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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM 20-F
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(Mark One)
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REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
OR
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the fiscal year ended December 31, 2024
OR
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
for the transition period from _________ to
OR
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SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Date of event requiring this shell company report ______
Commission file number 33-65728
SOCIEDAD QUIMICA Y MINERA DE CHILE S.A.
(Exact name of Registrant as specified in its charter)
CHEMICAL AND MINING COMPANY OF CHILE INC.
(Translation of Registrant’s name into English)
CHILE
(Jurisdiction of incorporation)
El Trovador 4285, 6th floor, Santiago, Chile +56 2 2425 2000
(Address of principal executive offices)
Gerardo Illanes +56 2 2425-2485, gerardo.illanes@sqm.com, El Trovador 4285, 6th floor
Santiago, Chile, 7550079
(Name, Telephone, E-mail and/or Facsimile Number and Address of Company Contact Person)
______________________________________________________________
Securities registered or to be registered, pursuant to Section 12(b) of the Act:
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| Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered |
| Series B common shares, in the form of American Depositary Shares each representing one Series B share |
SQM |
New York Stock Exchange |
Securities registered or to be registered pursuant to Section 12(g) of the Act:
None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Act:
None
Indicate the number of outstanding shares of each of the issuer’s classes of capital stock or common stock as of the close of business covered by the annual report.
Series A Common Shares 142,818,904
Series B Common Shares 142,818,904
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act. Yes x No o
If this report is an annual or transition report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934. Yes o No x
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted, electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated filer x Accelerated filer o Non-accelerated filer o Emerging growth company o
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards † provided pursuant to Section 13(a) of the Exchange Act. o
† The term “new or revised financial accounting standard” refers to any update issued by the Financial Accounting Standards Board to its Accounting Standards Codification after April 5, 2012.
Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act by the registered public accounting firm that prepared or issued its audit report. x
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. o
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive based compensation received by any of the registrant’s executive officers during the relevant recovery period pursuant to §240.10D-1(b). o
Indicate by check mark which basis of accounting the registrant has used to prepare the financial statements included in this filing:
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U.S. GAAP o |
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International Financial Reporting Standards as issued
by the International Accounting Standards Board x
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Other o |
If “Other” has been checked in response to the previous question indicate by check mark which financial statement item the registrant has elected to follow. Item 17 o Item 18 o
If this is an annual report, indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes o No x
TABLE OF CONTENTS
PRESENTATION OF INFORMATION
In this Annual Report on Form 20-F, for the year ended December 31, 2024 (this “Form 20-F”), except as otherwise provided or unless the context requires otherwise, all references to “we,” “us,” “Company” or “SQM” are to Sociedad Química y Minera de Chile S.A., an open stock corporation (sociedad anónima abierta) organized under the laws of the Republic of Chile, and its consolidated subsidiaries.
All references to “US$,” “U.S. dollars,” “USD” and “dollars” are to United States dollars, references to “pesos,” “CLP” and “Ch$” are to Chilean pesos, references to ThUS$ are to thousands of United States dollars, references to ThCh$ are to thousands of Chilean pesos and references to “UF” are to Unidades de Fomento. The UF is an inflation-indexed, peso-denominated unit that is linked to, and adjusted daily to reflect changes in, the previous month’s Chilean consumer price index. As of December 31, 2024, UF 1.00 was equivalent to US$38.55 and Ch$38,416.69 according to the Chilean Central Bank (Banco Central de Chile). As of March 31, 2025, UF 1.00 was equivalent to US$40.81 and Ch$38,894.11
The Republic of Chile is governed by a democratic government, organized in fifteen regions plus the Metropolitan Region (surrounding and including Santiago, the capital of Chile). Our production operations are concentrated in northern Chile, specifically in the Tarapacá Region and in the Antofagasta Region.
We use the metric system of weights and measures in calculating our operating and other data. The United States equivalent units of the most common metric units used by us are as shown below:
1 kilometer equals approximately 0.6214 miles
1 meter equals approximately 3.2808 feet
1 centimeter equals approximately 0.3937 inches
1 hectare equals approximately 2.4710 acres
1 metric ton (“MT” or “metric ton”) equals 1,000 kilograms or approximately 2,205 pounds.
We are not aware of any independent, authoritative source of information regarding sizes, growth rates or market shares for most of our markets. Accordingly, the market size, market growth rate and market share estimates contained herein have been developed by us using internal and external sources and reflect our best current estimates. These estimates have not been confirmed by independent sources.
Percentages and certain amounts contained herein have been rounded for ease of presentation. Any discrepancies in any figure between totals and the sums of the amounts presented are due to rounding.
GLOSSARY
"ADR": American Depositary Receipts evidencing American depositary shares, each representing one series B common share.
“assay values” Chemical result or mineral component amount contained by the sample.
“average global metallurgical recoveries” Percentage that measures the metallurgical treatment effectiveness based on the quantitative relationship between the initial product contained in the mine-extracted material and the final product produced in the plant.
“average mining exploitation factor” Index or ratio that measures the mineral exploitation effectiveness, based on the quantitative relationship between (in-situ mineral minus exploitation losses) / in-situ mineral.
“CAGR” Compound annual growth rate, the year over year growth rate of an investment over a specified period of time.
“cash and cash equivalents” The International Accounting Standards Board (IASB) defines cash and cash equivalents as short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
“CCHEN” The Chilean Nuclear Energy Commission (Comisión Chilena de Energía Nuclear).
"Codelco" The National Copper Corporation of Chile (Corporación Nacional del Cobre de Chile), a Chilean state-owned copper mining company.
“Controller Group” * A person or company or group of persons or companies that according to Chilean law, have executed a joint performance agreement, that have a direct or indirect share in a company’s ownership and have the power to influence the decisions of the company’s management.
“Corfo” Production Development Corporation (Corporación de Fomento de la Producción), formed in 1939, a Chilean national organization in charge of promoting Chile’s manufacturing productivity and commercial development.
“CMF” The Chilean Financial Market Commission. (La Comisión para el Mercado Financiero).
“cut-off grade” The minimal assay value or chemical amount of some mineral component above which exploitation is economical.
“dilution” Loss of mineral grade because of contamination with barren material (or waste) incorporated in some exploited ore mineral.
“exploitation losses” Amounts of ore mineral that have not been extracted in accordance with exploitation designs.
“fertigation” The process by which plant nutrients are applied to the ground using an irrigation system.
“geostatistical analysis” Statistical tools applied to mining planning, geology and geochemical data that allow estimation of averages, grades and quantities of mineral resources and reserves.
“heap leaching” A process whereby minerals are leached from a heap, or pad, of ROM (run of mine) ore by leaching solutions percolating down through the heap and collected from a sloping, impermeable liner below the pad.
“horizontal layering” Rock mass (stratiform seam) with generally uniform thickness that conform to the sedimentary fields (mineralized and horizontal rock in these cases).
“hypothetical resources” Mineral resources that have limited geochemical reconnaissance, based mainly on geological data and sample assay values spaced between 500–1000 meters.
“Indicated Mineral Resource” ** That part of a mineral resource with a level of geological confidence between that of measured and inferred resources; quantity and grade or quality are estimated on the basis of adequate geological evidence and sampling. The level of geological certainty associated with an indicated mineral resource is sufficient to allow a qualified person to apply modifying factors in sufficient detail to support mine planning and evaluation of the economic viability of the deposit.
“Inferred Mineral Resource” ** That part of a mineral resource with the lowest level of geological confidence; quantity and grade or quality are estimated on the basis of limited geological evidence and sampling. The level of geological uncertainty associated with an inferred mineral resource is too high to apply relevant technical and economic factors likely to influence the prospects of economic extraction in a manner useful for evaluation of economic viability.
“industrial crops” Refers to crops that require processing after harvest in order to be ready for consumption or sale. Tobacco, tea and seed crops are examples of industrial crops.
“Kriging Method” A technique used to estimate ore reserves, in which the spatial distribution of continuous geophysical variables is estimated using control points where values are known.
“LIBOR” London Inter Bank Offered Rate.
“limited reconnaissance” Low or limited level of geological knowledge.
“Measured Mineral Resource” ** That part of a mineral resource with the highest level of geological confidence; quantity and grade or quality are estimated on the basis of conclusive geological evidence and sampling. The level of geological certainty associated with a measured mineral resource is sufficient to allow a qualified person to apply modifying factors in sufficient detail to support detailed mine planning and final evaluation of the economic viability of the deposit.
“metallurgical treatment” A set of chemical and physical processes applied to the caliche ore and to the salar brines to extract their useful minerals (or metals).
“Mineral Reserve” ** An estimate of tonnage and grade or quality of indicated and measured mineral resources that, in the opinion of the qualified person, can be the basis of an economically viable project. More specifically, it is the economically mineable part of a measured or indicated mineral resource, which includes diluting materials and allowances for losses that may occur when the material is mined or extracted.
“Mineral Resource” ** A concentration or occurrence of material of economic interest in or on the earth’s crust in such form, grade or quality, and quantity that there are reasonable prospects for economic extraction. A mineral resource is a reasonable estimate of mineralization, taking into account relevant factors such as cut-off grade, likely mining dimensions, location or continuity, that, with the assumed and justifiable technical and economic conditions, is likely to, in whole or in part, become economically extractable. It is not merely an inventory of all mineralization drilled or sampled.
“ore depth” Depth of the mineral that may be economically exploited.
“ore type” Main mineral having economic value contained in the caliche ore (sodium nitrate or iodine).
“ore” A mineral or rock from which a substance having economic value may be extracted.
“Probable Mineral Reserve” ** The economically mineable part of an indicated and, in some cases, a measured mineral resource.
“Proven Mineral Reserve” ** The economically mineable part of a measured mineral resource and can only result from conversion of a measured mineral resource.
“solar salts” A mixture of 60% sodium nitrate and 40% potassium nitrate used in the storage of thermo-energy.
“vat leaching” A process whereby minerals are extracted from crushed ore by placing the ore in large vats containing leaching solutions.
“waste” Rock or mineral which is not economical for metallurgical treatment.
“Weighted average age” The sum of the product of the age of each fixed asset at a given facility and its current gross book value as of December 31, 2024 divided by the total gross book value of the Company’s fixed assets at such facility as of December 31, 2024.
*The definition of a Controller Group that has been provided is the one that applied to the Company. Chilean law provides for a broader definition of a “controller group”, as such term is defined in Title XV of Chilean Law No. 18,045 (Ley de Mercado de Valores or the “Securities Market Law”).
**The definitions we use for resources and reserves are as defined in subpart 1300 of SEC Regulation S-K.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS
This Form 20-F contains statements that are or may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These statements are not based on historical facts and reflect our expectations for future events and results. Words such as “believe,” “expect,” “predict,” “anticipate,” “intend,” “estimate,” “should,” “may,” “likely,” “could” or similar expressions may identify forward-looking information. These statements appear throughout this Form 20-F and include statements regarding the intent, belief or current expectations of the Company and its management, including but not limited to any statements concerning:
•trends affecting the prices and volumes of the products we sell and the effects on our results;
•level of reserves, quality of the ore and brines, and production levels and yields;
•our capital investment program and financing sources
•our Sustainable Development Plan;
•development of new products, anticipated cost synergies and product and service line growth;
•our business outlook, future economic performance, anticipated profitability, revenues, expenses, or other financial items;
•our negotiation with Codelco and the potential partnership for the production of lithium products from the Salar de Atacama during the period from 2025 to 2060;
•the future impact of competition; and
•regulatory changes.
Such forward-looking statements are not guarantees of future performance and involve risks and uncertainties. Actual results may differ materially from those described in such forward-looking statements included in this Form 20-F, including, without limitation, the information under “Item 4. Information on the Company,” “Item Number 5. Operating and Financial Review and Prospects” and “Item 11. Quantitative and Qualitative Disclosures About Market Risk.” Factors that could cause actual results to differ materially include, but are not limited to:
•volatility of demand and global prices for our products, including demand for products that incorporate our products into their components (e.g., electric vehicles which use batteries incorporating our lithium products);
•political, economic and demographic developments in certain emerging market countries, where we conduct a large portion of our business;
•the impact of the public health pandemics, including communicable infections or diseases, as well as any new strain and any associated economic downturn on our future operating and financial performance;
•failure to comply to environmental laws and regulations or to meet current and future production targets;
•operational slowdowns, stoppages, or delays as a result of safety and environmental risk, including accidents and other incidents;
•changes in production capacities;
•the nature and extent of future competition in our principal markets;
•our ability to implement our capital expenditures program, including our ability to obtain financing when required;
•changes in raw material and energy prices;
•currency and interest rate fluctuations;
•risks relating to the estimation of our reserves;
•risks relating to our exports;
•changes in quality standards or technology applications;
•adverse legal, regulatory or labor disputes or proceedings;
•changes in governmental policy or regulations;
•a potential change of control of our company; and
•additional risk factors discussed below under Item 3. “Key Information—Risk Factors."
SUMMARY OF RISK FACTORS
•Our inability to extend on favorable terms our access to the mineral exploitation rights relating to the Salar de Atacama concession, upon which our business is substantially dependent, beyond the expiration date of our current agreements in December 2030 through the formation of the association agreement with Codelco could have a material adverse effect on our business, financial condition and results of operations.
•Volatility of world lithium, fertilizer and other chemical prices and changes in production capacities could affect our business, financial condition and results of operations.
•Our sales could be impacted by global shipping constraints.
•Our sales to emerging markets and expansion strategy expose us to risks related to economic conditions and trends in those countries.
•Our inventory levels may vary for economic or operational reasons.
•New production of lithium, iodine and potassium nitrate from current or new competitors in the markets in which we operate could adversely affect prices.
•We have a capital expenditure program that is subject to significant risks and uncertainties.
•High raw materials and energy prices could increase our production costs of sales, and energy may become unavailable at any price.
•Our reserve estimates could be subject to significant changes, which may have a material adverse effect on our business, financial condition and results of operations.
•The growth of our lithium business depends on the growth in demand for electric vehicles using lithium-based batteries and reduced demand in the adoption of electric vehicles by consumers, including due to any reduction, elimination or discriminatory application of government subsidies, tax credits and other economic incentives for electric vehicles could materially adversely affect our business, financial condition and results of operations.
•The development of new battery technologies that use no, or significantly less, lithium, could materially and adversely impact our prospects and future revenues.
•To the extent that our competitors implement new and more efficient technologies for extraction of lithium and are able to produce lithium for a lower cost, our lithium products may not be competitively priced, which could reduce demand for our lithium products.
•Chemical and physical properties of our products could adversely affect their commercialization and changes in technology or other developments could result in preferences for substitute products.
•We are exposed to labor strikes, work stoppages, and labor liabilities that could impact our production levels and costs.
•We are subject to labor laws and regulations in Chile and in Australia and may be exposed to liabilities and potential costs for non-compliance.
•Lawsuits and arbitrations could adversely impact us.
•We have operations in multiple jurisdictions with differing regulatory, tax and other regimes.
•Environmental laws and regulations could expose us to higher costs, liabilities, claims, failure to meet current and future production targets or cause material changes, delays or stoppages in our operations.
•The occurrence of an accident or safety incident involving employees, contractors or others can result in injuries, disabilities or loss of life, which could expose us to operational slowdowns, stoppages or delays, significant financial losses and reputational harm, as well as civil and criminal liabilities.
•Our exports pose special risks to our business and operations.
•A significant percentage of our shares are held by two principal shareholder groups, including, a competitor of the Company, which could result in risks to free competition. Any change in such principal shareholder groups may result in a change of control of the Company or of its Board of Directors or its management, which may have a material adverse effect on our business, financial condition and results of operations.
•Our IT systems may be vulnerable to disruption which could place our systems at risk from data loss, operational failure, or compromise of confidential information.
•Political events or financial or other crises in any region worldwide can significantly impact Chile and may unfavorably affect our operations and liquidity, including heightened tensions in international relations with China.
•Outbreaks of communicable infections or diseases, or other public health pandemics may impact the markets in which we, our customers and our suppliers operate or market and sell products and could have a material adverse effect on our operations business, financial condition and results of operations.
•If our stakeholders and other constituencies believe we fail to appropriately address sustainability and other ESG concerns, it may adversely affect our business.
•Climate change and a global transition to a low carbon economy can create physical risks, including adverse weather conditions or significant changes in weather patterns, and other risks that could adversely affect our business, operations, and result of operations.
•Currency fluctuations may have a negative effect on our financial performance.
•The National Lithium Strategy has created and may continue to create uncertainty in the Chilean lithium industry, which could have a material adverse effect on our business performance or the value of our shares and ADRs.
•We are exposed to political risks in Chile and uncertainty surrounding the upcoming general and presidential elections.
•Changes in regulations regarding, or any revocation or suspension of mining, port or other concessions, and changes in water rights laws and other regulations, and new legislation affecting mining licenses could affect our business, financial condition and results of operations.
•The Chilean government could levy additional taxes on mining companies, which may include lithium exploitation companies, operating in Chile.
•Ratification of the International Labor Organization’s Convention 169 concerning indigenous and tribal peoples might affect our development plans and our operations and projects are subject to risks related to our relationships and/or agreements with local communities and laws on the rights of indigenous peoples.
•Chile has different corporate disclosure and accounting standards than in the U.S.
•Chile is located in a seismically active region.
•The price of our ADRs and the U.S. dollar value of any dividends will be affected by fluctuations in the U.S. dollar/Chilean peso exchange rate. Developments in other emerging markets could materially affect the value of our ADRs and our shares. The volatility and low liquidity of the Chilean securities markets could affect the ability of our shareholders to sell our ADRs.
•Our share or ADR price may react negatively to future acquisitions, divestitures, associations, capital increases and investments.
•ADR holders may be unable to enforce rights under U.S. securities laws.
•If preemptive rights are unavailable for our ADR holders, their holdings may be diluted if we issue new stock.
•If we were classified as a Passive Foreign Investment Company by the U.S. Internal Revenue Service, there could be adverse consequences for U.S. investors.
•Dividends and distributions to ADR holders may be limited by practical considerations and legal limitations, which may delay the payment and receipt of dividends and distributions by ADR holders.
•Changes in Chilean tax regulations could have adverse tax consequences for U.S. investors.
•If measures to minimize bad debt exposure are ineffective or our accounts receivable increase significantly, it may result in losses that could have a material adverse effect on our business, financial condition and results of operations.
•Quality standards in markets in which we sell our products could become stricter over time.
•Our business is subject to many operating and other risks which may not be fully covered by insurance.
•Our water supply could be affected by geological changes or climate changes.
•Any loss of key personnel may materially and adversely affect our business.
•Failure to comply with Chilean and international anti-corruption, anti-bribery, anti-money laundering and trade laws to which we are subject could adversely impact our business, financial condition and results of operations.
•We are subject to risk related to armed conflicts in other areas of the world, which may have a material adverse effect on our business, financial condition and results of operations.
PART I
ITEM 1. IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS
Not applicable.
ITEM 2. OFFER STATISTICS AND EXPECTED TIMETABLE
Not applicable.
ITEM 3. KEY INFORMATION
3.A.[Reserved]
3.B.Capitalization and Indebtedness
Not applicable.
3.C.Reasons for the Offer and Use of Proceeds
Not applicable.
3.D.Risk Factors
Our operations are subject to certain risk factors that may affect SQM’s business, financial condition, cash flows, or results of operations. In addition to other information contained in this Form 20-F, you should carefully consider the risks described below. These risks are not the only ones we face. Additional risks not currently known to us or that are known but that we currently believe are not significant may also affect our business operations. Our business, financial condition, cash flows or results of operations could be materially affected by any of these risks.
Risks Relating to our Business
Our inability to extend on favorable terms our access to the mineral exploitation rights relating to the Salar de Atacama concession, upon which our business is substantially dependent, beyond the expiration date of our current agreements in December 2030 through the association agreement with Codelco, could have a material adverse effect on our business, financial condition and results of operations.
Our subsidiary SQM Salar SpA, formerly named SQM Salar S.A (“SQM Salar”), as leaseholder, holds exclusive and temporary leasehold rights to exploit mineral resources in the Salar de Atacama in northern Chile until December 31, 2030. The underlying properties and mineral rights are owned by Corfo, a Chilean government entity, and leased to SQM Salar pursuant to (i) a lease agreement over mining exploitation concessions with Corfo, as amended from time to time, and (ii) the Salar de Atacama project agreement with Corfo, as amended from time to time (collectively, the “SQM-Corfo Agreements”). The SQM-Corfo Agreements provide for SQM Salar to (i) make quarterly lease payments to Corfo based on product sales from the leased mining properties and annual contributions to research and development, to local communities, to the Antofagasta Regional Government and to the municipalities of San Pedro de Atacama, María Elena and Antofagasta, (ii) maintain Corfo’s rights over the mining exploitation concessions and (iii) make annual payments to the Chilean government for such concession rights. The SQM-Corfo Agreements will expire on December 31, 2030.
On May 31, 2024, SQM and Codelco, the Chilean state-owned copper mining company which had been mandated by the Chilean government to negotiate its participation in the lithium operations in the Salar de Atacama, entered into a partnership agreement which establishes the rights and obligations of the parties to form an entity for the development of mining and production activities aimed at the production of lithium, potassium and other products from the properties of Corfo in the Salar de Atacama and their subsequent marketing (directly or through its subsidiaries or representative offices). The entity is to be formed through the merger by incorporation of Codelco’s subsidiary, Minera Tarar SpA, into the Company’s subsidiary, SQM Salar, subject to the terms and conditions set forth in the partnership agreement. Minera Tarar will obtain the mineral exploitation rights in the Salar de Atacama for the period January 1, 2031 to December 31, 2060 pursuant to a lease agreement and a project agreement to be entered into with Corfo (the “Tarar-Corfo Agreements”).
The partnership agreement includes forms of several agreements and documents to be entered into by the parties prior to the completion of the transaction, including a shareholders’ agreement, a sales agreement for the sale of the Company’s properties in the Salar de Maricunga, a license to be granted by the Company to the shared entity over certain industrial property rights, the by-laws and powers of attorney of the shared entity, the manner in which the Company will contribute to SQM Salar those assets and contracts of our lithium business in the Salar de Atacama that are not currently owned by SQM Salar, and execution of the Tarar-Corfo Agreements, among others. A number of conditions precedent remain to be satisfied for the formation of the joint venture to become effective, including completion of the consultation process with the indigenous communities in the Salar de Atacama, and termination of the SEC’s investigation described under “We are subject to Chilean and international anti-corruption, anti-bribery, anti-money laundering and international trade laws. Failure to comply with these laws could adversely impact our business, financial condition and results of operations.” on the terms described in the partnership agreement.
Our business is substantially dependent on the exploitation rights under the SQM-Corfo Agreements, since all of our products originating from the Salar de Atacama are derived from our extraction operations under the SQM-Corfo Agreements. For the year ended December 31, 2024, revenues related to products originating from the Salar de Atacama represented 55% of our consolidated revenues, consisting of revenues from our potassium business line and our lithium and derivatives business line for the period. As of December 31, 2024, only six years remain on the term of the SQM-Corfo Agreements and we had extracted approximately 52% of the total permitted accumulated extraction and sales limit of lithium under the lithium extraction and sales limits.
Our ability to continue our operations in the Salar de Atacama beyond 2030 will depend on implementing the association agreement with Codelco, which holds the exploitation rights in the Salar de Atacama from 2031 to 2060 through the Tarar-Codelco Agreements. If we are unable to implement the proposed association agreement with Codelco, we would be unable to continue extraction of lithium and potassium from the Salar de Atacama, which would have a material adverse effect on our business, financial condition and results of operations.
Volatility of world lithium, fertilizer and other chemical prices and changes in production capacities could affect our business, financial condition and results of operations.
The prices of our products are determined principally by world prices, which, in some cases, have been subject to substantial volatility in recent years. World lithium, fertilizer and other chemical prices constantly vary depending upon the relationship between supply and demand at any given time. Supply and demand dynamics for our products are tied to a certain extent to global economic cycles and have been impacted by circumstances related to such cycles. Furthermore, the supply of lithium, certain fertilizers, or other chemical products, including certain products that we provide, varies principally depending on the production of the major producers, (including us) and their respective business strategies.
We expect that prices for the products we manufacture will continue to be influenced, among other things, by worldwide supply and demand and the business strategies of major producers. Some of the major producers (including us) have increased or decreased production and have the ability to increase or decrease production.
As a result of the above, the prices of our products may be subject to substantial volatility. For example, during 2024, average lithium prices decreased from US$30,467 per metric ton in 2023 to US$10,936 per metric ton during the year ended December 31, 2024. High volatility or a substantial decline in the prices or sales volumes of one or more of our products could have a material adverse effect on our business, financial condition and results of operations.
Our sales could be impacted by global shipping constraints
We sell our products in more than 100 countries in the world. Our products are shipped in containers or break bulk format
from the port terminals in Antofagasta, Tocopilla, Mejillones and Iquique in Chile, and Bunbury in Australia. The challenges in the global shipping industry in the recent years have led to congestion in ports, a shortage in containers, and a lack of space on ships. Because of this situation, we face a risk of potential supply chain disruptions that may adversely affect our operations and ability to deliver our products to our customers. Depending on the terms of shipments to customers, the risk of loss related to these shipping issues could fall on us. Additionally, our revenues and collections may also be adversely affected by significant increases in the cost of transportation, as a result of increases in fuel or labor costs, higher demand for logistics services, or otherwise, and transportation delays that could have a negative impact on our sales agreements and customer relationships.
Our sales to emerging markets and expansion strategy expose us to risks related to economic conditions and trends in those countries.
We sell our products in more than 100 countries around the world, many of which are emerging markets. We anticipate expanding our sales in these and other emerging markets in the future. In addition, we may enter into acquisitions or joint ventures in jurisdictions in which we do not currently operate in connection with any of our businesses or new businesses in which we believe we may have sustainable competitive advantages. The results of our operations and our prospects in other countries where we operate will depend, in part, on the general level of political stability, economic activity and policies in those countries, as well as the duration of outbreaks of infections or communicable diseases or other pandemics. Future developments in the political systems or economies of these countries, or the implementation of future governmental policies in those countries, including the imposition of withholding and other taxes, restrictions on the payment of dividends or the repatriation of capital, the imposition of import tariffs or other restrictions, the imposition of new environmental regulations or price controls, or changes in relevant laws or regulations, could have a material adverse effect on our business, financial condition and results of operations in those countries.
Our inventory levels may vary for economic or operational reasons.
In general, economic conditions or operational factors can affect our inventory levels. Higher inventories carry a financial risk due to increased need for cash to fund working capital and could imply an increased risk of loss of product. At the same time, lower levels of inventory can hinder the distribution network and process, thus impacting sales volumes. There can be no assurance that inventory levels will remain stable. These factors could have a material adverse effect on our business, financial condition and results of operations.
New production of lithium, iodine and potassium nitrate from current or new competitors in the markets in which we operate could adversely affect prices.
In recent years, new and existing competitors have increased the supply of lithium, iodine and potassium nitrate, which has affected prices for those products. Further production increases could negatively impact prices. There is limited information on the status of new lithium, iodine and potassium nitrate production capacity expansion projects being developed by current and potential competitors and, as such, we cannot make accurate projections regarding the capacities of possible new entrants into the market and the dates on which they could become operational. If these potential projects are completed in the short term, they could adversely affect market prices and our market share, which, in turn, could have a material adverse effect on our business, financial condition and results of operations.
We have a capital expenditure program that is subject to significant risks and uncertainties.
Our business is capital intensive. Specifically, the exploration and exploitation of reserves, mining and processing costs, the maintenance of machinery and equipment and compliance with applicable laws and regulations require substantial capital expenditures. We must continue to invest capital to maintain or to increase our exploitation levels and the amount of finished products we produce. For example, we have an investment plan for an estimated range of US$3.1 to US$3.8 billion for the years 2025-2027. The plan will allow us to expand our lithium, iodine and nitrate operations by accessing natural resources both in the Salar de Atacama and caliche deposits in Chile, and through the Mt Holland project in Western Australia (a joint venture we are developing with our partner Wesfarmers). The plan also aims to increase mining capacity while protecting the environment, reduce operating costs and increase annual production capacity to meet expected growth in those markets.
Mining industry development projects typically require a number of years and significant expenditures before production can begin. Such projects could experience unexpected problems and delays during development, construction and start-up.
Our decision to develop a project typically is based on the results of feasibility studies, which estimate the anticipated economic returns of a project. The actual project profitability or economic feasibility may differ from such estimates as a result of any of the following factors, among others:
•changes in tonnage, grades and metallurgical characteristics of ore or other raw materials to be mined and processed;
•estimated future prices of the relevant products;
•changes in customer demand; higher construction and infrastructure costs;
•the quality of the data on which engineering assumptions were made;
•higher production costs; adverse geotechnical conditions;
•availability of adequate labor force; availability and cost of water and energy;
•availability and cost of transportation; fluctuations in inflation and currency exchange rates;
•availability and terms of financing;
•and potential delays relating to social and community issues.
In addition, we require environmental permits for our new projects. Obtaining permits in certain cases may cause significant delays in the execution and implementation of new projects and, consequently, may require us to reassess the related risks and economic incentives.
This may require modifying our operations to incorporate the use of seawater and updating our mining equipment and operational centers.
We cannot assure you that we will be able to maintain our production levels or generate sufficient cash flow or that we will have access to sufficient investments, loans or other financing alternatives, to continue our activities at or above present levels, or that we will be able to implement our projects or receive the necessary permits required for them in time. Any or all of these factors may have a material adverse effect on our business, financial condition and results of operations.
High raw materials and energy prices could increase our production costs and cost of sales, and energy may become unavailable at any price.
We rely on certain raw materials and various energy sources (diesel, electricity, liquefied natural gas, fuel oil and others) to manufacture our products. Purchases of energy and raw materials we do not produce constitute an important part of our cost of sales (excluding the payments to Corfo) which was approximately 44% in 2024. In addition, we may not be able to obtain energy at any price if supplies are curtailed or otherwise become unavailable. To the extent we are unable to pass on increases in the prices of energy and raw materials to our customers or we are unable to obtain energy, our business, financial condition and results of operations could be materially adversely affected.
Our reserve estimates could be subject to significant changes, which may have a material adverse effect on our business, financial condition and results of operations.
Our caliche ore mining reserve estimates and our Salar de Atacama brine mining reserve estimates are prepared by qualified persons and this information is presented in our technical report summaries prepared and filed as required by subpart 1300 of Regulation S-K. Estimation methods involve numerous uncertainties as to the quantity and quality of the reserves, and reserve estimates could change upwards or downwards. A downward change in our estimates and/or quality of our reserves could affect future volumes and costs of production and therefore have a material adverse effect on our business, financial condition and results of operations.
The growth of our lithium business depends on the growth in demand for electric vehicles using lithium-based batteries and reduced demand in the adoption of electric vehicles by consumers could materially adversely affect our business, financial condition and results of operations.
Our lithium products are a critical component of the lithium ion batteries used in electric vehicles. As a result, the growth of our lithium business is dependent on the continued adoption of electric vehicles by consumers. If the market for electric vehicles does not develop as we expect, or develops more slowly than we expect, our business, prospects, financial condition and future results of operations will be adversely affected. The market for electric vehicles is relatively new, rapidly evolving, and could be affected by numerous external factors, such as:
•government regulations and automakers’ responses to those regulations;
•the availability of tax and other economic incentives to purchase and operate electric vehicles or future regulation requiring increased used of non-polluting vehicles;
•rates of consumer adoption, which is driven in part by perceptions about electric vehicle features (including the range over which the vehicle may be driven on a single battery charge),
•quality, safety, performance, cost and charging infrastructure;
•competition, including from other types of alternative fuel vehicles, including plug-in hybrid electric vehicles and high fuel-economy internal combustion engine vehicles;
•volatility in the cost of battery materials, oil and gasoline;
•rates of customer adoption of higher performance lithium compounds; and
•rates of development and adoption of next generation battery technologies using lower lithium content or using alternatives to lithium.
Demand for electric vehicles has slowed globally, including in China, the largest electric vehicle market, and with range anxiety and ability to find high speed charging stations still a concern, many consumers have opted for hybrid electric vehicles, which have smaller batteries and correspondingly lower lithium content. If the market for electric vehicles does not develop as we expect, or develops more slowly than we expect, our business, financial condition and results of operations may be materially adversely affected.
Any reduction, elimination or discriminatory application of government subsidies, tax credits and other economic incentives for electric vehicles may reduce the competitiveness of electric vehicles and their demand, which could adversely affect our business, financial condition and operating results.
The growth of our lithium business depends upon the continued adoption by consumers of electric vehicles. Government subsidies and incentives are important for the competitiveness of electric vehicles. Any reduction, elimination or discriminatory application of government subsidies and economic incentives because of policy changes, the reduced need for such subsidies and incentives due to the perceived success of electric vehicles, or other reasons may result in diminished competitiveness of the electric vehicles industry generally, and a resulting decrease in the demand for our lithium products. In January 2025, President Trump revoked the Biden administration order setting a 50% electric vehicles target for 2030 and may seek to revise environmental and auto emissions standards that encouraged electric vehicle production, which may further reduce demand for and supply of electric vehicles and, in turn, adversely affect demand for lithium products. If the market for electric vehicles does not develop as we expect, or develops more slowly than we expect, our business, financial condition and results of operations could be materially adversely affected.
The development of new battery technologies that use no, or significantly less, lithium, could materially and adversely impact our prospects and future revenues.
Current and next generation high energy density batteries for use in electric vehicles rely on lithium compounds as a critical input. Many materials and technologies are being researched and developed with the goal of making batteries lighter, more efficient, faster charging and less expensive. Some of these could be less reliant on lithium hydroxide or other lithium compounds, especially if the demand for batteries for use in electric vehicles outstrips the available supply of lithium hydroxide or other lithium compounds. We cannot predict which new technologies may ultimately prove to be commercially viable and on what time horizon. Commercialized battery technologies that use less lithium compounds could materially and adversely impact our prospects and future revenues.
Our success as a producer of lithium and related products depends to a great extent on our ability to extract lithium from brines in an efficient and cost-effective manner. To the extent that our competitors implement new and more efficient technologies for extraction of lithium and are able to produce lithium for a lower cost than we can, our lithium products may not be competitively priced, which could reduce demand for our lithium products and materially adversely affect our business, financial condition and results of operations.
Our success as a producer of lithium and related products is dependent on our ability to develop and implement more efficient production capabilities based on mineral rich brine. Many of our competitors are seeking to develop and implement more efficient production capabilities from brine, such as implementing direct lithium extraction (DLE) technologies, which have the potential to significantly increase the supply of lithium from brine projects and reduce their cost of production. While we continue to make significant investment in research and development of the lithium extraction process, we cannot assure you that our product research and development projects will be successful or be completed within the anticipated time frame or budget. In addition, we cannot assure you that our existing or potential competitors will not develop products which are similar or superior to our products or are more competitively priced. Furthermore, there can be no assurance that advances in technology will occur in a timely or feasible way, if at all, that others will not acquire similar or superior technologies sooner than we do, or that we will acquire technologies on an exclusive basis or at a significant price advantage. The process of designing and developing new technology, products and services is costly and uncertain and requires extensive capital investment. If our lithium products are not competitively priced, demand for our lithium products could be reduced and materially adversely affect our business, financial condition and results of operations.
Chemical and physical properties of our products could adversely affect their commercialization.
Since our products are derived from natural resources, they contain inorganic impurities that may not meet certain customer or government standards. As a result, we may not be able to sell our products if we cannot meet such requirements. In addition, our cost of production may increase in order to meet such standards. Failure to meet such standards could materially adversely affect our business, financial condition and results of operations if we are unable to sell our products in one or more markets or to important customers in such markets.
Changes in technology or other developments could result in preferences for substitute products.
Our products, particularly lithium, iodine and their derivatives, are preferred raw materials for certain industrial applications, such as rechargeable batteries and liquid-crystal displays (LCDs). Changes in technology, the development of substitute products or other developments could adversely affect demand for these and other products which we produce. In addition, other alternatives to our products may become more economically attractive as global commodity prices shift. Any of these events could have a material adverse effect on our business, financial condition and results of operations.
We are exposed to labor strikes, work stoppages and labor liabilities that could impact our production levels and costs.
We are exposed to labor strikes and labor liabilities that could impact our production levels and costs. Approximately 87% of our employees are employed in Chile, of which approximately 77% were represented by 22 labor unions as of December 31, 2024. In addition, in Australia we have approximately 700 persons employed by us directly or through our Mount Holland Joint Venture. In 2024, collective bargaining agreements were renewed with 14 unions, of which 12 correspond to the SQM Iodine- Plant Nutrition Division and two to the Lithium Chile Division. We are exposed to labor strikes and illegal work stoppages by both our own employees and our independent contractors’ employees that could impact our production levels in both our own plants and our independent contractors’ plants. If a strike or illegal work stoppage occurs and continues for a sustained period of time, we could be faced with increased costs and even disruption in our product flow that could have a material adverse effect on our business, financial condition and results of operations.
We are subject to labor laws and regulations in Chile and in Australia, and may be exposed to liabilities and potential costs for non-compliance.
We are subject to labor laws and regulations in the jurisdictions in which we operate, primarily Chile and in Australia, that govern, among other things, the relationship between us and our employees, and we may in the future be subject to new laws and regulations in Chile and in Australia that may expose us to additional risks and costs of non-compliance.
There have been changes and proposed changes to various labor laws in Chile which include, but are not limited to, modifications related to teleworking, inclusion of workers with disabilities, minimum wage, unemployment insurance benefits, employee and employer relationships, pensions, profit sharing, regular work hours, salary equality between men and women, collective bargaining by economic sector, and other matters. These changes may increase our labor costs as well as the cost of compliance and expose us to additional liabilities for non-compliance.
On January 29, 2025, the Chilean Congress approved reforms to the Chilean pension fund regime that would, among other things, increase the employer contributions to employee pensions from 1.5% to 8.5% of the employee’s monthly wages. While the increases are expected to be implanted gradually over a 9-year period, it could result in increased labor costs for employers.
As of December 31, 2024, we had 7,258 employees in Chile and any increase in our labor costs could have a material adverse effect on our business, financial condition and results of operations.
Lawsuits and arbitrations could adversely impact us.
We are party to a range of lawsuits and arbitrations involving different matters as described in Note 21 to our consolidated financial statements and “Item 8.A. Legal Proceedings.” Although we intend to defend our positions vigorously, our defense of these actions may not be successful and responding to such lawsuits and arbitrations diverts our management’s attention from day-to-day operations. Adverse judgments or settlements in these lawsuits may have a material adverse effect on our business, financial condition and results of operations. In addition, our strategy of being a world leader includes entering into commercial and production alliances, joint ventures and acquisitions to improve our global competitive position. As these operations increase in complexity and are carried out in different jurisdictions, we may be subject to legal proceedings that, if settled against us, could have a material adverse effect on our business, financial condition and results of operations.
We have operations in multiple jurisdictions with differing regulatory, tax and other regimes.
We operate in multiple jurisdictions with complex regulatory environments that are subject to different interpretations by companies and respective governmental authorities. These jurisdictions may have different tax codes, environmental regulations, labor codes and legal framework, which adds complexity to our compliance with these regulations. Any failure to comply with such regulations could have a material adverse effect on our business, financial condition and results of operations.
Environmental laws and regulations could expose us to higher costs, liabilities, claims, failure to meet current and future production targets or cause material changes, delays or stoppages in our operations.
Our operations in Chile and in Australia are subject to national and local regulations relating to environmental protection. In accordance with Chilean regulations, we are required to conduct environmental impact studies or statements before we conduct any new projects or activities or significant modifications of existing projects that could impact the environment or the health of people in the surrounding areas. We are also required to obtain an environmental license for those projects and activities. The Chilean Environmental Assessment Service (Servicio de Evaluación Ambiental) or “SEA” evaluates environmental impact studies and statements submitted for its approval. The public, government agencies or local authorities may review and challenge projects that may adversely affect the environment, either before these projects are executed or once they are operating, if they fail to comply with applicable regulations. In order to ensure compliance with environmental regulations, Chilean authorities may impose fines up to approximately US$9 million per infraction, revoke environmental permits or temporarily or permanently close facilities, among other enforcement measures.
In accordance with Australian state and federal environmental laws and regulations, we are required to obtain environmental approvals and licenses to carry out exploration and mining activities. New projects may require federal government approval if they have, will have or are likely to have a significant impact on ‘matters of national environmental significance’. On a state level, mine developments are required to prevent, control and abate pollution and environmental harm and ensure the conservation and protection (as applicable) of the land subject to tenure.
Environmental regulations in Chile and in Australia have become increasingly stringent in recent years, both with respect to the approval of new projects and in connection with the implementation and development of projects already approved, and we believe that this trend is likely to continue. Given public interest in environmental enforcement matters, these regulations or their application may also be subject to political considerations that are beyond our control.
We regularly monitor the impact of our operations on the environment and on the health of people in the surrounding areas and have, from time to time, made modifications to our facilities to minimize any adverse impact. Future developments in the creation or implementation of environmental requirements or their interpretation could result in substantially increased capital, operation or compliance costs or otherwise adversely affect our business, financial condition and results of operations.
The success of our current investments in the Company’s operations is dependent on the behavior of the ecosystem variables being monitored over time. If the behavior of these variables in future years does not meet environmental requirements, our operation may be subject to important restrictions by the authorities on the maximum allowable amounts of brine and/or water extraction.
Our future development depends on our ability to sustain future production levels, which requires additional investments and the submission of the corresponding environmental impact studies or statements. If we fail to obtain approval or required environmental licenses, our ability to maintain production at specified levels will be seriously impaired, thus having a material adverse effect on our business, financial condition and results of operations.
In addition, our worldwide operations are subject to international and local environmental regulations. Since environmental laws and regulations in the different jurisdictions in which we operate may change, we cannot guarantee that future environmental laws, or changes to existing environmental laws, will not materially adversely impact our business, financial condition and results of operations.
Environmental laws and regulations may become more stringent in the future. Compliance with more stringent laws and regulations, as well as more vigorous enforcement policies or stricter interpretation of existing laws and regulations may necessitate significant capital outlays, materially affect our results of operations and business, or may cause material changes or delays in our operations and business activities.
Failure to comply with applicable environmental regulations may result in fines or administrative penalties or enforcement actions, including orders issued by regulatory or judicial authorities enjoining or curtailing operations or requiring corrective measures, installation of additional equipment or remedial action, any of which could result in the Company incurring significant expenditures, as well as having a significant negative impact on our reputation and image.
In addition, our operations and business activities require licenses and permits from various governmental authorities, including under environmental regulations. While we believe that the Company currently has the material licenses and permits required to conduct its business and operations, there can be no assurance that the Company will be able to obtain, maintain or renew all the necessary licenses and permits which may be required to conduct its business and operations in the future. Failure to obtain, maintain or renew those licenses and permits could have a material adverse effect on our business, financial condition and results of operations. For example, in Australia, the Mt. Holland joint venture operations generate waste by-product such as tailings, that are managed by the use of tailings storage facilities (TSFs). TSFs are regulated by applicable state, federal and local environmental regulations, permits and other requirements. Compliance with these requirements may require significant expenditures and impact production and operations of the Mt. Holland joint venture.
Most of our operations are at work sites with inherent safety and environmental risks. The occurrence of an
accident or safety incident involving our facilities, employees, contractors or others can result in significant damage to the facilities and surrounding communities and injuries, disabilities or even loss of life, which could expose us to operational slowdowns, stoppages or delays, significant financial losses and reputational harm, as well as civil and criminal liabilities.
Most of our operations are at work sites in Chile and Australia, with inherent safety and environmental risks. At these work sites, our employees, contractors and others are at times in close proximity with large pieces of mechanized equipment, moving vehicles, manufacturing processes and hazardous and regulated materials, in a challenging environment. The failure of the TSF operated by the Mt. Holland joint venture in Western Australia could result in severe, and in some cases, catastrophic, property and environmental damage and loss of life, due to hazardous material releases and contamination of surrounding communities ecosystems and water sources, which could endanger the neighboring communities, the local environment and the safety of workers and residents, as well as cause adverse effects to our operations, business and reputation. We are responsible for safety at our work sites, and, accordingly, we have an obligation to comply with applicable laws, including to implement effective safety policies and procedures and to provide appropriate personal protective equipment. The failure by us or others working at such sites to comply with such laws, to implement effective safety procedures, to provide necessary equipment, to protect other contractors at work sites we manage or to conduct work in a safe manner, may result in property damage, injury, disability or loss of life, which may result in investigations, claims or litigation that could result in operational slowdowns, stoppages or delays while such investigations, claims or litigation are conducted. Unsafe work sites also have the potential to increase employee turnover, increase the cost of a project to our customers and raise our operating and insurance costs. In addition, releases of hazardous materials or pollutants, or fires, explosions or other incidents, may result in environmental damages, or public safety concerns, at the facility and in the neighboring communities, and the related costs and liabilities could have a material adverse effect on our business, financial condition or results of operations.
Our safety record is critical to our reputation. For all of the foregoing reasons, if we fail to maintain adequate safety standards, we could suffer harm to our operations, business and reputation, reduced profitability or the loss of business or customers, which could have a material adverse effect on our business, financial condition and results of operations.
Our exports pose special risks to our business and operations.
Exports represent a significant portion of our net revenues, representing 96% of our net revenues for the year ended December 31, 2024. Exports expose us to risk factors beyond our control in our principal sales markets, including:
• fluctuations in exchange rates;
• deteriorating economic conditions;
• imposition of tariffs and other trade barriers, as explained below;
• exchange controls and restrictions on foreign exchange transactions;
• strikes or other events that may affect ports and transportation;
compliance with different foreign legal and regulatory regimes; and Disruptions due to import restrictions and tariffs, other trade protection measures and import or export licensing requirements imposed by foreign countries on our products pose significant risks.
