Rio Tinto in the race to buy Potash Corp's stake in Chilean lithium producer SQM

Anglo-Australian mining giant Rio Tinto, Canada's Wealth Minerals and Chinese private equity firm GSR Capital are in the race to buy Potash Corp of Saskatchewan's stake in Chilean lithium producer Sociedad Quimica Y Minera (SQM), Reuters yesterday reported, citing banking sources.

In September, China's ministry of commerce and the Indian regulator had approved the between merger Potash Corp and Agrium on condition that the former divests its minority stakes in SQM, Arab Potash Company and Israel Chemicals Ltd.

SQM's market cap is currently around $15 billion, which would value Potash Corp's 32-per cent stake in SQM at around $4.8 billion.

SQM is a chemical company and a supplier of plant nutrients, iodine, lithium and industrial chemicals. It is the world's biggest lithium producer and produced around 44,000 tonnes of lithium carbonate last year.

It has over $2 billion in sales and sells its products in 110 countries throughout Europe, America, Asia and Oceania.

Lithium is lightweight and used in making rechargeable batteries for laptops, phones and other digital devices and importantly electric car batteries.

Australia, Chile and Argentina are world's biggest producers of lithium, while the biggest market is China.

In May, GSR Capital agreed to buy Nissan's electric vehicle battery business, while Rio Tinto has a massive lithium project in Serbia, which is expected to start operation by 2023.