By Dave Sherwood and Nicole Mordant

SANTIAGO/VANCOUVER, March 13 (Reuters) - Chile's government has asked antitrust regulators to block the sale of a 32 percent stake in Chilean lithium company SQM to a Chinese firm on the grounds it would give it an unfair advantage in the global race to secure resources to develop electric vehicles.

Chile development agency Corfo, which oversees SQM's lithium leases in the Salar de Atacama, claimed in a 37-page complaint filed on Friday that the purchase of a stake in SQM by "Tianqi Lithium, or any entity related to it directly or indirectly (including companies controlled by the government of China)" would "gravely distort market competition."

WHY WOULD CHILE WANT TO BLOCK A CHINESE BUYER?

It was unclear if Corfo's complaint, if upheld, would block all potential Chinese bidders for the stake. But it certainly seeks to block Tianqi Lithium, one of China's top lithium producers.

SQM and Tianqi are "extremely close competitors ... and were one to acquire an interest in the other - even minority - it would have serious anti-competitive impacts on the market," Eduardo Bitran, the now former head of Corfo, wrote in the complaint.

Together, Tianqi and SQM, the world's second biggest lithium producer after U.S.-based Albemarle Corp, would control 70 percent of the global lithium market, the document said.

A combined Tianqi-SQM would be in a strong bargaining position, given the companies' outsized control of the lithium supply, for everything from prices to royalty payments, a source close to SQM said.

Tianqi, through Talison Lithium which it controls, is also in a joint venture with Albemarle in Australia where they own the world's biggest lithium mine, Greenbushes.

"The natural obvious buyer (of the SQM stake) are the Chinese ... it does tend to make an industry that is already an oligopoly even stronger to the detriment of potential new entrants," said Chris Berry, an independent energy metals analyst based in New York.

WHAT IS FOR SALE?

An equity stake in SQM worth over $4 billion is in play.

The stake is being sold by Canadian fertilizer company Nutrien Ltd - formerly Potash Corp of Saskatchewan - which has to offload its 32 percent interest to meet regulatory requirements after its merger with a rival fertilizer company to create Nutrien. SQM is also a significant fertilizer producer.

Nutrien is likely reaching out to the new Chilean administration to gauge whether there will be any change in the status of Corfo's complaint, said Edward Jones analyst Dan Sherman, who covers Nutrien.

But the company would hesitate to take any steps that might prolong the uncertainty and drag out the sale process, since lithium is a hot commodity, he said.