• trade barriers.
Significant political or regulatory changes in the jurisdictions where we sell our products, such as those resulting from the new U.S. presidential administration, are difficult to predict, may create uncertainty and could affect our business. Increased trade protectionism worldwide could adversely affect our business. Trade barriers implemented to protect or revive their domestic industries from foreign imports may reduce demand for our products. Import restrictions, including tariff restrictions, could have a significant impact on world trade. Trade protectionism in the markets we serve may lead to an increase in the cost of
exported goods, delivery time and the risks associated with exporting.
In recent years, tensions in international relations have intensified. For example, the U.S. government has implemented changes in U.S. and international trade policies. Any unfavorable governmental policies regarding international trade, such as capital controls or tariffs, as well as any renegotiation of existing trade agreements, trade retaliation or trade wars, could impact the global economy and, therefore, negatively affect our business, operating results, financial condition and cash flows. These policy pronouncements have generated significant uncertainty about the future relationship between the United States and other exporting countries, including trade policies, treaties, government regulations and tariffs, and have raised concerns about the possibility of a protracted trade war. Tension on trade and other issues remains high, and it is currently unclear what policies the current U.S. administration will implement. Protectionist developments, or the perception that they may occur, could have a significant adverse effect on global economic conditions and could significantly reduce global trade, particularly trade between the United States and other countries. Any unfavorable governmental policies regarding international trade, such as capital controls or tariffs, or the U.S. dollar payment and settlement system, could affect our competitiveness and materially and adversely affect our business, operating results and financial condition. Any new tariffs, legislation or regulations to be implemented, or any renegotiation of existing trade agreements, or any retaliatory trade measures, could have an adverse effect on our business, operating results and financial condition.
A significant percentage of our shares are held by two principal shareholder groups who may have interests that are different from that of other shareholders and of each other. Any change in such principal shareholder groups may result in a change of control of the Company or of its Board of Directors or its management, which may have a material adverse effect on our business, financial condition and results of operations.
As of March 31, 2025, two principal shareholder groups held in the aggregate 47.92% of our total outstanding shares, including 94.19% of our Series A common shares, and have the power to elect six of our eight directors. The interests of the two principal shareholder groups may in some cases differ from those of other shareholders and of each other.
As of March 31, 2025, one principal shareholder group is Sociedad de Inversiones Pampa Calichera S.A. and its related companies, Inversiones Global Mining Chile Limitada and Potasios de Chile S.A. (together, the “Pampa Group”), which owned approximately 25.76% of the total outstanding shares of SQM, and another principal shareholder is Tianqi Lithium Corporation (“Tianqi”), which directly and indirectly owned approximately 22.16% of the total outstanding shares of SQM.
The divestiture by the Pampa Group or Tianqi, or potential changes in the circumstances that have led to the determination of the CMF that there is currently no controlling shareholder of the Company, or a combination thereof, may have a material adverse effect on our business, financial condition and results of operations.
Tianqi is a significant shareholder and a competitor of the Company, which could result in risks to free competition
Tianqi is a competitor in the lithium business, and as a result of the number of SQM shares that it owns, it has the right to choose up to three Board members. Under Chilean law, we are restricted in our ability to decline to provide information about us, which may include competitively sensitive information, to a director of our company. On August 27, 2018, Tianqi and the Chilean antitrust regulator, the Chilean National Economic Prosecutor’s Office (Fiscalía Nacional Económica), or FNE, entered into an extrajudicial agreement, under which certain restrictive measures were implemented in order to (i) maintain the competitive conditions of the lithium market, (ii) mitigate the risks described in the agreement and (iii) limit Tianqi’s access to certain information of the Company and its subsidiaries, which is defined as “sensitive information” under the agreement.
During the approval process of the extrajudicial agreement before the FNE, we expressed our concerns regarding the measures contained in the extrajudicial agreement since, in the Company’s opinion, the measures (i) could not effectively resolve the risks that Tianqi and the FNE have sought to mitigate, (ii) are not sufficient to avoid access to our “sensitive information” that, in the possession of a competitor, could harm us and the proper functioning of the market and (iii) could contradict the Chilean Corporations Act.
During 2024, Tianqi filed a lawsuit challenging the CMF's decision that shareholder approval would not be required in connection with the formation of the new entity between SQM and Codelco. Following several lower court decisions rejecting Tianqi's claims, Tianqi filed an appeal with the Chilean Supreme Court, which rejected Tianqi's appeal.
The presence of a shareholder which is at the same time a competitor of ours and the right of this competitor to choose Board members could generate risks to free competition and/or increase the risks of an investigation of free competition against us, whether in Chile or in other countries, all of which could have a material adverse effect on our business, financial condition and results of operations.
Our information technology systems may be vulnerable to disruption which could place our systems at risk from data loss, operational failure, or compromise of confidential information.
We rely on various computer and information technology tools and systems, which are analyzed prior to their implementation and can add efficiency to business processes. The technological infrastructure is made up of the IT network and the OT network. These environments are separated and segmented in order to preventively contain any cyber attack or incident. Additionally, both networks are protected by various layers of security and these controls help prevent the spread of cyber threats and minimize the impact in the event of an information security breach.
However, we cannot guarantee that due to the increasing sophistication of cyber-attacks our systems will not be compromised and because we do not maintain specialized cybersecurity insurance, our insurance coverage for protection against cybersecurity risk may not be sufficient. Cybersecurity breaches could result in losses of assets or production, operational delays, equipment failure, inaccurate recordkeeping, or disclosure of confidential information, any of which could result in business interruption, reputational damage, lost revenue, litigation, penalties or additional expenses and could have a material adverse effect on our business, financial condition and results of operations. For further details regarding cybersecurity, please refer to “Item 16K. Cybersecurity.”
Political events or financial or other crises in any region worldwide can significantly impact Chile and may
unfavorably affect our operations and liquidity.
Chile is vulnerable to external shocks that could cause significant economic difficulties and affect growth. If Chile experiences lower than expected economic growth or a recession, it is likely that consumer demand for electricity will decrease and that some of our customers may have difficulties paying their electric bills, possibly increasing our uncollectible accounts. Any of these situations could adversely affect our results of operations and financial condition. Financial and political events in other parts of the world could also negatively affect our business. Export trade is important to the Chilean economy generally and to our business in particular. The new presidential administration in the United States has made number of policy changes on trade, foreign relations, government regulation, immigration and other matters that differ significantly from those of the prior administration, which could have material effects on the global political and economic landscape. President Trump has imposed or threatened to impose increased tariffs on imports of most goods from Canada and Mexico, additional tariffs on imports of goods from China above currently applicable tariff rates, steel and aluminum tariffs on all countries, and tariff on imports of cars and auto parts from foreign countries, among others. These tariffs could lead to retaliatory actions by other countries, which could impact foreign trade globally. Protectionist developments, or the perception they may occur, may have a material adverse effect on global economic conditions, and may significantly reduce global trade, including trade between Chile and other countries.
We are unable to predict how government policy, in the United States, China and other trading partners or the outbreak of a trade war between trading partners may impact global economic conditions
Heightened tensions in international relations with China could result in political and economic measures against Chinese-owned companies, which may adversely impact our business, financial condition, and results of operations.
As of March 31, 2025, one of our largest shareholders is Tianqi, a Chinese company, with a 22.16% ownership interest and board representation. Recently there have been heightened tensions in international relations between the United States and Europe, on the one hand, and China. International trade disputes and President Trump’s additional tariffs on imports of goods from China above currently applicable tariff rates and other trade restrictions have affected both diplomatic and economic ties among countries. This environment could result in political and economic measures against Chinese-owned companies. Any further deterioration in the relationship between China, the United States and certain other countries may limit our ability to invest and develop projects in certain countries and adversely impact our business, financial condition, and results of operations.
Outbreaks of communicable infections or diseases, or other public health pandemics may impact the markets in which we, our customers and our suppliers operate or market and sell products and could have a material adverse effect on our operations business, financial condition and results of operations.
Disease outbreaks and other public health conditions in a region where we, our customers or our suppliers operate or market and sell products, could have a significant negative impact on our revenues, profitability and business. The extent of the negative impact would depend on various factors, including but not limited to, the duration and severity of the outbreak, government-imposed restrictions on businesses and individuals, changes in demand for our products, supply chain disruptions, and the health and safety of our employees and the communities in which we operate.
The potential impact of any future disease outbreak or public health condition on international financial markets, and the measures governments and businesses may take to control such outbreaks, cannot be predicted and are beyond our control and it is possible that any such future outbreak could adversely affect our business, financial conditions and results of operations.
If our stakeholders and other constituencies believe we fail to appropriately address sustainability and other environmental, social and governance (ESG) concerns it may adversely affect our business.
In October 2020, we announced our sustainable development plan, which includes voluntarily expanding our monitoring systems, promoting better and deeper conversations with neighboring communities and becoming carbon neutral by 2040, and reducing water by 65% and brine extraction by 50% of our authorized limits. We also announced the goal of obtaining international certifications and participating in international sustainability indices that we consider essential for a sustainable future. Since our sustainable development plan was announced, we have participated in voluntary assessments, such as Ecovadis, CDP Certifications, Drive Sustainability, which support our sustainable development plan, such as Responsible Care from the Chilean Chemical Industries Association, Protect&Sustain from the International Fertilizer Association, Ecoports, ISO 14001, ISO 45001 and ISO 50001, and we have achieved IRMA 75 level of the same standard for our operations in the Salar de Atacama, which seeks to boost responsible mining. In 2021, the Port of Tocopilla obtained the Responsible Care certification, obtaining level 2 certification and in June 2023, the ECOSLC Foundation approved for the first time the ECOPORTS PERS Certification after validation by the independent auditor LRQA, The Netherlands. Also, during 2022, Responsible Care certification of the rectified New Victoria site was achieved. The Protect & Sustain certification applies to the operations of Coya Sur, Salar de Atacama, Antofagasta, Santiago and the Port of Tocopilla. Regarding ISO management systems, the Port of Tocopilla obtained certification in January 2022 in the ISO 14001 standard. We completed the ISO 14001 and 45001 recertification of our management systems at the Salar de Atacama and our Lithium Chemical Plant, along with the implementation of ISO 50001, as recommended by the certification body to certify our energy management system. We also obtained ISO 50001 certification for our Nueva Victoria, Coya Sur facilities. In 2023, the Port of Tocopilla was certified by EcoPorts, a leading environmental initiative for
the European port sector. We participated in the Dow Jones Sustainability Indexes (DJSI) assessment and were accepted in the World, Emerging Markets, Mila and Chile indices, and were included in the Sustainability Yearbook 2024. We were evaluated in the Carbon Disclosure Project (CDP) where we received a B category climate change rating, which is above the global average (C category) and in line with the global average for the chemical industry (B- category).
While we are dedicated to our sustainability-related efforts, if we do not adequately address all relevant stakeholder concerns regarding ESG criteria, we may face opposition, which could negatively affect our reputation, delay operations or result in threats or litigation actions. If we do not maintain our reputation with key stakeholders and interest groups and effectively manage these sensitive issues, they could adversely affect our business, results of operations and financial condition.
Climate change and a global transition to a low carbon economy can create physical risks and other risks that could adversely affect our business and operations and adverse weather conditions or significant changes in weather patterns could have a material adverse impact on our results of operations.
The impact of climate change and climate change-driven responses, such as a global transition to a low carbon economy on our operations and our customers’ operations, remains uncertain, but the regulatory, market-risks associated with climate change as well as the physical effects of climate change could have an adverse effect on our operations, employees, communities, supply chain and our customers.
Climate-derived threats include, among others, changes in regional weather patterns, including changes in precipitation and evaporation parameters that, on the one hand, some phenomena could intensify, bringing intense rains in short periods of time that generate other unwanted events that affect our operation and also our surrounding communities, such as road closures, infrastructure, landslides, among others. Additionally, rising sea levels and storm surges, increasing the days of port closures that could impact the supply chain affecting our customers and suppliers. Other events such as storm patterns and intensities, increased wind speed, heat waves, cold waves, among other events considered as acute physical risks of climate change. Other effects are related to temperature levels, including increased volatility in seasonal temperatures through excessively high or low temperatures. These extreme weather conditions may vary by geography and location. Weather conditions have historically caused volatility in the agricultural industry (and indirectly in our results of operations) by causing crop failures or significantly reduced harvests, which can adversely affect application rates, demand for our plant nutrition products and our customers’ creditworthiness. Weather conditions can also lead to a reduction in farmable acres, flooding, drought or wildfires, which could also adversely impact growers’ crop yields and the uptake of plant nutrients, reducing the need for application of plant nutrition products for the next planting season which could result in lower demand for our plant nutrition products and negatively impact the prices of our products.
Any prolonged change in weather patterns in our markets, as a result of climate change or otherwise, could have a material adverse impact on the results of our operations.
Risks Relating to Financial Markets
Currency fluctuations may have a negative effect on our financial performance.
We transact a significant portion of our business in U.S. dollars, and the U.S. dollar is the currency of the primary economic environment in which we operate. In addition, the U.S. dollar is our functional currency for financial statement reporting purposes. A significant portion of our costs, however, is related to the Chilean peso. Therefore, an increase or decrease in the exchange rate between the Chilean peso and the U.S. dollar would affect our costs of production. The Chilean peso has been subject to large devaluations and revaluations in the past and may be subject to significant fluctuations in the future. As of December 31, 2024, the Chilean peso exchange rate was Ch$996.46 per U.S. dollar, while as of December 31, 2023 the Chilean peso exchange rate was Ch$877.12 per U.S. dollar. The Chilean peso therefore depreciated against the U.S. dollar by 13.6% in 2024. As of March 31, 2025, the Observed Exchange Rate was Ch$946.10 per U.S. dollar.
As an international company operating in several other countries, we also transact business and have assets and liabilities in other non-U.S. dollar currencies, such as, among others, the Euro, the South African rand, the Mexican peso, the Chinese yuan, the Thai baht and the Brazilian real.
As a result, fluctuations in the exchange rates of such foreign currencies to the U.S. dollar may have a material adverse effect on our business, financial condition and results of operations.
We may be subject to risks associated with the discontinuation, reform or replacement of benchmark indices.
Interest rate, foreign exchange rate and other types of indices which are deemed to be “benchmarks” are the subject of increased regulatory scrutiny and may be discontinued, reformed or replaced. For example, in 2017, the U.K. Financial Conduct Authority announced that it will no longer persuade or compel banks to submit rates for the calculation of the London interbank offered rate (“LIBOR”) benchmark after 2021 and LIBOR eventually ceased publication on June 30, 2023. As was the case with LIBOR, other future reforms may, cause benchmarks to be different than they have been in the past, or to disappear entirely, or have other consequences which cannot be fully anticipated which introduces a number of risks for our business. These risks include (i) legal risks arising from potential changes required to document new and existing transactions; (ii) financial risks arising from any changes in the valuation of financial instruments linked to benchmark rates; (iii) pricing risks arising from how changes to benchmark indices could impact pricing mechanisms on some instruments; (iv) operational risks arising from the potential requirement to adapt IT systems, trade reporting infrastructure and operational processes; and (v) conduct risks arising from the potential impact of communication with customers and engagement during the transition period. Various replacement benchmarks, and the timing of and mechanisms for implementation are being considered. The transition away from LIBOR to risk-free reference rates (RFRs) requires financial firms to make a variety of internal changes, for example updating front-and back-office systems, retraining staff and redesigning processes, as well as potentially modifying or renegotiating potentially thousands of LIBOR-linked contracts. However, the discontinuation or reformation of existing benchmark rates or the implementation of alternative benchmark rates may have a material adverse effect on our business, financial condition and results of operations.
In addition to the financial benchmarks, there are also market benchmarks used for the pricing of our long-term supply contracts, which may also be subject to regulatory scrutiny, or which may be discontinued, reformed or replaced. For example, for some of our long-term supply contracts, prices reference to indices prepared by commodity reporting agencies such as the Shanghai Metals Market (SMM) and Fastmarkets.
Risks Relating to Chile
The National Lithium Strategy announced by the Chilean government in April 2023 has created and may continue to create uncertainty in the Chilean lithium industry, which could have a material adverse effect on our business performance or the value of our shares and ADRs.
On April 20, 2023, President Boric announced a new National Lithium Strategy that would, among other things, create a National Lithium Company (subject to approval by the Chilean Congress), with one of its objectives being to provide for the Chilean state’s participation in lithium-related activities in the Salar de Atacama.
In connection with the announcement, President Boric provided statements with respect to the following matters:
•Under the National Lithium Strategy, Codelco would be tasked by Corfo to lead the formation of the new National Lithium Company and would become its majority shareholder. Codelco would also be designated to lead negotiations with SQM to seek participation in SQM’s operations in the Salar de Atacama prior to its expiration in 2030, as well as similar negotiations with other mining companies operating in the Salar de Atacama. President Boric and Corfo have affirmed that the terms of existing mining leases in the Salar de Atacama would be respected and any Chilean state participation in their operations would be with the agreement of the applicable counterparty.
•For areas already under development by Codelco and Enami (the Chilean state-owned minerals company) for lithium, new lithium exploration and exploitation contracts would only be granted by the Chilean state to Codelco and Enami subsidiaries, who would decide whether or not to partner with private parties for the development projects. There would be a public bid process for exploration rights over unexplored areas. Any private entities seeking exploitation rights would be required to partner with a state-owned company who would be the controller of the project if it is declared to be strategic for the country.
There can be no assurance that the necessary elements of the National Lithium Strategy requiring Congressional action will be approved by the Chilean Congress. The National Lithium Strategy has created and may create uncertainty in the Chilean lithium industry. On May 31, 2024, SQM and Codelco entered into a partnership agreement which establishes the rights and obligations of the parties to form their partnership for the development of mining and production activities aimed at the production of lithium, potassium and other products from the properties of Corfo in the Salar de Atacama and their subsequent marketing (directly or through its subsidiaries or representative offices). The formation of the joint venture is subject to the satisfaction or waiver of certain conditions precedent. There can be no assurance that the conditions precedent will be satisfied or waived. Failure to consummate the formation of the new entity could adversely impact SQM’s ability to participate in the mineral exploitation in the Salar de Atacama concession beyond the expiration of the SQM-Corfo Agreements in December 2030 or to what extent the Chilean state will participate in SQM’s interest in its current Salar de Atacama mineral exploitation operations prior to the December 2030 expiration of the SQM-Corfo Agreements.
For the year ended December 31, 2024, revenues related to products originating from the Salar de Atacama represented 55% of our total consolidated revenues. Approximately 49% of our total consolidated revenues were represented by lithium products. The National Lithium Strategy has created and may continue to create uncertainty in the Chilean lithium industry, which could have a material adverse effect on our business performance or the value of our shares and ADRs.
See “— Risks Relating to our Business — Our inability to extend on favorable terms our access to the mineral exploitation rights relating to the Salar de Atacama concession, upon which our business is substantially dependent, beyond the expiration date of our current agreements in December 2030 through the formation of the association agreement with Codelco could have a material adverse effect on our business, financial condition and results of operations.”
As we are a company based in Chile, we are exposed to political risks in Chile and uncertainty regarding surrounding the upcoming general and presidential elections.
Our business, financial conditions and results of operations could be affected by changes in policies of the Chilean government, other political developments in or affecting Chile, legal changes in the standards or administrative practices of Chilean authorities or the interpretation of such standards and practices, over which we have no control. Upcoming general and presidential elections in November 2025, create heightened uncertainty regarding monetary, fiscal, tax, social and other policies. We have no control over the new government policies and cannot predict how those policies or government intervention will affect the Chilean economy or social conditions, or, directly and indirectly, our business, financial conditions and results of operations.
Changes in policies involving exploitation of natural resources, taxation and other matters related to our industry may adversely affect our business, financial conditions and results of operations. Changes in social, political, regulatory and economic conditions or in laws and policies governing foreign trade, manufacturing, development and investment in Chile, as well as crises and political uncertainties in Chile, could adversely affect economic growth in Chile.
Future adverse developments in Chile, including upcoming general and presidential elections, other political events, financial or other crises, changes to policies regarding foreign exchange controls, regulations, and taxation, may impair our ability to execute our business plan and could adversely affect our growth, results of operations, and financial condition. Inflation, devaluation, social instability, and other political, economic, or diplomatic developments could also reduce our profitability. Economic and market conditions in Chilean financial and capital markets may be affected by international events, which could unfavorably affect the value of our securities.
Changes in regulations regarding, or any revocation or suspension of mining, port or other concessions could affect our business, financial condition and results of operations.
We conduct our mining operations, including brine extraction, under exploitation and exploration concessions granted in accordance with provisions of the Chilean Constitution and related laws and statutes. Our exploitation concessions essentially grant a perpetual right (with the exception of the rights granted to SQM Salar with respect to the Salar de Atacama concessions under the SQM-Corfo Agreements described above, which expires in 2030) to conduct mining operations in the areas covered by the concessions, provided that we pay annual concession fees. Our exploration concessions permit us to explore for mineral resources on the land covered thereby for a specified period of time and to subsequently request a corresponding exploitation concession. Any changes to the Chilean Constitution with respect to the exploitation and exploration of natural resources and concessions granted as a result of the constitutional convention could materially adversely affect our existing exploitation and exploration concessions or our ability to obtain future concessions and could have a material adverse effect on our business, financial condition and results of operations.
We also operate port facilities at Tocopilla, Chile, for the shipment of products and the delivery of raw materials pursuant to maritime concessions, which have been granted under applicable Chilean laws and are normally renewable on application, provided that such facilities are used as authorized and annual concession fees are paid.
Any significant adverse changes to any of these concessions, any changes to regulations to which we are subject or adverse changes to our other concession rights, or a revocation or suspension of any of our concessions, could have a material adverse effect on our business, financial condition and results of operations.
Changes in water rights laws and other regulations could affect our business, financial condition and results of operations.
We hold water use rights that are key to our operations. These rights were obtained from the Chilean Water Authority (Dirección General de Aguas) for supply of water from rivers and wells near our production facilities, which we believe are sufficient to meet current operating requirements.
In January 2022, the Chilean Congress approved a bill that amends the Chilean Water Code (Código de Agua), which was published on April, 6, 2022, becoming an applicable Chilean law. This modification introduces several changes to the Water Code. A significant amendment is the change in the time periods for which the water rights were granted. According to this new legislation, water rights: (1) will have a temporary nature being granted for a maximum of 30 years (the specific period will depend on the characteristic of the riverbed and its water availability); (2) will be subject, in whole or in part, to expiration for its non-use; (3) will have to give human consumption and sanitation priority in the use of water (establishing priority orders and possible limitations in the granting and use of water depending on its destination); (4) will be subject to a minimum ecological flow to ensure nature conservation and environmental protection, as determined by the Chilean Water Authority; and (5) will be subject to the obligation of registration in the respective Real Estate Registry and in the Public Water Cadaster of the Chilean Water Authority, and to sanctions of expiration and fines in case of non-compliance.
The Chilean Congress is considering a draft bill that declares lithium mining to be in the national interest, which if passed in its current form, could enable the expropriation of our lithium assets.
The Chilean Congress is currently discussing a bill, Bulletin No. 10,638-08, which “Declares the exploitation and commercialization of lithium and Sociedad Química y Minera de Chile S.A. to be of national interest.” The purpose of this bill is to enable the potential expropriation of our assets, or our lithium operations in general. The bill is subject to further discussion in the Chilean Congress, which includes several possible changes to its current wording. We cannot guarantee that the bill will not eventually be approved by the Chilean Congress, or that its final wording will not refer to us or our lithium operations. If the bill is approved as currently drafted, it could have a material adverse effect on our business, financial condition and results of operations.
The Chilean government could levy additional taxes on mining companies, which may include lithium exploitation companies, operating in Chile.
The Chilean Internal Revenue Service ("SII" in its Spanish acronym) has sought to extend the specific tax on mining activities to lithium mining, which is not concessionable by law. As of December 31, 2023, SQM had paid a total of US$986.3 million for specific tax on mining activities applied to lithium related to tax years 2012 to 2023 (fiscal years 2011 to 2022). SQM Salar has filed seven tax claims against the SII. The amount paid included US$59.5 million in over-assessed amounts, US$818.0 million in disputed taxes (net of the corporate income tax impact), and US$108.8 million in interest and penalties. On April 5, 2024, the Santiago Court of Appeals issued a ruling on one of the tax claims, case No. 312-2022, overturning the ruling previously issued by the Santiago Metropolitan Region Tax and Customs Court, which had upheld SQM Salar’s action for annulment on public law grounds regarding tax assessments for tax years 2017 and 2018. Although this ruling by the Santiago Court of Appeals does not affect the other claims filed by SQM Salar against the SII and is still subject to appeal by SQM Salar, it prompted a review of the accounting treatment of the tax claims by the Company’s Board of Directors. As a result, the Company recognized a tax expense of US$1,106.2 million for the year ended December 31, 2023 (US$926.7 million for fiscal years 2011 to 2022, US$162.8 million for the fiscal year 2023, and US$16.7 million for fiscal year 2024). This expense reflects the potential impact of the Santiago Court of Appeals ruling on the tax claims. As of December 31, 2024 and December 31, 2023, the Company recorded non-current tax receivables of US$59.5 million.
If the SII ultimately prevails in the pending legal proceedings or continues to assess additional taxes based on its interpretation of the application of the mining tax specific to the extraction of lithium, it could have a material adverse effect on our business, financial condition and results of operations.
New legislation affecting mining licenses could materially adversely affect our mining licenses and mining concessions.
Law No. 21,420, published in the Official Gazette on February 4, 2022, reduces or eliminates certain tax exemptions in order to finance a new social security program called “Universal Guaranteed Pension”. Among other changes, this law contemplates amendments to the Chilean Mining Code, such as: (i) the increase in the value of the mining licenses related to the mining concessions (an increase of at least 4 times the previous value); (ii) the modification of the term on which the mining exploration concessions are granted and the prohibition on the holder to obtain a new mining exploration concession in the same area once the previous concession has expired; and (iii) amendments to the mining concessions award process.
Ratification of the International Labor Organization’s Convention 169 concerning indigenous and tribal peoples might affect our development plans.
Chile, a member of the International Labor Organization (“ILO”), has ratified the ILO’s Convention 169 (the “Indigenous Peoples Convention”) concerning indigenous and tribal people. The Indigenous Peoples Convention established several rights for indigenous people and communities. Among other rights, the Indigenous Peoples Convention states that (i) indigenous groups should be notified and consulted prior to the development of any project on land deemed indigenous, although veto rights are not mentioned, and (ii) indigenous groups have, to the extent possible, a stake in benefits resulting from the exploitation of natural resources in indigenous land. The extent of these benefits has not been defined by the Chilean government. The Chilean government has addressed item (i) above through Supreme Decree No. 66, issued by the Social Development Ministry. This decree requires government entities to consult indigenous groups that may be directly affected by the adoption of legislative or administrative measures, and it also defines criteria for the projects or activities that must be reviewed through the environmental evaluation system that also require such consultation.
To the extent that the new rights outlined in the Indigenous Peoples Convention become laws or regulations in Chile, judicial interpretations of the convention of those laws or regulations could affect the development of our investment projects in lands that have been defined as indigenous, which could have a material adverse effect on our business, financial condition and results of operations. The Chilean Supreme Court has consistently held that consultation processes must be carried out in the manner prescribed by the Indigenous Peoples Convention.
The consultation process may cause delays in obtaining regulatory approvals, including environmental permits, as well as public opposition by local and/or international political, environmental and ethnic groups, particularly in environmentally sensitive areas or in areas inhabited by indigenous populations. Furthermore, the omission of the consultation process when required by law may result in the revocation or annulment of regulatory approvals, including environmental permits already granted.
Consequently, operating projects may be affected since the omission of the consultation process, when required by law, could lead to public law annulment actions pursuing the annulment of the environmental permits granted.
However, this risk frequently arises during the environmental assessment phase when the environmental permits are to be obtained. In such scenario, affected parties may take several legal actions to declare null or void the environmental permits that omitted the consultation process, and in some cases, courts have overturned environmental approvals in which consultation was not made as prescribed in the Indigenous Peoples Convention.
If the Indigenous Peoples Convention affects our development plans, it could have a material adverse effect on our business, financial condition and results of operations.
Our operations and projects are subject to risks related to our relationships and/or agreements with local communities and laws on the rights of indigenous peoples.
Our operations and projects are subject to risks related to our relationships and/or agreements with local communities and laws on the rights of indigenous peoples. Our relationships with the communities that are located near our operations are essential to the success of our existing operations, exploration activities and the development of our production facilities. A failure to manage relationships with such local communities may lead to local dissatisfaction which, in turn, may lead to interruptions to our operations, exploration activities and development activities.
The Atacameño Peoples Council (Consejo de Pueblos Atacameños), which represents 18 Atacameño indigenous communities, advocates for the rights, traditions, and interests of the Atacameño people, including land use, environmental protection, and economic development in the Atacama region of Chile. On December 15, 2023, we signed an agreement with Codelco and the Atacameños Indigenous Organization to include the Atacameños Indigenous Organization in discussions regarding extending lithium extraction in the Salar de Atacama beyond 2030 through an association agreement with Codelco. However, in January 2024, a disagreement within the Atacameños Peoples Council led to a blockade of the main roads to our Salar de Atacama facilities for four days by a splinter group to express their dissent towards the non-binding Memorandum of Understanding we signed with Codelco for the operation and development of lithium extraction in the Salar de Atacama from 2025 to 2060. The blockade resulted in a shutdown of operations at our Salar de Atacama facilities for one day and was quickly resolved. However, there can be no assurance that other disruptions of our operations in the Salar de Atacama or elsewhere by members of the local communities near our operations may not occur again in the future.
Our lease agreement with Corfo, which grants us exclusive rights to exploit mineral resources in the Salar de Atacama until 2030, includes a commitment to invest between US$10 million and US$15 million annually in sustainable development projects for the Atacama La Grande indigenous communities through organizations promoting local development. We are dedicated to maintaining open, constructive dialogues with the local communities, primarily via roundtable discussions.
Disputes with the local communities that live near the Salar de Atacama may in the future interfere with our operations and/or result in additional operating costs or restrictions and adversely impact the use and enjoyment of mining rights with respect to our assets. Specific challenges in community relations include community concerns over management of increased traffic, environmental impacts and resource depletion, social, environmental and cultural heritage impacts, increasing expectations regarding the level of benefits that communities receive, benefits sharing with indigenous peoples’ governments, concerns focused on the level of transparency regarding the payment of compensation and the provision of other benefits to affected landholders and the wider community.
In particular, opposition by indigenous communities to our activities may require modifications, disrupt or preclude our operations, our exploration activities or the development of our production facilities or may require entry into additional agreements with local communities, which may result in additional costs.
Our current and future operations are subject to a risk that one or more indigenous communities in the locations in which we operate may oppose continued operation, further development or new development of our operations and facilities. Claims and protests driven by such opposition may disrupt or delay activities, including permitting, at our operations and facilities. The negotiation and review of agreements, including components such as business development, participation, co-management and compensation and other benefits, involve complicated and sensitive issues, associated expectations and often competing interests. The nature and subject matter of these negotiations may result in community unrest which, in some instances, may lead to interruptions in our exploration programs, operational activities or delays to development of our production facilities.
Chile has different corporate disclosure and accounting standards than those you may be familiar with in the United States.
Accounting, financial reporting and securities disclosure requirements in Chile differ in certain significant respects from those required in the United States. Accordingly, the information about us available to you will not be the same as the information available to holders of securities issued by a U.S. company. In addition, although Chilean law imposes restrictions on insider trading and price manipulation, applicable Chilean laws are different from those in the United States, and the Chilean securities markets are not as highly regulated and supervised as the U.S. securities markets.
Chile is located in a seismically active region.
Chile is prone to earthquakes because it is located along major fault lines. During 2017-2023, Chile has experienced several earthquakes which had a magnitude of over 6.0 on the Richter scale. There were also earthquakes in the past decade that caused substantial damage to some areas of the country. Chile has also experienced volcanic activity. A major earthquake or a volcanic eruption could have significant negative consequences for our operations and for the general infrastructure, such as roads, rail, and access to goods, in Chile. Although we maintain industry standard insurance policies that include earthquake coverage, we cannot assure you that a future seismic or volcanic event will not have a material adverse effect on our business, financial condition and results of operations.
Risks Relating to the Company's Shares and ADRs:
The price of our ADRs and the U.S. dollar value of any dividends will be affected by fluctuations in the U.S. dollar/Chilean peso exchange rate.
Chilean trading in the shares underlying our ADRs is conducted in Chilean pesos. The depositary for our ADRs will receive cash distributions that we make with respect to the shares in Chilean pesos. The depositary will convert such Chilean pesos to U.S. dollars at the then prevailing exchange rate to make dividend and other distribution payments in respect of ADRs. If the value of the Chilean peso falls relative to the U.S. dollar, the value of the ADRs and any distributions to be received from the depositary will decrease.
Developments in other emerging markets could materially affect the value of our ADRs and our shares.
The Chilean financial and securities markets are, to varying degrees, influenced by economic and market conditions in other emerging market countries or regions of the world. Although economic conditions are different in each country or region, investor reaction to developments in one country or region can have significant effects on the securities of issuers in other countries and regions, including Chile and Latin America. Events in other parts of the world may have a material effect on Chilean financial and securities markets and on the value of our ADRs and our shares.
The prices of securities issued by Chilean companies, including banks, are influenced to varying degrees by economic and market considerations in other countries. We cannot assure you that future developments in or affecting the Chilean economy, including consequences of economic difficulties in other markets, will not materially and adversely affect our business, financial condition or results of operations.
We are exposed to risks related to the weakness and volatility of the economic and political situation in Asia, the United States, Europe, other parts of Latin America and other nations. Although economic conditions in Europe and the United States may differ significantly from economic conditions in Chile, investors’ reactions to developments in these other countries may have an adverse effect on the market value of securities of Chilean issuers.
If these, or other nations’ economic conditions deteriorate, the economy in Chile, as both a neighboring country and a trading partner, could also be affected and could experience slower growth than in recent years, with possible adverse impact on our borrowers and counterparties.
The volatility and low liquidity of the Chilean securities markets could affect the ability of our shareholders to sell our ADRs.
The Chilean securities markets are substantially smaller, less liquid and more volatile than the major securities markets in the United States. The volatility and low liquidity of the Chilean markets could increase the price volatility of our ADRs and may impair the ability of a holder to sell our ADRs or to sell the shares underlying our ADRs into the Chilean market in the amount and at the price and time the holder wishes to do so.
Our share or ADR price may react negatively to future acquisitions, divestitures, capital increases and investments.
As world leaders in our core businesses, part of our strategy is to look for opportunities that will allow us to consolidate and strengthen our competitive position in jurisdictions in which we currently do not operate. Pursuant to this strategy, we may carry out acquisitions or joint ventures relating to any of our businesses or to new businesses in which we believe we may have sustainable competitive advantages. We may also seek to strengthen our leadership position in our core businesses through divestitures of certain assets or stakes in subsidiaries that we believe will allow us to concentrate our efforts on our core businesses. Depending on our capital structure at the time of any acquisitions or joint ventures, we may need to raise significant debt and/or equity which will affect our financial condition and future cash flows. We may also carry out capital increases, such as the one undertaken in 2021, in order to raise capital for our capital plan. In addition, any divestitures we effect may not result in strengthening our position in our core businesses as anticipated. Any change in our financial condition could affect our results of operations and negatively impact our share or ADR price.
ADR holders may be unable to enforce rights under U.S. securities laws.
Because we are a Chilean company subject to Chilean law, the rights of our shareholders may differ from the rights of shareholders in companies incorporated in the United States, and ADR holders may not be able to enforce or may have difficulty enforcing rights currently in effect under U.S. federal or state securities laws.
Our company is an open stock corporation incorporated under the laws of the Republic of Chile. Most of our directors and officers reside outside the United States, principally in Chile. All or a substantial portion of the assets of these persons are located outside the United States. As a result, if any of our shareholders, including holders of our ADRs, were to bring a lawsuit against our officers or directors in the United States, it may be difficult for them to effect service of legal process within the United States upon these persons. Likewise, it may be difficult for them to enforce judgments obtained in United States courts based upon the civil liability provisions of the federal securities laws in the United States against them in the United States.
In addition, there is no treaty between the United States and Chile providing for the reciprocal enforcement of foreign judgments. However, Chilean courts have enforced judgments rendered in the United States, provided that the Chilean court finds that the United States court respected basic principles of due process and public policy. Nevertheless, there is doubt as to whether an action could be brought successfully in Chile in the first instance on the basis of liability based solely upon the civil liability provisions of the United States federal securities laws.
If preemptive rights are unavailable for our ADR holders, their holdings may be diluted if we issue new stock.
Chilean laws require companies to offer their shareholders preemptive rights whenever issuing new shares of capital stock so shareholders can maintain their existing ownership percentage in a company. If we increase our capital by issuing new shares, a holder may subscribe for up to the number of shares that would prevent dilution of the holder’s ownership interest.
If we issue preemptive rights, United States holders of ADRs would not be able to exercise their rights unless a registration statement under the Securities Act were effective with respect to such rights and the shares issuable upon exercise of such rights or an exemption from registration were available. We cannot assure holders of ADRs that we will file a registration statement or that an exemption from registration will be available. Although in connection with the 2021 capital increase, we filed a registration statement that permitted holders of ADRs to exercise preemptive rights, we may, in our absolute discretion, decide not to prepare and file such a registration statement in a future capital increase. If our ADR holders were unable to exercise their preemptive rights in a future capital increase because we do not file a registration statement, the ADR depositary would attempt to sell their rights and distribute the net proceeds from the sale to them, after deducting the depositary’s fees and expenses. If the ADR depositary is not able sell the rights, the rights would expire and have no further value and holders of ADRs would not realize any value from them. In either case, ADR holders’ equity interests in us would be diluted in proportion to the increase in our capital stock.
If we were classified as a Passive Foreign Investment Company by the U.S. Internal Revenue Service, there could be adverse consequences for U.S. investors.
We believe that we were not classified as a Passive Foreign Investment Company (“PFIC”) for 2024. Characterization as a PFIC could result in adverse U.S. tax consequences to a U.S. investor in our shares or ADRs. For example, if we (or any of our subsidiaries) are a PFIC, our U.S. investors may become subject to increased tax liabilities under U.S. tax laws and regulations and will become subject to burdensome reporting requirements. The determination of whether or not we (or any of our subsidiaries or portfolio companies) are a PFIC is made on an annual basis and will depend on the composition of our (or their) income and assets from time to time. See “Item 10.E. Taxation—Material United States Tax Considerations.”
Dividends and distributions to ADR holders may be limited by practical considerations and legal limitations, which may delay the payment and receipt of dividends and distributions to ADR holders.
Holders of ADRs generally have the right to receive dividends and other distributions we make on Series B common shares held by the ADR custodian under the terms of the deposit agreement in proportion to the number of ADRs held as of the specified record date, after deduction of the applicable fees, taxes and expenses. Receipt of these dividends and distributions may be limited by practical considerations and legal limitations, which may delay the payment and receipt of dividends and distributions by ADR holders.
Changes in Chilean tax regulations could have adverse consequences for U.S. investors.
Cash dividends paid by the Company with respect to the shares, including the shares represented by ADRs, will be subject to a Chilean withholding tax at a rate of 35%, less the credit available for corporate tax, which must be withheld and paid by the Company (the “Withholding Tax”). The effective rate of Withholding Tax imposed on dividends attributed to earnings in 2024 of the Company and distributed during the same period was 23.90411%.
Changes in Chilean tax regulations could have adverse consequences for U.S. investors. For example, the changes introduced by Law No. 21,420 published in the Official Gazette on February 4, 2022 and effective on September 1, 2022, by which the highest value or gain obtained in the sale on the stock exchange or in a public offering process of shares of corporations with a high stock market presence will be affected by a single tax with a rate of 10%, except for certain institutional investors, could have adverse tax consequences for investors resident in the United States. See “Item 3.D. Risk Factors—Risks Relating to Chile—The Chilean Government Could Levy Additional Taxes on Corporations Operating in Chile” and “Item 10.E. Taxation—Material Chilean Tax Considerations.”
General Risk Factors
Our measures to minimize our exposure to bad debt may not be effective and a significant increase in our accounts receivable coupled with the financial condition of customers may result in losses that could have a material adverse effect on our business, financial condition and results of operations.
Potentially negative effects of global economic conditions on the financial condition of our customers may include the extension of the payment terms of our accounts receivable and may increase our exposure to bad debt. While we have implemented certain safeguards, such as using credit insurance, letters of credit and prepayment for a portion of sales, to minimize the risk, we cannot assure you that such safeguards will be effective and a significant increase in our accounts receivable coupled with the financial condition of customers may result in losses that could have a material adverse effect on our business, financial condition and results of operations.
Quality standards in markets in which we sell our products could become stricter over time.
In the markets in which we do business, customers may impose quality standards on our products and/or governments may enact stricter regulations for the distribution and/or use of our products. As a result, if we cannot meet such new standards or regulations, we may not be able to sell our products. In addition, our cost of production may increase in order to meet any such newly imposed or enacted standards or regulations. Failure to sell our products in one or more markets or to important customers could materially adversely affect our business, financial condition and results of operations.
Our business is subject to many operating and other risks for which we may not be fully covered under our insurance policies.
Our facilities and business operations in Chile and abroad are insured against losses, damage or other risks by insurance policies that are standard for the industry and that would reasonably be expected to be sufficient by prudent and experienced persons engaged in businesses similar to ours.
We may be subject to certain events that may not be covered under our insurance policies, which could have a material adverse effect on our business, financial condition and results of operations. Additionally, as a result of major earthquakes and unexpected rains and flooding in Chile, as well as other natural disasters worldwide, conditions in the insurance market have changed and may continue to change in the future, and as a result, we may face higher premiums and reduced coverage, which could have a material adverse effect on our business, financial condition and results of operations.
Our water supply could be affected by geological changes or climate change.
Our access to water may be impacted by changes in geology, climate change or other natural factors, such as wells drying up or reductions in the amount of water available in the wells or rivers from which we obtain water, that we cannot control. The use of seawater for future or current operations could increase our operating costs. In addition, seawater projects could face timing issues and permits uncertainty which make them difficult to develop and construct. Any such change may have a material adverse effect on our business, financial condition and results of operations.
Any loss of key personnel may materially and adversely affect our business.
Our success depends in large part on the skills, experience and efforts of our senior management team and other key personnel. The loss of the services of key members of our senior management or employees with critical skills could have a negative effect on our business, financial condition and results of operations. If we are not able to attract or retain highly skilled, talented and qualified senior managers or other key personnel, our ability to fully implement our business objectives may be materially and adversely affected.
We are subject to Chilean and international anti-corruption, anti-bribery, anti-money laundering and international trade laws. Failure to comply with these laws could adversely impact our business, financial condition and results of operations.
We are required to be in compliance with all applicable laws and regulations in Chile and internationally with respect to anti-corruption, anti-money laundering and other regulatory matters, including the Foreign Corrupt Practices Act (FCPA). Although we and our subsidiaries maintain policies, processes and controls intended to comply with these laws, we cannot ensure that these compliance policies and processes will prevent intentional, reckless or negligent acts committed by our officers or employees.
We have received a request for information and subpoena from the SEC requesting information related to our business operations, compliance program, and allegations of potential violations of the FCPA and other anti-corruption laws. The SEC has said that the investigation is a non-public, fact-finding inquiry and we are not aware that any conclusion has been reached by the SEC. We initiated an internal review to identify materials that are responsive to the SEC’s inquiry and are actively cooperating in the SEC’s review by providing the information requested. We are cooperating fully with the SEC regarding this matter. However, at this time we cannot predict when the SEC’s review will be completed, the outcome of its inquiry, what conclusions it may reach, any actions it may take as a result of its inquiry, or the impact of such conclusions or actions on our business, financial conditions or results of operations.
If we or our subsidiaries fail to comply with any applicable anti-corruption, anti-bribery, anti-money laundering or other similar laws, we and our officers and employees may be subject to criminal, administrative or civil penalties and other remedial measures, which could have material adverse effects on our and our subsidiaries’ business, financial condition and results of operations.
Any investigation of potential violations of anti-corruption, anti-bribery or anti-money laundering laws by governmental authorities in Chile or other jurisdictions could result in an inability to prepare our consolidated financial statements in a timely manner, which could adversely impact our reputation, ability to access the financial markets and ability to obtain contracts, assignments, permits and other government authorizations necessary to participate in our and our subsidiaries’ industry, which, in turn, could have adverse effects on our and our subsidiaries’ business, financial condition and results of operations.
We are subject to risks related to the armed conflicts in other areas of the world, which may have a material adverse effect on our business, financial condition and results of operations.
Global markets have been and may continue to be subjected to periods of economic uncertainty, volatility and disruption due to armed conflicts around the world. Since 2022, there has been an ongoing military conflict between Russia and Ukraine and since 2023 there have been armed conflicts in the Middle East, such as in Gaza and between Israel and Iran.
The Russia-Ukraine military conflict has provoked strong reactions from the United States, the UK, the European Union and various other countries around the world, including the imposition of broad financial and economic sanctions against Russia in the past years. However, President Trump has recently made several statements signaling a shift from the previous administration approach to U.S. foreign policy regarding Ukraine, NATO and Gaza, which could have material effects on the global political and economic landscape.
