court of Chile upholding the ruling of the Chilean courts. The judgment dismissed Tianqi Chile’s earlier appeal to the Supreme Court and constitutes the final decision in this litigation.

 

This means that Tianqi Lithium’s lawsuit challenging the strategic partnership between Chilean chemical and mining company SQM and Chile’s state-owned copper giant has ended in defeat. Meanwhile, the merger of SQM’s lithium business with that of the state-owned copper company will take full effect, and SQM’s nationalization is set to significantly reduce the returns Tianqi Lithium derives from SQM.

 

In its announcement, Tianqi Lithium stated that it expects the court ruling in this litigation to have no material impact on its current-period profit; however, changes in SQM’s future earnings could decline, thereby affecting Tianqi Lithium’s investment income and dividend receipts from SQM. There remains a possibility that an impairment provision may need to be recognized for this investment in the future.

 

Photo caption: Tianqi Lithium issues an announcement on its lawsuit and significant contract developments.

Source: Tianqi Lithium

 

In fact,

SQM is the world’s second-largest lithium producer and has been granted by the Chilean government a quota to develop, process, and sell 2.2 million tonnes of lithium carbonate equivalent from the Atacama Salt Flat by December 31, 2030.

 

In 2018, Tianqi Lithium invested US$4.066 billion to acquire a 23.77% stake in SQM, becoming its second-largest shareholder. As of June 30, 2025, Tianqi Lithium still holds approximately 22.16% of SQM’s shares.

 

The origins of this lawsuit can be traced back to 2023. In April 2023, Chile’s former left-wing president, Gabriel Boric, announced a strategy to nationalize the country’s lithium industry, emphasizing that for projects of strategic national importance, Chilean state-owned enterprises must hold controlling stakes in public–private partnerships.

 

Against this backdrop, SQM and the Chilean state-owned copper company Codelco signed a Memorandum of Understanding (MoU) regarding the operation of the Atacama Lithium Salt Flat from 2025 to 2060. Subsequently, on May 31, 2024, the two parties formally executed a Partnership Agreement, under which they plan to establish a joint venture—controlled by Codelco—through a merger.

 

Tianqi Lithium contends that the transaction process failed to adequately safeguard the rights of minority shareholders and could undermine the company’s directors’ lawful rights and oversight authority at the SQM shareholder level, prompting it to launch a protracted campaign to protect its interests.

 

Tianqi Lithium previously disclosed that, starting in May 2024, Tianqi Chile has filed a series of lawsuits with the Chilean Financial Market Commission (CMF) and the Chilean courts, seeking to require that the merger between SQM and Codelco be subject to approval by an extraordinary general meeting of SQM’s shareholders; however, all such claims have been dismissed.

 

Caption: Tianqi Lithium has endured a lengthy litigation process.

Source: Bloomberg

 

Finally, on November 21, 2025, Tianqi Lithium filed an appeal with the Supreme Court of Chile, requesting that the court accept the case and overturn the previous ruling. At the heart of the litigation lies a key dispute: whether decision-making authority under the partnership agreement between SQM and the Chilean state-owned copper company should rest with the board of directors or with the shareholders’ meeting.

 

On January 26, 2026, Chile’s Supreme Court issued a ruling upholding the Santiago Court of Appeals’ decision and dismissing Tianqi Chile’s appeal in its entirety. On January 27, SQM announced that all preconditions for its merger with the lithium business subsidiary of Codelco, Chile’s state-owned copper company, had been satisfied, and the merger transaction—announced by both parties in December 2025—has now entered into full effect.

 

Following the completion of the aforementioned merger, the core lithium business of the Atacama Salt Flat will be held by Codelco with a majority stake and will be consolidated into Codelco’s financial statements starting in 2031. This indicates that, beginning in 2031, SQM is expected to no longer retain control over its core lithium operations at the Atacama Salt Flat in Chile.

 

According to a joint announcement by the two companies, from 2025 to 2030, the Chilean government will receive 70% of the joint venture’s operating profits. Starting in 2031, this share will increase to 85%. In fact, even before the Partnership Agreement took effect, the Chilean government had already derived more than 60% of its revenue from SQM’s lithium business in 2022.

 

In December 2025, Nova Andino Litio SpA, the newly established joint venture between the two parties, held its inaugural board meeting and will henceforth be responsible for the production and development of the Atacama Lithium Salt Flat in Chile. Located on the western side of the Andes Mountains in the Atacama Desert, the Atacama Salt Flat is one of the world’s largest lithium‑bearing salt flats, with resources estimated at approximately 10.8 million tonnes of lithium metal equivalent.

 

“This marks Codelco’s official entry into the lithium business, making it a company that produces both copper and lithium,” said Máximo Pacheco, Chairman of Codelco, at the joint venture’s inaugural meeting. The announcement further stated that the public–private partnership model is designed to maximize the public value of lithium resources, strengthen the state’s role, and raise industry standards.

 

Caption: Salt ponds and processing areas on Chile’s Atacama Salt Flat.

