The controlling shareholder in Chile's lithium producer SQM has mounted a Constitutional Court challenge to halt regulators' decision greenlighting the sale of 24 percent of the company to Chinese group Tianqi.

Pampa Calichera, Potasios de Chile and Global Mining -- collectively known as the Pampa Group which holds 29.12 percent of SQM -- said in the suit filed Wednesday the decision by Chilean regulators to allow the deal breaks competition rules.

It wants Chile's antitrust regulators to rescind the decision "because it allows a market player to partially hold and participate in the management of one of its direct competitors."

It would also allow a direct competitor "access to confidential and economically sensitive information on the global lithium market."

Regulators last week gave the go ahead for the $4.1 billion sale in May of Canadian Nutrien group's 24-percent SQM stake to Tianqi.

The authority had launched an investigation in June into whether the deal broke competition rules. The Chinese company also has interests in Albermarle, the world's largest lithium producer and a direct competitor of SQM.

The deal would potentially give Tianqi influence over some 70 percent of the global lithium market, according to some estimates, via its interest in Albermarle and SQM.

Tianqi said in a statement that the "decision by the Constitutional Court is merely a formality.

"What comes next is the discussion regarding the admissibility of the lawsuit, and we will provide the court with solid legal arguments so it can be thrown out of court. We're very confident that will be the case."

SQM operates one of the world's largest lithium mines on the Atacama salt flats in northern Chile. Lithium is used in batteries, and is in high demand given the boom in the production of electric cars.

Chile has the world's largest reserves of lithium, and with Australia produces around 80 percent of total global production.

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