While the precise effects of the ongoing military conflict on the global economies remain uncertain, they have already resulted in significant volatility in financial markets as well as in an increase in energy and commodity prices globally. Should the conflict continue or escalate, markets may face various economic and security consequences including, but not limited to, supply shortages of different kinds, further increases in prices of commodities, including natural gas, oil, fertilizers and agricultural goods, significant disruptions in logistics infrastructure, telecommunications services, the risk of unavailability of information technology systems and infrastructure, among others, as well as potentially limiting access to financial markets. The resulting impacts on financial markets, inflation, interest rates, unemployment and other matters could disrupt the global economy. Other potential consequences include, but are not limited to, growth in the number of popular uprisings in the region, increased political discontent, especially in the regions most affected by the conflict or economic sanctions, increase in cyberterrorism activities and attacks, displacement of persons to regions close to the areas of conflict and an increase in the number of refugees fleeing the regions with armed conflicts, among other unforeseen social and humanitarian effects.
ITEM 4. INFORMATION ON THE COMPANY
4.A.History and Development of the Company
Historical Background
Sociedad Química y Minera de Chile S.A. is an open stock corporation organized under the laws of the Republic of Chile. We were constituted by public deed issued on June 17, 1968 by the Notary Public of Santiago, Mr. Sergio Rodríguez Garcés. Our existence was approved by Decree No. 1,164 of June 22, 1968 of the Ministry of Finance, and we were registered on June 29, 1968 in the Registry of Commerce of Santiago, on page 4,537 No. 1,992. Our headquarters is located at El Trovador 4285, Fl. 6, Las Condes, Santiago, Chile. Our telephone number is +56 2 2425-2000. We are legally referred to by our full name Sociedad Química y Minera de Chile S.A. as well as commercially by the abbreviated name “SQM.” Our Website is www.sqm.com. The information contained on or linked from our website is not included as part of, or incorporated by reference into this report. The SEC maintains a website that contains reports, proxy and information statements, and other information regarding issuers that file electronically with the SEC, such as our company, at www.sec.gov.
We were formed in 1968 through a joint venture between Compañía Salitrera Anglo Lautaro S.A. (“Anglo Lautaro”) and Corfo, a Chilean government entity. In 1971, Anglo Lautaro sold all of its shares to Corfo, and we were wholly owned by the Chilean government until 1983. In 1983, Corfo began a process of privatization by selling our shares to the public and subsequently listing such shares on the Santiago Stock Exchange. By 1988, all of our shares were publicly owned. Our ADRs have traded on the NYSE under the ticker symbol “SQM” since 1993. Each ADR represents one Series B common share. We have from time to time accessed international capital markets for the issuance of additional ADRs, including our US$1.1 billion capital increase in 2021.
Since our inception, we have produced nitrates and iodine, which are obtained from the caliche ore deposits in northern Chile. In 1985, we began to use heap leaching processes to extract nitrates and iodine, and in 1986 we started to produce potassium nitrate at our Coya Sur facility.
Between 1994 and 1999, we invested approximately US$300 million in the development of the Salar de Atacama project in northern Chile, which has enabled us to produce potassium chloride, lithium carbonate, lithium hydroxide, potassium sulfate and boric acid.
From 2000 through 2004, we principally consolidated the investments carried out in the preceding five years. We focused on reducing costs and improving efficiencies throughout the organization.
Starting in 2005, we began strengthening our leadership position in our core businesses through a combination of capital expenditures and advantageous acquisitions and divestitures.
Our capital expenditure program has allowed us to add new products to our product lines and increase the production capacity of our existing products. In 2005, we started production of lithium hydroxide at a plant in our Lithium Chemical Plant, near the city of Antofagasta in the north of Chile. In 2007, we completed the construction of a new prilling and granulating plant for nitrates in Coya Sur. In 2011, we completed expansions of our lithium carbonate capacity, achieving 48,000 metric tons of capacity per year. Since 2010, we have continued to expand our production capacity of potassium products in our operations in the Salar de Atacama. In 2011, we completed the construction of a new potassium nitrate facility in Coya Sur, increasing our overall production capacity of potassium nitrate by 300,000 metric tons per year. In 2013, we completed expansions in the production capacity of our iodine plants in Nueva Victoria. Our capital expenditure program also includes exploration for metallic minerals. Our exploration efforts have led to discoveries that in some cases may result in sales of the discovery and the generation of royalty income in the future. Within this context, in 2013 we sold our royalty rights to the Antucoya mining project to Antofagasta Minerals.
In 2014, we invested in the development of new extraction sectors and production increases in both nitrates and iodine at Nueva Victoria, reaching an approximate iodine production capacity (including the Iris facility) of 8,500 metric tons per year at the facility.
In 2015, we focused on increasing the efficiency of our operations. Within this context, we announced a plan to restructure our iodine and nitrate operations. In an effort to take advantage of our highly efficient production facilities at our Nueva Victoria site, we decided to suspend the mining and nitrate operations and reduce iodine production at our Pedro de Valdivia site. During 2017, we increased our iodine production capacity at Nueva Victoria to approximately 10,000 metric tons per year. We continued expanding our iodine capacity in 2018, which, including Pedro de Valdivia and Nueva Victoria, reached approximately 14,000 metric tons per year.
In 2017, we entered into a 50/50 joint venture with respect to the Mt. Holland lithium project to design, construct and operate a mine, concentrator and refinery for the production of lithium hydroxide.
On September 23, 2019, Wesfarmers Limited (“Wesfarmers”) acquired all the issued ordinary shares in our joint venture partner and became a 50% partner in the Mt. Holland lithium project in the joint venture with SQM Australia Pty.
In October 2020, we announced our Sustainable Development Plan, which includes voluntarily expanding our monitoring systems, promoting better and more meaningful conversations with neighboring communities, becoming carbon neutral and reducing water by 65% and brine extraction by 50%. As part of this plan, we also set a goal to obtain international certifications and participate in international sustainability indices.
In 2021, in the Salar de Atacama, we began preparing an external audit in IRMA’s rigorous responsible mining evaluation process. In February 2021, the Board approved the development cost of the Mt. Holland project in Western Australia, and our lithium carbonate production in Chile, reached an effective capacity of 120,000 metric tons. Also, in 2021, we completed a capital increase in the amount of approximately US$1.1 billion.
In November 2021, we were accepted into the Dow Jones Sustainability Chile and the Dow Jones Sustainability MILA Pacific Alliance Indices for the second year in a row.
In 2022, we completed our lithium carbonate and lithium hydroxide expansion projects in Chile, increasing production capacity to 180,000 metric tons and 30,000 metric tons, respectively. We also began the overhaul of a lithium hydroxide plant in China which will be fed with lithium sulfate from Chile. We completed phase 2 of the ISO 14001 and 45001 certification process in the Salar de Atacama and our Lithium Chemical Plant, and continued with the implementation process of ISO 50001 in the Salar de Atacama, Nueva Victoria and Coya Sur operations to support decarbonization goals associated with energy management systems. Additionally, we participated in the Dow Jones Sustainability Indices (DJSI)
assessment and were accepted into the MILA and Chile indices for the third consecutive year and were included in the Sustainability Yearbook 2023. We evaluated ourselves in Carbon Disclosure Project (CDP) where we received a category B climate change rating, which is higher than the global average (category C) and in line with the global chemicals industry average (category B-). During 2022-2023, we continued with the IRMA certification process and completed the on-site certification audit (phase 2) in the Salar de Atacama operation.
In 2023, we made significant progress in certifications and sustainability. For example, in September, we achieved a score of 75 in the IRMA standard at the Salar de Atacama, one of the most rigorous and respected sustainability standards. This score is the highest ever awarded to a lithium company worldwide. In addition, we completed the recertification of ISO 14001 and 45001 standards at the Salar de Atacama and the Lithium Chemical Plant. We obtained ISO 50001 certification (energy management system) for our operations in the northern region (SQM Iodine- Plant Nutrition Division) and began its implementation in the SQM Lithium Chile Division. Finally, we were once again accepted in the DJSI and Emerging Markets indices, and received a B- rating in the CDP water assessment. In terms of operations, we continue to expand our lithium production capacity both in Chile and abroad. In December 2023, together with Hancock Prospecting, owner of approximately 18.4% of the shares of Azure Minerals Limited ("Azure Minerals"), we entered into a transaction implementation agreement to acquire all outstanding shares of Azure Minerals through a joint scheme. Finally, at the end of 2023, we signed a non-binding Memorandum of Understanding with Codelco for the joint development of the Salar de Atacama between 2025 and 2060.
In May 2024, we completed the joint acquisition of Azure Minerals with Hancock, with each company now owning a 50% interest in Azure Minerals, whose principal asset is a 60% interest in the Andover lithium project in Western Australia, currently in the early exploration stage.
On May 31, 2024, we signed an agreement with Codelco for the joint exploitation of the Salar de Atacama between 2025 and 2060. The materialization of this agreement is subject to the fulfillment of a number of conditions precedent.
In terms of production capacity, we continued with our expansion projects for both lithium carbonate and lithium hydroxide. As a result, in 2024, our Lithium Chemical Plant reached a capacity of 210,000 metric tons of lithium carbonate, with plans to increase to 240,000 metric tons by 2026. We also continue to expand lithium hydroxide capacity to reach 100,000 metric tons by the end of 2025. During the year, we carried out a corporate reorganization, resulting in three main divisions: SQM Lithium Chile Division (lithium and potassium products from the Salar de Atacama), SQM Lithium International Division (lithium products from outside Chile), and SQM Iodine- Plant Nutrition Division (iodine and specialty plant nutrition products worldwide), with the objective of focusing, developing and strengthening each business area in order to maintain our leadership strategy in the key industries in which we operate.
Finally, in November, we held our first auction of spodumene concentrate through our SQM Lithium International Division.
Our capital expenditures for the years ended December 31, 2024, 2023 and 2022 were as follows:
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| (in millions of US$) |
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2024 |
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2023 |
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2022 |
| Capital expenditures |
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1,388.3 |
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1,103.6 |
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905.2 |
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During 2024, we had total capital expenditures of US$1,388.3 million. Our 2024 capital expenditure was primarily related to:
•Capacity expansion projects related to the completion of the increase of our lithium carbonate production in Chile from 210,000 metric tons per year to 240,000 metric tons per year by the end of 2026 or early 2027;
•Capacity expansion of lithium hydroxide production in Chile from 40,000 metric tons per year to 100,000 metric tons per year by 2025.
•Investment in the Mt. Holland lithium project in Western Australia with completion of the Kwinana refinery by mid-2025.
•Investments in different projects for the SQM Iodine- Plant Nutrition Division, including the investment in the seawater pipeline which is currently under construction and is projected to be ready by the end of 2026, and different initiatives to increase yields in the iodine facilities.
•Investment in international exploration projects; and
•General maintenance of all production facilities, among others
During 2023, we had total capital expenditures of US$1,103.6 million. Our 2023 capital expenditure was primarily related to:
•Capacity expansion projects related to the completion of the increase of our lithium carbonate production in Chile from 180,000 metric tons per year to 210,000 metric tons per year by the end of 2024;
•Capacity expansion of lithium hydroxide production in Chile from 30,000 metric tons per year to 100,000 metric tons per year by 2025;
•Investment in the Mount Holland lithium project in Western Australia, completion of mine and concentrator capacity and construction of refinery to produce 50,000 metric tons of lithium hydroxide in 2025.
•Investment in the development of new caliche projects in Pampa Blanca and Nueva Victoria to increase the iodine and nitrate production capacity; and
•General maintenance of all production facilities, among others.
During 2022, we had total capital expenditures of US$905.2 million. Our 2022 capital expenditure was primarily related to:
•Capacity expansion projects related to the completion of our increase of our lithium carbonate production in Chile from 120,000 metric tons per year to 180,000 metric tons per year by the end of 2022;
•Completion of capacity expansion of lithium hydroxide production in Chile from 21,500 metric tons per year to 30,000 metric tons per year;
•Investment in our new 50,000 metric ton Mt. Holland lithium hydroxide mine and refining plant in Western Australia;
•Acquisition of the 20,000 metric ton lithium hydroxide refining plant in China; and
•Investment in the development of new caliche projects to optimize the iodine and nitrate production plants and carry out general maintenance of all production facilities, among others.
We believe our capital expenditures for 2025, including maintenance could reach approximately US$1.1 billion, distributed as follows: approximately US$550 million for the SQM Lithium Chile Division for continued capacity expansions at the Lithium Chemical Plant and the Salar de Atacama facilities, sustainability initiatives and increased efficiencies. Approximately US$350 million for the SQM Iodine- Plant Nutrition Division, mainly to increase the iodine production to reach approximately four thousand metric tons in the next few years, and approximately US$200 million for the SQM Lithium International Division, which includes the completion of the construction of the lithium hydroxide refining plant in Kwinana, Australia, and exploration-related investments.
We expect our capital expenditure for the 2025-2027 period to be in the range of US$3.1 to US$3.8 billion, including maintenance. This investment plan is preliminary and subject to change depending on internal and external factors (please see Risk factors- Risks related to our business- "We have an investment plan that is subject to significant risks and uncertainties" )
4.B.Business Overview
The Company
We believe that we are the world’s largest producer of potassium nitrate and iodine and one of the world’s largest lithium producers. We also produce specialty plant nutrients, iodine derivatives, lithium derivatives, potassium chloride, potassium sulfate and certain industrial chemicals (including industrial nitrates and solar salts). Our products are sold in over 100 countries through our worldwide distribution network, with 96% of our sales in 2024 derived from countries outside Chile.
Our products are mainly derived from mineral deposits found in northern Chile. We mine and process caliche ore and brine deposits. The caliche ore in northern Chile contains the only known nitrate and iodine deposits in the world and is the world’s largest commercially exploited source of natural nitrates. The brine deposits of the Salar de Atacama, a salt-encrusted depression in the Atacama Desert in northern Chile, contain high concentrations of lithium and potassium as well as significant concentrations of sulfate and boron.
From our caliche ore deposits, we produce a wide range of nitrate-based products used for specialty plant nutrients and industrial applications, as well as iodine and iodine derivatives. At the Salar de Atacama, we extract brines rich in potassium, lithium, sulfate and boron in order to produce potassium chloride, potassium sulfate, lithium solutions and bischofite (magnesium chloride).
We produce lithium carbonate and lithium hydroxide at our plant near the city of Antofagasta, Chile, from the solutions brought from the Salar de Atacama. We market all of these products through an established worldwide distribution network.
Our products are divided into six categories: specialty plant nutrients; iodine and its derivatives; lithium and its derivatives; potassium chloride and potassium sulfate; industrial chemicals and other commodity fertilizers.
Specialty plant nutrients are premium fertilizers that enable farmers to improve yields and the quality of certain crops. Our main specialty fertilizer is potassium nitrate, which is used primarily via fertigation in high-value crops. Iodine and iodine derivatives are used in a wide range of medical, agricultural, and industrial applications as well as in human and animal nutrition products. They are mainly used in the X-ray contrast media, polarizing film and pharmaceuticals. Lithium and its derivatives are mainly used in batteries, greases and frits for production of ceramics. Potassium chloride is a commodity fertilizer that is produced and sold by us worldwide. Industrial chemicals have a wide range of applications in certain chemical processes such as the manufacturing of glass, explosives and ceramics. Industrial nitrates are also being used in concentrated solar power plants as a means for energy storage. Additionally, we trade other complementary fertilizers worldwide to diversify our offerings.
For the year ended December 31, 2024, we had revenues of US$4,528.8 million, gross profit of US$1,327.1 million and losses attributable to controlling interests of US$685.1 million. Our worldwide market capitalization as of December 31, 2024 was approximately US$10.2 billion.
Specialty Plant Nutrition: We offer three main types of specialty plant nutrients for fertigation, direct soil, and foliar applications: potassium nitrate, sodium nitrate, and specialty blends. We also sell other specialty fertilizers, including third-party products. These products, available in solid or liquid forms, are mainly used on high-value crops like fruit, flowers, and some vegetables. They are widely utilized in modern agricultural techniques such as hydroponics, greenhouses, and fertigation (where fertilizer is dissolved in water before irrigation).
Specialty plant nutrients offer advantages over commodity fertilizers, such as quick absorption, excellent water solubility, and low chloride content. Potassium nitrate, a key product, comes in crystalline and prill forms for various applications. Crystalline potassium nitrate suits fertigation and foliar use, while prills are ideal for direct soil application.
We market our products under the following brands: Ultrasol® (fertigation), Qrop® (soil application), Speedfol® (foliar application), and Allganic® (organic agriculture).
Sophisticated customers now seek integrated solutions rather than single products. Our offerings include customized blends and agronomic services, enhancing plant nutrition for better yields and quality. Derived from natural nitrate compounds or potassium brines, our products feature beneficial trace elements, offering advantages over synthetic fertilizers. Consequently, specialty nutrients command a premium price compared to standard fertilizers.
Iodine and its Derivatives: We believe that we are the world’s leading producer of iodine and iodine derivatives, which are used in a wide range of medical, pharmaceutical, agricultural and industrial applications, including X-ray contrast media, polarizing films for LCD and LED, antiseptics, biocides and disinfectants, in the synthesis of pharmaceuticals, electronics, pigments and dye components.
Lithium and its Derivatives: We are a leading producer of lithium carbonate, which is used in a variety of applications, including electrochemical materials for batteries used in electric vehicles, portable computers, tablets, cellular telephones and electronic apparatus, frits for the ceramic and enamel industries, heat-resistant glass (ceramic glass), air conditioning chemicals, continuous casting powder for steel extrusion, pharmaceuticals and lithium derivatives. We are also a leading supplier of lithium hydroxide, which is primarily used as an input for the lubricating greases industry and for cathodes for high energy capacity batteries.
Potassium: Potassium chloride is produced from brines extracted from the Salar de Atacama. This commodity fertilizer is used to nourish various crops, including corn, rice, sugarcane, soybeans, and wheat.
Industrial Chemicals: We produce and sell three industrial chemicals: sodium nitrate, potassium nitrate and potassium chloride. Sodium nitrate is used primarily in the production of glass, explosives, and metal treatment, metal recycling and the production of insulation materials, among other uses. Potassium nitrate is used in the manufacturing of specialty glass, and it is also an important raw material for the production of frits for the ceramics, enamel industries, metal treatment and pyrotechnics.
Solar salts, a combination of potassium nitrate and sodium nitrate, are used as a thermal storage medium in concentrated solar power plants. Potassium chloride is a basic chemical used to produce potassium hydroxide, and it is also used as an additive in oil drilling as well as in food processing, among other uses.
Other Products and Services: We sell a variety of fertilizers and blends, including those we do not produce. We are the largest producer of potassium nitrate and distributor of potassium nitrate, sulfate, and chloride.
The following table shows the percentage breakdown of our revenues for 2024, 2023 and 2022 according to our product lines:
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2024 |
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2023 |
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2022 |
| Specialty Plant Nutrition |
21 |
% |
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12 |
% |
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11 |
% |
| Iodine and Derivatives |
21 |
% |
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12 |
% |
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7 |
% |
| Lithium and Derivatives |
49 |
% |
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69 |
% |
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76 |
% |
| Potassium |
6 |
% |
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4 |
% |
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4 |
% |
| Industrial Chemicals |
2 |
% |
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2 |
% |
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2 |
% |
| Other |
1 |
% |
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0 |
% |
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0 |
% |
| Total |
100 |
% |
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100 |
% |
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100 |
% |
Business Strategy
SQM is a global company that develops and produces diverse products for several industries essential for human progress, such as health, nutrition, renewable energy and technology through innovation and technological development. We aim to maintain our leading world position in the lithium, potassium nitrate, iodine and thermo-solar salts markets by:
•Ensuring access to the best assets related to our current business lines by expanding our global presence;
•Actively searching for attractive minerals allowing us diversification opportunities to replicate and expand our existing mining capacities;
•Strengthening our operational, logistical and commercial excellence process from beginning to end, while looking to be a cost leader; and
•Maintaining a conservative financial policy which allows us to successfully endure economic cycles that could impact the markets in which we sell.
We are a dynamic company. In pursuit of our objectives, we expect to acquire and develop projects and interests that are consistent with our existing and new businesses, either alone or with joint venture partners. We may also divest or sell-down interests that we have acquired to deploy funds for other investments or other purposes in pursuit of our objectives or to adjust risk or diversify our asset base.
We are a company built and managed by a culture based on excellence, safety, sustainability and integrity. We work every day to expand this culture through the attraction, retention and development of talent as well encouraging an inclusive and diverse work environment ensuring the unique knowledge and innovation needed to sustain our business. We strive for safe and accident-free operations by promoting conduct that favors the physical safety and psychological well-being of everyone who works directly and indirectly with our company.
We position ourselves as leaders in sustainability and commit to a sustainable future where we constantly work to responsibly manage natural resources, protect human rights, care for the environment, form close and trusting relationships with our neighboring communities and create value. Within these communities, we support projects and activities with a focus on education, business development, and protection of the environment and historical heritage. We create value for our clients through established commercial models and the production and development of differentiated products that respond to their industry and market specific needs, constantly creating and providing a sustainable improvement in the quality of life. We will continue to create value for all of our stakeholders through responsible management of natural resources, sustainable expansion projects and improvement of our existing operations, with a focus on minimizing our environmental impacts by reducing our carbon, energy and water footprints and working together with our shareholders, employees, customers, suppliers and communities.
Specialty Plant Nutrition
Our strategy in our specialty plant nutrition business offers smart and sustainable nutritional solutions to our customers. To that end, we seek to: (i) leverage the advantages of our specialty products over commodity-type fertilizers applied to high-value crops; (ii) selectively expand our business by increasing our sales of higher margin specialty plant nutrients based on natural potassium and nitrates, particularly soluble potassium nitrate and specialty blends; (iii) seek investment opportunities in complementary businesses to develop new products and business models to add value to our customers; (iv) develop new specialty nutrient blends produced in our blending plants that are strategically located in or near our core
markets to meet specific customer needs; (v) focus primarily on markets where we can sell our plant nutrients in soluble applications to establish a leadership position; (vi) further develop our global distribution and marketing system directly and through strategic alliances; (vii) supply a product with consistent quality in accordance with our customers' specific requirements. (viii) invest in research and technology to improve our process yields, reduce our production costs and maximize productivity; and (ix) maintain production flexibility to capture emerging market opportunities.
Iodine and its Derivatives
Our strategy in our iodine business is to: (i) foster demand growth and promote new uses for iodine; (ii) supply a product with consistent quality in accordance with our customers' requirements; (iii) provide excellent service to our customers through a strong distribution network; (iv) build long-term relationships with our customers; (v) invest in research and technology to increase recovery yields, lower production costs and maintain high productivity; (vi) successfully execute our investment plan to increase production capacity and ensure flexibility; and (vii) participate in iodine recycling projects through the Ajay-SQM Group ("ASG"), a joint venture with U.S.-based Ajay Chemicals Inc. ("Ajay") and reduce our production costs through improved processes and higher productivity to compete more effectively.
Lithium and its Derivatives
Our strategy in our lithium business is to: (i) strategically allocate our lithium carbonate and lithium hydroxide sales; (ii) foster demand growth and promote new uses of lithium; (iii) selectively pursue opportunities in the lithium derivatives business by creating new lithium compounds; (iv) reduce our production costs through improved processes and higher productivity to compete more effectively; (v) supply a product with consistent quality in accordance with our customers' requirements; (vi) diversify our operations geographically and jurisdictionally; and (vii) diversify our asset base or adjust risk by acquiring new projects and interests (either alone or with joint venture partners), divesting existing projects or selling our interests in projects.
Potassium
Our strategy in our potassium business is to: (i) have the flexibility to offer products in crystallized (standard) or granular (compacted) form according to market requirements; (ii) focus on markets where we have logistical advantages and synergies with our specialty plant nutrition business; and (iii) supply a product with consistent quality according to our customers' specific requirements.
Industrial Chemicals
Our strategy in our industrial chemicals business is to: (i) maintain our leadership position in the industrial nitrates market; (ii) foster demand growth in different applications, as well as explore new potential applications; (iii) position ourselves as a reliable long-term supplier to the thermal storage industry by maintaining close relationships with R&D programs and industry initiatives; (iv) reduce our production costs through improved processes and higher productivity to compete more effectively; and (v) supply a product with consistent quality in accordance with our customers' requirements.
New Business Ventures
We constantly evaluate opportunities that are consistent with our existing and new businesses. We seek to acquire interests in projects both inside and outside of Chile where we believe we have sustainable competitive advantages, and we hope to continue doing so in the future.
In Australia, in addition to Mt. Holland and our investment in Azure, we are carrying out early-stage exploration activities in a series of different projects. Some of these activities are being directly carried out by our internal geological exploration team, based in our office in Perth, Western Australia, with others being worked in conjunction with partners through earn-in agreements. Activities range from desktop target generation to on-site mapping, rock chip/soil sampling and drilling.
During 2024, we also expanded into early exploration projects in Sweden (subject to conditions precedent), and Namibia, with similar activities as the ones being carried out in Australia.
In Chile, we are actively conducting exploration for metallic minerals in the mining properties we own. If such minerals are found, we may decide to exploit, sell or enter into an association to extract these resources. Our exploration efforts are currently focused on the layer of bedrock that lies beneath the caliche ore that we use as the primary raw material in the production of iodine and nitrates. This bedrock has significant potential for metallic mineralization, particularly copper, gold and silver. A significant portion of our mining properties are located in the Antofagasta region of Chile, where many large copper producers operate.
We have an in-house geological exploration team that explores the area directly, identifying drilling targets and assessing new prospects. In 2021, the team has confirmed the existence of high-grade copper and gold mineralization at the Bufalo project, located 120 kilometers east of the city of Antofagasta. The Bufalo project corresponds to a district that hosts several mineralized bodies of copper, copper-gold and copper-gold-silver in which SQM has already drilled nearly 170,000 meters, using our own diamond and reverse circulation (RC) drilling machines. More than 45 projects with copper potential have also been generated, in greenfield and intermediate exploration stages, which are under study and drilling. We also have a metal business development team that works to engage partners interested in investing in metal exploration within our mining properties. As of December 2024, we have an option agreement in place with a private equity-owned mining company. We participated in the formation of a joint venture as a result of the exercise of an option agreement with a major mining company in the precious metals market.
Main Business Lines
Specialty Plant Nutrition
In 2024, specialty plant nutrients revenues increased to US$941.9 million, representing 20.8% of our total revenues for that year and a 3.1% increase from US$913.9 million in specialty plant nutrients revenues in 2023. Due to increased sales volumes, despite price decreasing by approximately 11.9% in 2024.
We believe that we are the world’s largest producer of potassium nitrate. We estimate that our sales accounted for approximately 41% of global potassium nitrate sales for all agricultural uses by volume in 2024.
The following table shows our sales volumes of and revenues from specialty plant nutrients for 2024, 2023 and 2022:
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2024 |
|
2023 |
|
2022 |
Sales volumes (Th. MT) |
982.9 |
|
840.2 |
|
847.9 |
| Sodium nitrate |
12.5 |
|
16.7 |
|
14.4 |
| Potassium nitrate and sodium potassium nitrate |
534.0 |
|
443.5 |
|
477.4 |
Specialty blends(1) |
276.7 |
|
243.4 |
|
218.0 |
Other specialty plant nutrients(2) |
159.7 |
|
136.5 |
|
138.1 |
Total revenues (in US$millions) |
941.9 |
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|
913.9 |
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|
1,172.3 |
|
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(1)Includes third party products sold pursuant to our commercial agreement.
(2)Includes trading of other specialty fertilizers.
Specialty Plant Nutrition: Market
Specialty plant nutrients serve various agricultural purposes, including fertigation for high-value crops like vegetables and fruits. These fertilizers must be highly soluble and free of impurities for modern irrigation methods such as drip and micro-sprinkler systems. Potassium nitrate stands out among these nutrients due to its chlorine-free composition, high solubility, proper pH, and lack of impurities, allowing it to command a premium price over alternatives like potassium chloride and sulfate.
Modern irrigation systems are widely used in protected crops and high-value fruit plantations like greenhouses, tunnels (for berries), and shade houses (for tomatoes). Specialty nutrients are also applied for foliar and granular soil applications in niches such as potato and tobacco production.
Specialty plant nutrients have distinct characteristics that can increase productivity and improve quality when applied to specific crops and soils. These products offer certain benefits over commodity fertilizers derived from other sources of nitrogen and potassium, such as urea and potassium chloride.
Since 1990, the international market for specialty plant nutrients has expanded at a quicker pace than the market for commodity fertilizers. Contributing factors include: (i) the adoption of new agricultural technologies like fertigation, hydroponics, and greenhouses; (ii) rising land costs and water scarcity, which have prompted farmers to enhance yields and reduce water consumption; and (iii) growing demand for higher-quality crops.
However, during 2022 and 2023, the market for agricultural soluble potassium nitrate saw a reduction in consumption by approximately 12% and 8%, respectively, due to significant price increases, adverse climate conditions, and high inflation rates. These estimates exclude locally produced and sold potassium nitrate in China and only account for net imports and exports.
Notwithstanding two consecutive years of decline, we estimate that the Specialty Plant Nutrition market experienced a favorable recovery during 2024. Excluding production and consumption within China, we estimate that the market grew by around 17%, reaching levels slightly below those observed in 2020.
Specialty Plant Nutrition: Our Products
We produce three main types of specialty plant nutrients that provide nutritional solutions for fertigation, direct soil applications and foliar fertilizers: potassium nitrate (KNO3), sodium nitrate (NaNO3) and specialty blends. We also sell other specialty fertilizers, including products produced by third parties. All of these products are used in solid or liquid form primarily on high-value crops such as fruits, flowers and some vegetables. These fertilizers are widely used in crops using modern agricultural techniques such as hydroponics, greenhouses and crops with foliar application and fertigation (in the latter case, the fertilizer is dissolved in water prior to irrigation).
Specialty plant nutrients have certain advantages over commercial fertilizers, such as fast and effective absorption (without requiring nitrification), superior water solubility, and low chloride content. One of the most important products in this business line is potassium nitrate, which is marketed in crystalline or prilled form, allowing for different application methods. Crystalline potassium nitrate products are ideal for fertigation and foliar applications, and potassium nitrate beads are suitable for direct soil applications.
Special blends are produced using our own special plant nutrients and other components in blending plants operated by us or our affiliates and related companies around the world.
We have developed brands for commercialization of our Specialty Plant Nutrition products according to the different applications and uses of our products. Our main brands are: Ultrasol® (fertigation), Qrop® (soil application), Speedfol® (foliar application) and Allganic® (organic agriculture).
The advantages of our special Ultrasol® vegetable blends include the following:
•Fully water soluble for efficient use in hydroponics, fertigation, foliar applications, and advanced agricultural techniques, reducing water usage.
•Chloride-free to prevent toxicity in chlorine-sensitive crops.
•Provides nitrogen in nitric form for faster nutrient absorption compared to urea- or ammonium-based fertilizers.
In 2024, we continued to grow sales of differentiated fertilizers such as Ultrasoline® for improved root growth and optimal nitrogen metabolism, ProP® for more efficient phosphorus absorption, and Prohydric® for more efficient fertilization and water use.
Specialty Plant Nutrition: Marketing and Customers
In 2024, we sold our specialty plant nutrients in approximately 100 countries and to more than 1,500 customers. No single customer individually accounted for at least 10% of sales in this segment during 2024. The 10 largest customers collectively accounted for approximately 25% of sales during that period. No supplier accounted for more than 10% of this business line cost of sales.
The table below shows the geographical breakdown of our revenues:
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|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Revenues breakdown |
|
2024 |
|
2023 |
|
2022 |
| North America |
|
39 |
% |
|
45 |
% |
|
42 |
% |
| Europe |
|
17 |
% |
|
14 |
% |
|
17 |
% |
| Chile |
|
12 |
% |
|
12 |
% |
|
11 |
% |
| Central and South America (excluding Chile) |
|
12 |
% |
|
8 |
% |
|
11 |
% |
| Asia and Others |
|
21 |
% |
|
21 |
% |
|
20 |
% |
We distribute our specialty plant nutrition products globally through our network of commercial offices and distributors.
We maintain inventory of our specialty plant nutrients at our commercial offices in key markets to facilitate prompt deliveries to customers. Sales are conducted through spot purchase orders or short-term contracts.
As part of our marketing strategy, we offer technical and agronomical assistance to clients. Our knowledge is based on extensive research and studies conducted by our agronomical teams in collaboration with producers worldwide. This expertise supports the development of specific formulas and hydroponic and fertigation nutritional plans, enabling us to provide informed advice.
By working closely with our customers, we identify the needs for new products and potential high-value markets. Our specialty plant nutrients are used on various crops, especially value-added ones, where they help customers increase yields and quality to achieve premium pricing.
Our customers are located in diverse regions, and as a result, we do not expect any seasonal or cyclical factors to significantly impact the sales of our specialty plant nutrients.
Specialty Plant Nutrition: Competition
The primary factors influencing competition in the sale of specialty nutrients include product quality, logistics, agronomic service expertise, and pricing.
We consider ourselves the world's largest producer of potassium nitrate for agricultural purposes. Our potassium nitrate faces indirect competition from both specialty and commodity substitutes, which some customers may opt for depending on the soil type and crops involved.
In 2024, our sales represented approximately 41% of the global agricultural potassium nitrate market by volume. In the 100% soluble potassium nitrate segment, our main competitor is Haifa Chemicals Ltd. ("Haifa") of Israel. We estimate that Haifa's sales accounted for around 22% of global agricultural potassium nitrate sales in 2024 (excluding sales by Chinese producers within the domestic Chinese market).
Kemapco, a Jordanian producer owned by Arab Potash, operates a production facility near the Port of Aqaba, Jordan. We estimate that Kemapco's sales comprised roughly 13% of global agricultural potassium nitrate sales in 2024.
ACF, another Chilean producer primarily focused on iodine production, has produced potassium nitrate from caliche ore since 2005. Additionally, several potassium nitrate manufacturers operate in China, with most of their production consumed domestically within China.
Iodine and its Derivatives
We believe that we are the world’s largest producer of iodine. In 2024, our revenues from iodine and iodine derivatives amounted to US$968.3 million, representing 21.4% of our total revenues in that year and an increase from US$892.2 million in 2023. This increase was mainly attributable to higher sales volumes than in 2023. Average iodine prices were approximately 2.3% lower in 2024 than in 2023. Our sales volumes increased approximately 11.1% in 2024. We estimate that our sales accounted for approximately 37% of global iodine sales by volume in 2024.
The following table shows our total sales volumes and revenues from iodine and iodine derivatives for 2024, 2023 and 2022:
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2024 |
|
2023 |
|
2022 |
Sales volumes (Th. MT) |
|
|
|
|
|
| Iodine and derivatives |
14.5 |
|
13.1 |
|
12.7 |
Total revenues (in US$millions) |
968.3 |
|
|
892.2 |
|
|
754.3 |
|
Iodine: Market
Iodine and iodine derivatives are used in a wide range of medical, agricultural and industrial applications as well as in human and animal nutrition products. Iodine and iodine derivatives are used as raw materials or catalysts in the formulation of products such as X-ray contrast media, biocides, antiseptics and disinfectants, pharmaceutical intermediates, polarizing films for LCD and LED screens, chemicals, organic compounds and pigments. Iodine is also added in the form of potassium iodate or potassium iodide to edible salt to prevent iodine deficiency disorders.
During 2024, X-ray contrast media was the leading application of iodine, accounting for approximately 37% of demand. Iodine’s high atomic number and density make it ideally suited for this application, as its presence in the body can help to increase contrast between tissues, organs, and blood vessels with similar X-ray densities. Other applications include pharmaceuticals, which we believe account for 13% of demand; LCD and LED screens, 13%; iodophors and povidone-iodine, 6%; animal nutrition, 7%; fluoride derivatives, 6%; biocides, 5%; nylon, 3%; human nutrition, 3% and other applications, 7%.
In 2024, our estimates indicate that the market experienced an upturn of approximately 7% compared to the previous year. This expansion can primarily be attributed to a series of key factors impacting various industries. First, the broader global economic recovery has led to a better-than-expected GDP in 2024, with industrial production boosting company investments, especially in India and China. Additionally, demand for contrast media has accelerated due to significant expansions and strong performance among major players in this industry, where government expenditures in healthcare and new technologies have played a key role. Finally, while high prices have slowed demand in certain sectors, such as iodophors and biocides, the decline in these applications was smaller than the growth seen in other industries, leading to a strong iodine demand.
The demand for X-ray contrast media emerged as a primary driver of growth in the iodine market. This increase is largely due to heightened healthcare expenditures, increased prevalence of chronic diseases necessitating diagnostic imaging, rising volume of CT procedures, advancements in imaging technology and demographic shift towards an aging population. The growing use of diagnostic imaging, particularly in China, Europe and the US, has significantly bolstered the demand for iodine-based contrast agents, counterbalancing some of the declines seen in other sectors.
Iodine: Our Products
We produce iodine in our Nueva Victoria plant, near Iquique, Chile, our Pedro de Valdivia plant and at the Pampa Blanca mining site, both located close to María Elena, Chile. We have a total production capacity of approximately 14,300 metric tons per year of iodine.
Through Ajay “ASG”), we produce organic and inorganic iodine derivatives. ASG was established in the mid-1990s and has production plants in the United States, Chile and France. ASG is one of the world’s leading inorganic and organic iodine derivatives producer.
Consistent with our iodine business strategy, we are constantly working on the development of new applications for our iodine-based products, pursuing a continuing expansion of our businesses and maintaining our market leadership.
We manufacture our iodine and iodine derivatives in accordance with international quality standards and have qualified our iodine facilities and production processes under the ISO 9001:2015 program, providing third party certification of the quality management system and international quality control standards that we have implemented.
Iodine: Marketing and Customers
In 2024, we sold our iodine products in approximately 33 countries to 131 customers, and most of our sales were exports. Two customers individually accounted for at least 10% of sales in this segment, representing approximately 33% of iodine sales. The 10 largest customers together accounted for approximately 77% of sales during this period. No supplier had an individual concentration of at least 10% of this business line's cost of sales.
The following table shows the geographical breakdown of our revenues:
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Revenues breakdown |
|
2024 |
|
2023 |
|
2022 |
| North America |
|
16 |
% |
|
14 |
% |
|
19 |
% |
| Europe |
|
38 |
% |
|
41 |
% |
|
38 |
% |
| Chile |
|
0 |
% |
|
0 |
% |
|
0 |
% |
| Central and South America (excluding Chile) |
|
2 |
% |
|
2 |
% |
|
2 |
% |
| Asia and Others |
|
43 |
% |
|
42 |
% |
|
41 |
% |
We sell iodine through our own worldwide network of representative offices and through our sales, support and distribution affiliates. We maintain inventories of iodine at our facilities throughout the world to facilitate prompt delivery to customers. Iodine sales are made pursuant to spot purchase orders or within the framework of supply agreements. Supply agreements generally specify annual minimum and maximum purchase commitments, and prices are adjusted periodically, according to prevailing market prices.
Iodine: Competition
The world’s main iodine producers are based in Chile, Japan and the United States. Iodine is also produced in Russia, Turkmenistan, Azerbaijan, Indonesia and China.
Iodine is produced in Chile from a unique mineral known as caliche ore, whereas in Japan, the United States, Russia, Turkmenistan, Azerbaijan, and Indonesia, producers extract iodine from underground brines that are mainly obtained together with the extraction of natural gas and petroleum. The recycled iodine waste production comes mainly from China and Japan.
Five Chilean companies accounted for approximately 60% of total global sales of iodine in 2024, including SQM, with approximately 37%, and four other producers accounting for the remaining 23%. The other Chilean producers are S.C.M. Cosayach (Cosayach), controlled by the Chilean holding company Inverraz S.A.; ACF Minera S.A., owned by the Chilean Urruticoechea family; Algorta Norte S.A., a joint venture between ACF Minera S.A. and Toyota Tsusho; and Atacama Minerals, which is owned by Chinese company Tewoo.
We estimate that eight Japanese iodine producers accounted for approximately 23% of global iodine sales in 2024, including recycled iodine.
We estimate that iodine producers in the United States accounted for nearly 5% of world iodine sales in 2024.
Iodine recycling is a growing trend worldwide. Several producers have recycling facilities where they recover iodine and iodine derivatives from iodine waste streams.
We estimate the 16% of the iodine supply comes from iodine recycling. Through ASG or alone, we are also actively participating in the iodine recycling business using iodinated side-streams from a variety of chemical processes in Europe and the United States.
The prices of iodine and iodine derivative products are determined by market conditions. World iodine prices vary depending upon, among other things, the relationship between supply and demand at any given time. Iodine supply varies primarily as a result of the production levels of the iodine producers (including us) and their respective business strategies.
In 2024, our annual average iodine sales prices decreased slightly compared to 2023, reaching approximately US$67 per kilogram in 2024, from the average sales prices of approximately US$68 per kilogram observed in 2023.
Demand for iodine varies depending upon overall levels of economic activity and the level of demand in the medical, pharmaceutical, industrial and other sectors that are the main users of iodine and iodine-derivative products. Certain substitutes for iodine are available for certain applications, such as antiseptics and disinfectants, which could represent a cost-effective alternative to iodine depending on prevailing prices.
The main factors of competition in the sale of iodine and iodine derivative products are reliability, price, quality, customer service and the price and availability of substitutes. We believe we have competitive advantages compared to other producers due to the size and quality of our mining reserves and the available production capacity. We believe our iodine is competitive with that produced by other manufacturers in certain advanced industrial processes. We also believe we benefit competitively from the long-term relationships we have established with our largest customers.
Lithium and its Derivatives
In 2023, our revenues from lithium sales amounted to US$2,241.3 million, representing 49.5% of our total revenues and a 56.7% decrease from US$5,180.1 million in 2023, due to significantly lower average prices partially offset by higher sales volumes during the year. The average price for 2024 was approximately 64.1% lower than the average price in 2023. Our sales volumes increased approximately 20.5% in 2024.
We believe we are one of the world’s largest producers of lithium carbonate and lithium hydroxide, and we estimate that our sales volumes accounted for approximately 17% of the global lithium chemicals sales volumes.
The following table shows our total sales volumes and revenues from lithium carbonate and its derivatives for 2024, 2023 and 2022:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2024 |
|
2023 |
|
2022 |
Sales volumes (Th. MT) |
|
|
|
|
|
| Lithium and derivatives |
204.9 |
|
170.0 |
|
156.8 |
Total revenues (in US$millions) |
2,241.3 |
|
|
5,180.1 |
|
|
8,152.9 |
|
Lithium: Market
The lithium market can be divided into (i) lithium minerals for direct use (a market in which SQM does not participate directly), (ii) basic lithium chemicals, which include lithium carbonate and lithium hydroxide (as well as lithium chloride, from which lithium carbonate may be made), and (iii) inorganic and organic lithium derivatives, which include numerous compounds produced from basic lithium chemicals, a market in which SQM does not participate directly.
Lithium carbonate and lithium hydroxide are used for the production of cathode material for secondary (rechargeable) batteries, due to the high electrochemical potential and low density of lithium. Batteries represent the main application for lithium, with approximately 90% of total demand, including batteries for electric vehicles, which represented approximately 70% of total demand in 2024.
There are many other applications both for basic lithium chemicals and lithium derivatives, such as lubricating greases heat-resistant glass (ceramic glass), chips for the ceramics and glaze industry, chemicals for air conditioning, as well as other pharmaceutical synthesis and metal alloys.
Lithium’s main properties, which facilitate its use in this range of applications, are that it:
•is the lightest solid metal and element at room temperature;
•is low density;
•has a low coefficient of thermal expansion;
•has high electrochemical potential; and
•has a high specific heat capacity.
We estimate that during 2024, demand for lithium chemicals increased by approximately 25%, exceeding 1.2 million metric tons. We expect applications related to energy storage to continue driving demand in the coming years.
Lithium: Our Products
We produce lithium carbonate at our Lithium Chemical Plant, near Antofagasta, Chile, from highly concentrated lithium chloride produced in the Salar de Atacama. The annual production capacity of our lithium carbonate plant at our Lithium Chemical Plant is approximately 210,000 metric tons per year. We believe that the technologies we use, together with the high concentrations of lithium and the characteristics of the Salar de Atacama, such as high evaporation rate and concentration of other minerals, allow us to be one of the lowest cost producers of lithium worldwide.
We also, produce lithium hydroxide at our Lithium Chemical Plant, which has a production capacity of 40,000 metric tons per year and we are in the process of increasing this capacity to 100,000 metric tons per year by the end of 2025. In addition, we produce lithium hydroxide from lithium sulfate at our lithium hydroxide refining plant in China. This facility has a design capacity of 20,000 metric tons per year. We have additional capacity, through toll manufacturing plants, to produce 20,000 metric tons of lithium carbonate from lithium sulfate per year. We are also developing the Mt. Holland lithium project in Australia through our joint venture with Wesfarmers. The concentrator plant is ramping up production to nameplate capacity, while the Kwinana lithium hydroxide refinery continues to advance in construction, with 95% completion by and a planned production capacity of 50,000 metric tons of lithium hydroxide (50% SQM's share).
Lithium: Marketing and Customers
In 2024, we sold our lithium products in 43 countries to approximately 218 customers, and most of our sales were to customers outside of Chile. During 2024, 93% of our sales of lithium were in Asia. Two customers accounted for at least 10% of lithium and lithium derivatives sales, representing approximately 28% of our lithium revenues in 2024. Our ten largest customers together accounted for approximately 60% of revenues. One supplier, Corfo, accounted for approximately 24% of this business line's cost of sales, mainly related to lease payments payable to Corfo under the SQM-Corfo Agreements for lithium products produced in the Salar de Atacama. We make lease payments to Corfo which are associated with the sale of different products produced in the Salar de Atacama, including lithium carbonate, lithium hydroxide and potassium chloride. See Note 22.2 to our consolidated financial statements for the disclosure of lease payments made to Corfo for all periods presented.