Source: Reuters

 

In addition to Tianqi Lithium, another leading lithium miner, Ganfeng Lithium, is also caught in a dispute over the nationalization of lithium resources. In May 2024, Shanghai Ganfeng, Bacanora, and Sonora—subsidiaries controlled by Ganfeng Lithium—initiated arbitration proceedings before the International Centre for Settlement of Investment Disputes, citing a series of Mexican laws, regulations, and related measures.

 

Ganfeng Lithium stated that Mexico’s aforementioned laws, regulations, and related measures have nationalized lithium resources, thereby impacting the operations of its Sonora lithium‑clay project in Mexico and resulting in the revocation of mineral concessions held by the company’s three wholly owned subsidiaries in the country. At present, the international arbitration remains ongoing.

 

Tianqi Lithium and Ganfeng Lithium are merely microcosms of the resurgent wave of resource nationalism. Against the backdrop of the global energy transition, countries are accelerating their shift from fossil‑fuel‑intensive to critical‑mineral‑intensive energy systems. The growing strategic importance of critical minerals for industrial competitiveness and national security has made them a front‑line arena for geopolitical competition and cooperation.

 

As the strategic importance of critical minerals rises, resource nationalism—manifested in measures such as export restrictions, tax and fee hikes, limitations on foreign investment, nationalization of resources, and the formation of OPEC‑like monopolistic alliances—is increasingly emerging across emerging economies.

 

Resource‑rich countries have begun to inject strategic premiums into critical minerals by proactively intervening on the supply side, thereby breaking their longstanding vulnerability in the global value chain—characterized by a lack of bargaining power—and leveraging this approach to enhance their geopolitical influence or safeguard their own interests.

 

Caption: Examples of how key mineral-resource‑rich countries overseas have strengthened domestic resource protection in recent years.

Source: CITIC Securities Research Department

 

From a country-by-country perspective, with the exception of Latin America’s major mining nations that exert control over lithium, Indonesia’s export controls on nickel and the Democratic Republic of the Congo’s export controls on cobalt have both proven highly effective in preserving the value of these minerals and supporting their prices.

 

Indonesia holds the world’s largest nickel reserves, accounting for 40% to 45% of global nickel resources. Since 2020, the Indonesian government has banned the export of unprocessed nickel ore, requiring exporters to establish processing facilities within the country and thereby transforming Indonesia from a mere resource exporter into a resource‑processing nation.

 

In December 2025, Indonesia announced plans to cut nickel ore production in 2026. The target for 2026 is approximately 250 million tonnes, nearly one-third lower than the 379 million‑tonne target set for 2025. In early January, Indonesia’s Minister of Mining stated that the 2026 nickel production quota would be adjusted according to industry demand and precisely managed through the administrative instrument known as the Mining Quota Approval (RKAB).

 

This series of moves directly pushed nickel prices higher, sparking a new round of sharp gains. On January 6, LME nickel futures hit $18,545 per tonne, with a single-day increase of over 9%, marking the largest intraday surge in more than three years. Over the preceding two weeks, global nickel prices had already accumulated a gain of more than 20%, underscoring the market’s strong expectations for supply-side disruptions.

 

Caption: LME Nickel Futures Trend

Source: Investing

 

In the Democratic Republic of the Congo, the shift from a ban on cobalt exports to a more refined and flexible export‑quota system has continued to support cobalt prices. In February 2025, the Strategic Minerals Market Regulation and Control Authority of the DRC announced that, in response to global oversupply in the cobalt market, it would suspend cobalt exports; this ban remained in effect until September, after which a quota‑based export regime was implemented starting October 15.

 

Meanwhile, Africa boasts vast reserves of the metals essential for the energy transition, including cobalt, copper, nickel, lithium, and phosphate. Over the past two years, newly elected governments across several West and Central African countries have increasingly embraced “nationalism,” viewing control over natural resources as a key source of political legitimacy—further accelerating the rise of resource nationalism.

 

At its core, resource nationalism is a contest between the interests of resource‑rich countries and those of other international actors. Today, this dynamic is reshaping the global resource order and will have far‑reaching implications for the future of the global energy transition.

 

The wave of resource nationalism has surged once again, and coupled with the recent sharp rise in prices of critical minerals and shifts in the geopolitical landscape, Chinese mining companies now face new challenges as they seek to expand overseas.

 

Faced with a new wave of resource nationalism, Chinese enterprises find themselves under mounting pressure. As they deepen their involvement in resource development across Africa and Latin America, the time has come to make timely adjustments to their cooperation models and industrial strategies.

 

Among the most effective measures is shifting corporate cooperation from “resource acquisition” to “co‑building industries,” a model that aligns with the mutual interests of China and resource‑rich countries.

 

Promote the extension of industrial chains into midstream processing and even high-value‑added sectors such as manufacturing related to new energy. This will not only strengthen the security of China’s supply chains but also generate tax revenues and employment for resource‑exporting countries, aligning with their industrialization aspirations and thereby enhancing their willingness to cooperate.

 

In addition, Chinese enterprises must establish a more robust risk-mitigation framework, which includes diversifying procurement sources, promoting a diversified supply-chain footprint, participating in the formulation of international rules, and strengthening their overseas compliance capabilities. They should also leverage technological innovation to enhance their irreplaceable position within the supply chain.