China’s Tianqi Lithium is about to close a deal to buy a 24% stake in Chile’s Sociedad Quimica Y Minerva (SQM), one of the world’s biggest lithium producers, for around USD4.3 billion. Chengdu-based Tianqi is building the world’s biggest lithium processor in Western Australia. Based on SQM’s market value of USD14.8 billion, Tianqi would pay a roughly 22% premium for the shares. Lithium is a key ingredient of rechargeable batteries. Nutrien, formed by the merger of Agrium and Potash Corp of Saskatchewan, must sell its stake in SQM by next March as part of a commitment to regulators approving the deal. Nutrien owns about 30% of SQM, which also has significant fertilizer production.

Chile might still block the deal. Chile’s former government in March asked antitrust regulator FNE to block the stake sale to Chinese firms, saying it would distort the global lithium market and give China an unfair advantage in securing strategic resources. FNE has until August, with the possibility of extensions, to determine whether to launch an investigation.

Tianqi’s interest comes as Beijing aggressively promotes electric vehicles to combat air pollution and help domestic carmakers to build global brands. Tianqi, which is in talks with several institutional investors and banks for financing, plans to fund the deal through bank loans, mezzanine loans and its own working capital, sources said. Citic Group and its unit China Citic Bank are considering providing part of the capital for the stake acquisition. Shenzhen-listed Tianqi, which has a market capitalization of USD9.5 billion, plans to raise at least USD1 billion from a Hong Kong float this year.

Chinese private equity firm GSR Capital has also been vying for the stake. SQM, Tianqi, GSR, and Citic Group did not respond to requests for comment. SQM currently has an annual lithium carbonate production capacity of 48,000 tons in Chile, which it will expand to 70,000 tons by mid-2018 and to 100,000 tons in 2019.