The following table shows the geographical breakdown of our revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Revenues breakdown |
|
2024 |
|
2023 |
|
2022 |
| North America |
|
3 |
% |
|
3 |
% |
|
2 |
% |
| Europe |
|
4 |
% |
|
5 |
% |
|
5 |
% |
| Chile |
|
0 |
% |
|
0 |
% |
|
0 |
% |
| Central and South America (excluding Chile) |
|
0 |
% |
|
0 |
% |
|
0 |
% |
| Asia and Others |
|
93 |
% |
|
92 |
% |
|
93 |
% |
We sell lithium carbonate (Li2CO3) and lithium hydroxide (LiOH) through our own worldwide network of representative offices and through our sales, support and distribution affiliates. We maintain stocks of these products at our facilities around the world to facilitate prompt delivery to customers. Sales of lithium carbonate and lithium hydroxide are made on the basis of spot purchase orders or under supply contracts. The contracts generally specify minimum and maximum annual purchase commitments, and prices are adjusted periodically, according to the variation of price indexes established in the market.
Lithium: Competition
Lithium is produced mainly from two sources: (i) concentrated brines and (ii) minerals. During 2024, the main lithium brines producers were Chile, Argentina and China, while the main lithium mineral producers were Australia and China. Other relevant regions for lithium production were Brazil and Zimbabwe. With total sales of approximately 204.9 thousand metric tons of lithium carbonate and hydroxide, we believe our market share of lithium chemicals was approximately 17% in 2024. The main competitors in the lithium market with their estimated market share are: Albemarle (14%), Jiangxi Ganfeng Lithium Co (6%), Tianqi Lithium Corp. (6%) and Arcadium Lithium (4%).
Tianqi is also a significant shareholder of SQM, holding approximately 22.16% of SQM's shares as of March 31, 2025.
We believe that lithium production will continue to increase this decade, in response to an increase in demand growth.
Potassium
In 2024, our potassium chloride and potassium sulfate revenues amounted to US$270.8 million, representing 6.0% of our total revenues and a 3.0% decrease compared to 2023, due to lower prices, partially offset by higher sales volumes during the year. The average price for 2024 was approximately 24.2% lower than the average prices in 2023. Our sales volumes in 2024 were approximately 28.0% higher than sales volumes reported during 2023.
The following table shows our sales volumes of and revenues from potassium chloride and potassium sulfate for 2024, 2023 and 2022:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2024 |
|
2023 |
|
2022 |
Sales volumes (Th. MT) |
|
|
|
|
|
| Potassium chloride and potassium sulfate |
695.0 |
|
543.1 |
|
480.5 |
Total revenues (in US$millions) |
270.8 |
|
|
279.1 |
|
|
437.2 |
|
Potassium: Market
During the last decade, demand for potassium chloride and fertilizers in general has increased due to several factors, such as a growing world population, higher demand for protein-based diets, and less arable land. These factors contribute to fertilizer demand growth as a result of efforts to maximize crop yields and continue to use resources more efficiently. We estimate that global demand in 2024 reached approximately 72 million metric tons, an increase from approximately 68 million tons during 2023, primarily due to lower prices and increased availability of potassium supply from Belarus and Russia.
Studies by the International Fertilizer Association indicate that cereals account for approximately 39% of global potassium demand, including maize (17%), rice (12%), and wheat (8%). Oil crops represent 25% of global consumption, with soybeans at 13% and oil palm at 9%. Other uses make up about 36%.
Potassium: Our Product
We produce potassium chloride (KCl) by extracting brines from the Salar de Atacama, which are rich in potassium and other salts. Potassium chloride is the most used and cost-effective potassium-based fertilizer for various crops. We offer potassium chloride in two grades: standard and compacted.
Potassium is one of the three essential macronutrients required for plant development. It is suitable for fertilizing crops that can tolerate relatively high levels of chloride and those grown under conditions with sufficient rainfall or irrigation to prevent chloride accumulation in the rooting systems.
The benefits of using potassium include:
•Increased yield and quality
•Enhanced protein production
•Improved photosynthesis
•Intensified transport and storage of assimilates
•Better water efficiency
Potassium chloride is also utilized as a raw material to produce potassium nitrate and other specialty nutrient granulated blends (NPK). Since 2009, our effective end product capacity has increased to over 2 million metric tons per year, providing us with greater flexibility and market coverage.
Potassium: Marketing and Customers
In 2024, we sold potassium chloride and potassium sulfate to approximately 729 customers in 39 countries. No single customer individually accounted for at least 10% of this segment's sales in 2024. We estimate that the 10 largest customers together accounted for approximately 35% of sales during this period . No single supplier has a concentration of at least 10% of this business line's cost of sales. We make lease payments to Corfo which are associated with the sale of different products produced in the Salar de Atacama, including lithium carbonate, lithium hydroxide and potassium chloride. See Note 22.2 to our consolidated financial statements for the disclosure of lease payments made to Corfo for all periods presented.
The following table shows the geographical breakdown of our revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Revenues breakdown |
|
2024 |
|
2023 |
|
2022 |
| North America |
|
23 |
% |
|
24 |
% |
|
16 |
% |
| Europe |
|
15 |
% |
|
11 |
% |
|
6 |
% |
| Chile |
|
13 |
% |
|
11 |
% |
|
15 |
% |
| Central and South America (excluding Chile) |
|
33 |
% |
|
34 |
% |
|
41 |
% |
| Asia and Others |
|
16 |
% |
|
20 |
% |
|
22 |
% |
Potassium: Competition
We estimate that in 2024 we accounted for less than 1% of global sales of potassium chloride. Our main competitors are Uralkali, Belaruskali, Nutrien and Mosaic. In 2024, Uralkali was estimated to account for approximately 16% of global sales, Belaruskali for approximately 15%, Nutrien for approximately 15%, and Mosaic for approximately 8%.
Industrial Chemicals
In 2024, our revenues from industrial chemicals were US$78.2 million, representing approximately 1.7% of our total revenues for that year and a 55.4% decrease from US$175.2 million in 2023, as a result of lower sales volumes in this business line, which offset higher sales prices. Sales volumes in 2024 decreased 70.9% compared to sales volumes reported last year, while average prices in the business line increased 53.1% during 2024 compared to average prices reported during 2023.
The following table shows our sales volumes of industrial chemicals and total revenues for 2024, 2023 and 2022:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2024 |
|
2023 |
|
2022 |
Sales volumes (Th. MT) |
|
|
|
|
|
| Industrial chemicals |
52.6 |
|
180.4 |
|
147.0 |
Total revenues (in US$millions) |
78.2 |
|
|
175.2 |
|
|
165.2 |
|
Industrial Chemicals: Market
Industrial sodium and potassium nitrates are used in a wide range of industrial applications, including the production of glass, ceramics and explosives, metal recycling, insulation materials, metal treatments, thermal solar and various chemical processes.
We are also experiencing a growing interest in using solar salts in thermal storage solutions related to CSP (Concentrated Solar Power) technology. Due to their proven performance, solar salts are being tested in industrial heat processes and heat waste solutions. These new applications may open new opportunities for solar salts uses in the near future, such as retrofitting coal plants.
Industrial Chemicals: Our Products
We produce and sell three industrial chemicals: sodium nitrate (NaNO3), potassium nitrate (KNO3) and potassium chloride (KCl). Sodium nitrate is used primarily in the production of glass, explosives, metal treatment, metal recycling and the production of insulation materials, adhesives, among other uses. Potassium nitrate is used in the manufacturing of specialty glass, and it is also an important raw material for the production of frits for the ceramics, enamel industries, metal treatment and pyrotechnics. Solar salts, a combination of potassium nitrate and sodium nitrate, are used as a thermal storage medium in concentrated solar power plants. Potassium chloride is a basic chemical used to produce potassium hydroxide, and it is also used as an additive in oil drilling and in food processing, among other uses.
In addition to producing sodium and potassium nitrate for agricultural applications, we produce different grades of these products, including prilled grades, for industrial applications. The grades differ mainly in their chemical purity. We have operational flexibility in producing industrial grade nitrates, because they are produced from the same process as their equivalent agricultural grades, needing only an additional step of purification.
We may, with certain constraints, shift production from one grade to the other in response to market conditions. This flexibility allows us to maximize yields and to reduce commercial risk. In addition to producing industrial nitrates, we produce, market and sell industrial-grade potassium chloride.
Industrial Chemicals: Marketing and Customers
In 2024, we sold our industrial nitrate products in 53 countries, to approximately 274 customers. No single customer accounted for at least 10% of this segment's sales, and the 10 largest customers together accounted for approximately 27% of this segment's revenues. No supplier accounts for more than 10% of this business line's cost of sales. We make lease payments to Corfo which are associated with the sale of different products produced in the Salar de Atacama, including lithium carbonate, lithium hydroxide and potassium chloride. See Note 22.2 to our consolidated financial statements for the disclosure of lease payments made to Corfo for all periods presented.
The following table shows the geographical breakdown of our revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Revenues breakdown |
|
2024 |
|
2023 |
|
2022 |
| North America |
|
56 |
% |
|
27 |
% |
|
36 |
% |
| Europe |
|
24 |
% |
|
12 |
% |
|
17 |
% |
| Chile |
|
1 |
% |
|
1 |
% |
|
1 |
% |
| Central and South America (excluding Chile) |
|
10 |
% |
|
6 |
% |
|
7 |
% |
| Asia and Others |
|
9 |
% |
|
54 |
% |
|
39 |
% |
Our industrial chemical products are marketed mainly through our own network of offices, logistic platforms, representatives and distributors. We maintain updated inventories of our stocks of sodium nitrate and potassium nitrate, classified according to graduation, to facilitate prompt dispatch from our warehouses. We provide support to our customers and continuously work with them to improve our service and quality, together with developing new products and applications for our products.
Industrial Chemicals: Competition
We believe that we are one of the world’s largest producers of industrial sodium nitrate and potassium nitrate. In 2024, our estimated market share by volume for industrial potassium nitrate was 32% and for industrial sodium nitrate was 29% (excluding domestic demand in China and India).
Our competitors in sodium nitrate are mainly based in Europe and Asia, producing sodium nitrate as a by-product of other production processes. In sodium nitrate, BASF AG, a German corporation, and several producers in Eastern Europe and China are competitive since they produce industrial sodium nitrate as a by-product. Our industrial sodium nitrate grades also compete indirectly with substitute chemicals, including sodium carbonate, sodium sulfate, calcium nitrate and ammonium nitrate, which may be used in certain applications in place of sodium nitrate and are available from a large number of producers worldwide.
Our main competitors in the industrial potassium nitrate business are Haifa Chemicals, Kemapco and some Chinese producers, which we estimate had a market share of 18%, 9% and 15%, respectively, in 2024.
Producers of industrial sodium nitrate and industrial potassium nitrate compete in the marketplace based on attributes such as product quality, delivery reliability, price, and customer service. Our operation offers both products at high quality and with low cost.
In the industrial potassium chloride market, we are a relatively small producer, mainly focused on supplying regional needs.
Other Products
SQM generates revenue from the sale of third-party fertilizers (both specialty and commodity). These fertilizers are traded globally in substantial volumes and are used either as raw materials for specialty mixes or to enhance our product portfolio.
We have established capabilities in commercial management, supply, flexibility, and inventory management, enabling us to respond to the evolving fertilizer market and secure profits from these transactions.
Production Process
Our integrated production process can be classified according to our natural resources:
•caliche ore deposits, which contain nitrates, iodine and potassium;
•brines from the Salar de Atacama, which contain potassium, lithium, sulfate, boron and magnesium; and
•spodumene deposits from the Mt. Holland project in Western Australia, which contain lithium.
Caliche Ore Deposits
Caliche ore deposits are located in the First and Second Regions in northern Chile. During 2024, our mining operations were concentrated in the First Region where we mainly worked in the mining sectors Tente en el Aire, Mina Oeste, Hermosa, Mina Sur and Torcaza, and in the Second Region at the Pampa Blanca site. Operations at the El Toco mine (which is part of the Maria Elena site) and the Pedro de Valdivia site were suspended in November 2013 and November 2015, respectively, in an effort to optimize our production facilities with lower production costs.
Caliche ore is found under a layer of barren overburden in seams with variable thickness from one to four meters, and with the overburden varying in thickness between zero and two meters.
Before proper mining begins, the exploration stage is carried out, including complete geological reconnaissance, sampling and drilling caliche ore to determine the quality and characteristics of each deposit. Treatability tests are performed at a pilot plant. Drill-hole samples are properly identified and tested at our chemical laboratories. With the exploration information on a closed grid pattern of drill holes, the ore evaluation stage provides information for mine planning purposes. Mine planning is done on a long-term basis (ten years), medium-term basis (three to five years) and short-term basis (one year). Once all of this information has been compiled, detailed planning for the exploitation of the mine takes place.
The mining process generally begins with bulldozers first removing the overburden in the mining area. This process is followed by an inspection and review of the drill holes before production drilling and blasting occurs to break the caliche seams. The ore is loaded onto off-road trucks, which take it to the leaching heaps to be processed.
During 2024, SQM used four continuous mining equipment systems to replace the drilling and blasting process for mining some of the caliche ore and obtaining a smaller ore size (under 6 ½ inches) that allows a better metallurgical recovery.
The run of mine ore is loaded in heaps and leached with water to produce concentrated solutions containing iodine, nitrate and potassium. These solutions are treated at our iodide plants where iodine is extracted through both solvent-extraction and blow out processes. The remaining solutions, which are rich in nitrates and potassium, are subsequently sent to solar evaporation ponds where the solutions are evaporated and after iodide is obtained, nitrate and potassium salts are produced. These concentrated salts are then sent to Coya Sur where they are used to produce potassium nitrate and sodium nitrate.
Caliche Ore-Derived Products
Caliche ore-derived products are sodium nitrate, potassium nitrate, sodium potassium nitrate and iodine.
Sodium Nitrate
During 2024, sodium nitrate for both agricultural and industrial applications was produced from nitrate salts from our mining operations at Sur Viejo and fed to our new crystallization plant located in Coya Sur. Crystallized sodium nitrate is processed at the Coya Sur production plants to produce sodium nitrate and sodium potassium nitrate in different chemical and physical forms, including crystallized and prilled products. Finally, the products are transported by truck to our port facilities in Tocopilla for shipping to customers and distributors worldwide.
Potassium Nitrate
Potassium nitrate is produced at our Coya Sur facility using a production process developed in-house. Potassium salts produced at Nueva Victoria or Coya Sur and potassium salts from the Salar de Atacama are added to our conversion plants. A chemical reaction begins, transforming sodium nitrate into potassium nitrate and creating formed sodium chloride as a by-product. Depending on the specifications of the required product, it is subjected to an adiabatic or atmospheric cooling process to obtain the required quality.
Our current potassium nitrate production capacity at Coya Sur is approximately 900,000 metric tons per year.
The potassium nitrate produced at Coya Sur is transported to Tocopilla for shipping and delivery to customers and distributors. All potassium nitrate produced in crystallized or prilled form at Coya Sur has been certified by TÜV-Rheinland under the quality standard ISO 9001:2015. Additionally, the Coya Sur and Nueva Victoria leaching sites achieved certification by TÜV-Rheinland in 2023 under the ISO 50001:2015 quality standard (certification of energy management systems), and in Coya Sur, we are advancing in the phase two of the external audit to certify our potassium nitrate, sodium nitrates and soluble fertilizers production.
Iodine and Iodine Derivatives
During 2024, we produced iodine at our facilities at Nueva Victoria, Pedro de Valdivia and Pampa Blanca (iodide solutions). Iodine is extracted from solutions produced by leaching caliche ore.
As in the case of nitrates, the process of extracting iodine from the caliche ore is well established, but variations in the iodine and other chemical contents of the treated ore and other operating parameters require a high level of know-how to manage the process effectively and efficiently.
The solutions resulting from the leaching of caliche ore carry iodine in iodate form. Part of the iodate solution is reduced to iodide using sulfur dioxide, which is produced by burning sulfur. The resulting iodide is combined with the rest of the untreated iodate solution to release elemental iodine in low concentrations. The iodine is then extracted from the aqueous solutions and concentrated in iodide form using a solvent extraction and stripping plant in the Pedro de Valdivia and Nueva Victoria facilities and using a blow out plant in the Iris facility. The concentrated iodide is oxidized to metallic iodine, which is then refined through a smelting process and prilled. We have obtained patents in the United States and Chile (Chilean patent number 47,080) for our iodine prilling process.
Prilled iodine is tested for quality control purposes, using international standard procedures. It is then packed in 20 to 50-kilogram drums or 350-to-700-kilogram maxi bags and transported by truck to Antofagasta, Mejillones, or Iquique for export. Our iodine and iodine derivatives production facilities have been certified by TÜV-Rheinland under the ISO 9001:2015 program, providing third-party certification of our quality management system. The last recertification process was approved in November 2022, valid through March 2026.
Our total iodine production in 2024 was 13,101 metric tons predominately from our Nueva Victoria facility. We have the flexibility to adjust our production according to market conditions.
Tente en el Aire iodine plant (module 4), has a capacity of 6,000 metric tons of iodide per year and will allow us to process an additional of 1,300 m3/h of iodate solutions. The construction was completed by the end of 2024. This additional volume will requiere additional water consumption, which will be provided by the new seawater pipeline. Currently, our biggest constraint to increasing iodine production is lack of water supply. With this additional capacity of iodide production, our total current effective production capacity at our iodine plants is approximately 16,000 metric tons per year (including our capacity at the Nueva Victoria and Pedro de Valdivia iodine plants).
Additionally, the seawater pipeline with a capacity of 900 liters per second is under construction and is expected to enter into operation by the end of 2026.
We use a portion of the iodine we produce to manufacture inorganic iodine derivatives, which are intermediate products used for manufacturing agricultural and nutritional applications, at facilities located near Santiago, Chile. We also produce inorganic and organic iodine derivative products together with Ajay, which purchases iodine from us. In the past, we have primarily sold our iodine derivative products in South America, Africa and Asia, while Ajay and its affiliates have primarily sold their iodine derivative products in North America and Europe.
Salar de Atacama Brine Deposits
The Salar de Atacama, located approximately 210 kilometers east of Antofagasta, is a salt-encrusted depression in the Atacama Desert, within which lies an underground deposit of brines contained in porous sodium chloride rock fed by an underground inflow from the Andes mountains, which is the result of millions of years of climatic and tectonic impacts. Brines are pumped from depths of 15 to 150 meters below the surface, through a field of wells that are located in the Salar de Atacama, distributed in areas authorized for exploitation, and which contain relatively high concentrations of potassium, lithium, sulfates and other minerals.
The brines are estimated to cover a surface of approximately 2,800 square kilometers and contain commercially exploitable deposits of potassium, lithium, sulfates and boron. Concentrations vary at different locations throughout the Salar de Atacama. Our mining exploitation rights to the Salar de Atacama are pursuant to the SQM-Corfo Agreements, which expire in 2030. The SQM-Corfo Agreements, as amended in January 2018, establish a total production and sales limit of up to 349,553 metric tons of lithium metallic equivalent (1,860,671 tons of lithium carbonate equivalent), which is in addition to the approximately 64,816 metric tons of lithium metallic equivalent (345,015 tons of lithium carbonate equivalent) then remaining from the originally authorized amount. See “Item 10.C. Material Contracts – SQM-Corfo Agreements.”
For the year ended December 31, 2024, revenues related to products originating from the Salar de Atacama represented 55% of our consolidated revenues, consisting of revenues from our potassium business line and our lithium and derivatives business line for the period. All of our products originating from the Salar de Atacama are derived from our extraction operations under the SQM-Corfo Agreements. As of December 31, 2024, only six years remain on the term of the SQM-Corfo Agreements.
Under the Chilean National Lithium Strategy announced in April 2023, the Chilean government, through Codelco, intends to participate in the lithium-related activities in the Salar de Atacama. On December 27, 2023, SQM and Codelco signed a non-binding MOU, which, among other matters, established a framework for the terms and conditions of the definitive agreements for a new entity through which SQM’s subsidiary, SQM Salar, may continue to exploit mineral resources in the Salar de Atacama until 2060. Corfo has granted to Codelco’s subsidiary, Minera Tarar, the rights to exploit the Salar de Atacama from 2031 to 2060, which will be contributed to the joint venture. If the parties are unable to agree on definitive agreements for the proposed new entity, either the Chilean government or SQM could allow the SQM-Corfo Agreements to expire in 2030 in accordance with their terms. See “Risk Factors ― The new National Lithium Strategy announced by the Chilean government in April 2023 has created and may continue to create uncertainty in the Chilean lithium industry, which could have a material adverse effect on our business performance or the value of our shares and ADRs.”
Products Derived from the Salar de Atacama Brines
The variety of products that may be derived from the Salar de Atacama brines includes solutions of lithium chloride, lithium sulfate, lithium carbonate, lithium hydroxide, lithium salts, potassium chloride, potassium salts, potassium sulfate, boric acid, sodium chloride and bischofite (magnesium chloride).
In order to produce these products, brines from the Salar de Atacama are pumped to solar evaporation ponds. Evaporation of the water contained in the brine in a sequential process of precipitation and evaporation, results in potassium-enriched salts and lithium-concentrated brines. In the first stages of the evaporation process, sodium chloride salts (halite) precipitate followed by potassium chloride salts together with sodium chloride (sylvinite), which are used to produce fertilizer products. The brine that remains in the evaporation pond system continues its concentration, producing additional products of interest, such as lithium sulfate salts and a concentrated lithium chloride solution, which are used to produce lithium sulfate concentrate and lithium carbonate, respectively.
Lithium Chloride Solution and Lithium Carbonate
The concentrated lithium chloride solution obtained during the evaporation process contains approximately 4-5% of lithium. The solution is then transported by truck to the Lithium Chemical Plant located near Antofagasta, approximately 190 kilometers southeast of the Salar de Atacama. At this plant, the solution is further purified and treated with sodium carbonate to produce lithium carbonate, which is dried and then, if necessary, compacted and finally packaged for shipment to customers.
The production capacity of our lithium carbonate facility at the end of 2024 was 210,000 metric tons per year.
Future production will depend on the actual volumes and quality of the lithium solutions sent by the Salar de Atacama operations, as well as prevailing market conditions. Our future production will also be subject to the extraction limit described in the SQM-Corfo Agreements discussed above. See “—Salar de Atacama Brine Deposits” and “Item 8.A.7 Legal Proceedings.”
Our lithium carbonate production quality assurance program has been certified by TÜV-Rheinland under ISO 9001:2015 since September 2018.
Lithium Hydroxide (from Lithium Carbonate)
Lithium carbonate is sold to customers, and we also use it as a raw material for our lithium hydroxide production, which started operations at the end of 2005. We currently have three lithium hydroxide plants in Chile, one of which has two production lines and the second of which came into operation at the end of July 2024. Together, they have a total production capacity of 40,000 metric tons per year. These plants are located at the lithium production chemical plant, adjacent to our lithium carbonate operations.
In the production process, lithium carbonate is reacted with a lime solution to produce lithium hydroxide brine and calcium carbonate salt. The calcium carbonate salt is removed from the process by filtration and the lithium hydroxide brine is stored in ponds. The brine is then evaporated in a multi-effect evaporator and crystallized to produce lithium hydroxide which is then dried and packaged for shipment to customers.
Our lithium hydroxide production quality assurance program has been certified by TÜV-Rheinland under ISO 9001:2015 since September 2018.
Lithium Sulfate
During the brine concentration process and if the chemistries are favorable, it is possible to obtain lithium sulfate as additional raw material. This salt mainly precipitates in the potassium carnallite and bischofite stages.
After collection, the lithium sulfate is treated in the MOP H II plant through crushing, flotation and filtration processes, obtaining wet lithium sulfate as an intermediate product. In addition, salts with high potassium content are obtained as a by-product of the process, which are treated in the adjacent SOP-H plant, allowing additional potassium chloride to be obtained.
The wet lithium sulfate is then treated at the SOP S/C plant producing dry lithium sulfate as a finished product, which is currently sent to our refining plant and different tolling facilities in China to be converted into lithium hydroxide and/or lithium carbonate.
Lithium Hydroxide (from Lithium Sulfate)
Our lithium hydroxide operations in China began at the beginning of 2023, with a design annual capacity of 20,000 metric tons. The production of lithium hydroxide monohydrate from lithium sulfate begins with a purification stage of the raw material for its subsequent transformation to lithium carbonate, which is subsequently converted into high-purity lithium hydroxide through crystallization, drying, cooling and packaging stages. Impurities from the process are eliminated in a form of mixed salts, avoiding liquid waste in the plant. Sodium sulfate is generated as a by-product, which is dried and packaged for sale.
Additionally, we have tolling contracts with tolling facilities in China for the refining of lithium sulfate with an additional annual capacity of 20,000 metric tons allowing the production of lithium hydroxide and/or lithium carbonate.
Potassium Chloride
We use potassium chloride derived from the Salar de Atacama brines in the production of potassium nitrate. Production of our own supplies of potassium chloride provides us with substantial raw material cost savings. We also sell potassium chloride to third parties, primarily as a commodity fertilizer.
To produce potassium chloride, brines from the Salar de Atacama are sent to the first evaporation stage, where sodium chloride salts (halite) precipitate, are then harvested and removed. These salts have the potential to be used in the copper mining process.
In the second stage of the evaporation process, the remaining brine from the first stage is transferred to other evaporation ponds where potassium chloride salts together with sodium chloride (sylvinite) precipitate. These salts are harvested and then sent for treatment at one of the wet potassium chloride plants where potassium chloride is separated by a grinding, flotation, and filtering process. In the final evaporation stage, salts containing magnesium are harvested and treated at one of the cold leach plants where magnesium is removed. Part of the potassium chloride is transported approximately 300 kilometers to our Coya Sur facilities via a dedicated truck transport system, where it is used in the production of potassium nitrate. The use of potassium chloride salts as a raw material in Coya Sur allows us to capture significant savings, as it allows us to use potassium salts with different qualities and to avoid buying and importing potassium chloride from external sources.
The remainder of the potassium chloride produced at the Salar de Atacama is shipped to our port in Tocopilla in either crystallized (standard) or granular (compacted) form and then shipped and sold as a commodity fertilizer to third parties. All of our potassium chloride-related plants in the Salar de Atacama currently have a nominal production capacity of up to 2.6 million metric tons per year. Actual production capacity depends on volume, quality and performance of the salts used in the process and quality of the brine resources pumped from the Salar de Atacama.
Mount Holland Spodumene Deposits
The Mount Holland project is an integrated lithium project in Western Australia consisting of (i) an open-pit mine on the Earl Grey hard rock lithium deposit and a spodumene concentrator comprised of Dense Media Separation ("DMS") and flotation circuits, 120 kilometers southeast of Southern Cross, and (ii) a lithium hydroxide (LiOH) refinery, located in the town of Kwinana, 26.5 kilometers from the Port of Fremantle, from which the battery-grade LiOH product will be shipped. The concentrator at the Mt. Holland site has a nominal production capacity of 383,000 dry metric tons per annum concentrate at a grade of 5.5 per cent lithium oxide matching the refinery feed requirements. The refinery in Kwinana has the capacity to produce 50,000 metric tons per annum of lithium hydroxide.
The project is an unincorporated joint venture in which SQM and Wesfarmers, through a wholly owned subsidiary, each holding 50% of the assets. The joint venture is managed by Covalent, an entity equally owned (50/50) by SQM and Wesfarmers.
The Mount Holland project focuses on the extraction and beneficiation of spodumene reserves in the Earl Grey pegmatite group. The deposit consists of a main body of thick tabular pegmatites, which become progressively narrower and branch to the south and east of the main pegmatite until the main body splits into several narrower dikes. Sporadically, isolated box rock enclaves are found within the pegmatite body.
The first ore from the pit was mined in 2022 and the concentrator started commissioning in the third quarter of 2023. First concentrate production from both circuits was achieved in the last quarter of 2023 and the first export of spodumene concentrate was in the first half of 2024. In December 2023, construction of the concentrator plant was completed and in December 2024, the refinery is under construction, with the objective of completion during 2025.
Products Derived from the Mount Holland Spodumene Deposits
Spodumene Concentrate
After traditional drill and blasting, load and haul operations of the spodumene ore obtained from the open pit is sent to Run of Mine (ROM) ore pad, from which a crushing circuit is fed. The crushing circuit reduces the granulometry of the material and generates a particle size suitable for processing at the smaller scale DMS circuit of the concentrator plant. This crushing circuit also has an intermediary crushed ore stockpile. The concentrator also has a larger integrated flotation circuit for treatment of the finer portion of ore.
Until full commissioning of the lithium hydroxide refinery at Kwinana, the concentrate will be trucked there for commissioning and production, and will continue to be trucked to a storage facility at Bunbury, approximately 500 kilometers west of the Mt. Holland mine. At Bunbury, the product is distributed to the SQM and Wesfarmers joint venture partners to follow their individual shipping and marketing plans.
Lithium Hydroxide
At the Kwinana refinery, the spodumene concentrate feed is calcined in a rotary kiln and afterwards treated with sulfuric acid. The sulfated calcine is transferred to the leaching and impurity removal area and leached with a process liquor. The slurry is then neutralized and filtered. The filtrate is pumped into the purification area where it is passed through a filter to remove fine entrained particles and later enters the solution causticization area where caustic soda (NaOH) is added to convert the lithium sulfate to lithium hydroxide (LiOH) plus sodium sulfate (Na2SO4). Lithium hydroxide is then crystallized, dried and finally packaged for shipment and subsequent commercialization. The production capacity of the lithium hydroxide plant is designed to take the whole concentrate production from Mt. Holland and transform it into 50,000 metric tons of lithium hydroxide per year upon completion of its construction.
Future production will depend on the actual volumes and quality of the spodumene concentrate shipped by the concentrator operation, the refinery plant performance and prevailing market conditions.
Raw Materials
The main raw material that we require in the production of nitrate and iodine is caliche ore, which is obtained from our surface mines. The main raw material in the production of potassium chloride, lithium carbonate, lithium hydroxide and potassium sulfate is the brine extracted from our operations at the Salar de Atacama.
Other important raw materials are sodium carbonate (used for lithium carbonate production), sulfuric acid, hydrochloric acid, kerosene, sulphur, anti-caking and anti-dust agents, calcium oxide, potassium carbonate, ammonium nitrate (used for the preparation of explosives in the mining operations), woven bags for packaging our final products, electricity acquired from electric utilities companies, and liquefied natural gas and fuel oil for heat generation. Our raw material costs (excluding caliche ore and salar brines and including energy) represented approximately 44% of our cost of sales in 2024.
Since 2017, we have been connected to the central grid, which supplies electricity to the majority of cities and industries in Chile. We have several electricity supply agreements signed with major producers in Chile, which are within the contract terms. Our electricity needs are primarily covered by Power Purchase Agreements that we entered into with Empresa Eléctrica Cochrane SpA (an AES affiliate) on December 31, 2012.
For our supply of liquefied natural gas, we maintain a five-year contract with Engie, which was executed in 2019 and some annual contracts to supply possible increases in demand. In addition, we have a supply of liquefied petroleum gas (LPG) from Lipigas at our Lithium Chemical Plant and the Salar de Atacama.
We obtain ammonium nitrate, sulfuric acid, hydrochloric acid, kerosene, sulphur, calcium oxide and soda ash from several large suppliers, mainly in Chile, the United States and Europe, under long-term contracts or general agreements, some of which contain provisions for annual revisions of prices, quantities and deliveries. Diesel fuel is obtained under contracts that provide fuel at international market prices.
At Mt. Holland, different reagents are added at various points in the concentrator. Ferrosilicon is added to facilitate the gravity separation in the DMS circuit, and collector, flocculants and coagulant reagents are utilized in the flotation circuit, among others. The reagents are stored at a weatherproof storage shed on site. In the refinery, sulfuric acid and caustic soda will be delivered via pipeline, and all other reagents by truck to a designated off-loading facility for storage within the refinery.
For main power supply at Mt. Holland, the substations on site were connected in January 2023 to Western Power’s 132kV grid power network (Bounty station). At the Kwinana refinery, the power is supplied from Western Power’s grid connection via the 132/22kV Kwinana Beach Power (KBP) switchyard which was commissioned in October 2023.
To support the heating in the pyrometallurgical system of the refinery, a gas pipeline between the existing ATCO natural gas network and the Kwinana refinery site boundary was connected and installed. Gas will be supplied by a local supplier. A diesel refueling facility is to be installed on site in 2024 with diesel fuel being trucked to site.
We believe that all of our contracts and agreements with third-party suppliers with respect to our main raw materials contain standard and customary commercial terms and conditions.
Water Supply
We hold water rights for the supply of surface and subterranean water near our production facilities. The main sources of water for our nitrate and iodine facilities at Pedro de Valdivia, María Elena and Coya Sur are the Loa and San Salvador rivers, which run near our production facilities. Water for our Nueva Victoria and Salar de Atacama facilities is obtained from wells near the production facilities. For our lithium carbonate and lithium hydroxide production processes at our Lithium Chemical Plant, in 2024 we recovered approximately 1,060,000 m3 of ultrapure water from liquid plant waste, the rest of the water required for the process was purchased from third parties and we also purchased drinking water from local utility companies.
The main source of potable water for Mt. Holland mine is a water pipeline from Goldfields pipeline (Water Corporation) which is linked at approximately 2.5 kilometers north west of the Moorine Rock townsite, and transported through a 136 kilometers below ground water pipeline. Water on site is stored in tanks, and the pipeline water tanks supply reticulated water to raw/fire water tanks, and to a central potable water treatment system for personal consumption. There are additional potable water storage tanks at the campsite. Water for the refinery will be sourced from Kwinana Water Reclamation Plant (KWRP), however during outages (i.e. during KWRP plant maintenance) the system is designed with the flexibility of changing water source via an interchangeable spool and associated controls to be able to easily source potable water supply from Water Corporation.
Government Regulations
Regulations in Chile Generally
We are subject to the full range of government regulations and supervision generally applicable to companies engaged in business in Chile, including labor laws, social security laws, public health laws, consumer protection laws, tax laws, environmental laws, free competition laws, and securities laws. These include regulations to ensure sanitary and safety conditions in manufacturing plants.
We conduct our mining operations pursuant to judicial exploration concessions and exploitation concessions, as well as concession and exploitation lease agreements, granted pursuant to applicable Chilean law. Exploitation concessions grant a perpetual right (with the exception of the Salar de Atacama rights, which have been leased to us until 2030) to conduct mining operations in the areas covered by such concessions, provided that annual concession fees are paid. Exploration concessions permit us to explore for mineral resources on the land covered thereby for a specified period, and to subsequently request a corresponding exploitation concession.
Under Law No. 16,319 that created the Chilean Nuclear Energy Commission (Comisión Chilena de Energía Nuclear), or “CCHEN”, we have an obligation to the CCHEN regarding the exploitation and sale of lithium from the Salar de Atacama, which prohibits the use of lithium for nuclear fusion. In addition, CCHEN has imposed quotas that limit the total tonnage of lithium authorized to be sold, along with other conditions.
We also hold water use rights granted by the respective administrative authorities and which enable us to have a supply of water from rivers or wells near our production facilities sufficient to meet our current operating requirements. See “Item 3.D. Risk Factors—Risks Relating to Chile—Changes in water rights laws and other regulations could affect our business, financial condition and results of operations.”. The Water Code and related regulations are subject to change, which could have a material adverse impact on our business, financial conditions and results of operations.
We operate port facilities at Tocopilla, Chile for the shipment of products and the delivery of raw materials in conformity with maritime concessions, which have been granted by the respective administrative authorities. These concessions are normally renewable on application, provided that such facilities are used as authorized and annual concession fees are paid.
We are subject to tax regulations in Chile and in the other countries in which we operate. The Chilean government may again decide to levy additional taxes on mining companies or other corporations in Chile, and such taxes could have a material adverse impact on our business, financial conditions and results of operations. For example, in 2022 Law No. 21,420 was published (later modified by Law No. 21,649 of 2023) which considerably increased the amount payable for mining exploitation and exploration patents.
We are also subject to the Chilean Labor Code and the Subcontracting Law No 20,123, which are overseen by the Labor Authority (Dirección del Trabajo), the National Geology and Mining Service (Servicio Nacional de Geología y Minería) or “Sernageomin”, and the National Health Service.
Recent changes to these laws and their application may have a material adverse effect on our business, financial condition and results of operations. In April 2023, Law No. 21,561 was published, which established a reduction in the weekly working day from 45 to 40 hours. This reduction in working hours will imply increases in labor costs for both direct employees and subcontracted personnel. See “Item 3.D. Risk Factors—Risks Relating to Our Business—We are exposed to labor strikes and labor liabilities that could impact our production levels and costs.”
In addition, we are subject to Law No. 20,393, which establishes criminal liability for legal entities. This law was modified by Law No. 21,595 published in August 2023, which introduced additional crimes for which companies and company executives are responsible in Chile, including crimes for environmental impacts.
We are subject to the Securities Market Law and Law No. 18,046 on Corporations (Ley de Sociedades Anónimas) or the “Chilean Corporations Act”, which regulates corporate governance of public companies. Specifically, the Chilean Corporations Act regulates, among other things, independent director requirements, disclosure obligations to the general public and to the CMF, as well as regulations relating to the use of inside information, the independence of external auditors, and procedures for the analysis of transactions with related parties. See “Item 6.C. Board Practices” and “Item 7.B. Related Party Transactions.”
Law No. 21,455, which was published in the Official Gazette on June 21, 2022, establishes a legal framework for facing the challenges derived from climate change and complying with the Chilean State’s international commitments regarding such issue. Law No. 21,455, amends the Chilean Corporations Act to require open stock corporations registered in the Securities Registry to periodically provide information to CMF in connection with the impact of their activities on the environment and climate change.
Law No. 21,521, which was published in the Official Gazette on January 4, 2023, seeks to promote competition and financial inclusion in financial services through innovation and technology. Law No. 21,521 regulates the following financial services: (i) crowdfunding platforms; (ii) alternative systems for the transaction of financial instruments or securities; (iii) credit advice; (iv) investment advice (v) custody of financial instruments; (vi) order routing, and (vii) intermediation of financial instruments. In addition, Law No. 21,521 amends the Chilean Corporations Act to increase by 2,000 (or the higher number determined by the CMF) the number of shareholders that a closed corporation must have to be required to register its shares in the Securities Registry and become an open stock corporation. Law No. 21,521 also amends the Securities Market Law to establish a simplified regime for debt securities, which will be detailed by the CMF.
There are currently no material legal or administrative proceedings pending against us except as discussed under “Item 8.A.7 Legal Proceedings”, in Note 20 to our consolidated financial statements and below under “Safety, Health and Environmental Regulations in Chile.”
Safety, Health and Environmental Regulations in Chile
Our operations in Chile are subject to both national and local regulations related to safety, health and environmental protection. In Chile, the main regulations on these matters that are applicable to us are the Mine Health and Safety Act of 1989 (Reglamento de Seguridad Minera or the “Mine Health and Safety Act”), the Health Code (Código Sanitario), the Health and Basic Conditions Act of 1999 (Reglamento sobre Condiciones Sanitarias y Ambientales Básicas en los Lugares de Trabajo or the “Health and Basic Conditions Act”), the Subcontracting Law, the Environmental Law of 1994, amended in 2010 (Ley sobre Bases Generales del Medio Ambiente) and Law No.16,744 of the Labor Code relating to workplace accidents and occupational diseases (“Law No. 16,744”).
Health and safety at work are fundamental aspects in the management of mining operations, which is why we have made constant efforts to maintain good health and safety conditions for the people working at our mining sites and facilities. In addition to the role played by us in this important matter, the Chilean government has a regulatory role, enacting and enforcing regulations in order to protect and ensure the health and safety of workers. The Chilean government, acting through the Ministry of Labor and Social Security, Ministry of Health, and the Sernageomin, performs health and safety inspections at the mining sites and oversees mining projects, among other tasks, and it has exclusive powers to enforce standards related to environmental conditions and the health and safety of the people performing activities related to mining.
The regulations set in Law No. 16,744 and the Mine Health and Safety Act protect workers and nearby communities from health and safety hazards. The Health and Basic Conditions Act along with our Internal Mining Standards (Reglamentos Internos Mineros) establish guidelines to maintain a workplace where safety and health risks are managed appropriately.
We are subject to the general provisions of the Health and Basic Conditions Act, our own internal standards and the provisions of the Mine Health and Safety Act. In the event of non-compliance, the Ministry of Health and relevant regulatory bodies are entitled to use their enforcement powers to ensure compliance with the law.
In November 2011, the Ministry of Mining enacted Law No. 20,551 that regulates the closure of mining sites and facilities (Ley que Regula el Cierre de Faenas e Instalaciones Mineras). This statute became effective in November 2012 and required all mining sites to present or update their closure plans as of November 2014. SQM has fulfilled this requirement for all of its mining sites and facilities. The main requirements of the law are related to the execution of measures to obtain the physical and chemical stability of the mining site and its facilities, as well as the protection of life, health, safety of people and the environment, along with the estimated cost to implement such plans. The mining site closure plans are approved by Sernageomin and the corresponding financial assurances are subject to approval by the CMF. In both cases, SQM has received the requisite approvals. During 2020, any required closure plans were updated and presented to Sernageomin in accordance with required deadlines. In 2021, approvals of the updates of the closure plan for Tocopilla and Pedro de Valdivia sites were renewed, while in 2022, approvals of the updates of the closure plans for the Salar de Atacama, Lithium Chemical Plant, Coya Sur, Nueva Victoria and Pampa Orcoma were received. Finally, during the year 2023, the update of the closure plans for the Pampa Blanca and María Elena sites was approved.
We continuously monitor the impact of our operations on the environment and on the health of our employees and other persons who may be affected by such operations. We have made modifications to our facilities in an effort to limit any adverse impacts. Also, over time, new environmental standards and regulations have been enacted, which have required minor adjustments or modifications of our operations. We anticipate that additional laws and regulations will be enacted over time with respect to environmental matters. There can be no assurance that future legislative or regulatory developments will not impose new restrictions on our operations. We are committed to continuously improving our environmental performance through our Environmental Management System.
Since 2020, we have participated in voluntary ratings such as Ecovadis, international certifications such as Responsible Care from the Chilean Chemical Industry Association, Protect&Sustain from the International Fertilizer Association, ISO 14001, ISO 45001 and ISO 50001, and the IRMA Standard Assessment Audit, to promote responsible mining.
During 2024, the Port of Tocopilla was re-certified by Responsible Care, achieving level 1 certification. Similarly, this year, the Nueva Victoria mine was re-certified, again achieving level 1.
In terms of port environmental management, the Port of Tocopilla improved its performance in Ecoports of the Port Environmental Review System (PERS), raising its compliance percentage from 90.57 % in 2022 to 92.98 % in August 2024. In July 2024, both Coya Sur and the Port of Tocopilla achieved 100% compliance with the Clean Production Agreement (APL) Seal.
In terms of certifications and management systems, in March 2024, the Coya Sur site obtained ISO 14001 certification. Subsequently, in October 2024, the Port of Tocopilla successfully passed the Phase 1 external certification audit for ISO 45001:2018, thus advancing to the next stage of the process. In November 2024, both ISO 45001:2018 certification and ISO 14001:2015 recertification for the Port of Tocopilla were successfully completed.
Finally, in January 2025, the external follow-up audit was conducted at Coya Sur, Mine & Leach, and the Iodine Plant obtained ISO 50001:2018 certification, becoming the first iodine plant in the world to achieve this recognition.
During 2024, we continued to make progress in the SQM Lithium Chile Division's strategy of certifications and evaluations, which is why we carried out follow-up audits for ISO 9001, 14001, 45001 and 50001 certifications at the Salar de Atacama. At our Chemical Lithium Plant, we obtained certification in Chilean standard 3262 - Gender Equality and Work-Life Balance Management System, which represents a progress and complements other evaluations and sustainability standards of the Company.
In line with our sustainability objectives, during 2024, we continued working on the integration of IRMA in our processes by advancing in some cross-cutting requirements in the Lithium Chemical Plant and during 2025 we have planned the follow-up audit in Salar de Atacama with the objective of verifying the level of achievement of IRMA 75.
As a result of our participation in the DJSI assessment during 2024, we began to assess ourselves voluntarily as the Lithium Chile Division in the mining category, achieving a score of 58 points. This score gives us a consistent view of the challenges of the business to continue progressing, particularly in governance due to changes related to our division.
We also completed the CDP water and climate assessment, in which we obtained a B and B- grade, respectively, and which is aligned with our sustainability plan. In addition, our decarbonization targets were validated by Science Based Targets after a robust review process. In addition, the Lithium Chile Division achieved a gold rating with Ecovadis for the first time, placing it in the 97th percentile of our industry.
Specific regulations for mining operations in Western Australia
Our Australian operations are subject to a broad range of laws and regulations imposed by local and federal governments and regulatory bodies as applicable to companies engaged in business in Australia. Tax regulations in Australia are governed by federal laws, such as income tax and goods and services tax, and are administered by the Australian Taxation Office. The Company is also subject to other Australian federal regulations, including native title, environmental protection and biodiversity conservation, emissions reporting, the Australian Corporations Act, work health and safety, and the Competition and Consumers Act.
There are also a number of state-specific laws and regulations for projects located in Western Australia, including occupational health and safety laws, taxes (such as payroll tax and transfer duty), mining and resources rights (which includes state mining royalties), land access and indigenous rights, and environmental laws administered by different government departments.
For SQM’s Australian projects, specific laws and regulations apply both from Australian federal government as well as the state and local governments of Western Australia.
