Tianqi Lithium faces potential tax recapture on strategic investment

Tianqi Lithium Corp. announced that its wholly-owned subsidiary, Tianqi Lithium Energy Australia Pty Ltd (TLEA), successfully completed a capital increase and share expansion, introducing Australia-based IGO Limited as a strategic investor. IGO's payment of $1.395 bn was received by July 6, 2021. As a result, Tianqi Lithium now holds 51% and IGO Lithium 49% of TLEA's registered capital.

However, the Australian Tax Office (ATO) is currently reviewing the transaction's structure, including internal restructuring steps. The ATO issued a preliminary communication in August 2025, indicating the transaction might not meet Australia's general anti-avoidance rules. This could result in the TLEA equity transfer not being exempt from capital gains tax, incurring additional tax liabilities of 25%-100% of the tax amount, plus penalties and interest.

Tianqi Lithium has until October 3, 2025, to respond to the ATO's preliminary assessment. While the company is preparing its response, the final financial impact remains uncertain, though it is not expected to affect the 2025 first-half financial results. Tianqi Lithium and IGO Lithium have a tax sharing agreement from June 21, 2021, to share tax responsibilities up to an agreed maximum. The company will host a performance briefing on September 1, 2025, to discuss its 2025 half-year results.