June 28 (NBD) -- Chinese lithium product maker Tianqi Lithium Corporation (Tianqi Lithium, 002466.SZ) responded Tuesday to investors' concerns arising from the company's acquisition of Chilean lithium producer SQM.  

According to the response, the amount Tianqi Lithium paid for the new deal will be considered as a long-term equity investment and will be accounted for using the equity method. Therefore, the fluctuation of SQM's stock price will not directly affect the balance sheet of the Chinese company.  

After the deal is closed, Tianqi Lithium will not participate in SQM's daily operation and sales activities, but will offer opinions at the board level instead.  

The acquisition is expected to help Tianqi Lithium generate profits and hedge risks in the long run.

Though SQM's lithium products are currently priced lower than those in China, the gross profit rate of them is as high as 70 percent.

Email: tanyuhan@nbd.com.cn