Environmental laws
Environmental laws governing the mining sector in Australia are extensive. In Australia, the government owns the land and rights to extract minerals from the land and allows parties to apply for tenure to explore or mine the land. SQM (directly or through joint ventures) has obtained the right to mining tenure from the WA government to conduct its exploration and mining operations in Australia. The Mining Act 1978 (WA) ("Mining Act of WA") and the associated Mining Regulations 1981 (WA) govern exploration and mining on land in Western Australia. Mining tenements under the Mining Act of WA include mining leases (which grant a right to conduct mining operations in the areas covered by such concessions, provided that annual concession fees are paid and expenditures are met), exploration licenses (that allow companies to explore for mineral resources on the land covered for a specified period, and to subsequently request a corresponding mining lease) and miscellaneous licenses and general purpose leases, (for ancillary mining activities such as above ground infrastructure and ground water extraction, among others). The grant of a mining tenement under the Mining Act of WA and the conditions imposed are at the discretion of the Minister for Mines and Petroleum. A right to explore usually carries the obligation of spending a specified amount of money on exploration activities.
SQM’s operations are subject to both state and federal environmental laws and regulations, which involve obtaining environmental approvals and licenses to carry out exploration and mining activities. The Environment Protection and Biodiversity Conservation Act 1999 (Cth) (the "EPBC Act") is the Australian Government's central piece of environmental legislation. It provides a legal framework to protect and manage nationally and internationally important flora, fauna, ecological communities, and heritage places. Under the EPBC Act new projects may require federal government approval if it has, will have or is likely to have a significant impact on ‘matters of national environmental significance’. The Australian Government’s Department of Climate Change, Energy, the Environment and Water manages the referral and environmental impact assessment process under the EPBC Act.
On a state level, SQM mine developments are subject to the Environmental Protection Act 1986 (WA) ("EP Act"). Under the EP Act, SQM is obliged to prevent, control and abate pollution and environmental harm and ensure the conservation and protection (as applicable) of the land subject to SQM’s tenure. If a proposal is likely to have a significant impact on the environment it should be referred to the Western Australia Environmental Protection Authority to determine whether an environmental impact assessment is required under Part IV of the EP Act. The Western Australian Department of Water and Environmental Regulation administers Part V of the EP Act. All polluting facilities classified as prescribed facilities (e.g., process plant and tailings storage facility, landfill, wastewater treatment plant) are required to obtain works approvals to construct and perating icenses to operate the respective facility under Part V of the EP Act.
The Western Australia Department of Energy, Mines, Industry Regulation and Safety (DEMIRS) ensures the responsible development of Western Australia’s mineral, petroleum, and geothermal resources. DEMIRS regulates the mining industry to ensure environmental compliance and implementation of best practices in environmental management in accordance with the Mining Act of WA. All new mining projects require approval of a Mining Development and Closure Proposal by DEMIRS prior to ground disturbance. According to the Mining Act, a standalone Mine Closure Plan (MCP) must be submitted to DEMIRS to demonstrate that the mining operation is planning and progressing towards successful closure and achievement of the closure outcomes for the operation. Updated revisions of the MCP are then submitted and approved by DEMIRS, as required.
Under the Mining Rehabilitation Fund Act 2012 and associated Regulations 2013, DEMIRS administers the Mining Rehabilitation Fund (MRF), which is a pooled fund to facilitate the rehabilitation of historical abandoned mines inherited by the government. All tenement holders operating under the Mining Act of WA tenure are required to report disturbance data and contribute annually to the MRF. Closure cost liability estimates are also a component of closure planning and are required for inclusion in the financial reporting of Australian companies as per the Australian Accounting Standards Board (AASB) 137 Provisions, Contingent Liabilities and Contingent Assets.
Groundwater exploration and abstraction is regulated under the Rights in Water Irrigation Act 1914 (Western Australia), administered by the Department of Water and Environmental Regulation. The regulation requires specific license applications to assess environmental impacts including consideration of other users, sustainability of aquifers and groundwater dependent ecosystems. Purchase of water from existing water networks and infrastructure is governed by the Water Corporation under the Water Corporation Act 1995 (Western Australia), which applies to the Mt Holland mine site and Kwinana Lithium Hydroxide Plant.
The National Pollutant Inventory (NPI) is tracking pollution across Australia and ensures that the community has access to information about the emission and transfer of toxic substances which may affect them locally. There has been increasing community demand to know about toxic substances emitted to the local environment. Australian, state and territory governments have agreed to legislation called NEPM, which helps protect or manage particular aspects of the environment. Australian industries are required to monitor, measure and report their emissions under this legislation.
Mining companies in Australia are subject to the National Environmental Protection (National Pollutant Inventory) Measure 1998 as part of their environmental management obligations. This framework requires mining companies to track and report pollutant emissions on an annual basis and manage their environmental impacts in line with national standards.
Climate Change
In Australia, there are a range of climate change laws and regulations aimed at reducing greenhouse gas emissions (GHG) promoting energy efficiency, and encouraging the use of renewable energy in the mining sector. The National Greenhouse Emissions Reporting (NGER) Scheme, managed by the Clean Energy Regulator and governed by the NGER Act 2007, requires mining companies to report their GHG, energy consumption, and production data annually. Mining companies must submit detailed annual reports on their energy usage and emissions (scope 1 and 2), which are used to track national emissions and to assess the effectiveness of Australia’s climate change laws.
The Safeguard Mechanism (established under the Clean Energy Act 2011 (Cth)) applies to large emitters (i.e., facilities that emit more than a baseline of 100,000 tonnes of CO₂-equivalent per year). Large emitters are required to keep their emissions below the baseline. If they exceed their emissions limits, they must either purchase carbon credits or invest in emissions reduction projects to offset the excess. This requirement will be triggered when the Kwinana Lithium Hydroxide Refinery is in steady-state operations (entering commissioning in 2025).
New laws for climate-related risk disclosures have been introduced in 2024. The Australian Securities and Investments Commission (ASIC) will oversee compliance with the Treasury Laws Amendment (Financial Market Infrastructure and Other Measures) Bill 2024 (Cth) including amendments to the Corporations Act 2001 (Cth) and the Australian Securities and Investments Commission Act 2001 (Cth). The phased in approach will require Australian companies to prepare and disclose an audited sustainability report alongside their annual financial statements. The report shall be prepared in accordance with Australian Sustainability Reporting Standards (ASRS), which have been issued by the AASB (specifically AASB 2 Climate-related Disclosures) and includes information on material climate-related risks and opportunities, governance structures, risk management processes, and metrics (Scope 1, 2, and 3 GHG). This legislation aligns Australia with international standards on climate-related disclosures, such as those recommended by the Taskforce on Climate-related Financial Disclosures (TCFD) and International Financial Reporting Standards (IFRS S1 and S2).
Health and safety
DEMIRS also administers the Work Health and Safety Act 2020 (WA), Work Health and Safety (General) Regulations 2022 (WA) and the Work Health and Safety (Mines) Regulations 2022 (WA) (collectively, "WHS Act"). The WHS Act includes personal responsibilities for company Directors or person's conducting a business or undertaking to comply with work health and safety obligations. The company has a primary duty of care to ensure the health and safety of workers while they are at work, consulting with workers about work health and safety hazards and implement a Mine Safety Management System (MSMS). The MSMS includes provisions for health monitoring, risk management, and emergency preparedness specific to mining operations. This includes ensuring the safety of workers, contractors, and the public, with a strong focus on safety training and the provision of necessary protective equipment. The legislation mandates that employers take proactive steps to eliminate, minimize, or control potential hazards that workers may face, such as exposure to toxic substances or physical dangers from mining equipment.
The Dangerous Goods Act 2004, also administered by DEMIRS, regulates the storage, handling, and transport of dangerous goods, ensuring that workers and the environment are protected from hazardous substances.
Western Australia also has laws for workers' compensation, ensuring that workers who are injured on the job receive medical benefits and compensation. The Workers' Compensation and Injury Management Act 2023, administered by WorkCover WA, provides a framework for compensating workers for work-related injuries and illnesses.
Labor and Human Rights
The Fair Work Act 2009 (Cth) and associated Regulations (2009) provide a legal framework for workplace relations in Australia. In addition to the Fair Work Act 2009, mining companies must ensure compliance with recent amendments aimed at improving worker conditions, particularly within the Fly-In, Fly-Out (FIFO) sector. Recent amendments to the Fair Work Act 2009 (Cth) and Sex Discrimination Act 1984 (Cth) through the "Closing the Loopholes" and "Respect@Work" changes are being implemented progressively between 2023 and 2025.
Relevant "Closing the Loopholes" changes include (i) prohibition on discrimination against employees who have experienced family and domestic violence, (ii) "same job same pay" changes that provide employees (or their representatives) with the ability to apply for a "regulated labor hire arrangement order" to require a labor hire provider to pay its employees no less than they would be paid under the host employer’s enterprise agreement, (iii) criminal offenses for intentional wage theft (including large fines and imprisonment) and (iv) increased rights of union delegates in the workplace. The "Right to Disconnect" law was implemented in 2024 to protect workers from excessive work-related communications outside of regular working hours, ensuring they have the right to disconnect from their work without facing negative consequences.
The "Respect@Work" changes introduce an affirmative obligation on employers to eliminate (i) workplace sexual harassment, sex discrimination and sex-based harassment; (ii) conduct that amounts to subjecting a person to a hostile workplace environment on the ground of sex; and (iii) certain acts of victimization. There is a particular focus on this issue in the Western Australia mining industry in light of the state Government’s "Enough is Enough: Sexual harassment against women in the FIFO mining industry" report released in September 2022. Mining companies are obligated to implement policies that prevent harassment, provide education and training to workers, and create safe, inclusive work environments.
Other relevant federal human rights legislation includes the Age Discrimination Act 2004, Disability Discrimination Act 1992, and Racial Discrimination Act 1975. These laws are administered by the Australian Human Rights Commission, which operates under the Australian Human Rights Commission Act 1986 to fulfil Australia’s role in complying with international human rights covenants to which it is a party. Australia has agreed to implement the United Nations Guiding Principles on Business and Human Rights (“UNGPs”). By implementing the UNGPs, entities have a responsibility to respect human rights in their operations and supply chains. The Modern Slavery Act 2018 (Cth) requires Australian companies (with annual consolidated revenue of at least A$100 million) to disclose actions taken to assess and address modern slavery risks in their business and supply chains.
Indigenous Peoples
The Aboriginal Heritage Act 2021 (WA) (“AH Act”) and the Native Title Act 1993 (Cth) (“NT Act”) govern obligations relating to Aboriginal heritage and native title when undertaking activities on Australian land.
The AH Act protects and manages Aboriginal cultural heritage sites by requiring approval for activities that may impact or cause harm to Aboriginal heritage (such as archaeological and ethnographic sites which are of significance to Aboriginal people). Before undertaking activities on land in Western Australia, SQM is required to survey the lands for Aboriginal cultural heritage, which includes both tangible and intangible cultural heritage. Under the AH Act, if an Aboriginal heritage site is identified, there is a regime for permits and approvals to disturb or destroy Aboriginal heritage sites. Under section 18 of the AH Act, the Minister determines whether to grant the party with tenure (over the land where Aboriginal heritage has been identified) permission to impact Aboriginal heritage sites, i.e. by undertaking mining activities.
The NT Act allows indigenous groups to seek legal recognition of their traditional rights over land and waters by providing a process to make Native Titles claims in the Federal Court of Australia. The NT Act regulates how land can be used or developed in areas where native title is claimed or exists. "Future acts" such as development or mining on native title land must undergo a process of consultation. This consultation process is a prerequisite before undertaking development activities, including exploration and mining. The Act also provides for obtaining consent from native title holders through negotiation and agreements regarding the use of land or waters and can include arrangements for land access, compensation, and other conditions related to native title.
Foreign Investment
Under the Foreign Acquisitions and Takeovers Act 2021 (Cth), foreign investment in Australian mining projects is subject to review by the Australian Foreign Investment Review Board (FIRB) to determine whether the foreign investment proposals could compromise resource security, national defense interests, or the environment. The Australian Treasurer is responsible for making a decision on whether or not to approve foreign investment proposals. Like many countries, Australia reviews foreign investment proposals on a case-by-case basis to ensure they are not contrary to the national interest. The review framework is well-established, practical, and non-discriminatory.
International Regulations
SQM operates under strict regulatory requirements in several jurisdictions, including, among others:
•EU Regulation: Under the REACH Regulation, SQM is a registrant for iodine, sodium nitrate, potassium nitrate and urea phosphate. As of 2023, SQM's subsidiaries in Europe must comply with the new EU safety data sheet format.
•Carbon Border Adjustment Mechanism (CBAM): In October 2023 the transitional phase came into force, requiring reporting of GHG emissions on imports to the EU. SQM submitted its first notification in 2024.
•Explosives Precursors: SQM participates in the implementation of Regulation (EU) 2019/1148 and has trained its personnel in Europe through an e-learning course.
•Regulations in Ecuador and Chile: In 2023, Ecuador established requirements for trade in controlled chemical substances, and SQM obtained the necessary authorizations. In Chile, regulations were published for Law No. 21,349 on fertilizers and biostimulants, applicable in 2026.
•International Transport: SQM collaborates with the International Maritime Organization (the "IMO") (Sub-Committee on Carriage of Cargoes and Containers of the IMO) on cargo and container transport regulations. In 2023, IMO updated the IMSBC Code, incorporating potassium nitrate and sodium nitrate as Group C cargoes.
Research and Development, Patents and Licenses
See “Item 5.C. Research and Development, Patents and Licenses.”
4.C.Organizational Structure
All of our principal operating subsidiaries are essentially wholly owned, except for Soquimich Comercial S.A., which is approximately 61% owned by us and whose shares are listed and traded on the Santiago Stock Exchange, and Ajay SQM Chile S.A., which is 51% owned by us.
The following is a summary of our significant subsidiaries as of December 31, 2024.
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| Principal subsidiaries |
Activity |
Country of
Incorporation |
SQM Beneficial
Ownership Interest
(Direct/Indirect) |
|
|
SQM Nitratos S.A. |
Extracts and sells caliche ore to subsidiaries and affiliates of SQM |
Chile |
100 |
% |
|
|
| SQM Industrial S.A. |
Produces and markets SQM’s products directly and through other subsidiaries and affiliates of SQM |
Chile |
100 |
% |
|
|
| SQM Nueva Potasio SpA |
With the SQM Salar SpA Division, SQM granted a percentage of participation to SQM Nueva Potasio SpA, thereby maintaining a 100% indirect ownership of SQM Salar SpA. |
Chile |
100 |
% |
|
|
SQM Salar SpA |
Exploits the Salar de Atacama to produce and market SQM’s products directly and through other subsidiaries and affiliates of SQM |
Chile |
100 |
% |
|
|
SQM Potasio SpA |
Produces and markets SQM’s products directly and through other subsidiaries and affiliates of SQM |
Chile |
100 |
% |
|
|
SQM Europe N.V. |
Sales and distribution of products throughout the world |
Belgium |
100 |
% |
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|
SQM Australia Pty |
Exploration, development and production of lithium and resources in Australia. |
Australia |
100 |
% |
|
|
For a list of all our consolidated subsidiaries, see Note 2.5 to our consolidated financial statements.
ITEM 4A. UNRESOLVED STAFF COMMENTS
None.
4.D. Property, Plant and Equipment
Mineral Reserves and Resources
Information concerning SQM's mining properties in this Form 20-F has been prepared in accordance with the requirements of subpart 1300 of Regulation S-K. Among other things, subpart 1300 of Regulation S-K requires disclosure of Mineral Resources, in addition to Mineral Reserves, as of December 31, 2024, both in the aggregate and for each of our individually material mining properties. Our Mineral Reserves and Resources are estimated by individuals deemed Qualified Persons ("QP") according to the standards set forth in subpart 1300 of Regulation S-K.
SQM is a production stage company based on the classification of its material properties, which include Mineral Resource and Reserve estimates for development and production stage projects. See the individual property disclosures below for further details regarding the mineral rights, titles, property size, permits and other information for our significant mineral extraction properties.
Mineral Resources and Reserves are defined in subpart 1300 of Regulation S-K as follows:
•Mineral Resource: A concentration or occurrence of material of economic interest in or on the earth’s crust in such form, grade or quality, and quantity that there are reasonable prospects for economic extraction. A mineral resource is a reasonable estimate of mineralization, taking into account relevant factors such as cut-off grade, likely mining dimensions, location or continuity, that, with the assumed and justifiable technical and economic conditions, is likely to, in whole or in part, become economically extractable. It is not merely an inventory of all mineralization drilled or sampled.
•Mineral Reserve: An estimate of tonnage and grade or quality of indicated and measured mineral resources that, in the opinion of a QP, can be the basis of an economically viable project. More specifically, it is the economically
mineable part of a Measured or Indicated Mineral Resource, which includes diluting materials and allowances for losses that may occur when the material is mined or extracted.
Under subpart 1300 of Regulation S-K, mineral resources may not be classified as mineral reserves unless the determination has been made by a QP that such mineral resources can be the basis of an economically viable project. The conversion of a reported Mineral Resources to Mineral Reserves should not be assumed.
Mineral resource classifications are differentiated under subpart 1300 of Regulation S-K, in part, as follows:
•Measured resource. That part of a mineral resource with the highest level of geological confidence; quantity and grade or quality are estimated on the basis of conclusive geological evidence and sampling. The level of geological certainty associated with a measured mineral resource is sufficient to allow a QP to apply modifying factors in sufficient detail to support detailed mine planning and final evaluation of the economic viability of the deposit.
•Indicated resource. That part of a mineral resource with a level of geological confidence between that of measured and inferred resources; quantity and grade or quality are estimated on the basis of adequate geological evidence and sampling. The level of geological certainty associated with an indicated mineral resource is sufficient to allow a QP to apply modifying factors in sufficient detail to support mine planning and evaluation of the economic viability of the deposit.
•Inferred resource. That part of a mineral resource with the lowest level of geological confidence; quantity and grade or quality are estimated on the basis of limited geological evidence and sampling. The level of geological uncertainty associated with an inferred mineral resource is too high to apply relevant technical and economic factors likely to influence the prospects of economic extraction in a manner useful for evaluation of economic viability.
Caliche
Geologists and mining engineers who are QPs have prepared estimates of caliche ore resources and reserves. The resource and reserve figures presented below are estimates and may be subject to modifications due to natural factors that affect the distribution of mineral grades, which would, in turn, modify the recovery of nitrate and iodine. Therefore, no assurance can be given that the indicated levels of recovery of nitrates and iodine will be realized. Estimates of ore resources and reserves are based on evaluations, performed by engineers and geologists, of assay values derived from sampling of drillholes and additional samples. Drillholes have been made at different spaced intervals suitable to defining a resource. Drill patterns begin at 400 x 400 meters and spacing is reduced to 200 x 200 meters, 100 x 100 meters, 100 x 50 meters, and 50 x 50 meters. The caliche ore is unique and different from other metallic and non-metallic minerals. Caliche ore is found in large horizontal layers at depths ranging from one to four meters and has an overburden between zero and two meters. This horizontal layering is a natural geological condition that allows resource estimates to be made with high confidence in the continuity of the caliche bed, based on surface geological reconnaissance and analysis of samples and trenches.
Salar de Atacama
Hydrogeologists and geologists who are QPs prepare the resource and reserve estimates of potassium, sulfate, lithium and boron dissolved in brines at the Salar de Atacama. SQM holds exploitation concessions through Corfo covering an area of 81,920 hectares, over which SQM staff have carried out geological exploitation, brine sampling and geostatistical analysis.
Mount Holland
Geologists and mining engineers who are QPs prepared the mineral resource and reserve estimation for lithium contained in pegmatites at Mount Holland. The mineral reserve has been calculated from the mine plan created from the mineral resource estimation. Wireframes for the geological domains are defined by geochemical criteria of SiO2 > 70% and Fe2O3 < 3%, which is representative of pegmatite with minimal host rock dilution as verified against geological logging.
Mining Rights
The discussion of SQM's mining rights is organized below according to the geographic location of its mining operations. SQM's caliche ore mining interests are located throughout the valley of the Tarapacá and Antofagasta regions of northern Chile (in a part of the country known as “El Norte Grande”). From caliche ore, SQM produces products based on nitrates and iodine, and caliche also contains concentrations of potassium. SQM's mining interests in the brine deposits of the Salar de Atacama are found within the Atacama Desert, in the eastern region of El Norte Grande. From these brines SQM primarily produces products based on potassium, sulfate, and lithium. SQM's lithium mining interests are located in Mount Holland in Western Australia.
SQM produces spodumene concentrate from the Mount Holland deposit and plans to produce lithium hydroxide following the commissioning of a refinery facility in Kwinana, Western Australia.
The map below shows the location of SQM's principal mining operations in Chile and the exploitation and exploration mining concessions that have been granted to us, as well as the mining properties that we lease from Corfo:
Figure 1. Location of SQM mining operations in Chile and the exploitation and exploration mining concessions. Location coordinates longitude and latitude, respectively: of (i) Salar de Atacama (68°24’36.00"W), (23°33’3.60"S); (ii) Nueva Victoria: (69°39’48"W), (20°57’37"S); (iii) Pampa Orcoma: (69°57’22"W), (19°56’19"S); and (iv) Pampa Blanca (69°38’11"W), (23°09’49"S).
The map below shows the location of SQM's principal mining operations in Australia and the mining and exploration concessions that have been granted to the Mount Holland Joint Venture.
Figure 2. Australia’s south-west showing the location of the Mt Holland project mine Site, concentrator and refinery; location of Mt. Holland tenements; Kwinana refinery site in Perth, Western Australia. Location coordinates longitude and latitude, respectively of (i) Mt. Holland Tenements: (119º45’0”E), (32º5’24”S); (ii) Kwinana Refinery: (115º46’12”E), (32º13’12”S).
Mining Concessions in Chile
SQM holds mining rights in Chile pursuant to mining concessions for exploration and exploitation of mining resources granted pursuant to applicable law in Chile. For a discussion of the mining concessions, see “Material Individual Properties — El Norte Grande — Mining Concessions for the Exploration and Exploitation of Caliche Ore” and “—Salar de Atacama Mining Concessions for Exploitation of Brines.”
As of December 31, 2024, approximately 99.33% of SQM’s mining interests in Chile were held pursuant to Mining Exploitation Concessions and 0.67% pursuant to Mining Exploration Concessions. Of the Mining Exploitation Concessions, approximately 99.05% already have been granted pursuant to applicable Chilean law, and approximately 0.95% are in the process of being granted. Of the Mining Exploration Concessions, approximately 100% already have been granted pursuant to applicable Chilean law.
In 2024, we made payments of US$20.3 million to the Chilean government for Mining Exploration and Exploitation Concessions, including the concessions we lease from Corfo. These payments do not include the payments we made directly to Corfo pursuant to the SQM-Corfo Agreements, according to the percentages of the sales price of products produced using brines from the Salar de Atacama.
The following table shows the Mining Exploitation and Exploration Concessions held by SQM, including the mining properties we lease from Corfo, as of December 31, 2024:
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Exploitation
Concessions |
|
Exploration
Concessions |
|
Total |
| Region of Chile |
|
Total
Number |
|
Hectares |
|
Total
Number |
|
Hectares |
|
Total
Number |
|
Hectares |
| Region I |
|
2,717 |
|
509,628 |
|
12 |
|
2,400 |
|
2,729 |
|
512,028 |
| Region II |
|
8,883 |
|
2,346,364 |
|
51 |
|
16,400 |
|
8,934 |
|
2,362,764 |
| Region III and others |
|
455 |
|
104,621 |
|
1 |
|
100 |
|
456 |
|
104,721 |
| Total |
|
12,055 |
|
2,960,613 |
|
64 |
|
18,900 |
|
12,119 |
|
2,979,513 |
The majority of the Mining Exploitation Concessions held by SQM were requested primarily for non-metallic mining purposes. However, a small percentage of our Mining Exploration Concessions were requested for metallic mining purposes. The annual payment to the Chilean government for this group of concessions is higher.
The current modifications to the Mining Code under Chilean Law No. 21,420 and others, modified the amount of mining protection through the creation of article 142 bis, determining that, a reduced mining patent is not contemplated for exploitation of mining concessions which economic interest is related to non-metallic substances. However, it allows the reduction of patent for exploitation concessions, when verifying work in the concession and/or accrediting the obtaining of an RCA with respect to its exploration project in the Environmental Impact Assessment System.
Mount Holland Mining Rights
The Mount Holland lithium project development envelope for the Mine and Concentrator is spread across three core mining tenements (M77/1065, M77/1066 & M77/1080), as well as exploration licenses, general purpose licenses and miscellaneous licenses (Project Tenements), covering an approximate area of 4,626 hectares. A summary map showing the main tenements is provided in Figure 2.
The majority of the project properties are currently registered in equal parts to (i) MH Gold and Montague Resources Australia Pty Ltd, both ultimately owned by Wesfarmers and (ii) SQM Australia — an affiliate of SQM. The project is a an unincorporated joint venture, of which SQM and Wesfarmers, through a wholly owned subsidiary, each holding 50% of the assets. The joint venture is managed by Covalent, an entity equally owned (50/50) by SQM and Wesfarmers.
Covalent is neither the registered holder nor the applicant of the project properties under the Mining Act of 1978 of WA (Mining Law).
The Kwinana refinery development is located on a long-term lease covering 40.5 hectares at Lot 15, Mason Road in Kwinana. The lease was registered by Covalent with Development WA in September 2021.
Costs
Caliche ore is the key raw material used in the production of iodine, specialty plant nutrients and industrial chemicals. The following gross margins for the specified business lines were calculated on the same basis as cut-off grades used to estimate our reserves. We expect costs to remain relatively stable in the near future.
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2024 |
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2023 |
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2022 |
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Gross
Margin |
|
Price |
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Gross
Margin |
|
Price |
|
Gross
Margin |
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Price |
| Iodine and Derivatives |
|
54 |
% |
|
US$67/kg |
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60 |
% |
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US$68/kg |
|
63 |
% |
|
US$59/kg |
| Specialty Plant Nutrition |
|
18 |
% |
|
US$958/ton |
|
43 |
% |
|
US$1,088/ton |
|
38 |
% |
|
US$1,383/ton |
| Industrial Chemicals |
|
39 |
% |
|
US$1,487/ton |
|
19 |
% |
|
US$971/ton |
|
32 |
% |
|
US$1,124/ton |
Brines from the Salar de Atacama are the key raw material used in the production of potassium chloride and potassium sulfate, and lithium and its derivatives. The following gross margins for the specified business lines were calculated on the same basis as cut-off grades used to estimate our reserves. We expect costs to remain relatively stable in the near future.
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|
2024 |
|
2023 |
|
2022 |
|
|
Gross
Margin |
|
Price |
|
Gross
Margin |
|
Price |
|
Gross
Margin |
|
Price |
| Potassium Chloride and Potassium Sulfate |
|
13 |
% |
|
US$390/ton |
|
21 |
% |
|
US$514/ton |
|
56 |
% |
|
US$910/ton |
| Lithium and Derivatives |
|
26 |
% |
|
US$10,936/ton |
|
43 |
% |
|
US$30,520/ton |
|
55 |
% |
|
US$52,000/ton |
Summary of Mineral Reserves and Resources
The following tables summarize our estimated mineral reserves and resources as of December 31, 2024. The quantity of the mineral resources is estimated on an in-situ basis as attributable to SQM. Mineral resources are reported exclusive of mineral reserves. The quantity of the mineral reserves is estimated on a saleable product basis as attributable to SQM. The relevant technical information supporting mineral reserves and resources for each material property is included in the “Material Individual Properties” section below, as well as in the technical report summaries (“TRS”) filed as Exhibits 96.1, 96.2, 96.3, 96.4 and 96.5 to this Form 20-F.
Summary of Mineral Reserves at the End of the Fiscal Year Ended December 31, 2024(1),(2)
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|
Proven Mineral Reserves |
|
Probable Mineral Reserves |
|
Total Mineral Reserves |
|
Amount
(Vol Mm3)
|
|
Grade
(Li weight %)
|
|
Amount
(Vol Mm3)
|
|
Grade
(Li weight %)
|
|
Amount
(Vol Mm3)
|
|
Grade
(Li weight %)
|
Lithium—Brines: (3), (4), (5), (6) |
|
|
|
|
|
|
|
|
|
|
|
| Salar de Atacama, Chile |
68 |
|
0.20 |
|
|
107 |
|
0.20 |
|
|
175 |
|
0.20 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount
(Mt)
|
|
Grade
(Li weight %)
|
|
Amount
(Mt)
|
|
Grade
(Li weight %)
|
|
Amount
(Mt)
|
|
Grade
(Li weight %)
|
Lithium—Pegmatite in Situ: (7) |
|
|
|
|
|
|
|
|
|
|
|
Mount Holland, Australia |
20.0 |
|
1.56 |
|
|
22.3 |
|
1.37 |
|
|
42.2 |
|
1.46 |
|
In Stockpiles |
|
|
|
|
0.6 |
|
1.01 |
|
|
0.6 |
|
1.01 |
|
Total |
20 |
|
1.56 |
|
22.8 |
|
1.36 |
|
42.8 |
|
1.45 |
|
Amount
(Vol Mm3)
|
|
Grade
(K weight %)
|
|
Amount
(Vol Mm3)
|
|
Grade
(K weight %)
|
|
Amount
(Vol Mm3)
|
|
Grade
(K weight %)
|
Potassium: (3), (4), (5), (6) |
|
|
|
|
|
|
|
|
|
|
|
| Salar de Atacama, Chile |
68 |
|
2.29 |
|
|
107 |
|
2.16 |
|
|
175 |
|
2.21 |
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount
(Mt)
|
|
Grade
(NO3
weight %)
|
|
Amount
(Mt)
|
|
Grade
(NO3
weight %)
|
|
Amount
(Mt)
|
|
Grade
(NO3
weight %)
|
Nitrate: (8), (9), (10) |
|
|
|
|
|
|
|
|
|
|
|
| El Norte Grande Caliche, Chile |
|
|
|
|
|
|
|
|
|
|
|
| Pedro de Valdivia |
99 |
|
9.1 |
|
|
112 |
|
5.8 |
|
|
211 |
|
7.3 |
|
| Maria Elena |
94 |
|
8.1 |
|
|
10 |
|
6.9 |
|
|
104 |
|
8.0 |
|
| Pampa Blanca |
85 |
|
5.4 |
|
|
|
|
|
|
85 |
|
5.4 |
|
| Nueva Victoria |
781 |
|
4.5 |
|
|
254 |
|
5.7 |
|
|
1,036 |
|
4.8 |
|
| Pampa Orcoma |
— |
|
— |
|
|
309 |
|
6.9 |
|
|
309 |
|
6.9 |
|
| Total |
1,060 |
|
5.3 |
|
|
685 |
|
6.3 |
|
|
1,745 |
|
5.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount
(Mt)
|
|
Grade
(I2 parts per
million)
|
|
Amount
(Mt)
|
|
Grade
(I2 parts per
million)
|
|
Amount
(Mt)
|
|
Grade
(I2 parts per
million)
|
Iodine: (8), (9), (10) |
|
|
|
|
|
|
|
|
|
|
|
| El Norte Grande Caliche, Chile |
|
|
|
|
|
|
|
|
|
|
|
| Pedro del Valdivia |
99 |
|
522 |
|
112 |
|
366 |
|
211 |
|
439 |
| Maria Elena |
94 |
|
491 |
|
10 |
|
374 |
|
104 |
|
480 |
| Pampa Blanca |
85 |
|
392 |
|
|
|
|
|
85 |
|
392 |
| Nueva Victoria |
781 |
|
303 |
|
254 |
|
366 |
|
1,036 |
|
318 |
| Pampa Orcoma |
— |
|
— |
|
309 |
|
413 |
|
309 |
|
413 |
| Total |
1,060 |
|
347 |
|
685 |
|
387 |
|
1,745 |
|
363 |
________________________________________________
(1)Comparisons of values may not add due to rounding of numbers and the differences caused by averaging.
(2)The units "Mm3", “Mt”, “kt”, “ppm” and % refer to million cubic meters, million metric tons, thousand metric tons, parts per million, and percent by weight, respectively.
(3)Salar de Atacama, Chile. The process efficiency is based on the type of extracted brine at each well over the course of the simulation, the average process efficiency over the entire life of mine (LoM) is approximately 52% for lithium and approximately 74% for potassium.
(4)Salar de Atacama, Chile. The average lithium and potassium concentration is weighted by the simulated extraction rates in each well.
(5)Salar de Atacama, Chile. The mineral resource and reserve estimate considers a 0.05% w/w cut-off grade for lithium based on the cost of generating lithium product, lithium carbonate sales, and the respective cost margin. Based on historical lithium prices from 2010 and the forecast to 2040, a projected lithium carbonate price of US$11,000 per metric ton with the corresponding cost and profit margin is considered with a small increase to accommodate the evaporation area and use of additives. A similar analysis was undertaken for potassium where the cut-off grade of 1% w/w has been set by SQM based on respective costs, sales, and margin.
(6)Salar de Atacama, Chile. This reserve estimate differs from the in-situ base reserve previously reported (SQM, 2020) and considers the modifying factors of converting mineral resources to mineral reserves, including the production wellfield design and efficiency, as well as environmental and process recovery factors. The reserve estimate also considers the expiry of the Lease Agreement in 2030 (end of LoM). The QP for the Mineral Reserves is Rodrigo Riquelme.
(7)Earl Grey deposit, Mount Holland, Australia. The Mineral Reserves reported in the table correspond to 50% attributable to SQM. The tonnage and average grade of the Mineral Reserve have been rounded to reflect the accuracy of the estimate, and figures may not match due to rounding. Indicated in-situ resources have been converted to probable reserves. Measured in-situ resources have been converted to proven Mineral Reserves. Measured in-situ resources with an iron oxide grade greater than 2.5% are considered feed ore for the Ore Sorter and have been converted to probable mineral reserves. Mining dilution has been estimated using a regularized model, with block sizes of 5m x 5m x 5m, and an additional 1.5m edge dilution is considered. The Mineral Reserve has been limited to modeled blocks with at least 50% by volume of spodumene-bearing pegmatite. The metallurgical processes are designed for a maximum nominal feed of 2 Mtpa of ore. Spodumene concentrate recovery is estimated at 75% lithium oxide in predominantly spodumene mineralization and 0% for other mineralization types (petalite and mixed spodumene and petalite). The following costs were considered for the reserve evaluation: mining cost of US$5.82/t, process cost of US$44.67/t feed to the concentrator, general costs of US$8.95/t feed to the concentrator, and logistics costs of US$42.39/t concentrate. Mining dilution was set at 5% and recovery at 95%. Estimated costs in Australian dollars were converted to US dollars based on an exchange rate of AU$0.70:US$1.00. These economic parameters result in a Mineral Reserve cut-off grade of 0.5% lithium oxide, assuming a price of US$1,200 FOB per tonne of 6% lithium oxide concentrate at SQM's Bunbury warehouses. The price used is derived from the long-term forecast made by Benchmark Minerals in December 2024 and was used for the reserve estimate. It does not represent an opinion or consensus on future prices by any of the partners. GeoInnova Consultores are the Qualified Person responsible for Mineral Reserves, effective December 31, 2024.
(8)El Norte Grande Caliche, Chile. The cut-off grades of the proven and probable Reserves vary according to the required targets at the different mines. The values assigned correspond to the averages of the different sectors. The cut-off grade comes from the Cut-off Benefit and is expressed as equivalent iodine.
(9)El Norte Grande Caliche, Chile. The average overall metallurgical recovery of the nitrate and iodine processes contained in the recovered material varies between 50% and 80%.
(10)The mineral reserve estimate considers a cut-off Benefit > 3.0 USD/t based on the production costs of iodine and derivative products. Based on historical iodine prices from 2010 and the forecast to 2040, a projected Iodine price of US$42,000 per metric ton is determined, considering the corresponding operational, financial and planned investment costs, depreciation, profit margin and taxes. A similar analysis was undertaken for nitrates based on respective costs for potassium-sodium nitrates (fertilizers) production. A projected price of US$820 per metric ton for potassium-sodium nitrates is considered by SQM in the economic analysis executed from 2010 and the forecast to 2040. The QPs for Nueva Victoria and Pampa Blanca mineral reserves are Marco Fazzi, Freddy Ildefonso and Gino Slanzi.
Summary of Mineral Resources Excluding Reserves at the End of the Fiscal Year Ended December 31, 2024 (1), (2), (3)
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|
Measured Mineral
Resource |
|
Indicated Mineral
Resources |
|
Measured & Indicated
Mineral Resources |
|
Inferred Mineral
Resources |
|
Amount
(Vol Mm3)
|
|
Grade
(Li
weight %)
|
|
Amount
(Vol Mm3)
|
|
Grade
(Li
weight %)
|
|
Amount
(Vol Mm3)
|
|
Concentration
(Li weight %)
|
|
Amount
(Vol Mm3)
|
|
Grade
(Li
weight %)
|
Lithium—Brines:(4), (5) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Salar de Atacama, Chile |
2.254 |
|
0.20 |
|
|
1.435 |
|
0.160 |
|
|
3.689 |
|
0.180 |
|
|
1.614 |
|
0.133 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount
(Mt)
|
|
Grade
(Li2O weight %)
|
|
Amount
(Mt)
|
|
Grade
(Li2O weight %)
|
|
Amount
(Mt)
|
|
Grade
(Li2O weight %)
|
|
Amount
(Mt)
|
|
Grade
(Li2O weight %)
|
Lithium—Pegamite:(6) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Mount Holland, Australia |
17.1 |
|
1.30 |
|
|
29.1 |
|
1.34 |
|
|
46.2 |
|
1.32 |
|
|
16.7 |
|
1.17 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount
(Vol Mm3)
|
|
Grade
(K weight%)
|
|
Amount
(Vol Mm3)
|
|
Grade
(K weight %)
|
|
Amount
(Vol Mm3)
|
|
Grade
(K
weight %)
|
|
Amount
(Vol Mm3)
|
|
Grade
(K
weight %)
|
Potassium:(4)t, (5) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Salar de Atacama, Chile |
2.254 |
|
1.80 |
|
|
1.435 |
|
1.70 |
|
|
3.689 |
|
1.77 |
|
|
1.614 |
|
1.77 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount
(Mt)
|
|
Grade
(NO3
weight %)
|
|
Amount
(Mt)
|
|
Grade
(NO3
weight %)
|
|
Amount
(Mt)
|
|
Grade
(NO3
weight %)
|
|
Amount
(Mt)
|
|
Grade
(NO3
weight %)
|
Nitrate: (7), (8) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| El Norte Grande Caliche, Chile |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Pedro de Valdivia |
— |
|
— |
|
|
138 |
|
7.6 |
|
|
138 |
|
7.6 |
|
|
52 |
|
6.1 |
|
| Maria Elena |
21 |
|
11.1 |
|
|
119 |
|
10.0 |
|
|
140 |
|
10.2 |
|
|
117 |
|
7.2 |
|
| Pampa Blanca |
48 |
|
5.0 |
|
|
526 |
|
6.3 |
|
|
574 |
|
6.2 |
|
|
218 |
|
5.4 |
|
| Nueva Victoria |
223 |
|
3.6 |
|
|
41 |
|
3.6 |
|
|
264 |
|
3.6 |
|
|
49 |
|
5.3 |
|
| Pampa Orcoma |
— |
|
— |
|
|
18 |
|
7.4 |
|
|
18 |
|
7.4 |
|
|
— |
|
— |
|
| Total |
292 |
|
4.4 |
|
|
843 |
|
6.9 |
|
|
1,135 |
|
6.3 |
|
|
436 |
|
5.9 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amount
(Mt)
|
|
Grade
(I2 parts per
million)
|
|
Amount
(Mt)
|
|
Grade
(I2 parts per
million)
|
|
Amount
(Mt)
|
|
Grade
(I2 parts per
million)
|
|
Amount
(Mt)
|
|
Grade
(I2 parts per
million)
|
Iodine: (7), (8) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| El Norte Grande Caliche, Chile |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Pedro de Valdivia |
— |
|
— |
|
138 |
|
564 |
|
138 |
|
564 |
|
52 |
|
409 |
| Maria Elena |
21 |
|
489 |
|
119 |
|
465 |
|
140 |
|
469 |
|
117 |
|
362 |
| Pampa Blanca |
48 |
|
394 |
|
526 |
|
559 |
|
574 |
|
545 |
|
218 |
|
513 |
| Nueva Victoria |
223 |
|
218 |
|
41 |
|
272 |
|
264 |
|
227 |
|
49 |
|
372 |
| Pampa Orcoma |
— |
|
— |
|
18 |
|
457 |
|
18 |
|
457 |
|
— |
|
— |
| Total |
292 |
|
267 |
|
843 |
|
530 |
|
1,135 |
|
463 |
|
436 |
|
444 |
________________________________________________
(1)Comparison of values may not add due to the rounding of numbers and differences caused by averaging.
(2)The units "Mm3", “Mt”, “kt”, “ppm” and % refer to million cubic meters, million metric tons, thousand metric tons, parts per million, and percent by weight, respectively.
(3)Mineral resources are not mineral reserves and do not have demonstrated economic viability. There is no certainty that all or any part of the mineral resource will be converted into mineral reserves upon the application of modifying factors.
(4)Salar de Atacama, Chile. Mineral resources are reported as in-situ and exclusive of mineral reserves, where the estimated mineral reserve without processing losses during the reported life of mine (LoM) and real declared extraction from 2024 were subtracted from the mineral resource inclusive of mineral reserves. A direct correlation between proven reserves and measured resources, as well as probable reserves and indicated resources was assumed.The QP for the Mineral Resources is Juan Becerra.
(5)Salar de Atacama, Chile. The mineral resource and reserve estimate consider a 0.05% w/w cut-off grade for lithium based on the cost of generating lithium product, lithium carbonate sales, and the respective cost margin. Based on historical lithium prices from 2010 and the forecast to 2040, a projected lithium carbonate price of US$11,000 per metric ton with the corresponding cost and profit margin is considered with a small increase to accommodate the evaporation area and use of additives. A similar analysis was undertaken for potassium where the cut-off grade of 1% w/w has been set by SQM based on respective costs, sales, and margin.
(6)Earl Grey deposit, Mount Holland, Australia. The declared Mineral Resources correspond to 50% attributable to SQM and are reported as exclusive of Mineral Reserves. Mineral Resource tonnage and average contained grade have been rounded to reflect estimation accuracy, and figures may not match due to rounding. Resources are reported as in situ based on a regularized 5m x 5m x 5m block model, constrained in a Resource Pit using a Lerchs-Grossman optimization algorithm, and below the current pit surface as of December 27, 2024. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. There is a reasonable expectation that Inferred Resources within the Reserve Pit can be converted to Measured and Indicated Resources with additional drilling and exploration. There is a reasonable expectation that Mineral Resources that do not meet the mineralogical criteria for Mineral Reserves can be recovered by alternative processing methods. Resource pit optimization and economic parameters for deriving the cut-off grade include a price of US$1,300 FOB per tonne of 6% lithium oxide concentrate at SQM's Bunbury warehouses. The price used is the average forecast for 2026-2024 by Benchmark Minerals in December 2024 and does not represent an opinion or consensus of future prices by any of the joint venture partners. The costs used for optimization are: mining cost of US$5.82/t, process cost of US$44.67/t fed to the concentrator, general costs of US$8.95/t fed to the concentrator, and logistics costs of US$42.39/t of concentrate. Mining dilution is set at 5% and mining recovery at 95%. Royalty fees are 5%. The optimization considered for the concentrator is 75% for spodumene mineral zones, 55% for mixed spodumene and petalite mineralogy, 35% for petalite mineralogy, and 0% for other lithium minerals. Cost estimates in Australian dollars were converted to US dollars based on an exchange rate of AU$0.70:US$1.00. These economic parameters define a cut-off grade of 0.50% lithium oxide for the spodumene and mixed spodumene and petalite domains and 0.78% lithium oxide for petalite minerals. GeoInnova Consultores are the Qualified person responsible for the mineral resource estimate, effective December 31, 2024.
(7)El Norte Grande, Caliche, Chile. To calculate measured resources, SQM uses the results of the drill holes with spacing of 50 x 50 m and 100 x 100 m (RGM50 and RGM100) and a 3D block model built with Ordinary Kriging (OK). Indicated resources are calculated for areas with drill hole spacing of 100 x 100 m to 200 x 200m (RGM100 up to RGM200) and 3D block model obtained from the Inverse Distance Weighting (IDW). To evaluate measured and indicated resources, SQM applies the following criteria: Caliche thickness >2.0 m; overburden thickness < 3.0 m; barren/mineral ratio < 1.0 and Cut-off benefit > 0.1 USD/t. The mineral resource estimates were prepared by Marco Fazzi (who is the QP for these mineral resource estimates), reported using the SK 1300 Definition Standards adopted December 2018. The QPs for Nueva Victoria and Pampa Blanca mineral reserves are Marco Fazzi, Freddy Ildefonso and Gino Slanzi.
(8)El Norte Grande, Caliche, Chile. The estimate was completed using a SG of 2.1 ton/m³. Cut-off grade for equivalent iodine vary according to the targets required at the different mines. The values assigned correspond to the average of the different sectors. The mineral resources estimate considers a cut-off grade of equivalent iodine based on the production costs of iodine and its derivative products. Based on historical iodine prices from 2010 and the forecast to 2040, a projected iodine price of US$42,000 per metric ton is determined, taking in account the corresponding operational, financial and planned investment costs, depreciation, profit margin and taxes. A similar analysis was undertaken for nitrates based on the respective costs for potassium-sodium nitrates (fertilizers) production. A projected price of US$820 per metric ton for potassium-sodium nitrates is considered by SQM in the economic analysis executed from 2010 and the forecast to 2040.
Material Individual Properties
To determine our individually material mining operations in accordance with subpart 1300 of Regulation S-K, management considered both quantitative and qualitative factors, assessed in the context of our overall business and financial condition. Such assessment included the aggregate mining operations on all of SQM mining properties, regardless of the stage of production or the type of mineral produced. Quantitative factors included, among others, mining operations’, the relative contributions of mining operations to SQM's aggregate historical and estimated revenues, cash flows, and EBITDA. Qualitative factors may include, as applicable, capital expansion plans, long-term pricing outlook, the regulatory environment and various strategic priorities. SQM has determined that, as of December 31, 2024, its individually material mines are the caliche ore mines at Nueva Victoria, Pampa Blanca and Pampa Orcoma in El Norte Grande region of Chile, the brines in the Salar de Atacama in Chile and the Mount Holland lithium project in Western Australia. SQM will update its assessment of individually material mines on an annual basis.
Information that follows relating to such individually material properties is derived from the technical report summary (TRS) relating to such properties prepared in compliance with Item 601(b)(96) and subpart 1300 of Regulation S-K. Portions of the following information are based on assumptions, qualifications and procedures that are not fully described herein. Reference should be made to the full text of the TRS, incorporated herein by reference and made a part of this Form 20-F. The relevant TRS for the Salar de Atacama property, the Nueva Victoria property, the Pampa Blanca property and the Pampa Orcoma property, and the Mount Holland lithium project properties are included as Exhibits 96.1, 96.2, 96.3, 96.4 and 96.5, respectively, to this Form 20-F.
El Norte Grande Caliche, Chile
SQM's mining operations are concentrated in the First Region of Chile, where we mainly work in the mining areas of Tente en el Aire, Nueva Victoria Oeste, Hermosa and Torcaza, and in the Second Region of Chile, where we work in the mining area of Pampa Blanca.
The El Norte Grande Caliche, found in Regions I and II of northern Chile, corresponds to flat areas or “pampas”, that have been thoroughly explored. Results indicate that these prospects hold mineralization of nitrate and iodine. The area is accessible from Santiago through Route 5. The mineralization is stratiform in style, with a wide areal distribution, forming "spots" of several kilometers in extension, where mineralization thicknesses are variable. As a result of geological activity over time (volcanism, weathering, faulting) the deposits form continuous mantles. Environmental permits for mining operations, and the corresponding Environmental Qualification Resolution, grant access to the required water and electricity supply, as well as the infrastructure required for the mining operation.
Facilities
Nueva Victoria
The Nueva Victoria mine and facilities are located 140 kilometers southeast of Iquique and are accessible by highway. Since 2007, the Nueva Victoria mine includes the mining properties Soronal, Mapocho and Iris. At this site, SQM uses caliche ore to produce salts rich in nitrates and iodine, through heap leaching and the use of solar evaporation ponds. The main production facilities at this site include the operation centers for the heap leaching process, the iodide and iodine plants at Nueva Victoria and Iris and the evaporation ponds at the Sur Viejo sector of the site. The areas currently being mined are located approximately 27 kilometers northeast of Nueva Victoria. Solar energy and electricity are the primary sources of power for this operation. The nitrate-rich salts are sent to Coya Sur, which is a processing plant located approximately 15 kilometers south of María Elena, and production activities undertaken there are associated with the production of potassium nitrate and finished products. The main production plants at this site include three potassium nitrate plants with a total capacity of 900,000 metric tons per year. There are also four production lines for crystallized nitrates, with a total capacity of 1,200,000 metric tons per year, and a prilling plant with a capacity of 360,000 metric tons per year. The potassium nitrate produced at Coya Sur is an intermediate product that is used as a raw material for the production of finished products (crystallized nitrates and prilled nitrates). Therefore, the production capacities listed above are not independent of one another and cannot be added together to obtain an overall total capacity. Natural gas is the main source of energy for the Coya Sur operation.
Pampa Blanca
The Pampa Blanca Project mine and facilities are located in the Antofagasta Region of northern Chile. It is located 100 kilometers northeast of the city of Antofagasta, in the commune of Sierra Gorda. The property has an area of 51,201 hectares and is composed of 152 mining concessions. The Pampa Blanca Project aims to produce salts rich in iodide, iodine and nitrate from the processing of caliche, extracted from deposits rich in this mineral. The Pampa Blanca Mining Plan considers an initial extraction of caliche at a rate of 5.5 million metric tons per year between 2024-2040. For the period 2024-2040 a total extraction of 85.3 million metric tons of caliche is projected with an average grade of 392 ppm of iodine and 5.4% of nitrates. The production process to obtain iodine as the main product, along with salts rich in sodium nitrate and potassium nitrate as by-products, consists of heap leaching with fresh water or with recirculated solutions to obtain a solution rich in iodate, which will then be treated in a chemical plant to transform it into elemental iodine in prill format. Solar energy and electricity are the main sources of energy for this operation. The Pampa Blanca Project facilities also include operation centers for the heap leaching process, iodide plant, and evaporation ponds.
Pampa Orcoma
The Pampa Orcoma Project is located in the Tarapacá Region of northern Chile. It is situated 99 kilometers to the northeast of the city of Iquique, in the community of Huara. The property covers an area of 10,296 hectares and is composed of 45 mining concessions. The Pampa Orcoma Project aims to produce iodide, iodine and nitrate-rich salts from the processing of caliche that will be extracted from deposits rich in this mineral. The Pampa Orcoma Mining Plan considers an initial extraction of caliche at a rate of 8.4 million metric tons per year during the first four years of operation, followed by an extraction rate of 20 million metric tons per year from the fifth year of operation onwards.
For the 16 year of LoM, a total extraction of 287.4 million metric tons of caliche is projected with an average grade of 408 ppm iodine and 6.7% nitrates. The production process to obtain iodine as the main product, along with salts rich in sodium nitrate and potassium nitrate as by-products, involves leaching with seawater or with recirculated solutions to obtain a solution rich in iodate, which will then be treated in chemical plants to transform it into elemental iodine in prill format. The Pampa Orcoma Project plan includes the construction of the following facilities: iodide and iodine production plants, with a capacity of 2,500 metric tons per year (of equivalent iodine), evaporation ponds to produce salts rich in nitrate at a rate of 320,325 metric tons per year and a seawater adduction pipe to meet the water needs. Solar energy and electricity are the primary sources of energy for this future operation. The development of the Pampa Orcoma Project was postponed, with no changes to the project information since December 31, 2022.
The following table provides a summary of the El Norte Grande production facilities as of December 31, 2024:
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| Facility |
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Type of Facility |
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Approximate Size
(hectares)(1)
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Nominal Production
Capacity
(thousands of metric
tons/year)
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|
Weighted
Average
Age
(years) (2)
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|
Gross Book
Value
(millions of US$) (2)
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Coya Sur (3) (4) |
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Nitrates production |
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Industrial: 885 |
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Potassium nitrate: 900 Crystallized nitrates: 1,200 Prilled nitrates: 360 |
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11.32 |
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745.4 |
Nueva Victoria (5) (7) |
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Concentrated nitrate salts and iodine production |
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Mine: 84,400 Industrial: 1,858 |
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Iodine: 13.0 |
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11.3 |
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851.0 |
Pampa Blanca (6) |
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Concentrated nitrate salts and iodide production |
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Mine: 10,187 Industrial: 96 |
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Iodide: 1.3 |
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11.7 |
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91.7 |
Pampa Orcoma (8) |
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Concentrated nitrate salts and iodine production |
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6,506 |
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Iodine: 2.5 |
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— |
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— |
______________________________________________
(1)Approximate size considers both the production facilities and the mine for Nueva Victoria Mining areas are those authorized for exploitation by the environmental authority and/or Sernageomin.
(2)Weighted average age and gross book value correspond to production facilities, excluding the mine, for Nueva Victoria and the Tocopilla port facilities.
(3)Includes production facilities and solar evaporation ponds.
(4)The potassium nitrate produced at Coya Sur is an intermediate product that is used as a raw material for the production of finished products (crystallized nitrates and prilled nitrates). Therefore, the production capacities listed above are not independent of one another and cannot be added together to obtain an overall total capacity. During 2024, one of the intermediate products plants had a temporary closure, affecting production capacity by 400.000 Ton/year.
(5)Includes production facilities, solar evaporation ponds and leaching heaps. The total iodine production capacity includes the capacities of our Nueva Victoria and Pedro de Valdivia plants. The effective iodine capacity is 14,300 metric tons per year.
(6)The iodide production is sent to our Nueva Victoria plant to produce iodine in prilled format.
(7)Includes production facilities and nitrate solutions ponds
(8)The development of the Pampa Orcoma project was postponed, without any changes to the information reported as of December 31, 2022.
SQM directly or indirectly through subsidiaries owns, leases or holds concessions over the facilities where it carries out its operations. Such facilities are free of any material liens, pledges or encumbrances, and we believe they are suitable and adequated for the business we conduct in them.
Extraction Yields
The following table shows certain operating data relating to each of our El Norte Grande mines for 2024, 2023 and 2022:
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| (in thousands, unless otherwise stated) |
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2024 |
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2023 |
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2022 |
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Coya Sur(1) |
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| Metric tons of crystallized nitrate produced |
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646 |
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642 |
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725 |
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| Nueva Victoria |
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| Metric tons of ore mined |
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49,169 |
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43,450 |
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44,324 |
| Iodine (ppm) |
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416 |
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398 |
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430 |
Metric tons of iodine produced(2) |
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13.1 |
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13.9 |
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12.4 |
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Pampa Blanca |
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| Metric tons of ore mined |
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5,789 |
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5,001 |
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746 |
| Iodine (ppm) |
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461 |
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456 |
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440 |
Metric tons of iodine produced(2) |
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1.3 |
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0.8 |
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0.0 |
________________________________________________
(1)Includes production of finished products at Coya Sur from treatment of nitrates solutions from Pedro de Valdivia, nitrate salts from pile treatment at Nueva Victoria, and net production from NPT, or technical grade potassium nitrates.
(2)Includes production of iodine in prill form from our Nueva Victoria and Pedro de Valdivia plants.
Reserves and Resources
According to SQM's experience in caliche ore extraction, the grid pattern drillholes with spacings between 50 and 100 meters produce data on the caliche resources that is sufficiently defined to consider them measured resources and then, adjusting for technical, economic and legal aspects, as proven reserves. These reserves are obtained using the Kriging Method and the application of operating parameters to obtain economically profitable reserves.
Similarly, the information obtained from detailed geologic work and samples taken from grid pattern drillholes with spacings between 100 and 200 meters can be used to determine indicated resources. By adjusting such indicated resources to account for technical, economic and legal factors, it is possible to calculate probable reserves. Probable reserves are calculated by using a Inverse Distance Weighting (IDW), and have an uncertainty or margin of error greater than that of proven reserves. However, the degree of certainty of probable reserves is high enough to assume continuity between points of observation.
The conversion of resources into reserves requires consideration of modifying factors, the most relevant of which is the existence of a valid environmental license (RCA or Sectorial Authorization). The criteria for converting resources into reserves, based on the environmental license modifying factor criterion, adopted for caliche mines are as follows:
1.Caliche Thickness of ≥ 2.0 m and Overburden Thickness of ≤ 3.0 m
2.Barren / Mineral Ratio of ≤ 1.0 m and slope of ≤ 8%
3.Cut-off Benefit of ≥ 3.0 USD/t
4.Only measured and indicated resources with a valid environmental license are converted into proven and probable reserves, respectively.
Nueva Victoria—Summary of Mineral Reserves at the End of the Fiscal Year Ended December 31, 20241,2,3,4,5,6,7,8
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Amount
(Mt)
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Nitrate
Grade
(weight %)
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Iodine Grade
(Parts per
million(ppm)) |
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Cut-off
Eq Iodine1
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Metallurgical
recovery 2
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| Proven mineral reserves |
781 |
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4.5 |
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303 |
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250 ppm |
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50%-80% |
| Probable mineral reserves |
254 |
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5.7 |
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366 |
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| Total mineral reserves |
1,036 |
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5.2 |
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420 |
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________________________________________________
(1)Mineral Reserves are based on Measured and Indicated Mineral Resources at an operating cut-off benefit ≥ 3.0 USD/t and reported as equivalent iodine. Operating constraints of caliche thickness ≥ 2.0 m; overburden thickness ≤3.0 m; and waste / caliche ratio ≤1.0 are applied.
(2)Proven Mineral Reserves are based on Measured Mineral Resources at the criteria described in (1) above. The average overall metallurgical recovery of the nitrate and iodine processes contained in the recovered material varies between 50% and 80%. Based on SQM’s operational experience and the laboratory and full-scale tests carried out, a progressive increase, over time, in heap leaching yield is expected, as irrigation application rates increase.
(3)Mineral Reserves are stated as in-situ ore (caliche) as the point of reference.
(4)The units “Mt”, “kt”, “ppm” and % refer to million metric tons, thousand metric tons, parts per million, and percent by weight, respectively.
(5)Mineral Reserves are based on an iodine price of US$42,000 per metric ton and a price of US$820 per metric ton for potassium-sodium nitrates. Mineral Reserves are also based on economic viability as demonstrated in an after-tax discounted cashflow.
(6)Marco Fazzi, Freddy Ildefonso and Gino Slanzi are the QPs responsible for the Mineral Reserves.
(7)The QP is not aware of any environmental, permitting, legal, title, taxation, socioeconomic, marketing, political or other relevant factors that could materially affect the Mineral Reserve estimate that are not discussed in this TRS.
(8)Comparisons of values may not total due to rounding of numbers and the differences caused by use of averaging methods.
Nueva Victoria—Summary of Mineral Resources Exclusive of Mineral Reserves at the End of the Fiscal Year Ended December 31, 20241,2,3,4,5,6
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Resources |
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Amount
(Mt)
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Nitrate
Grade
(weight %)
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Iodine Grade
(ppm)
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Cut-off
Eq Iodine 5
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| Measured mineral resources |
223 |
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3.6 |
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218 |
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200 ppm |
| Indicated mineral resources |
41 |
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3.6 |
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272 |
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| Measured + Indicated mineral resources |
264 |
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3.6 |
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226 |
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| Inferred mineral resources |
49 |
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5.3 |
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372 |
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________________________________________________
(1)Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. There is no certainty that all or any part of the Mineral Resource will be converted into Mineral Reserves upon the application of modifying factors.
(2)Mineral Resources are reported as in-situ and exclusive of Mineral Reserves, where the estimated Mineral Reserve without processing losses during the reported LoM was subtracted from the Mineral Resource inclusive of Mineral Reserves.
(3)Comparisons of values may not add due to rounding of numbers and the differences caused by use of averaging methods
(4)The units “Mt”, “ppm” and % refer to million metric tons, parts per million, and percent by weight, respectively.
(5)The Mineral Resource estimate considers a cut-off grade of 200 ppm for equivalent iodine, as well as caliche thickness ≥ 2.0 m and overburden thickness ≤ 3.0 m and. The equivalet iodine cut-off grade considers the cost and medium- and long-term price forecasts of generating iodine as discussed in Sections 11, 16 and 19 of the TRS.
(6)Marco Fazzi, Freddy Ildefonso and Gino Slanzi are the QPs responsible for the Mineral Resources.
Pampa Orcoma—Summary of Mineral Reserves at the End of the Fiscal Year Ended December 31, 20241,2,3,4,5,6,7,8,9
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Amount
(Mt)
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Nitrate
Grade
(weight %)
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Iodine Grade
(ppm)
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Cut-off
grades1
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Metallurgical
recovery 2
|
| Proven mineral reserves |
— |
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— |
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— |
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Nitrates 3.0%, Iodine 300 ppm |
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50%-70% |
| Probable mineral reserves |
309 |
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6.9 |
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413 |
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| Total mineral reserves |
309 |
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6.9 |
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413 |
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________________________________________________
(1)Comparisons of values may not add due to rounding of numbers and the differences caused by use of averaging methods.
(2)The units “Mt”, “ppm” and %, refer to million metric tons, parts per million and percent by weight, respectively. The average overall metallurgical recovery of the nitrate and iodine processes contained in the recovered material varies between 50% and 70%. Based on SQM’s operational experience and the laboratory and full-scale tests carried out, a progressive increase, over time, in heap leaching yield is expected, as irrigation application rates increase.
(3)The Mineral Reserve estimate considers a cut-off grade of 300 ppm for iodine and 3.0% for nitrates, based on accumulated cut-off iodine grades and operational average grades, as well as the cost and medium- and long-term prices forecast of generating iodine.
(4)Modifying factors of historical operational use in various of SQM’s mining facilities, are applied to iodine and nitrate grades, the factors applied to iodine and nitrate grades are 0.9 and 0.85, respectively.
(5)Mineral Resources in the area without an environmental permit are estimated at 18 Mt.
(6)Mineral Reserves are reported as in-situ ore.
(7)Marco Fazzi, Freddy Ildefonso and Gino Slanzi are the QPs responsible for the Mineral Reserves.
(8)The QP is not aware of any environmental, permitting, legal, title, taxation, socioeconomic, marketing, political or other relevant factors that could materially affect the Mineral Reserve estimate that are not discussed in this TRS.
(9)The development of the Pampa Orcoma project was postponed without any changes to the information reported as of December 31, 2022.
Pampa Orcoma—Summary of Mineral Resources Exclusive of Mineral Reserves at the End of the Fiscal Year Ended December 31, 20241,2,3,4,5,6,7
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Resources |
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Amount
(Mt)
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Nitrate
Grade
(weight %)
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Iodine Grade
(ppm)
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Cut-off
grade1,2
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| Measured mineral resources |
— |
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— |
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— |
|
Nitrates 3.0%, Iodine 300 ppm |
| Indicated mineral resources |
18 |
|
7.4 |
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|
457 |
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| Measured + Indicated mineral resources |
18 |
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7.4 |
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457 |
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|
| Inferred mineral resources |
— |
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— |
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|
— |
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________________________________________________
(1)Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. There is no certainty that all or any part of the Mineral Resource will be converted into Mineral Reserves upon the application of modifying factors.
(2)Mineral Resources are reported as in-situ and exclusive of Mineral Reserves, where the estimated Mineral Reserve without processing losses during the reported LOM was subtracted from the Mineral Resource inclusive of Mineral Reserves.
(3)Comparisons of values may not add due to rounding of numbers and the differences caused by use of averaging methods.
(4)The units “Mt”, “ppm” and %, refers to million metric tons, parts per million and percent by weight, respectively.
(5)The Mineral Resource estimate considers a cut-off grade of 300 ppm for iodine and 3.0% for nitrates, based on accumulated cut-off iodine grades and operational average grades, as well as the cost and medium and long term prices forecast for prilled iodine production.
(6)Marco Fazzi, Freddy Ildefonso and Gino Slanzi are the QPs responsible for the Mineral Resources.
(7)The development of the Pampa Orcoma project was postponed without any changes to the information reported as of December 31, 2022.
Pampa Blanca—Summary of Mineral Reserves at the End of the Fiscal Year Ended December 31, 20241,2,3,4,5,6,7,8
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Amount
(Mt)
|
|
Nitrate
Grade
(weight %)
|
|
Iodine Grade
(ppm)
|
|
Cut-off
Eq Iodine grades1
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|
Metallurgical
recovery 2
|
| Proven mineral reserves |
85 |
|
5.4 |
|
392 |
|
345 ppm |
|
50%-70% |
| Probable mineral reserves |
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|
|
| Total mineral reserves |
85 |
|
5.4 |
|
392 |
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|
|
________________________________________________
(1)Mineral Reserves are based on Measured and Indicated Mineral Resources at an operating cut-off benefit ≥ 3.0 USD/t and reported as equivalent iodine. Operating constraints of caliche thickness ≥ 2.0 m; overburden thickness ≤3.0 m; and waste / caliche ratio ≤1.0 are applied.
(2)Proven Mineral Reserves are based on Measured Mineral Resources at the criteria described in (1) above. The average overall metallurgical recovery of the nitrate and iodine processes contained in the recovered material varies between 50% and 70%. Based on SQM’s operational experience and the laboratory and full-scale tests carried out, a progressive increase, over time, in heap leaching yield is expected, as irrigation application rates increase.
(3)Mineral Reserves are stated as in-situ ore (caliche) as the point of reference.
(4)The units “Mt”, “kt”, “ppm” and % refer to million metric tons, thousand metric tons, parts per million, and percent by weight, respectively.
(5)Mineral Reserves are based on an iodine price of US$42,000 per metric ton and a price of US$820 per metric ton for potassium-sodium nitrates. Mineral Reserves are also based on economic viability as demonstrated in an after-tax discounted cashflow.
(6)Marco Fazzi, Freddy Ildefonso and Gino Slanzi are the QPs responsible for the Mineral Reserves.
(7)The QPs are not aware of any environmental, permitting, legal, title, taxation, socioeconomic, marketing, political or other relevant factors that could materially affect the Mineral Reserve estimate that are not discussed in this TRS.
(8)Comparisons of total values may not match due to rounding of numbers and the differences caused by use of averaging methods.
Pampa Blanca—Summary of Mineral Resources Exclusive of Mineral Reserves at the End of the Fiscal Year Ended December 31, 20241,2,3,4,5,6
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Resources |
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Amount
(Mt)
|
|
Nitrate
Grade
(weight %)
|
|
Iodine Grade
(ppm)
|
|
Cut-off
Eq Iodine grade1,2
|
| Measured mineral resources |
48 |
5 |
5.0 |
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|
394 |
|
250 ppm |
| Indicated mineral resources |
526 |
|
6.3 |
|
|
559 |
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|
| Measured + Indicated mineral resources |
574 |
|
6.2 |
|
|
545 |
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|
| Inferred mineral resources |
218 |
|
5.4 |
|
|
513 |
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|
________________________________________________
(1)Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. There is no certainty that all or any part of the Mineral Resource will be converted into Mineral Reserves upon the application of modifying factors.
(2)Mineral Resources are reported as in-situ and exclusive of Mineral Reserves, where the estimated Mineral Reserve without processing losses during the reported LoM was subtracted from the Mineral Resource inclusive of Mineral Reserves.
(3)Comparisons of values may not add due to rounding of numbers and the differences caused by use of averaging methods
(4)The units “Mt”, “ppm” and % refer to million metric tons, parts per million, and percent by weight respectively.
(5)The Mineral Resource estimate considers a cut-off grade of 345 ppm for equivalent iodine, as well as caliche thickness ≥ 2.0 m and overburden thickness ≤ 3.0 m. The equivalent iodine cut-off grade considers the cost and medium- and long-term price forecasts of generating iodine as discussed in Sections 11, 16 and 19 of the TRS.
(6)Marco Fazzi, Freddy Ildefonso and Gino Slanzi are the QPs responsible for the Mineral Resources.
The Nueva Victoria deposit's proven mineral reserves of 781 million metric tons as of December 31, 2024, increased by 387% from 201.8 million metric tons as of December 31, 2023. The Nueva Victoria probable mineral reserves of 254 million metric tons as of December 31, 2024, decreased by 48% from 529 million metric tons as of December 31, 2023. The increase in mineral reserves was driven by mine exploitation and recategorization of probable reserves in Hermosa Oeste and Franja Oeste, with a corresponding reduction in probable reserves. In 2023, no measured resources excluding reserves were reported, while in 2024 there are 223 million metric tons of measured resources. The indicated mineral resources of 41 million metric tons as of December 31, 2024, increased by 48% fron 20 million metric tons as of December 31, 2023. The Nueva Victoria inferred mineral resources of 49 million metric tons as of December 31, 2024, had no changes from the amounts as of December 31, 2023.
The Pampa Orcoma probable mineral reserves and indicated mineral resources of 309 million metric tons and 18 million metric tons as of December 31, 2024, respectively, remained unchanged from the amounts as of December 31, 2023, because there were no material changes that would modify the estimated mineral reserves.
The Pampa Blanca proven mineral reserves of 85.3 million metric tons as of December 31, 2024 increased by 282% from 30.2 million metric tons as of December 31, 2023. There were no Pampa Blanca probable mineral reserves reported as of December 31, 2024 compared to Pampa Blanca probable mineral reserves of 12.1 million metric tons as of December 31, 2023.
The proven and probable reserves shown above are the result of the evaluation of approximately 23.2% of the total caliche-related mining property of our Company. However, we have explored more intensely the areas in which we believe there is a higher potential of finding high-grade caliche ore minerals. The remaining 76.8% of this area has not been explored or has had limited reconnaissance, which is not sufficient to determine the potential and hypothetical resources. In 2024, basic recognition of new mining properties in the Pampa Fortuna sector equivalent to 3,500 hectares was carried out. With respect to detailed explorations, in 2024, campaigns were carried out to recategorize indicated resources equivalent to 5,325 hectares in the Hermosa Oeste, Pampa Engañadora, Franja Oeste, Tea Oeste, Iris Vigia, Mina Sur and Mina Oeste sectors. An advanced exploration program is already designed for 2025, intended to cover an area of 34,350 hectares in the Toco Norte, Pampa Fortuna; Salinas; Hermosa Oeste and Franja Oeste sectors. The reserves shown in these tables are calculated based on properties that are not involved in any legal disputes between SQM and other parties.
We maintain an ongoing program of exploration and resource evaluation on the land surrounding our production mines, and other sites for which we have the appropriate concessions.
The information presented in the table with respect to the Nueva Victoria, Pampa Orcoma and Pampa Blanca mines has been validated by the following QPs:
Mr. Marco Fazzi is a Geologist with more than 25 years of experience in the underground and open pit mining operations in metallic and non-metallic deposits. Currently, he works for SQM as a Mineral Resources and Long-Term Planning Manager. He has extensive experience in exploration geology, mineral control geology, geological modeling and resource and reserve estimation management. Mr. Fazzi is a Qualified Person as defined in subpart 1300 of Regulation S-K and is registered under No. 287 in the Public Registry of QPs in Mining Resources and Reserves, in accordance with Law No. 20,235 that regulates the role of QPs and creates the Qualifying Commission of Competences in Mining Resources and Reserves ("Law for QPs") and its current regulation in Chile.
Mr. Freddy Ildefonso is a Geologist, and has been a Qualified Person, as defined in subpart 1300 of regulation S-K and is registered under No. 386 of the public Registry of Qualified Persons in Mining Resources and Reserves, in accordance with the law of QPs and its current regulation in Chile since 2019. He has more than 23 years of experience working in metallic (Copper and Gold) and non-metallic (Nitrate, Iodine and Borates) deposits in the areas of exploration geology, quality control, geological modeling, production geology and management of estimation and reporting of resources and reserves. He currently works as superintendent of Geosciences at SQM, leading areas of mining resources and long-term planning.
Mr. Gino Slanzi is a Civil Engineer. He is currently the General Manager for Inprotec SPA and Senior Consultant for Pares & Alvarez. He has worked for more than 35 years in the development of metallurgical mining projects, the optimization of production plants and on management models. He visited the site in 2022. Mr. Slanzi is a QP as defined in subpart 1300 of Regulation S-K and is registered under No.441 in the Public Registry of QPs in Mining Resources and Reserves, in accordance with the Law for QPs and its current regulation in Chile.
Mining Concessions for the Exploration and Exploitation of Caliche Ore.
We hold our mining rights for caliche ore pursuant to mining concessions for exploration and exploitation of mining resources that have been granted pursuant to applicable law in Chile:
(1)“Mining Exploitation Concessions”: entitle us to use the land in order to exploit the mineral resources contained therein on a perpetual basis, subject to annual payments to the Chilean government; and
(2)“Mining Exploration Concessions”: entitle us to use the land in order to explore for and verify the existence of mineral resources for a period of two years, at the expiration of which the concession may be extended one time only for two additional years, if the area covered by the concession is reduced by half. We may alternatively request an exploitation concession in respect of the area covered by the original exploration concession, which must be made within the timeframe established by the original exploration concession.
(3)In addition, the current modifications to the Mining Code under Law 21,420 and others, modified the validity of the exploration concessions, which will be four years, allowing the validity to be extended for up to four more years for a single time if geological information is delivered as a result of the exploration or if an RCA has been obtained or an admissible project has been entered into the Environmental Impact Assessment System.
A Mining Exploration Concession is generally obtained for purposes of evaluating the mineral resources in a defined area. If the holder of the Mining Exploration Concession determines that the area does not contain commercially exploitable mineral resources, the Mining Exploration Concession is usually allowed to lapse. An application also can be made for a Mining Exploitation Concession without first having obtained a Mining Exploration Concession for the area involved.
As of December 31, 2024, the surface area covered by Mining Exploitation Concessions that have been granted in relation to the caliche resources of our mining sites was approximately 557,710 hectares, excluding future expansions. We have not requested additional mining rights.
Salar de Atacama, Chile
The operations of SQM in the Salar de Atacama are located in the Antofagasta Region of Chile, which covers the El Loa Province and the San Pedro de Atacama commune. The Salar de Atacama Project is currently in operation for the treatment of brines to obtain lithium and potassium salts, and as such it is in a production stage. The Salar de Atacama deposits are owned by Corfo, which grants special operating contracts or administrative leases to private companies for the extraction of brine. SQM and Albemarle have a lease agreement with Corfo to extract and produce lithium from brines stored in the Salar de Atacama deposit. Consequently, SQM must follow the terms of the agreement and also the conditions established in current RCAs in order to retain operations in the Salar de Atacama. Exploration is routinely carried out within the established areas.
SQM leases an area of about 1,400 square kilometers with permission to extract brines from an area of 820 square kilometers with two core operations. It currently produces lithium at its southwest operation. The lease was signed in 1993 and expires on December 31, 2030.
The closest cities are Calama and Antofagasta, located 160 and 230 kilometers west of the site, respectively. From Calama, the road to the site is through Route R-23, and from Antofagasta, it is via Route B-385.
SQM’s mineral resource in the Salar de Atacama is constituted by in-situ brine within a porous media, and the resource estimate depends on the brine concentration, reservoir geometry, and drainable interconnected pore volume. Within SQM’s concessions, the lithium and potassium resources were estimated based on extensive exploration and many depth-specific samples from each unit.
The geology of the Salar de Atacama is characterized by sedimentary, evaporite, igneous and volcanic rocks from the Paleozoic to the Holocene eras, as well as recent unconsolidated clastic deposits and evaporitic sequences. The salt flat itself resides in a tectonic basin of recent compressive-transpressive behavior and is bounded by high angle reverse and strike-slip faults. The Salar de Atacama surface is constituted by recent evaporitic deposits, where over time the process of evaporation has precipitated salts, and surficial clastic sediments are found mainly along the salt flat margins. The salt crust is mainly composed of halite, sulfates, and occasional organic matter, with alluvial facies in the peripheral zones.
Evaporitic and clastic deposits within the salt flat host brine with depth and are delimitated and cut by local fault systems; several structural blocks have been identified due to recent fault displacement.
The salar system of the Salar de Atacama basin is typical of a mature salar, with a nucleus constituted by a thick section of halite (>90%) with sulfate and a minor percentage of clastic sediments, as well as some interbedded clay sediments and sulfates over a surface area of 1,100 square kilometers and down to a depth of 900 meters. Within SQM’s concessions, mineralization includes lithium and potassium-rich brine in porous media of distinct zones and depths of the Salar de Atacama nucleus.
Facilities
Our facilities at the Salar de Atacama are located 210 kilometers to the east of the city of Antofagasta and 190 kilometers to the southeast of the city of María Elena. At this site we use brines extracted from the salar to produce potassium chloride, potassium sulfate, and lithium chloride solutions, which are subsequently sent to the lithium carbonate plant at our Lithium chemical facility for processing. The main production plants at this site include the solar evaporations ponds systems, the potassium chloride flotation plants (MOP-H I and II), the potassium carnallite plants (PC I and PC I extension), the potassium sulfate flotation plant (SOP-H), the potassium chloride drying plant (Dual Plant or MOP-S), the potassium chloride compacting plant (MOP-G3), the potassium sulfate drying plant (SOP-S) and the potassium sulfate compacting plant (SOP-G). The energy used consists primarily of solar energy, as well as electricity, fuel and gas sources.
Our Lithium Chemical Plant site is located approximately 20 kilometers east of Antofagasta. The production plants at this facility include the lithium carbonate plant, with a production capacity of 210,000 tons per year, and the lithium hydroxide plant, with a production capacity of 40,000 tons per year. Lithium chloride (LiCl) solution is concentrated and purified in the lithium chemical plants through stages of contaminant removal (specifically boron, magnesium and calcium content) and conversion reaction to produce: technical grade lithium carbonate; battery grade lithium carbonate; technical grade lithium hydroxide; and battery grade lithium hydroxide. Electricity and natural gas are the main sources of energy for the operations of our Lithium Chemical Plant.
The following table provides a summary of the capacity of the Salar de Atacama production facilities as of December 31, 2024:
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| Facility |
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Type of Facility |
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Approximate
Size
(hectares) (1)
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Nominal Production
Capacity
(thousands of metric
tons/year)
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Weighted
Average
Age
(years) (2)
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Gross Book
Value
(millions of US$) (2)
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Salar de Atacama |
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Potassium chloride, potassium sulfate, lithium chloride, and boric acid production |
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35,911 |
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Lithium sulfate: 90 Potassium chloride: 2,680 Potassium sulfate: 245 Boric acid: 15 |
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13.73 |
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1,785.7 |
Lithium Chemical Plant, Antofagasta |
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Lithium carbonate and lithium hydroxide production |
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126 |
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Lithium carbonate: 210 Lithium hydroxide: 40 |
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3.81 |
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1,495.8 |
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(1)Approximate size considers both the production facilities and the mine for the Salar de Atacama. Mining areas are those authorized for exploitation by the environmental authority and/or Sernageomin.
(2)Weighted average age and gross book value correspond to production facilities, excluding the mine, for the Salar de Atacama.
We directly or indirectly through subsidiaries own, lease or hold concessions over the facilities at which we carry out our operations. Such facilities are free of any material liens, pledges or encumbrances, and we believe they are suitable and adequate for the business we conduct in them.
Extraction Yields
The following table shows certain operating data relating to each of our Salar de Atacama operations for 2024, 2023 and 2022:
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2024 |
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2023 |
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2022 |
Salar de Atacama (1) |
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Metric tons of potassium chloride, potassium sulfate and potassium salts produced |
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924.9 |
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1,208 |
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984 |
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Metric tons of dry lithium sulfate produced |
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53.5 |
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51.1 |
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18.9 |
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Lithium Chemical Plant (1) |
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| Metric tons of lithium carbonate produced |
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179.6 |
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165.5 |
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152.5 |
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(1)Lithium carbonate is produced from concentrated lithium chloride solution obtained at the Salar de Atacama and processed at our Lithium Chemical Plant near Antofagasta. Potassium salts include synthetic sylvinite produced in the plant and other harvested potassium salts (natural sylvinite, carnallites and harvests from plant ponds) that are sent to Coya Sur for the production of crystallized nitrates.
Reserves and Resources
The mineral reserve was estimated for potassium and lithium dissolved in brines of the Salar de Atacama considering modifying factors for converting mineral resources to mineral reserves, including the production wellfield design and efficiency, pumping scheme, and recovery factors for lithium and potassium. The projected future brine extraction was simulated using a flow and solute transport model. Numerical modeling was supported by a detailed calibration process and hydrogeological, geological, and hydrochemical data within the exploitation concessions. Based on the current SQM production wellfield, which corresponds to the effective date of mineral resource and reserve declaration that is most representative of 2024, we estimate that the proven and probable reserves of lithium and potassium are as follows:
Salar de Atacama—Summary of Mineral Reserves, Considering Process Recoveries (Effective December 31, 2024)(1),(2),(3),(4),(5),(6)
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Brine Volume
(Million cubic meters) |
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Amount
(Million metric tons) |
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Grades/Qualities
(wt.%) |
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Cut-off
grades
(wt.%) |
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Metallurgical
recovery (%) |
| Lithium |
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Proven mineral reserves (Years 1-2) |
68 |
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0.08 |
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0.20 |
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0.05 |
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52 |
Probable mineral reserves (Years 3-6) |
107 |
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0.14 |
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0.20 |
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0.05 |
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52 |
| Total mineral reserves |
175 |
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0.22 |
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0.20 |
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0.05 |
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52 |
| Potassium |
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Proven mineral reserves (Years 1-2) |
68 |
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1.42 |
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2.31 |
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1.00 |
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74 |
Probable mineral reserves (Years 3-6) |
107 |
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2.12 |
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2.16 |
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1.00 |
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74 |
| Total mineral reserves |
175 |
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3.54 |
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2.24 |
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1.00 |
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74 |
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(1)The process efficiency is based on the type of extracted brine at each well over the course of the simulation, the average process efficiency over the entire LoM is approximately 52% for lithium and approximately 74% for potassium.
(2)The values in the “Amount” column correspond to contained metallic lithium (LME) and potassium.
(3)The average lithium and potassium concentration is weighted by the simulated extraction rates in each well
(4)Comparisons of values may not add due to rounding of numbers and the differences caused by averaging
(5)The mineral resource and reserve estimate considers a 0.05% w/w cut-off grade for lithium based on the cost of generating lithium product, lithium carbonate sales, and the respective cost margin. Based on historical lithium prices from 2010 and the forecast to 2040, a projected lithium carbonate price of US$11,000 per metric ton with the corresponding cost and profit margin is considered with a small increase to accommodate the evaporation area and use of additives. A similar analysis was undertaken for potassium where the cut-off grade of 1% w/w has been set by SQM based on respective costs, sales, and margin.
(6)This reserve estimate considers the modifying factors of converting mineral resources to mineral reserves, including the production wellfield design and efficiency, as well as environmental and process recovery factors. The reserve estimate also considers the expiry of the SQM-Corfo Agreements in 2030 (end of LoM). The QP for the Mineral Reserves is Rodrigo Riquelme.
Production well locations are based on the Measured and Indicated Resource zones. Due to the mixing of brines over time, hydrogeological processes, and pumping effects, the mineral reserve was classified based on time:
•Proven Reserves were specified for the first two years of the simulation given that the model is adequately calibrated to the 2015-2020 period, and the initial portion of the projected simulation has higher confidence due to less expected short-term changes in pumping, conceptual hydraulic parameters, and the water balance, among other factors.
•Probable Reserves were conservatively assigned for the last four years of the simulation considering that the numerical model will be continually improved and recalibrated in the future due to potential medium to long term changes in neighboring pumping, conceptual hydraulic parameters, and the water balance, among other factors.
Probable reserves and inferred resources are being continually explored in order to be able to reclassify them as proven reserves and indicated or measured resources, respectively. This exploration includes systematic packer testing, chemical brine sampling, and long-term pilot production pumping tests.
Complementing the reserve information, SQM has an environmental impact assessment (RCA 226/06) which defines a maximum brine extraction until the end of the SQM-Corfo Agreements (December 31, 2030). Considering the authorized maximum net brine production rates under RCA 226/06 and voluntary reduction plan announced by SQM, which is characterized by a reduction in future pumping from 1,166 L/s to 822 L/s during the 6-year LoM, a total of approximately 175 million cubic meters of brine will be extracted from the producing wells (considering process recoveries), corresponding to 0.22 million metric tons of lithium.
The lithium and potassium resource were classified into three categories (Measured, Indicated, Inferred) according to the amount of information from the hydrogeological units, as well as geostatistical criteria. Hydrogeological knowledge was prioritized as the first classification criterion based on exploration, monitoring, and historical production data, while geostatistical variables were used as a secondary criterion. We estimate that our lithium and potassium resources as of December 31, 2020, which we also consider as an adequate representation of December 31, 2024, are as follows:
Salar de Atacama—Summary of Mineral Resources, Exclusive of Mineral Reserves (Effective December 31, 2024) (1),(2),(3),(4),(5),(6),(7)
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Brine Volume
(Million metric
cubes) |
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Amount
(Million metric
tons) |
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Grades/Qualities
(wt.%) |
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Cut-off grades
(wt.%) |
| Lithium |
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| Measured mineral resources |
2,254 |
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5.4 |
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0.20 |
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0.05 |
| Indicated mineral resources |
1,435 |
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2.8 |
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0.16 |
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0.05 |
| Measured + Indicated mineral resources |
3,689 |
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8.2 |
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0.18 |
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0.05 |
| Inferred mineral resources |
1,614 |
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2.6 |
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0.13 |
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0.05 |
| Potassium |
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| Measured mineral resources |
2,254 |
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49.8 |
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1.80 |
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1.00 |
| Indicated mineral resources |
1,435 |
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30.0 |
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1.70 |
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1.00 |
| Measured + Indicated mineral resources |
3,689 |
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79.8 |
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1.77 |
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1.00 |
| Inferred mineral resources |
1,614 |
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34.9 |
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1.77 |
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1.00 |
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(1)Mineral resources are not mineral reserves and do not have demonstrated economic viability. There is no certainty that all or any part of the mineral resource will be converted into mineral reserves upon the application of modifying factors.
(2)Mineral resources are reported as in-situ and exclusive of mineral reserves, where the estimated mineral reserve without processing losses during the reported LoM (A direct correlation between proven reserves and measured resources, as well as probable reserves and indicated resources was assumed.
(3)Effective porosity was utilized to estimate the drainable brine volume based on the measurement techniques of the SQM porosity laboratory (Gas Displacement Pycnometer). The QP considers that the high frequency sampling of effective porosity, its large dataset, and general lack of material where specific retention can be dominant permits effective porosity to be a reasonable parameter for the resource estimate.
(4)The values in the “Amount” column correspond to contained metallic lithium (LME) and potassium.
(5)Comparison of values may not add due to the rounding of numbers and differences caused by averaging.
(6)The mineral resource and reserve estimate considers a 0.05% w/w cut-off grade for lithium based on the cost of generating lithium product, lithium carbonate sales, and the respective cost margin. Based on historical lithium prices from 2010 and the forecast to 2040, a projected lithium carbonate price of US$11,000 per metric ton with the corresponding cost and profit margin is considered with a small increase to accommodate the evaporation area and use of additives. A similar analysis was undertaken for potassium where the cut-off grade of 1% w/w has been set by SQM based on respective costs, sales, and margin.
(7)Juan Becerra is the QP responsible for the Mineral Resources.
Because both lithium and potassium are extracted from the same brines from the Salar de Atacama, the following discussion of changes in mineral reserves and resources in the Salar de Atacama apply to both lithium and potassium. The Salar de Atacama brine proven mineral reserves of 68 million cubic meters at December 31, 2024 decreased by 35% from 104 million cubic meters at December 31, 2023. The Salar de Atacama brine probable mineral reserves of 107 million cubic meters at December 31, 2024 remained unchanged from the amounts at December 31, 2023. The Salar de Atacama brine measured, indicated and inferred mineral resources, exclusive of reserves, of 2,254 million cubic meters, 1,435 million cubic meters and 1,614 million cubic meters at December 31, 2024, respectively, remained unchanged from the amounts at December 31, 2023 because the mineral resource exclusive of mineral reserve represents the resource in place after LoM, and none of the mineral resource declared in 2023 has been converted to mineral reserves.
The information presented in the tables above for Salar de Atacama were validated by the following QPs:
Mr. Rodrigo Riquelme Tapia is a Mining Engineer. He is currently partner and General Manager of GeoInnova, located at Antonio Bellet 444, Of. 1301, Providencia, Metropolitan Region, Chile. He has worked as a mining engineer for more than 24 years, of which 18 have been focused on resource and reserve estimation topics. Mr. Riquelme has been an external consultant for SQM since 2018, and visited the site in 2019 and 2023. Mr. Riquelme is a QP as defined in subpart 1300 of Regulation S-K and is registered under No. 50 in the Public Registry of QPs in Mining Resources and Reserves, in accordance with the Law for QPs and its current regulation in Chile.
Dr. Juan Becerra is a geologist, with an MSc and PhD in geology, with more than 15 years of experience in exploration, regional geology, structural geology, modeling and estimation of Li, K and REE resources. He is a QP, as defined in subpart 1300 of Regulation S-K, and has been registered since 2023 under No. 0480 in the Public Registry of QPs in Mining Resources and Reserves, in compliance with the Law for QPs and its current regulation in Chile. He is also a member (No. 699) of the College of Geologists, and has participated in the evaluation of lithium projects and the preparation of technical reports following national (CH20235) and international (S-K1300, CRIRSCO) regulations, standards and codes. He has published and participated in multiple scientific contributions, and has also supervised undergraduate and postgraduate theses. Currently, he works as Superintendent of Geology at SQM Salar SpA, where he leads a multidisciplinary team of technicians and professionals focused on the exploration and evaluation of lithium projects.
Mining Concessions for the Exploitation of Brines at the Salar de Atacama
As of December 31, 2024, our subsidiary SQM Salar held exclusive rights to exploit the mineral resources in an area covering approximately 140,000 hectares of land in the Salar de Atacama in northern Chile, of which SQM Salar is only entitled to exploit the mineral resources in 81,920 hectares. These rights are owned by Corfo and leased to SQM Salar pursuant to the SQM-Corfo Agreements. Corfo cannot unilaterally amend the Corfo Agreements, and the rights to exploit the resources cannot be transferred. The SQM-Corfo Agreements provides for SQM Salar to (i) make quarterly lease payments to Corfo based on product sales from leased mining properties and annual contributions to research and development, to local communities, to the Antofagasta Regional Government and to the municipalities of San Pedro de Atacama, María Elena and Antofagasta, (ii) maintain Corfo’s rights over the Mining Exploitation Concessions and (iii) make annual payments to the Chilean government for such concession rights. The SQM-Corfo Agreements were entered into in 1993 and expire on December 31, 2030.
Under the terms of the SQM-Corfo Agreements, Corfo has agreed that it will not permit any other person to explore, exploit or mine any mineral resources in the approximately 140,000 hectares area of the Salar de Atacama mentioned above.
SQM Salar holds an additional 248,968 hectares of constituted Mining Exploitation Concessions in areas near the Salar de Atacama, which correspond to mining reserves that have not been exploited. SQM Salar also holds Mining Exploitation Concessions that are in the process of being granted covering 4,300 hectares in areas near the Salar de Atacama.
In addition, as of December 31, 2024, SQM Salar held Mining Exploration Concessions covering approximately 2,900 hectares and has not applied for any additional Mining Exploration Concessions. Exploration rights are valid for a period of four years, after which we can (i) request a Mining Exploitation Concession for the land, (ii) request an extension of the Mining Exploration Concession for an additional four years or (iii) allow the concession to expire. Additionally, the current modifications to the Mining Code under Law 21,420 and others, modified the validity of the exploration concessions, which will be four years, allowing the validity to be extended for up to four more years for a single time if geological information is delivered as a result of the exploration or if an RCA has been obtained or an admissible project has been entered into the Environmental Impact Assessment System.
According to the terms of the SQM-Corfo Agreements, with respect to lithium production, the Chilean Commission on Nuclear Energy (CCHEN) established a total accumulated extraction limit set as amended by the Corfo Arbitration Agreement in January 2018, up to 349,553 metric tons of lithium metallic equivalent (1,860,670 tons of lithium carbonate equivalent), which is in addition to the approximately 64,816 metric tons of lithium metallic equivalent (345,015 tons of lithium carbonate equivalent) remaining from the originally authorized amount in the aggregate for all periods while the SQM-Corfo Agreements are in force. As of December 31, 2024, six years remain on the term of the SQM-Corfo Agreements. See “Item10.C. Material Contracts – SQM-Corfo Agreements”
The environmental permit Resolución de Calificación Ambiental (RCA No. 226/2006, issued on October 19th, 2006, by COREMA (Comisión Regional del Medio Ambiente or Regional Environmental Commission) authorizes SQM to extract brines via pumping wells from two areas in the western and southwestern portions of the areas defined in the SQM-Corfo Agreements. SQM refers to these brine extraction areas as AAE zones (Áreas Autorizadas para la Extracción or Authorized Areas of Extraction), and they are further divided based on the products historically generated in each sector: (i) The northern portion is denominated the AAE-SOP, where “SOP” signifies sulfato de potasio (potassium sulfate product), and it covers a surface area of 10,512 hectares which is equivalent to 29.27% of the total AAE area; (ii) the southern portion is referred to as AAE-MOP, where “MOP” indicates muriato de potasio (potassium chloride product), covering a surface area of 25,399 hectares that is equivalent to 70.73% of the total AAE area.
SQM routinely carries out exploration activities within the areas involved in the SQM-Corfo Agreements and authorized by the Environmental Permits. These are aimed at maintaining the amount of wells needed for production.
The water that SQM uses for its mineral production in the Salar de Atacama is obtained from wells located in the alluvial aquifer on the eastern edge of the Salar de Atacama, for which the company has rights to use groundwater as well as the corresponding environmental authorization (RCA No. 226/2006). As part of the voluntary sustainability commitment assumed by SQM in 2020, the Company aims to reduce its water consumption by up to 50% in 2028.
SQM’s operations are subject to certain risk factors that may affect the business, financial conditions, cash flow, or SQM’s operational results, such as: the potential inability to extend or renew mineral exploitation rights in the Salar de Atacama beyond the defined expiration date (December 31, 2030) in the SQM-Corfo Agreements; risks related to being a company based in Chile; potential political risks as well as changes to the Chilean Constitution and legislation may affect development plans, production levels, and costs; and risks related to financial markets.
Mount Holland Lithium Project, Australia
The Mount Holland project is a production stage integrated lithium project in Western Australia consisting of (i) an open pit mine and lithium concentrator operation, at Mount Holland, 100 kilometers southeast of Southern Cross, and (ii) a lithium hydroxide (LiOH) refinery located in the Town of Kwinana, 26.5 kilometers from the port of Fremantle, from where the LiOH will be shipped.
The project is an unincorporated joint venture in which SQM and Wesfarmers through a wholly owned subsidiary each holding 50% of the assets. The joint ventures is managed by Covalent, an entity equally owned (50/50) by SQM and Wesfarmers.
The project is accessed by land using the Parker Range Road and Marvel Loch-Forrestania road, which are an all-season gravel road. The Parker Range road is connected to the Great Eastern Highway which is a paved road with connectivity to Southern Cross, Kalgoorlie and Perth.
Also, the project has its own access by air using an airstrip and infrastructure in the southern part of the mine.
The Project comprises:
•An open pit mining operation aimed at extracting lithium ore from the Earl Grey lithium deposit at Mount Holland, approximately 100 kilometers south of Southern Cross in Western Australia and 500 kilometers east of Perth.
•A spodumene concentrator facility located at the Mount Holland site with a nominal production capacity of 383,000 metric tons per annum of dry spodumene concentrate at a grade of 5.5% Li2O.
•A refinery in development, located in the Kwinana industrial precinct approximately 45 kilometers south of Perth, with the capacity to produce 50,000 metric tons per annum of battery-grade lithium hydroxide product (LiOH) for export globally.
•The non-process infrastructure (NPI) required to support the Mount Holland and Kwinana sites including roads, buildings, accommodation and the provision of logistics and utilities.
The Mount Holland project is located in the Forrestania Greenstone Belt (FGB) of the Archean Yilgarn Craton of Western Australia. Exploration by Kidman Resources Limited ("Kidman Resources") beginning in 2016 defined numerous occurrences of rare element pegmatites across the FGB, the most significant of which is the Earl Grey pegmatite group. On September 11, 2017, Kidman Resources and SQM entered into an asset sale agreement, and SQM acquired its interest in the tenements for a total investment of US$110 million. Pursuant to the asset sale agreement, the parties agreed to form an unincorporated joint venture to mine and process spodumene ore into spodumene concentrate or lithium hydroxide. The Mount Holland JV was established by the unincorporated joint venture agreement dated December 21, 2017, between SQM Australia and MH Gold, a then wholly owned subsidiary of Kidman Resources. Wesfarmers acquired Kidman Resources in 2019, which resulted in Wesfarmers taking over Kidman Resources’ interest in the Mount Holland JV on September 23, 2019.
SQM and Wesfarmers announced a positive investment decision in February 2021 following the completion of a feasibility study by Covalent. The project commenced mining activities in the first quarter of 2022, with first ore mined in the fourth quarter of 2022, and the concentrator finished construction and commenced ramp up of production in 2023. The refinery is in construction with an expected completion date during the first half of 2025.
The Mount Holland project is focused on the exploitation of the spodumene hosted lithium resource in the Earl Grey pegmatite group, which consists of a main tabular pegmatite body, flanked by numerous minor dykes at both its top and bottom. The pegmatite field covers an area of up to 1 x 2 square kilometers and has a thickness of up to 100 meters. The pegmatites become progressively narrower and branched to the south and east of the main pegmatite until the main body divides into several narrower dykes. Isolated host rock enclaves are sporadically found within the pegmatite body.
The pegmatites have an approximate strike of 210° to 220° and dip of 5° to 15° to the northwest. At their western margin, the pegmatites appear to be affected by gentle folding. The dip of the pegmatites is variable, with the pegmatite steepening from sub-horizontal in the south to 10° to 15° to the northwest north of the Earl Grey gold pit.
Lithium mineralization within the fresh pegmatite is zoned, and primarily controlled by the dominant mineralogy; spodumene and petalite dominated assemblages are more lithium-rich than altered (cookeite) and Li-absent assemblages. Lithium mineralization is depleted in weathered pegmatite.
Extensive exploration supports the characterization of the Earl Grey pegmatite and the Resource and Reserve estimation, comprising surface mapping and extensive exploration drilling. Early exploration and resource definition was predominantly carried out by Kidman Resources, beginning in 2016. Since 2020, Covalent has conducted additional diamond drilling for metallurgical sampling, grade control drilling campaigns and improvement definition of the orebody geometry in the proposed starter pit area.
Most of the exploration drill holes completed at Earl Grey have been drilled using standard reverse circulation ("RC") drilling techniques. Diamond drilling comprises boreholes with diameters of 47.6mm, 50.5mm, 63.5mm and 85mm, which are drilled for geological, metallurgical and geotechnical purposes. Drilling recoveries for RC drilling range from 70-90% in this geological/geomorphological setting. The recoveries for diamond drilling are in the order of 95-100%. Recoveries diminish where shear zones or other structural disturbances have been crossed. The orientation of the boreholes is at relatively sharp angles (less than 90º) and, therefore, the intersected length is not considered as a representation of the true thickness of the pegmatite; its real thickness is determined through geological models.
Resource drilling was initially conducted on broad exploration grids to determine the extent of mineralization. This was followed by a drill program on a 50m by 50m grid to support the resource estimate. Through the development of the project in 2020, the first stages of the open pit were defined, and the drilling program was designed for grade control based on higher density and geostatistical criteria, infilling to a nominal 25m x 25m grid. Grade control drilling and resource definition drilling continue to progress to the north and east of the starter pit area to increase local confidence in the short and medium term mining areas. This information supports the current definition of Resources and Reserves.
Facilities
The Mount Holland project is an integrated lithium project in Western Australia consisting of (i) an open-pit mine on the Earl Grey deposit (spodumene pegmatite) and a spodumene concentrator comprised of DMS and flotation circuits, 120 kilometers southeast of Southern Cross, and (ii) a lithium hydroxide (LiOH) refinery, located in the town of Kwinana, 26.5 kilometers from the Port of Fremantle, from where the battery-grade LiOH product will be shipped. The concentrator at Mt. Holland site has a nominal production capacity of 383,000 dry tons per annum concentrate at a grade of 5.5 per cent lithium oxide matching the refinery feed requirements. The refinery in Kwinana has the capacity to produce 50,000 tons per annum of battery-grade lithium hydroxide.
First ore from the pit was mined in 2022, and the concentrator started its commissioning in the third quarter of 2023. First concentrate production of both circuits was achieved in the last quarter of 2023, and the first spodumene concentrate shipment occurred in the first half of 2024. Construction of the concentrator was completed in December 2023, and construction of the refinery is underway in December 2024, with the goal of opening during 2025.
The following table provides a summary of production related to the Mount Holland project as of December 31, 2024:
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| Facility |
Type of Facility |
Approximate size (hectares)(1) |
Nominal Production Capacity (kt/year) |
Weighted Average (years)(2) |
Gross Book Value (millions of US$)(2) |
| Mt. Holland |
Mine and concentrator producing 5.5% spodumene concentrate |
4,626 |
383 |
48 |
444 |
Kwinana |
Lithium hydroxide production |
40 |
50 |
48 |
485 |
(1) Approximate size considers both the production facilities and the mining, exploration, miscellaneous and general purpose leases for Mount Holland, where the mine, concentrator and NPI facilities reside, and the Kwinana refinery. Nominal production capacities are for the whole project (SQM+Wesfarmers share)
(2) Weighted average age and gross book value correspond to SQM’s 50% share of production facilities for Mount Holland assets and Kwinana refinery.
Extraction Yields
The following table shows operating data relating to the Mt. Holland operations during 2024, 2023 and 2022:
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| (in thousands, unless otherwise stated) |
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2024 |
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2023 |
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2022 |
Mount Holland |
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Spodumene concentrate produced (dry kt)(1) |
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232.0 |
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15.0 |
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0.0 |
(1) Equivalent to 100% of production (whole project: SQM+Wesfarmers) equivalent to 5,5% of Li2O
Reserves and Resources
Mt. Holland—Summary of Mineral Reserves at the End of the Fiscal Year Ended December 31, 2024(1)
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Amount |
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Grades/Qualities |
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Cut-off
grades |
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Metallurgical recovery |
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Total
Mton |
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SQM Attributable
MTon |
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Li2O % |
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Li2O % |
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% |
| Proven mineral reserves |
39.9 |
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20.0 |
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1.56 |
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0.5 |
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75% Concentrator: 85% Refinery |
| Probable mineral reserves |
44.6 |
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22.3 |
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1.37 |
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0.5 |
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75% Concentrator: 85% Refinery |
| Proven in Stockpiles |
1.1 |
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0.6 |
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1.01 |
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0.5 |
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75% Concentrator: 85% Refinery |
| Total mineral reserves |
85.6 |
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42.8 |
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1.45 |
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0.5 |
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75% Concentrator: 85% Refinery |
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(1)Earl Grey deposit, Mount Holland, Australia. The Mineral Reserves reported in the table correspond to 50% attributable to SQM. The tonnage and average grade of the Mineral Reserve have been rounded to reflect the accuracy of the estimate, and figures may not match due to rounding. Indicated in-situ resources have been converted to probable reserves. Measured in-situ resources have been converted to proven Mineral Reserves. Measured in-situ resources with an iron oxide grade greater than 2.5% are considered feed ore for the ore sorter and have been converted to probable mineral reserves. Mining dilution has been estimated using a regularized model, with block sizes of 5m x 5m x 5m, and an additional 1.5m edge dilution is considered. The Mineral Reserve has been limited to modeled blocks with at least 50% by volume of spodumene-bearing pegmatite. The metallurgical processes are designed for a maximum nominal feed of 2 Mtpa of ore. Spodumene concentrate recovery is estimated at 75% lithium oxide in predominantly spodumene mineralization and 0% for other mineralization types (petalite and mixed spodumene and petalite). The following costs were considered for the reserve evaluation: mining cost of US$5.82/t, process cost of US$44.67/t feed to the concentrator, general costs of US$8.95/t feed to the concentrator, and logistics costs of US$42.39/t concentrate. Mining dilution was set at 5% and recovery at 95%. Estimated costs in Australian dollars were converted to US dollars based on an exchange rate of AU$0.70:US$1.00. These economic parameters result in a Mineral Reserve cut-off grade of 0.5% lithium oxide, assuming a price of US$1,200 FOB Australia per ton of 6% lithium oxide concentrate at SQM's Bunbury warehouses. The price used is derived from the long-term forecast made by Benchmark Minerals in December 2024 and was used for the reserve estimate. It does not represent an opinion or consensus on future prices by any of the partners. GeoInnova Consultores are the Qualified Person responsible for Mineral Reserves, effective December 31, 2024.
Mt. Holland—Summary of Mineral Resources Exclusive of Mineral Reserves at the End of the
Fiscal Year Ended December 31, 2024(1)
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Amount |
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Resources
Grades
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Cut-off
grades |
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Metallurgical recovery |
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Total
Mt
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SQM Attributable
Mt
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Li2O % |
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Spodumene Domain Li2O % |
Mixed Domain Li2O % |
Petalite Domain Li2O % |
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Spodumene Domain
%
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Mixed Domain % |
Petalite Domain
%
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| Measured Mineral Resources |
34.1 |
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17.1 |
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1.30 |
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0.50 |
0.50 |
0.78 |
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75 |
55 |
35 |
| Indicated Mineral Resources |
58.3 |
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29.1 |
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1.34 |
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0.50 |
0.50 |
0.78 |
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75 |
55 |
35 |
| Measured + Indicated Mineral Resources |
92.4 |
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46.2 |
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1.32 |
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0.50 |
0.50 |
0.78 |
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75 |
55 |
35 |
| Inferred Mineral Resources |
33.4 |
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16.7 |
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1.17 |
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0.50 |
0.50 |
0.78 |
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75 |
55 |
35 |
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(1)The SQM attributable portion of Mineral Resources is 50%. Mineral Resources are reported exclusive of Mineral Reserves. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. Resources have been reported as in-situ (hard rock within an optimized pit shell) and below the pit surface, effective 27th December 2024. Resources have been categorized
subject to the opinion of a QP based on the quality and quantity of informing data for the estimate and consistency of geological units and grade distribution. Resources that are contained within the Mineral Reserve pit design may be excluded from Reserves due to an Inferred classification or where the mineralogical domain does not meet the criteria for plant recovery. These resources are disclosed separately from the Resources contained within the Mineral Reserve. There is reasonable expectation that Inferred Resources within the Mineral Reserve pit design may be converted to higher confidence materials with additional drilling and exploration effort. There is reasonable expectation that Mineral Resources that do not meet the mineralogical criteria for Mineral Reserves can be recovered using alternative processing methods. Mineral Resource tonnage and average contained grade were rounded to reflect the accuracy of the estimate and figures may not match, due to rounding. The disclosed Resource corresponds only to Resources attributable to SQM. The resources have been reported as in-situ from a block model regularized to 5mN x 5mE x 5mRL and constrained to an optimized pit shell. Resource pit optimization and economics for derivation of cut-off grade include pricing of US$1300/t FOB Australia of 6% Li2O concentrate, US$5.82/t mining cost, US$44.67/t processing cost, US$8.95/t concentrator feed corporate overheads cost, US$42.39/t on concentrate logistics cost. Mining dilution was set at 5% and recovery at 95%. Royalty rates are 5%. The optimization considered concentrator recoveries of 75% for spodumene mineral domains, 55% for mixed spodumene and petalite mineral domains, and 35% for petalite mineral domains. Costs estimated in Australian Dollars were converted to US Dollars based on an exchange rate of 0.70US$:1.00AU$. The average price from 2026 to 2040 for 6.0% spodumene concentrate from the Benchmark Lithium Forecast Report Q4 2024 was applied for the determination of Mineral Resources. These economic parameters define a 0.50% Li2O cut-off grade for the spodumene and mixed domains and 0.78% Li2O for the petalite domain. Geoinnova Consultores are the Qualified Persons responsible for the Mineral Resource estimate, effective, December 31, 2024.
Total Mineral Resource tons increased by 30% from 95 metric tons reported as of December 31,2023 to 125.8 metric tons as of December 31, 2024. Depletion of the Mineral Resource was completed by interrogating the 2023 resource model against the end of year mine surface. There was 18 thousand tons of material depleted that was considered part of the 2023 exclusive mineral resource. The model update resulted in an increase of 12.3 metric tons of total Mineral Resources, and changes to reporting parameters (regularizing the model to 5x5x5, changes to mine economics, applying a 100m buffer to the TSF for pit optimization and a change in petalite processing recovery) resulted in an increase of 16.8 Mt to total Mineral Resources. The changes also resulted in a 13% decrease in the reported Li2O grade and a 13% total increase in total contained Li2O. Details of the updated Mineral Resource Estimated are presented in the Mount Holland Mine technical report summary.
The total Mineral Reserve tons increased by 2% from 83.8 metric tons reported at the end of 2023 fiscal year to 85.6 metric tons the end of fiscal year 2024. The changes in the Mineral Reserve were the result of depletion through mining including stockpiling of ore tons, re-estimation of the Mineral Resource block model, adjustments to the modelling of dilution to better align with mining practices, and inclusion of an ore sorting facility to process ore contaminated with waste rock at the orebody contacts. Depletion of the Mineral Reserve was completed through interrogating the current Reserve block model against the end of 2023 and end of 2024 surveyed mine surfaces. Ore stockpiling totaling 2.7 metric tons was added to the Reserve. The Mount Holland lithium project proven and probable Mineral Reserves attributable to SQM totaled 20.0 million metric tons and 22.3 million metric tons as of December 31, 2024, respectively.
The information presented in the tables above (Mount Holland project) has been validated by Geoinnova Consultores, a third-party firm comprising mining experts in accordance with Item 1302(b)(1) of Regulation S-K, served as the Qualified Persons and prepared the estimates of lithium mineral resources and reserves at the Mount Holland project, with an effective date of December 31, 2024. A copy of the QP’s most recent technical report summary with respect to the lithium mineral resource and reserve estimates at the Mount Holland Project, dated April 17, 2025, with an effective date of December 31, 2024, is filed as Exhibit 96.5 to this report.
Mining Rights
The Mount Holland lithium mine and concentrator operations are spread across three core mining tenements (M77/1065, M77/1066 and M77/1080), as well as exploration licenses, general purpose licenses and miscellaneous licenses (Project Tenements), covering an approximate area of 4,626 hectares.
The majority of the project properties are currently registered in equal parts to (i) MH Gold and Montague Resources Australia Pty Ltd, both ultimately owned by Wesfarmers, and (ii) SQM Australia, an affiliate of SQM. The project is a an unincorporated joint venture, in which SQM and Wesfarmers, through a wholly owned subsidiary each holding 50% of the assets. The joint venture is managed by Covalent, an entity equally owned (50/50) by SQM and Wesfarmers. Covalent is neither the registered holder nor the applicant of the project properties under the Mining Act of 1978 of WA (Mining Law).
Transportation and Storage Facilities
Product transportation is carried out by trucks that are operated by dedicated third parties through long-term contracts. SQM leases port and storage facilities for the transportation and management of finished products and consumable materials.
SQM's main centers for the production and storage of raw materials are the facilities in Nueva Victoria, Coya Sur and Salar de Atacama in Chile and Mount Holland in Australia. Other facilities include chemical plants for the finished products of lithium carbonate and lithium hydroxide at our Lithium Chemical Plant near the city of Antofagasta, Chile, the lithium hydroxide refinery in Western Australia (part of the Mount Holland project), and the Port of Tocopilla terminal in Chile, which is the principal facility for the storage and shipment of our bulk products and packaged potassium chloride (MOP), nitrates and lithium carbonate.
In Chile, the nitrate finished products are produced at our Coya Sur facilities and then transported via trucks to the Port of Tocopilla terminal where they are stored and shipped in bulk or packaged in polypropylene bags, polyethylene or polypropylene bags. The latter can also be transported and stored in an alternative port (Mejillones) for later shipment.
Potassium chloride is produced at our Salar de Atacama facilities and we transport it by truck, either to the Port of Tocopilla terminal, the Coya Sur facility or the alternative Port of Mejillones for its shipment. The product transported to Coya Sur is an intermediate product that is used as a raw material for the production of potassium nitrate. The product transported to the Port of Tocopilla or Mejillones is a final product that will be shipped or transported to the customer or affiliate. The nitrate raw material for the production of potassium nitrate in Coya Sur is currently produced at Nueva Victoria.
Lithium chloride solution, which contains a high concentration of boron, is produced at our Salar de Atacama facilities, and is transported to the lithium carbonate plant at our Lithium Chemical Plant area where the finished lithium carbonate is produced. Part of the lithium carbonate is provided to the adjacent lithium hydroxide plant where the finished lithium hydroxide is produced. These two products are packed in packaging of distinct characteristics such as polyethylene bags, multi-layer or polypropylene FIBC big bags, and stored within the same facilities in secured storerooms. The products are later consolidated into containers that are transported by trucks to a transit warehouse or directly to port terminals for their subsequent shipment. The port terminals used are currently suited to receive container ships and are situated in Antofagasta, Mejillones and Iquique. Lithium carbonate can also be transported in packaged format both to the Port of Tocopilla and to an alternative port (Mejillones) to be shipped in break bulk format.
Iodine obtained from the same caliche used for the production of nitrates, is processed, packaged and stored exclusively in the Pedro de Valdivia and Nueva Victoria facilities. The packaging used for iodine are drums and polypropylene FIBC big bags with an internal polyethylene bag and oxygen barrier, which are consolidated into containers and sent by truck to port terminals suited for their management, principally located in Antofagasta, Mejillones and Iquique. These products are sent to distinct markets by container ship or by truck to Santiago where iodine derivatives are produced in the Ajay-SQM Chile plants. Drums and maxibags can also be transported on flat ramps to an alternative port (Mejillones) to be shipped in break bulk format.
In Australia, spodumene concentrate production from the Mount Holland mine began in 2023. Until the full ramp-up of the lithium hydroxide refinery in Kwinana, the concentrate will be trucked to a storage facility in Bunbury, approximately 500 kilometers west of the Mount Holland mine. At Bunbury, the product is distributed to both JV partners SQM and Wesfarmers, for them to follow their individual shipment and commercialization plans. For the ground logistics from Mount Holland mine to Bunbury Port, bulk haulage operators are responsible to haul the spodumene concentrate via haul trucks on public road. The haulage operator has a certification awarded by Bureau Veritas for the provision of bulk haulage and warehouse services, transport of controlled waste dangerous goods, operation and maintenance of heavy vehicles in accordance with the requirements of the management system standards, ISO 9001:2015 and ISO 45001:2018.
In Chile, we own and operate the port and storage facilities at the Port of Tocopilla terminal for the transportation and management of finished products and consumable materials. The Port of Tocopilla terminal facilities cover approximately 22 hectares and are located approximately 186 kilometers north of Antofagasta, approximately 124 kilometers west of María Elena and Coya Sur and 372 kilometers to the west of Salar de Atacama. Our affiliate, Servicios Integrales de Tránsitos y Transferencias S.A. (SIT), operates facilities for the shipment of products and the delivery of certain raw materials based on renewable concessions granted by Chilean regulatory authorities, provided that the facilities are used in accordance with the authorization granted and we pay an annual concession fee. The facilities include a truck weighing machine that confirms product entry into the port and transfers the product to distinct storage zones, a piezometer within the shipping system to carry out bulk product loaded onto ships, a crane with a 40-ton capacity for the loading of sealed product onto ships and a nitrate mixing facility.
The storage facilities consist of a system of six silos, with a total storage capacity of 55,000 metric tons, and a mixed storage area of open and covered storehouses with a total storage capacity of approximately 250,000 metric tons. In addition, to fulfill future storage needs, we will continue to make investments in accordance with the investment plan outlined by management. The products are also put into bags at the Port of Tocopilla terminal facilities where the bagging capacity is established by two bag packaging machines, one for sacks and polypropylene FIBC big bags and one for FFS polyethylene. The products that are packaged in Tocopilla may be subsequently shipped at the same port or may also be consolidated into trucks or containers for its subsequent dispatch to clients by land or sea through containers from other ports, principally located in Antofagasta, Mejillones and Iquique.
For the transportation of bulk product, the transportation belt system extends across the coastline to deliver products directly to the hatches of bulk cargo ships. The nominal load capacity of this shipping system is 1,200 tons per hour. The transportation of packaged product is carried out utilizing the same bulk cargo ships using barges without motors located in the dock and loaded by a crane with a 40-ton capacity from the Port of Tocopilla terminal. Thereafter, they are towed and unloaded using ship cranes to the respective warehouses.
We normally contract bulk cargo ships to transfer the product from the Port of Tocopilla terminal to our hubs around the world or to clients directly, who, in certain instances, use their own contracted vessels for delivery.
Tocopilla processes related to the reception, handling, storage and shipment of bulk/packaged nitrates produced at Coya Sur are certified by the third-party organization TÜV-Rheinland under the quality standard ISO 9001:2015. The Port of Tocopilla has also Responsible Care, ISO 14000 and Ecoport certifications.
Computer System
We have a management information system (Enterprise resource planning or "ERP") that integrates and manages the company's administrative business and support processes: Finance, Accounting, Human Resources and Logistics (IT). The ERP and satellite systems are located in Chile. However, each subsidiary or commercial office has its own ERP which is then consolidated into the information system in Chile. In addition, we have industrial systems such as: plant operation, extraction and maintenance (OT) that are part of the operation.
The information system is mainly used for finance, accounting, human resources, supply and inventory tracking, billing, quality control, research activities and control of the production process and maintenance. The main data processing center is located in our offices in Santiago de Chile, Antofagasta and in our international subsidiaries, that are interconnected through the telecommunications network, data clouds and services.
The use of cloud technologies allows us to be compatible with new business processes and respond quickly and at low cost to the changing conditions of our business and the market.
To ensure the reliability of our client services, we have adopted an information security and cybersecurity framework based on international norms and standards. This information security framework is focused on the protection and safeguarding of critical business assets and requires a continuous work on raising the awareness among our users on the best uses of processes and technology.
Internal Controls
The preparation of mineral reserve and resource estimates is completed in accordance with our prescribed internal control procedures, which are designed specifically to ensure the reliability of such estimates presented herein. Annually, QPs and other employees review the estimates of mineral reserves and mineral resources, the supporting documentation, and compliance with applicable internal controls. Such controls employ management systems, standardized procedures, workflow processes, multi-functional supervision and management approval, internal and external reviews, reconciliations, and data security covering record keeping, chain of custody and data storage.
The internal controls for reserve and resource estimates also cover exploration activities, sample preparation and analysis, data verification, processing, metallurgical testing, recovery estimation, mine design and sequencing, and reserve and resource evaluations, with environmental, social and regulatory considerations. The quality assurance and control protocols over the assaying of drill hole samples are performed by reputable commercial laboratories following certification and accreditation programs established by the American Society for Testing and Materials (ASTM) or Australian National Association of Testing Authorities (NATA).
The reserve and resource estimates have inherent risks due to data accuracy, uncertainty from geological interpretation, mine plan assumptions, uncontrolled rights for mineral and surface properties, environmental challenges, uncertainty for future market supply and demand, and changes in laws and regulations. Management and QPs are aware of those risks that might directly impact the assessment of mineral reserves and resources. The current mineral reserves and resources are estimated based on the best information available and are subject to re-assessment when conditions change. Refer to Item 4A. “Risk Factors” for discussion of risks associated with the estimates of our mineral reserves and resources.
ITEM 5. OPERATING AND FINANCIAL REVIEW AND PROSPECTS
The information in this Item 5 should be read in conjunction with the Company’s Consolidated Financial Statements and the notes thereto included elsewhere in this Annual Report.
The Company’s Consolidated Financial Statements have been prepared in accordance with the International Financial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).
5.A.Operating Results
Introduction
The following discussion should be read in conjunction with the Company’s Consolidated Financial Statements. Certain calculations (including percentages) that appear herein have been rounded.
Our Consolidated Financial Statements are prepared in accordance with IFRS as issued by the IASB and presented in U.S. dollars.
We operate as an independent corporation.
Overview of Our Results of Operations
We divide our operations into the following business lines:
•the production and sale of specialty plant nutrients;
•the production and sale of iodine and its derivatives;
•the production and sale of lithium and its derivatives;
•the production and sale of potassium, including potassium chloride and potassium sulfate;
•the production and sale of industrial chemicals, principally industrial nitrates and solar salts; and
•the purchase and sale of other commodity fertilizers for use primarily in Chile.
We sell our products through three primary channels: our own sales offices, a network of distributors and, in the case of our fertilizer products, through third-party distribution network in countries where its presence and commercial infrastructure are larger than ours. Similarly, in those markets where our presence is larger, both our specialty plant nutrients and third-party products are marketed through our offices.
Factors Affecting Our Results of Operations
Our results of operations substantially depend on:
•trends in demand for and supply of our products, including global economic conditions, which impact prices and sales volumes;
•efficient operations of our facilities, particularly as some of them run at production capacity;
•our ability to accomplish our capital expenditures program in a timely manner;
•the levels of our inventories;
•trends in the exchange rate between the U.S. dollar and Chilean peso, as a significant portion of the cost of sales is in Chilean pesos, and trends in the exchange rate between the U.S. dollar and the euro, as a significant portion of our sales is denominated in euros; and
•energy, logistics, raw materials, labor and maintenance costs.
Impact of Foreign Exchange Rates
We transact a significant portion of our business in U.S. dollars, which is the currency of the primary economic environment in which we operate and is our functional and presentation currency for financial reporting purposes. A significant portion of our costs is related to the Chilean peso as most of our operations occur in Chile, and therefore an increase or decrease in the exchange rate between the Chilean peso and the U.S. dollar affects our costs of production. Additionally, as an international company operating in Chile and several other countries, we transact a portion of our business and have assets and liabilities in Chilean pesos and other non-U.S. dollar currencies, such as the euro, the South African rand and the Mexican peso. As a result, fluctuations in the exchange rate of such currencies to the U.S. dollar may affect our financial condition and results of operations. See Note 24 to our consolidated financial statements.
We monitor and attempt to balance our non-U.S. dollar assets and liabilities position, including through foreign exchange contracts and other hedging instruments, to minimize our exposure to foreign exchange rate risk. As of December 31, 2024, for hedging purposes we had open contracts to buy U.S. dollars and sell Chinese yuan for approximately US$302.65 million (CNY2,198.7 million), to sell euros for approximately US$40.35 million (EUR37.31 million), and to sell South African rand for approximately US$28.92 million (ZAR 530.45 million), as well as forward exchange contracts to sell U.S. dollars and buy Chilean pesos for US$5.9 million (Ch$5,879.1 million). All the UF 9.5 million outstanding principal amount of bonds issued in the Chilean market were hedged with cross-currency swaps to the U.S. dollar for approximately US$401.01 million as of December 31, 2024.
In addition, we had open forward exchange contracts to buy U.S. dollars and sell Chilean pesos to hedge our time deposits in Chilean pesos for approximately US$15.4 million.
The following table shows our revenues (in millions of US$) and the percentage of revenues accounted for by each of our product lines for each of the periods indicated:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2024 |
|
2023 |
|
2022 |
|
% |
|
US$ |
|
% |
|
US$ |
|
% |
|
US$ |
| Specialty plant nutrition |
21 |
% |
|
941.9 |
|
12 |
% |
|
913.9 |
|
11 |
% |
|
1,172.3 |
| Iodine and derivatives |
21 |
% |
|
968.3 |
|
12 |
% |
|
892.2 |
|
7 |
% |
|
754.3 |
| Lithium and derivatives |
49 |
% |
|
2,241.3 |
|
69 |
% |
|
5,180.1 |
|
76 |
% |
|
8,152.9 |
| Potassium |
6 |
% |
|
270.8 |
|
4 |
% |
|
279.1 |
|
4 |
% |
|
437.2 |
| Industrial chemicals |
2 |
% |
|
78.2 |
|
2 |
% |
|
175.2 |
|
2 |
% |
|
165.2 |
| Other products and services |
1 |
% |
|
28.3 |
|
0 |
% |
|
27.0 |
|
0 |
% |
|
28.6 |
|
|
|
|
|
|
|
|
|
|
|
|
| Total |
100 |
% |
|
4,528.8 |
|
100 |
% |
|
7,467.5 |
|
100 |
% |
|
10,710.6 |
The following table shows certain financial information of the Company (in millions of US$) for each of the periods indicated, as a percentage of revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Year Ended December 31, |
|
|
|
2024 |
|
2023 |
|
2022 |
|
| (in millions of US$) |
|
US$ |
|
% |
|
US$ |
|
% |
|
US$ |
|
% |
|
| Revenues |
|
4,528.8 |
|
|
100.0 |
|
|
7,467.5 |
|
|
100.0 |
|
|
10,710.6 |
|
|
100.0 |
|
|
Cost of sales (1) |
|
(3,201.7) |
|
|
70.7 |
|
|
(4,392.4) |
|
|
58.8 |
|
|
(4,973.9) |
|
|
46.4 |
|
|
| Gross profit |
|
1,327.1 |
|
29.3 |
|
|
3,075.1 |
|
41.2 |
|
|
5,736.6 |
|
|
53.6 |
|
|
| Other income |
|
32.2 |
|
0.7 |
|
|
40.6 |
|
0.5 |
|
|
9.9 |
|
|
0.1 |
|
|
| Administrative expenses |
|
(186.0) |
|
|
4.1 |
|
|
(175.8) |
|
|
2.4 |
|
|
(142.6) |
|
|
1.3 |
|
|
Other expenses |
|
(104.7) |
|
|
2.3 |
|
|
(93.4) |
|
|
1.3 |
|
|
(75.9) |
|
|
1.3 |
|
|
Impairment gains or reversal (losses) of financial assets |
|
(0.6) |
|
0.0 |
|
|
0.2 |
|
0.0 |
|
|
3.4 |
|
|
0.7 |
|
|
| Other gains (losses) |
|
(2.1) |
|
0.0 |
|
|
(2.3) |
|
0.0 |
|
|
0.1 |
|
|
0.0 |
|
|
| Finance income |
|
103.6 |
|
2.3 |
|
|
122.7 |
|
1.6 |
|
|
47.0 |
|
|
0.4 |
|
|
Finance costs |
|
(197.5) |
|
|
4.3 |
|
|
(138.4) |
|
|
1.9 |
|
|
(86.6) |
|
|
0.8 |
|
|
Share of profit of associates and joint ventures accounted for using the equity method |
|
11.0 |
|
0.2 |
|
|
0.6 |
|
0.0 |
|
|
20.1 |
|
|
0.2 |
|
|
| Foreign currency exchange differences |
|
(8.6) |
|
|
0.2 |
|
|
(22.3) |
|
|
0.3 |
|
|
(25.5) |
|
|
0.2 |
|
|
Income before taxes |
|
974.4 |
|
|
21.5 |
|
|
2,807.0 |
|
|
37.6 |
|
|
5,486.5 |
|
|
51.2 |
|
|
Income tax expense (2) |
|
(282.6) |
|
|
6.2 |
|
|
(1,876.8) |
|
|
25.1 |
|
|
(1,572.2) |
|
|
14.7 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income attributable to: |
|
|
|
|
|
|
|
|
|
|
|
|
|
| Controlling interests |
|
685.1 |
|
15.1 |
|
|
923.2 |
|
12.4 |
|
|
3,906.3 |
|
|
36.5 |
|
|
| Non-controlling interests |
|
6.7 |
|
0.0 |
|
|
7.1 |
|
0.1 |
|
|
8.0 |
|
|
0.1 |
|
|
Net income |
|
691.8 |
|
|
15.3 |
|
|
930.3 |
|
12.5 |
|
|
3,914.3 |
|
|
36.5 |
|
|
________________________________________________
(1)Cost of sales includes the payment obligations under lease contract with Corfo, which includes quarterly lease payments based on product sales from leased mining properties and since 2018, annual contributions to research and development, to local communities, to the Antofagasta Regional Government and to the municipalities of San Pedro de Atacama, María Elena and Antofagasta. The expenses related to Corfo were US$397 million in 2024, US$1,868.9 million in 2023, and US$3,273.0 million in 2022.
(2)Income tax expenses for the year 2023 includes the net effect of the payment of the specific tax on mining activities in Chile applied to the extraction of lithium in the total amount of US$1,089.5 million. For prior years, such payments were accounted for as a non-current tax asset and did not impact the consolidated statement of income. See Notes 20.3 to the consolidated financial statements, “Item 3.D. Risk Factors— Risks Relating to Chile—The Chilean government could levy additional taxes on mining companies, which may include lithium exploitation companies, operating in Chile" and "Item 8.A.7 Legal Proceedings— Chilean Tax Litigation".
Results of Operations – 2024 compared to 2023
Revenues
Revenues decreased by (39.4)% to US$4,528.8 million in 2024 from US$7,467.5 million in 2023. The main factors that caused the decrease in revenues and variations in different product lines are described below.
Lithium and Derivatives
Revenues from lithium and derivatives totaled US$2,241.3 million during the twelve months ended December 31, 2024, a decrease of 56.7% compared to US$5,180.1 million recorded for the twelve months ended December 31, 2023. Set forth below are sales volume data for the specified years:
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|
|
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|
|
|
|
|
|
|
|
|
|
| (in Th. MT) |
|
2024 |
|
2023 |
|
% Change |
| Lithium and derivatives |
|
204.9 |
|
170.0 |
|
21% |
Lithium sales in 2024 reached nearly 205 thousand metric tons of LCE, an increase of 21% compared to 2023. This volume includes close to 4,000 metric tons of LCE coming from Mount Holland. However, the increase in volume was not enough to offset the continuous decline in prices, a trend we have been observing since early 2023. As a result, our average realized price dropped by more than 64%, from US$30,467 per ton in 2023 to US$10,936 per ton in 2024.
Specialty Plant Nutrition
Revenues from our Specialty Plant Nutrition business line for the twelve months ended December 31, 2024 totaled US$941.9 million, a slight increase when compared to US$913.9 million reported for the twelve months ended December 31, 2023. Set forth below are sales volume data for the specified years by product category in this product line:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (in Th. MT) |
2024 |
|
2023 |
|
% Change |
| Specialty Plant Nutrition Total Volumes |
982.9 |
|
840.2 |
|
17 |
% |
| Sodium nitrate |
12.5 |
|
16.8 |
|
(26) |
% |
| Potassium Nitrate and Sodium Potassium Nitrate |
534.0 |
|
443.5 |
|
20 |
% |
| Specialty Blends |
276.7 |
|
243.4 |
|
14 |
% |
| Other specialty plant nutrients (*) |
159.7 |
|
136.5 |
|
17 |
% |
________________________________________________
*Includes trading of other specialty fertilizers.
In 2024, Specialty Plant Nutrition sales volumes grew by approximately 17% compared to the previous year, reaching nearly 983 thousand tons. However, our average realized price for the year decreased by around 12% compared to 2023, from US$1,088 per metric ton to US$958 per metric ton, resulting in moderate revenue growth for this business line, at approximately 3% year-over-year.
We estimate that the potassium nitrate market, excluding internal production and consumption in China, grew by 17%, returning to 2021 levels. For 2025, we anticipate market growth of around 4-5%, with prices remaining similar to those observed during the second half of 2024.
Iodine and Derivatives
Revenues from sales of iodine and derivatives during the twelve months ended December 31, 2024, totaled US$968.3 million, an increase of 8.5% compared to US$892.2 million reported for the twelve months ended December 31, 2023. Set forth below are sales volume data for the specified years:
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (in Th. MT) |
|
2024 |
|
2023 |
|
% Change |
| Iodine and derivatives |
|
14.5 |
|
13.1 |
|
11 |
% |
In 2024, our sales volumes grew by 11%, achieving record-high sales volumes of more than 14.5 thousand metric tons of iodine, including its derivatives. We estimate that the market grew by 8% in 2024 compared to 2023. This growth was driven by increased demand across nearly all iodine applications, particularly in X-ray contrast media.
Throughout 2024, we observed quarter-over-quarter price increases, and we expect the average sales price in the first quarter of 2025 to be higher than in the fourth quarter of 2024, when our price reached US$69.7 per kilogram.
Potassium
Potassium revenues for the twelve months ended December 31, 2024, totaled US$270.8 million, lower than revenues reported during the twelve months ended December 31, 2023, which totaled US$279.1 million, representing a 3.0% decrease.
|
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|
|
|
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|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (in Th. MT) |
|
2024 |
|
2023 |
|
% Change |
Potassium chloride |
|
695.0 |
|
543.1 |
|
28% |
Potassium sales volumes grew by more than 28% in 2024 compared to 2023, driven by strong market demand in key regions such as Brazil, Europe, and India. We estimate that market demand reached approximately 72 million metric tons, supported by lower prices and increased supply from Belarus and Russia. Our potassium sales exceeded expectations due to higher-than-anticipated potassium sulfate sales from third parties.
Industrial Chemicals
Industrial chemicals revenues for the twelve months ended December 31, 2024 reached US$78.2 million, 55.4% lower than US$175.2 million recorded for the twelve months ended December 31, 2023. Set forth below are sales volume data for the specified years by product category:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (in Th. MT) |
|
2024 |
|
2023 |
|
% Change |
| Industrial chemicals |
|
52.6 |
|
180.4 |
|
(71)% |
Industrial chemicals revenues during the fourth quarter of 2024 were lower compared to revenues reported for the same period last year, as a result of 71% decrease in sales volumes, which more than offset higher sales prices.
Other Products and Services
Revenues from sales of other commodity fertilizers and other income reached US$28.3 million for the twelve months ended December 31, 2024, an increase compared to US$27.0 million for the twelve months ended December 31, 2023, due to increased commercial activity driven by the recovery of the fertilizer industry market.
Cost of Sales
Cost of sales amounted to US$3,201.7 million for the twelve months ended December 31, 2024, a decrease of 27.1% compared to US$4,392.4 million for the same period in 2023, mainly due to lower payments to Corfo related to lower lithium prices under the formula for lease payment rate tight to lithium sales prices.
Lithium and Derivatives
Lithium and derivatives cost of sales decreased 43.6% to US$1,666.3 million in 2024 from US$2,955.7 million in 2023, primarily as a result of decreased average prices which impact cost of sales as described below.
Our costs of sales related to our lithium and derivatives business line fluctuate with our price of lithium under the SQM-Corfo Agreements. For technical and battery grade lithium carbonate, the following structure of progressive lease payment rates based on the final sale price applies:
|
|
|
|
|
|
|
|
|
| Price US$/MT Li2CO3 |
|
Lease payment rate |
| $0 - $4,000 |
|
6.8 |
% |
| Over $4,000 - $5,000 |
|
8.0 |
% |
| Over $5,000 - $6,000 |
|
10.0 |
% |
| Over $6,000 - $7,000 |
|
17.0 |
% |
| Over $7,000 - $10,000 |
|
25.0 |
% |
| Over $10,000 |
|
40.0 |
% |
Similarly for technical grade and battery grade lithium hydroxide, the following structure of progressive lease payment rates based on the final sale price applies:
|
|
|
|
|
|
|
|
|
| Price US$/MT LiOH |
|
Lease payment rate |
| $0 - $5,000 |
|
6.8 |
% |
| Over $5,000 - $6,000 |
|
8.0 |
% |
| Over $6,000 - $7,000 |
|
10.0 |
% |
| Over $7,000 - $10,000 |
|
17.0 |
% |
| Over $10,000 - $12,000 |
|
25.0 |
% |
| Over $12,000 |
|
40.0 |
% |
See Note 18.2 to our consolidated financial statements for the disclosure of lease payments made to Corfo for all periods presented.
Specialty Plant Nutrition
Specialty plant nutrition cost of sales increased 12.1% to US$775.2 million in 2024 from US$691.5 million in 2023, as a result of higher sales volumes in 2024 when compared to 2023. The average cost of sales in the specialty plant nutrition business line was US$789/MT in 2024, lower than US$823/MT in 2023. The sales volumes in the specialty plant nutrition business line were approximately 982,900 metric tons in 2024, an approximately 17% increase compared to approximately 840,200 metric tons in 2023.
Iodine and Derivatives
Iodine and derivatives cost of sales increased 25.1% to US$444.9 million in 2024 from US$355.7 million in 2023. The average cost of sales in the iodine and derivatives business line was US$30.7/kilogram in 2024, an increase of 12.6% from US$27.2/kilogram in 2023. The increase in average cost of sales in the iodine and derivative business line is mainly a result of increased production costs associated with the start-up of new mining operations at Pampa Blanca.
Potassium
Potassium cost of sales increased 7.6% to US$236.4 million in 2024 from US$219.6 million in 2023, as a result of increased sales volumes. The average cost of sales in the potassium business line of US$340/MT in 2024 approximately a 15.9% decrease when compared to US$$404//MT in 2023.
Our costs of sales related to our potassium business line fluctuate with our price of potassium under the SQM-Corfo Agreements. For potassium chloride, the following structure of progressive lease payment rates based on the final sale price applies:
|
|
|
|
|
|
|
|
|
| Price US$/MT KCl |
|
Lease payment rate |
| $0 - $300 |
|
3.0 |
% |
| Over $300 - $400 |
|
7.0 |
% |
| Over $400 - $500 |
|
10.0 |
% |
| Over $500 - $600 |
|
15.0 |
% |
| Over $600 |
|
20.0 |
% |
See Note 18.2 to our consolidated financial statements for the disclosure of lease payments made to Corfo for all periods presented.
Industrial Chemicals
Industrial chemicals cost of sales decreased 66.4% to US$47.5 million in 2024 from US$141.4 million in 2023, as a result of lower sales volumes in the business line. The average cost of sales in the industrial chemicals business line was US$903/MT in 2024, an increase of 2.6% from US$783/MT in 2023
Gross Profit
Gross profit decreased 56.8% to US$1,327.1 million in 2024, which represented 29.3% of revenues, from US$3,075.1 million in 2023, which represented 41.2% of revenues. As discussed above, this decrease is attributable to the decrease in revenues as a result of lower prices of lithium and derivatives, specialty plant nutrients, industrial chemicals and potassium, offset by higher sales volumes of lithium and derivatives, iodine and derivatives, industrial chemicals and potassium.
Other Income
Other income decreased 20.7% to US$32.2 million in 2024, which represented 0.7% of revenues, from US$40.6 million in 2023, which represented 0.5% of revenues.
Administrative Expenses
Administrative expenses totaled US$186.0 million (4.1% of revenues) for the twelve months ended December 31, 2024, compared to US$175.8 million (2.4% of revenues) for the twelve months ended December 31, 2023.
Other Expenses
Other expenses increased 12.1% to US$104.7 million in 2024, which represented 2.3% of revenues, from US$93.4 million in 2023, which represented 1.3% of revenues.
Other Gains (Losses)
Other losses were US$2.1 million in 2024, compared to losses of US$2.3 million in 2023.
Finance Income
Finance income decreased 15.6% to US$103.6 million in 2024, which represented 2.3% of revenues, from US$122.7 million in 2023, which represented 1.6% of revenues, due to higher interest rates earned on our investments and more cash available to invest.
Finance Costs
Financial costs for the twelve months ended December 31, 2024 totaled US$197.5 million, compared to financial costs of US$138.4 million for the twelve months ended December 31, 2023.
Share of Profit of Associates and Joint Ventures accounted for using the Equity Method
Share of profit of associates and joint ventures accounted for using the equity method increased 1,859.2% to US$11 million in 2024, which represented 0.24% of revenues, from US$0.6 million in 2023, which represented 0.01% of revenues.
Foreign Currency Exchange Differences
Losses from foreign currency exchange differences amounted to US$8.6 million in 2024, which represented 0.2% of revenues, compared with a loss of US$22.3 million in 2023, which represented 0.3% of revenues. A significant portion of our costs is related to the Chilean peso as most of our operations occur in Chile.
Because the U.S. dollar is our functional currency, we are subject to currency fluctuations. We seek to mitigate this impact through an active hedging program.
Profit Before Taxes
Profit before taxes decreased by US$1,832.6 million or 65.3%, to US$974.4 million in 2024 from US$2,807.0 million in 2023. This decrease was primarily attributable to a decrease in revenues by US$2,938.7 million and an increase in administrative expenses by US$10.2 million, partially offset by a decrease in cost of sales by US$1,190.8 million and an increase in net finance income (finance income less finance expenses) by US$78.2 million.
Income Tax Expense
The Company reported an income tax expense of US$282.6 million for the year ended December 31, 2024, lower than the income tax expense of US$1,876.8 million reported in for the year ended December 31, 2023. The income tax expense reported for the year 2023 was impacted by a one time charge described described in Note 20 of the Financial Statements.
Net income
The net income for the year decreased US$238.5 to a loss of US$691.8 million in 2024 from US$930.3 million in 2023, primarily due to lower average prices in all of our business lines except the iodine and derivative business line. Net income for the year 2023 considers in the income tax expense a net effect in the total amount of US$1,089.5 million related to the income tax expense adjustment of the specific tax on mining activity in Chile applied to lithium exploration. (See Note 20.3 to the consolidated financial statements, “Item 3.D. Risk Factors— Risks Relating to Chile—The Chilean government could levy additional taxes on mining companies, which may include lithium exploitation companies, operating in Chile" and "Item 8.A.7 Legal Proceedings— Chilean Tax Litigation").
Results of Operations – 2023 compared to 2022
For a discussion of the comparison of our results of operations for the fiscal years 2023 and 2022, see “Part I, Item 5.A. Operating Results—Results of Operations – 2023 compared to 2022” of our Form 20-F for the fiscal year ended December 31, 2023 filed with the SEC in April, 2024.
5.B.Liquidity and Capital Resources
As of December 31, 2024, we had US$2.5 billion of cash and cash equivalents and time deposits. In addition, as of December 31, 2024, we had US$1,676 million of unused uncommitted working capital credit lines. Our Net Financial Debt to Adjusted EBITDA ratio was 1.6x as of December 31, 2024. In January 2025 we repaid US$250 million of debt which reached maturity.
Shareholders’ equity increased to US$5,198.1 million as of December 31, 2024 from US$4,477.1 million as of December 31, 2023. Our ratio of total liabilities to total equity (including non-controlling interest) on a consolidated basis increased to 1.21 as of December 31, 2024 from 1.01 as of December 31, 2023.
We evaluate from time to time our cash requirements to fund capital expenditures, dividend payouts and increases in working capital, but we believe our working capital is sufficient for our present requirements. As debt requirements also depend on the level of accounts receivable and inventories, we cannot accurately determine the amount of debt we will require nor are our requirements typically seasonal.
The table below shows our cash flows for 2024, 2023 and 2022:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| (in millions of US$) |
|
2024 |
|
2023 |
|
2022 |
Net cash flow from operating activities |
|
1,274.7 |
|
|
(196.6) |
|
|
4,077.6 |
|
Net cash flow from (used in) financing activities |
|
282.4 |
|
66.3 |
|
(2,003.0) |
Net cash flow from (used in) investing activities |
|
(1,214.0) |
|
|
(1,481.5) |
|
|
(909.4) |
|
| Effects of exchange rate fluctuations on cash and cash equivalents |
|
(6.6) |
|
|
(2.0) |
|
|
(25.0) |
|
| Net increase (decrease) in cash and cash equivalents |
|
336.5 |
|
(1,613.9) |
|
1,140.2 |
|
We operate a capital-intensive business that requires significant investments in revenue-generating assets. Our past growth strategies have included purchasing production facilities and equipment and the improvement and expansion of existing facilities. Funds for capital expenditures and working capital requirements have been obtained from net cash from operating activities, borrowing under credit facilities and issuing debt securities.
We believe that our capital expenditures for 2025 could reach approximately US$1.1 million focused on the maintenance of our production facilities in order to strengthen our ability to meet our production goals and to increase our production capacity, primarily related to lithium carbonate and lithium hydroxide capacity expansions and nitrates and iodine capacity in Chile and development of our lithium projects in Australia and China. See “Item 4.A. History and Development of the Company—Capital Expenditure Program.”
Our other major use of funds is for dividend distributions. In the consolidated statement of cash flows, we reported dividends paid of US$67.2 million and US$1.5 billion during 2024 and 2023, respectively. For a disclosure of our 2024 dividend policy and payments, see “Item 8.A.8. Dividend Policy.”
The proposed dividend policy for 2024 was announced at the Annual General Shareholders’ Meeting held on April 25, 2024.
We have not entered into any transactions with unconsolidated entities whereby we have financial guarantees, retained or contingent interests in transferred assets, derivative instruments or other contingent arrangements that would expose us to material continuing risks, contingent liabilities, or any other obligations arising out of a variable interest in an unconsolidated entity that provides financing, liquidity, market risk or credit risk support to us or that engages in leasing, hedging or research and development services with us.
Our future cash position could be impacted by, among other things, an operational shutdown, unforeseen expenses, a decreased ability of our customers to pay us for products or services or lower average prices or sales volumes in our business lines, which could have an impact on our cash position and could lead to a material adverse effect on our business, financial condition and results of operations. See “Item 3.D. Risk Factors”
Financing Activities
Our current ratio, defined as current assets divided by current liabilities, increased to 2.51 as of December 31, 2024 from 2.50 as of December 31, 2023. The following table shows key information about our outstanding long- and short-term debt as of December 31, 2024.
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Debt Instrument(1) |
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Current
Amount
(MillionUS$) |
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Non-Current
Amount
(MillionUS$) |
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Interest
Rate |
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Issue
Date |
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Maturity
Date |
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Amortization |
| 4.38% Notes due 2025 — US$250 million |
|
254.6 |
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— |
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4.38% |
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Oct. 23, 2014 |
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Jan. 28, 2025 |
|
Bullet |
| 4.25% Notes due 2029—US$450 million |
|
2.2 |
|
447.7 |
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4.25% |
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May 7, 2019 |
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May 7, 2029 |
|
Bullet |
| 6.50% Notes due 2033—US$750 million (Green Bond) |
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5.7 |
|
736.6 |
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6.50% |
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Nov 7, 2023 |
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Nov 7, 2033 |
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Bullet |
| 5.50% Notes due 2034 - US$850 million |
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12.5 |
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833.6 |
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5.50% |
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Sep 10, 2024 |
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Sep 10, 2034 |
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Bullet |
| 4.25% Notes due 2050 - US$400 million |
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7.3 |
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394.4 |
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4.25% |
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Jan 22, 2020 |
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Jan 22, 2050 |
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Bullet |
| 3.50% Notes due 2051—US$700 million (Green Bond) |
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7.0 |
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685.8 |
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3.50% |
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Sep. 10, 2021 |
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Sep. 10, 2051 |
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Bullet |
| Series H Bond — UF 4 million. |
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15.7 |
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62.4 |
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4.90% |
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Jan. 13, 2009 |
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Jan. 05, 2030 |
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Semiannual, beginning in 2019 |
| Series O Bond — UF 1.5 million |
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0.8 |
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57.3 |
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3.80% |
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Apr. 04, 2012 |
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Feb. 01, 2033 |
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Bullet |
| Series P Bond — UF 3 million |
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1.7 |
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115.6 |
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3.25% |
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Mar. 31, 2018 |
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Jan. 15, 2028 |
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Bullet |
| Series Q Bond — UF 3 million |
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0.3 |
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115.4 |
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3.45% |
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Nov. 8, 2018 |
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Jun. 1, 2038 |
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Bullet |
________________________________________________
(1)UF denominated bonds are fully hedged to U.S. dollars with cross-currency swaps. Note 12.4 b and d
As of December 31, 2024, we had total long-term financial debt of US$3,600.6 million compared to US$3,213.4 million as of December 31, 2023. The total short-term debt as of December 31, 2024, was US$1,163.5 million, and as of December 31, 2023, was US$1,256.5 million.
As of December 31, 2024, all of our long-term debt, including the current portion, was denominated in U.S. dollars, and all our UF-denominated bonds were hedged with cross-currency swaps to the U.S. dollar. The financial covenants related to our debt instruments include: (i) limitations on the ratio of NFD to equity (including non-controlling interest) on a consolidated basis, and (ii) minimum production assets. We believe that the terms and conditions of our debt agreements are standard and customary.
The following table shows the maturities of our nominal long-term debt by year as of December 31, 2024 (in millions of US dollars):
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Maturity(1) |
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Amount |
| 2025 |
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300.5 |
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| 2026 |
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56.9 |
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| 2027 |
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56.9 |
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| 2028 |
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172.5 |
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| 2029 and thereafter |
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3,515.9 |
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| Total |
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4,102.7 |
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________________________________________________
(1)Only the principal amount has been included. For the UF-denominated local bonds, the amounts presented reflect the real U.S. dollar obligation as of December 31, 2024 not including the effects of the cross-currency swaps that hedge these bonds to the U.S. dollar and which had, as of December 31, 2024, a market value of US$15.4 million against SQM.
Environmental and Occupational Safety and Health Projects
We spent approximately US$47.2 million on environmental, safety and health projects in 2024. This amount forms part of the capital expenditure program discussed above.
Non-IFRS Financial Measures
This Form 20-F makes reference to certain non-IFRS financial measures, namely Net Financial Debt, EBITDA and adjusted EBITDA. These non-IFRS financial measures are not recognized measures under IFRS, do not have a standardized meaning prescribed by IFRS and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these measures are provided as additional information to complement IFRS measures by providing further understanding of the Company’s results of operations from management’s perspective. Accordingly, they should not be considered in isolation nor as a substitute for analysis of our financial information reported under IFRS.
Net Financial Debt (NFD)
Net Financial Debt represents Other Current Financial Liabilities + Non-current Financial Liabilities - Cash and Cash Equivalent - Other Current Financial Assets - Other Non-current Hedging Assets. NFD is a financial metric used by management as a tool for assessing the Company's financial health and its ability to manage its debt obligations. When considering new investments or expansion opportunities, management may use NFD/Adjusted EBITDA ratios to assess the impact of additional debt on the company's overall financial position and its ability to generate sufficient earnings to cover debt obligations. NFD/Adjusted EBITDA ratios are also used in communications with stakeholders, such as investors, creditors, and analysts, to provide insight into the company's financial stability and its ability to generate earnings relative to its debt levels.
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For the year ended December 31, |
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2024 |
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2023 |
|
2022 |
| (+) Other Current Financial Liabilities |
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1,163.5 |
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1,256.5 |
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523.0 |
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(+) Other non-current Financial Liabilities |
|
3,600.5 |
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3,213.4 |
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2,394.2 |
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| (-) Cash and Cash Equivalent |
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1,377.9 |
|
1,041.4 |
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|
2,655.2 |
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| (-) Other Current Financial Assets |
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1,079.6 |
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1,325.8 |
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|
961.4 |
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| (-) Other Non-current Hedging Assets |
|
3.0 |
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16.0 |
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|
22.6 |
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| Net Financial Debt |
|
2,303.7 |
|
2,086.7 |
|
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(722.0) |
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EBITDA represents Profit for the Year + Depreciation and Amortization Expenses + Finance Costs + Income Tax and Adjusted EBITDA is defined as EBITDA – Other income – Other gains (losses) - Share of Profit of associates and joint ventures accounted for using the equity method + Other expenses by function + Net impairment gains on reversal (losses) of financial assets – Finance income – Currency differences. We have included EBITDA and adjusted EBITDA to provide investors with a supplemental measure of our operating performance.
We believe EBITDA and adjusted EBITDA are important supplemental measures of operating performance because it eliminates items that have less bearing on our operating performance and thus highlights trends in our core business that may not otherwise be apparent when relying solely on IFRS financial measures.
EBITDA and adjusted EBITDA have important limitations as analytical tools. For example, EBITDA and adjusted EBITDA do not reflect (a) our cash expenditures, or future requirements for capital expenditures or contractual commitments; (b) changes in, or cash requirements for, our working capital needs; (c) the significant interest expense, or the cash requirements necessary to service interest or principal payments, on our debt; and (d) tax payments or distributions to our parent to make payments with respect to taxes attributable to us that represent a reduction in cash available to us.
Although we consider the items excluded in the calculation of non-IFRS measures to be less relevant to evaluate our performance, some of these items may continue to take place and accordingly may reduce the cash available to us.
We believe that the presentation of the non-IFRS financial measures described above is appropriate. However, these non-IFRS measures have important limitations as analytical tools, and you should not consider them in isolation, or as substitutes for analysis of our results as reported under IFRS. Because of these limitations, we primarily rely on our results as reported in accordance with IFRS and use EBITDA and adjusted EBITDA only supplementally.
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For the years ended December 31, |
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2024 |
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2023 |
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2022 |
|
(ThUS$) |
|
(ThUS$) |
|
(ThUS$) |
Net income |
691.8 |
|
|
930.3 |
|
|
3,914.3 |
| (+) Depreciation and amortization expenses |
342.4 |
|
280.8 |
|
244.5 |
| (+) Finance costs |
197.5 |
|
138.4 |
|
86.7 |
(+) Income tax expense |
282.6 |
|
1,876.8 |
|
1,572.0 |
| EBITDA |
1,514.3 |
|
3,226.3 |
|
5,817.6 |
| (-) Other income |
32.2 |
|
40.6 |
|
9.9 |
| (-) Other gains (losses) |
(2.1) |
|
(2.3) |
|
0.1 |
| (-) Share of Profit of associates and joint ventures accounted for using the equity method |
11.0 |
|
0.6 |
|
20.2 |
| (+) Other Expenses |
(104.7) |
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|
(93.4) |
|
|
(76.0) |
|
(+) impairment gains on reversal (losses) of financial assets |
(0.6) |
|
0.2 |
|
3.4 |
| (-) Finance income |
103.6 |
|
122.7 |
|
47.0 |
(-) Foreign currency translation differences |
(8.6) |
|
|
(22.3) |
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|
(25.4) |
|
| Adjusted EBITDA |
1,483.6 |
|
3,180.1 |
|
5,838.4 |
5.C.Research and Development, Patents and Licenses, etc.
One of the main objectives of our research and development team is to develop new processes and products in order to maximize the returns obtained from the resources that we exploit. Our research is performed by three different units, whose research covers topics, such as design, modeling and simulation of chemical processes for optimization of existing products or development of new products, physical-chemistry of concentrated brines, development of chemical analysis and measurement methodologies of physical properties of finished products, considering all the relevant processes in the production of our products.
Our research and development policy emphasizes the following: (i) optimizing current or developing new processes in order to decrease costs and improve product quality through the implementation of new technology, (ii) developing higher-margin products from current products through vertical integration or different product specifications, (iii) adding value to inventories and (iv) using renewable energy in our processes.
Our research and development activities have been instrumental in improving our production processes and developing new value-added products. As a result, new methods of extraction, crystallization and finishing products have been developed. Technological advances in recent years have enabled us to improve process efficiency for the nitrate, potassium and lithium operations, particularly in sustain recoveries from the ore resources with dynamic or complex behaviour, improve the physical quality of our prilled products and reduce dust emissions and caking by applying specially designed additives to our products handled in bulk. Our research and development efforts have also resulted in new, value-added markets for our products. One example is the use of sodium nitrate and potassium nitrate as thermal storage in solar power plants.
Among the main projects worked on during 2024 in the SQM- Iodine-Plant Nutrition Division were:
•Water use efficiency: Development of a molecule that enhances water use efficiency, applied either directly or in combination with a line of soluble products.
•Nutrient use efficiency: A molecule that improves phosphorus absorption efficiency.
•Use of iodine in agriculture: Development of the Ultrasoline line. Iodine is part of various plant proteins and activates multiple genes that trigger beneficial effects in plants, including increased yield, improved stress tolerance, enhanced earliness, root development, and more.
Among the main projects worked on during 2024 in the SQM Lithium Chile Division were:
Consolidation of information from 140 studies of new technologies and existing suppliers, scaling a total of 20 pilot tests. This information has allowed us to present the conceptual engineering design for Salar Futuro, including Direct Lithium Extraction, brine reinjection and gradual reduction of inland water use.
The engineering of these projects also includes significant improvements in lithium recovery at Salar de Atacama and the Lithium Chemical Plant in Antofagasta.
The Company has patented several production processes for nitrate, iodine and lithium products. These patents have been registered mainly in the United States of America, Chile and other countries, when necessary. The patents used in SQM's production processes are Chilean Patent No. 47,080 for iodine (production of spherical shaped granules for subliming products) and Japanese Patent No. 4,889,848 for nitrates (granular fertilizers).
During 2024, our research and development related expenditure totaled approximately US$8.7 million for the SQM Iodine -Plant Nutrition Division and US$19 million for the lithium-related divisions.
5.D.Trend Information
Our revenues decreased 39.4% to US$4,528.8 million in 2024 from US$7,467.5 million in 2023. Gross profit reached US$1,327.1 million (29.3% of revenues) in 2024, lower than US$3,075.1 million (41.2% of revenues) recorded in 2023. Profit attributable to controlling interests decreased to a loss of US$404.4 million in 2024 from US$2,012.7 million in 2023.
Revenues for lithium and derivatives totaled US$2,241.3 million during the twelve months ended December 31, 2024, a decrease of 56.7% compared to US$5,180.1 million recorded for the twelve months ended December 31, 2023. Lithium sales in 2024 reached nearly 205 thousand metric tons of LCE, an increase of 21% compared to 2023. This volume includes close to 4,000 metric tons of LCE coming from Mount Holland. However, the increase in volume was not enough to offset the continuous decline in prices, a trend we have been observing since early 2023. As a result, our average realized price dropped by more than 64%, from US$30,467 per ton in 2023 to US$10,936 per ton in 2024. In the fourth quarter, we achieved record-high quarterly sales, reaching approximately 58,000 metric tons of LCE, which includes our first sales of spodumene concentrate. For 2025, we expect an increase of approximately 15% in our sales volumes compared to 2024, including sales of around 10,000 metric tons of LCE from the Mount Holland operation. We also anticipate that the average realized price in 2025 should be lower than in 2024, with first quarter of 2025 prices slightly below those recorded in the fourth quarter of 2024.
Revenues from sales of iodine and derivatives during the twelve months ended December 31, 2024, totaled US$968.3 million, an increase of 8.5% compared to US$892.2 million reported for the twelve months ended December 31, 2023. In 2024, our sales volumes grew by 11%, achieving record-high sales volumes of more than 14.5 thousand metric tons of iodine, including its derivatives. We estimate that the market grew by 8% in 2024 compared to 2023. This growth was driven by increased demand across nearly all iodine applications, particularly in X-ray contrast media. Throughout 2024, we observed quarter-over-quarter price increases, and we expect the average sales price in the first quarter of 2025 to be higher than what was seen in the fourth quarter of 2024, when our price reached US$69.7 per kilogram. We anticipate these market conditions to persist throughout 2025, with prices remaining relatively stable, due to limited market supply. Overall, we expect market demand to stabilize, with market growth of approximately 2% in 2025 compared to 2024. Sales volumes are projected to remain in line with 2024 levels.
Revenues from our Specialty Plant Nutrition business line for the twelve months ended December 31, 2024 totaled US$941.9 million, a slight increase when compared to US$913.9 million reported for the twelve months ended December 31, 2023. In 2024, Specialty Plant Nutrition sales volumes grew by approximately 17% compared to the previous year, reaching nearly 983 thousand tons. However, our average realized price for the year decreased by around 12% compared to 2023, from US$1,088 per metric ton to US$958 per metric ton, resulting in moderate revenue growth for this business line, at approximately 3% year-over-year. We estimate that the potassium nitrate market, excluding internal production and consumption in China, grew by 17%, returning to 2021 levels. For 2025, we anticipate market growth of around 4-5%, with prices remaining similar to those observed during the second half of 2024.
Additionally, we expect an increase in our sales volumes, in line with or slightly exceeding market growth.
Potassium revenues for the twelve months ended December 31, 2024, totaled US$270.8 million, lower than revenues reported during the twelve months ended December 31, 2023, which totaled US$279.1 million, representing a 3.0% decrease. Potassium sales volumes grew by more than 28% in 2024 compared to 2023, driven by strong market demand in key regions such as Brazil, Europe, and India. We estimate that market demand reached approximately 72 million metric tons, supported by lower prices and increased supply from Belarus and Russia. Our potassium sales exceeded expectations due to higher-than-anticipated potassium sulfate sales from third parties. For 2025, we anticipate a significant reduction of approximately 50% in our potassium sales volumes due to lower production in the Salar de Atacama. This aligns with our plan to reduce brine extraction, prioritizing high-lithium-content brines. Additionally, by prioritizing potassium chloride production as a feedstock to increase potassium nitrate production in our SPN business line, there will be less potassium available for third-party sales, which will become a lower priority
5.E.Critical Accounting Estimates
For information on our critical accounting estimates, see Note 3.34 to our consolidated financial statements.
5.F.Safe Harbor
The information contained in Item 5.E contains statements that may constitute forward-looking statements. See “Cautionary Statement Regarding Forward-Looking Statements” in this Annual Report, for safe harbor provisions.
ITEM 6. DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES
6.A.Directors and Senior Management
We are managed by our executive officers under the direction of our Board of Directors, which, in accordance with our By-laws, consists of eight directors, seven of whom are elected by holders of Series A common shares and one of whom is elected by holders of Series B common shares. The entire Board of Directors is regularly elected every three years at our Annual General Shareholders’ Meeting. Cumulative voting is allowed for the election of directors. The Board of Directors may appoint replacements to fill any vacancies that occur during periods between elections. If a vacancy occurs, the entire Board must be elected or re-elected at the next regularly scheduled Annual General Shareholders’ Meeting. Our Chief Executive Officer is appointed by the Board of Directors and holds office at the discretion of the Board. The Chief Executive Officer appoints our executive officers. There are regularly scheduled meetings of the Board of Directors once a month. Extraordinary meetings may be called by the Chairman when requested by (i) the director elected by holders of the Series B common shares, (ii) any other director with the assent of the Chairman or (iii) an absolute majority of all directors. The Board of Directors has a Directors’ Committee and its regulations are discussed below.
On March 20, 2024, Xu Tieying resigned from the Board of Directors effective April 24, 2024. As a result of this resignation, the entire Board was up for election at the Annual General Shareholders’ Meeting held on April 25, 2024. Each of the eight members of the current Board of Directors (including Mr. Xu) was elected for a three-year term at the 2024 Annual General Shareholders’ Meeting.
Our current directors are as follows:
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| Name |
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Position and relevant experience |
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Current position held since |
| Gonzalo Guerrero Y. |
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Chairman of the Board and member of the SHE Committee. Mr. Guerrero earned a law degree from the Universidad de Chile and a Masters of Business Law from the Universidad Adolfo Ibáñez. He is Chairman of the Board of SQM Salar S.A., Delegate Counsel of SONAMI, Chairman of the Board of Maria Elena Foundation for Social and Patrimonial Development, Board director of ICARE, elective counsel of SOFOFA, Chairman of SOFOFA Chile/Australia business council, and is a director of the Chilean Mining Council. He has experience in relations with communities and associations. Mr. Guerrero is an independent director under NYSE standards. |
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April 2017 (Chairman since April 2022) |
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Position and relevant experience |
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Current position held since |
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| Patricio Contesse F. |
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Vice Chairman of the Board and member of the Corporate Governance Committee and the Safety, Health and Environment Committee. Mr. Contesse is an independent director under NYSE standards. Mr. Contesse is a lawyer with a degree from the Pontificia Universidad Católica de Chile. Previously, he was a Board member of SQM from 2013 until 2015. Since 2011, he has held senior executive positions in Pampa Group through 2021, where he is currently Vice Chairman of the Boards of Directors of the Pampa Group entities. His areas of expertise includes regulatory and corporate governance matters. |
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April 2018 |
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| Hernán Büchi B. |
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Director. Mr. Büchi earned a degree in Civil Engineering from the Universidad de Chile. He served on the SQM Board of Directors for several years until April 2016, before rejoining in 2017. He is currently a Board member of Quiñenco S.A., among others. He is also Chairman of the Board of Directors of the Universidad del Desarrollo. |
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April 2017 |
| Georges de Bourguignon A. |
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Director. Mr. de Bourguignon is an economist from the Pontificia Universidad Católica de Chile with an MBA from Harvard University. In the academic field, he has been a professor of Economics at the Pontificia Universidad Católica de Chile, while, in the business world, he is co-founder and currently Chairman of Asset Chile S.A., a corporate finance advisory firm, and of Asset AGF, an investment fund administration firm. He also serves as a director in various companies, including Vivo Spa, where he has been Chairman since August 2022, in Tánica S.A., since May 2017 and Embotelladora Andina since 2016. He was a director of SQM (2019 - April 2022), Empresas La Polar S.A. (2011-2015), Sal Lobos S.A (2006-2018) and Chairman of the Committee of Directors of Latam Airlines Group (2012-2019). |
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April 2024 |
Antonio Gil N.(1) |
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Director. Mr. Gil holds a degree in Industrial Engineering from ICAI (Universidad Pontificia Comillas, Spain) and is a graduate of Harvard Business School (where he obtained his MBA). He also completed the Stanford Executive Program at Stanford University. He has more than 25 years of experience in strategic leadership, management, financial and investment roles at global, European and Latin American companies. He is currently board member at Latam Airlines Group. Previously, he was CEO of Moneda Asset Management, Vice President of ACAFI, Managing Director, worldwide CFO and member of the global executive committees of several large global businesses at JPMorgan. He started his career as strategic consultant for BCG in Spain. |
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April 2022 |
| Gina Ocqueteau T. |
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Director. Ms. Ocqueteau graduated as a nurse from the Universidad de Chile and holds an MBA in Commercial Management and Marketing from ESEM, Business School, Madrid Campus. She is currently CEO of Waygroup Chile, founding partner of Crosscheck, director of the Asia Pacific Chamber of Commerce and Imagen Chile Foundation, director of UDD Ventures and Vice Chairman of Unión Emprededora. She has been a director of Chile Mujeres since 2019 and was a member of the Advisory Council of the Ministry of Women and Gender Equity in 2021. Previously, she was also director of the Association of Entrepreneurs, ASECH, and held senior positions within ACHS. |
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April 2022 |
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Current position held since |
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| Ashley Ozols |
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Director. Mr. Ozols earned a Bachelor of Commerce degree from the University of New South Wales, Sydney and is also a CFA charterholder. He resides in Australia and has over 20 years of international business experience providing strategic, financial and advisory services to American, Australian and Asian based clients. Between 2003 and 2017, he worked at several investment banks, including Macquarie Group, Grant Samuel, and CLSA. Between 2017 and beginning his role as a board member at SQM in 2021, he worked at Tianqi Lithium as an executive focused on corporate development.
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December 2021 |
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| Xu Tieying |
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Director. Mr. Xu earned a doctorate degree in law from the Università degli studi di Roma Tor Vergata, Italy. He studied at the Centro di Studi Giuridici Latinoamericani of the same university. He is also a P.R. China Legal Professional Qualifications Certificate holder. Currently, he is an Associate Professor at the Sichuan University, China, specializing in Civil and Commercial Law. He has also released several publications and books on Civil and Commercial Law. |
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April 2023 |
Our current executive officers are as follows:
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Current position held since |
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| Ricardo Ramos R. |
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Chief Executive Officer. Mr. Ramos earned an industrial engineering degree from the Pontificia Universidad Católica de Chile. In 1989, he joined SQM as Finance Advisor and served as Chief Financial Officer and Vice President of Corporate Services from 1994 until 2018, before assuming his current role in January 2019. |
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January 2019 |
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Gerardo Illanes G.(2) |
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Chief Financial Officer. Mr. Illanes earned an engineering degree from the Universidad Católica de Chile and a Master of Business Administration from Emory University’s Goizueta Business School. In 2006, he joined SQM and has served in several positions within the finance area at our headquarters in Santiago, Chile and in subsidiaries around the world. Mr. Illanes is also a member of the Board of Soquimich Comercial. In May 2016, he became Vice President of Finance, and assumed his current role in October 2018. |
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October 2018 |
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| Name |
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Position and relevant experience |
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Current position held since |
| Gonzalo Aguirre T. |
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General Counsel. Mr. Aguirre earned a degree in law from the Universidad Católica de Chile and a Master of Laws (LL.M) degree from Georgetown University Law Center. He joined SQM in April 2016 and has served as Legal Vice President since September 2016. Prior to joining SQM, he worked at SunEdison as Head of Legal for Latin America and at AES Gener, where he served as a counsel on corporate and project matters. Prior to his in-house experience, he worked for Carey y Cía Ltda, Paul Hastings LLP (as an international legal consultant) and Vial and Palma, where his practice focused on corporate and financial matters. He is admitted to practice in Chile and in Washington, D.C., as a special legal consultant. |
|
September 2016 |
|
|
|
|
|
| Pablo Altimiras C. |
|
Chief Executive Officer of the SQM Iodine-Plant Nutrition Division. Mr. Altimiras earned an engineering degree and a Master of Business Administration from the Universidad Católica de Chile. In 2007, he joined SQM as Chief of Logistics Projects. In 2009, he was promoted to Regulatory Affairs Director. He was Business Development Vice Manager from 2010 to 2011 and Development and Planning Manager in 2012. In 2016, he became Vice President of Business Development and Planning. In October 2018, he became Vice President of Lithium and Iodine Businesses and assumed his current role in the Company in June 2024. |
|
June 2024 |
|
|
|
|
|
José Miguel Berguño C.(3) |
|
Vice President of Corporate Services. Mr. Berguño earned an engineering degree and Master of Business Administration from the Universidad Católica de Chile. In 1998, he joined SQM as Planning Engineer. In 2001, he served as Supply Chain Manager, and in 2006 he was Human Resources Manager. From 2010 to 2011, he was the National Director of Science under the Minister of Labor. In 2012, he was Human Resources Manager for Vitamina Work Life. In 2013, he resumed his role as Supply Chain Manager at SQM, and in 2016 took on the position of Vice President of Human Resources and Performance. In 2019, he became Vice President of Operations of Nitrates and Iodine and assumed his current role in December 2021.
|
|
December 2021 |
|
|
|
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|
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|
|
|
|
|
|
|
| Name |
|
Position and relevant experience |
|
Current position held since |
| Carlos Díaz O. |
|
Chief Executive Officer of the SQM Lithium Chile Division. Mr. Díaz earned an engineering degree and a Master of Business Administration from the Pontificia Universidad Católica de Chile. In 1996, he joined SQM and worked in the planning, finance and logistics areas of the Company until 2012. From 2012 through 2019, he was Vice President of Operations, Nitrates and Iodine. In 2019, he became Vice President of Operations, Potassium and Lithium and assumed his current role in June 2024. |
|
June 2024 |
| Mark Fones |
|
Chief Executive Officer of the SQM International Lithium Division. Mr. Fones earned an engineering degree and a Master of Business Administration from the Pontificia Universidad Católica de Chile. He joined SQM in 2003 as a supply engineer and worked in different areas of the company such as M&A, development, and finance. He also served as CEO of SQM Australia and Covalent. He was appointed CEO of the International Lithium division in June 2024 to lead the company's lithium growth outside Chile. |
|
June 2024 |
________________________________________________
(1)As of December 31, 2024, Mr. Gil beneficially owned 1,730 SQM shares.
(2)As of December 31, 2024, Mr. Illanes beneficially owned 800 SQM shares.
(3)As of December 31, 2024, Mr. Berguño beneficially owned 380 SQM shares.
6.B.Compensation
At the Annual General Shareholders’ Meeting held on April 25, 2024, shareholders approved the Board of Directors compensation for 2024, including the compensation for the Audit and Financial Risk Committee, Corporate Governance Committee and the Safety, Health and Environmental Committee.
During 2024, directors were paid a monthly retainer fee, which was independent of attendance and the number of Board sessions. For the Chairman and the Vice Chairman, the fee amounted to UF 800 and UF 700 per month respectively. For the remaining six directors, the fee amounted to UF 600 per month each. In addition, the directors received variable compensation (in Chilean pesos) based on a profit-sharing program approved by the shareholders. Both the Chairman and the Vice Chairman received the equivalent of 0.12% of the total net profit that the Company obtained during the 2024 fiscal year and each of the remaining six directors received the equivalent of 0.06% of the 2024 total net profit of the Company.
In addition, during 2024, members of the Directors’ Committee were each paid UF 200 per month, regardless of the number of sessions held by the Directors’ Committee. The members of the Directors’ Committee also received variable compensation (in Chilean pesos) based on a profit-sharing program approved by the shareholders. Also, each member of the Directors’ Committee received an amount equal to 0.02% of the total net profit that the Company obtained during the 2024 fiscal year.
For the calculation of the variable remuneration that the directors were entitled to receive, the pre-tax profit obtained by the Company during the 2024 fiscal year was considered with a maximum limit of 110% of the variable remuneration paid by the Company's directors for variable remuneration charged to the 2023 fiscal year.
During 2024, the members of the Safety, Health and Environmental and the Corporate Governance Committees each received UF 100 per month, regardless of the number of sessions held.
During 2024, the compensation paid to each of our directors who served on the Board of Directors during the year was as follows (amounts in Chilean pesos):
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
SQM Board
Meeting (Ch$) |
|
SQM
Directors’
Committee
(Ch$) |
|
SQM Health,
Safety and
Environment
Committee
(Ch$) |
|
Corporate
Governance
Committee
(Ch$) |
|
Total (Ch$) |
| Gonzalo Guerrero Yamamoto |
1,144,442,304 |
|
|
|
|
45,083,568 |
|
|
|
|
1,189,525,872 |
|
| Patricio Contesse Fica |
1,099,358,726 |
|
|
|
|
45,083,568 |
|
|
45,083,568 |
|
|
1,189,525,862 |
|
| Hernan Büchi Buc |
662,388,288 |
|
|
60,578,128 |
|
|
|
|
45,083,568 |
|
|
768,049,984 |
|
| Antonio Gil Nievas |
662,388,288 |
|
|
220,796,096 |
|
|
|
|
|
|
883,184,384 |
|
| Gina Ocqueteau |
662,388,288 |
|
|
220,796,096 |
|
|
|
|
|
|
883,184,384 |
|
Ashley Luke Ozols |
661,411,890 |
|
|
167,575,840 |
|
|
|
|
|
|
828,987,730 |
|
Georges De Bourguignon(1) |
181,734,384 |
|
|
|
|
30,289,064 |
|
|
|
|
212,023,448 |
|
| Xu Teiying |
661,411,890 |
|
|
|
|
|
|
44,920,838 |
|
|
706,332,728 |
|
Antonio Schneider(2) |
480,653,904 |
|
|
|
|
14,794,504 |
|
|
|
|
495,448,408 |
|
| TOTAL |
6,216,177,962 |
|
|
669,746,160 |
|
|
135,250,704 |
|
|
135,087,974 |
|
|
7,156,262,800 |
|
(1)Director since April 25, 2024
(2)Director until April 25, 2024
For the year ended December 31, 2024, the aggregate compensation paid to our 176 members of management based in Chile was US$31.1 million. We do not disclose to our shareholders or otherwise make available to the public information as to the compensation of our individual executive officers.
We maintain incentive programs for our employees based on individual performance, company performance and short-term indicators. We provide executives with an annual and a long-term bonus plan. Their incentives are based on target achievement, individual contribution to the Company’s operating results, and the Company’s performance. SQM also operates a compensation plan designed to retain its executives by providing bonuses linked to the Company’s share price.
As of December 31, 2024, we had a provision related to all of the incentive programs in the aggregate of US$65.5 million.
We do not maintain any pension or retirement programs for the members of the Board of Directors or our executive officers in Chile.
6.C.Board Practices
Information regarding the period of time each of SQM’s current Directors has served in his office is provided in the discussion of each member of the Board of Directors above in “Item 6.A. Directors and Senior Managers.”
The date of expiration of the term of the current Board of Directors is April 2027. The contracts of our executive officers are indefinite. The current Board of Directors was elected at the Annual General Shareholders’ Meeting held on April 25, 2024 for a three-year term expiring in April 2027.
The members of the Board of Directors are remunerated in accordance with the information provided above in “Item 6.B. Compensation.” There are no contracts between SQM, or any of its subsidiaries, and the members of the Board of Directors providing for benefits upon termination of their term.
Directors’ Committee – Audit Committee
As required by Chilean Law, during 2024, we had a Directors’ Committee (Comité de Directores) composed of three Directors, which performs the functions of an audit committee. Under the NYSE corporate governance rules, the audit committee of a U.S. company must perform the functions detailed in the NYSE Listed Company Manual Rules 303A.06 and 303A.07. Non-U.S. companies are required to comply with Rule 303A.06 but are not required to comply with Rule 303A.07.
From April 25, 2024 up to the present, our Directors’ Committee was comprised of three Directors: Mr. Antonio Gil N., Mrs. Gina Ocqueteau T., and Mr. Hernán Buchi. Each of the three members met the NYSE independence and Chilean independence requirements for audit committee members. Mr. Gil held the position of Chairman of the Directors’ Committee.
During 2024, the Directors’ Committee (the “Committee”) analyzed or reviewed (i) the Company's Unaudited Financial Statements and Reports; (ii) the Company's Audited Financial Statements and Reports; (iii) the Reports and proposals of the External Auditors, Account Inspectors and Independent Risk Rating Agencies of the Company; (iv) the proposal to the Board of Directors regarding the External Auditors and the Independent Risk Classifiers that the Board of Directors may recommend to the respective Shareholders' Meeting for their subsequent appointment; (v) tax and other services, other than auditing services, rendered by the Company's external auditors on behalf of the Company and its subsidiaries in Chile and abroad; (vi) the remuneration systems and compensation plans for the Company's employees, managers and senior executives; (vii) proposals to the Board of Directors on corporate policies that the Company must have, in accordance with the law; (viii) the Company's risk matrix; (ix) activities related to the Company's compliance program; (x) the Company's Internal Control Report provided by the External Auditors; (xi) the update and follow-up of the information requirement process reported in note 6 to the Company's financial statements. (xii) the review of the accounting, legal and tax treatment of the liquidations made by the Internal Revenue Service in relation to the specific tax on mining activities related to the exploitation of lithium; (xiii) the accounting, legal and tax treatment of value added tax on the Company's sales in China; (xiv) the accounting treatment of the association agreement with Corporación Nacional del Cobre; and (xv) the different matters referred to in the chapter "Directors' Committee" included in the Company's Financial Statements as of December 31, 2024.
Regarding the above, the Committee:
(a)Examined the information regarding the financial statements of SQM for the 2024 fiscal year and the report issued thereon by the external auditors of SQM, Similarly, it also examined the Company’s Interim Consolidated Financial Statements for the 2024 fiscal year.
(b)It proposed to the Board of Directors the names of the Company's external auditors and independent risk classifiers and that the Board of Directors of the Company, in turn, could suggest for appointment to the respective Ordinary General Shareholders' Meeting of the Company. The Board of Directors approved such suggestions to be submitted to the Meeting for approval.
(c)Reviewed and approved the compensation systems and compensation plans for the Company's employees and senior executives.
The Committee also (i) authorized the hiring by the Company of various consulting services with PwC, in non-audit related matters, (ii) reviewed the expenses of the Company's CEO, (iii) reviewed the reports of the Company's internal audit and risk (including SOX audit) and compliance areas, and (iv) reviewed the information presented by the external auditors.
The Committee issued the Annual Management Report referred to in the Chilean Corporations Act.
The Company did not carry out any transactions with related parties other than those that must be executed in accordance with the requirements and procedures established in Title XVI of the Corporations Law.
The Committee did not make use of the operating expense budget approved by the ordinary shareholders' meeting for the year 2024.
Compensation Recovery Policy
In October 2022, the SEC adopted Rule 10D-1 under the Exchange Act, requiring national securities exchanges and national securities associations, such as NYSE, to require listed companies to adopt a written compensation recovery (clawback) policy providing for the recovery, in the event of a required accounting restatement, of incentive-based compensation received by the Chief Executive Officer and certain other “executive officers” as defined in Rule 10D-1(d) under the Exchange Act. The amendment to NYSE’s listing rules became effective on October 2, 2023, and issuers like SQM listed on NYSE were required to adopt SEC-compliant clawback policies by December 1, 2023.
On October 18, 2023, our Board of Directors adopted SQM’s compensation recovery policy, a copy of which is filed as Exhibit 97 to this Form 20-F. The compensation recovery policy complies with the requirements of Section 303A.14 of the NYSE listing rules implementing SEC Rule 10D-1.
Under our compensation recovery policy, in the event we are required to prepare an accounting restatement due to (i) material noncompliance with any financial reporting requirements under U.S. securities laws, including any required accounting restatement to correct an error in a previously issued financial statement that is material to such previously issued financial statement, or (ii) an error not material to a previously issued financial statement, but that would result in a material misstatement if the error were corrected in the current period financial statements or left uncorrected in the current period financial statements, we are entitled to recover a portion or all of any incentive-based compensation provided to certain current or former executive officers (including the CEO, the CFO and the principal accounting officer), who, during a three-year period preceding the date on which an accounting restatement is required, received incentive compensation based on the erroneous financial data that exceeds the amount of incentive-based compensation the executive officer would have received based on the restatement. The Directors’ Committee administers our compensation recovery policy and has discretion, in accordance with the applicable laws, rules and regulations, to determine how to seek recovery under the policy and may forego recovery if it determines that recovery would be impracticable.
Comparative Summary of Differences in Corporate Governance Standards
The following table provides a comparative summary of differences in corporate governance practices followed by us under our home-country rules and those applicable to U.S. domestic issuers pursuant to Section 303A of the New York Stock Exchange (NYSE) Listed Company Manual.
Listed Companies that are foreign private issuers, such as SQM, are permitted to follow home country practices in lieu of the provisions of Section 303A, except such companies are required to comply with the requirements of Section 303A.06, 303A.11 and 303A.12(b) and (c).
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| Section |
|
|
NYSE Standards |
|
|
SQM practices pursuant to Chilean Stock Exchange regulations |
| 303A.01 |
|
|
Listed companies must have a majority of independent directors. |
|
|
There is no legal obligation to have a majority of independent directors on the Board but, according to Chilean law, the Company’s directors cannot serve as executive officers. |
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| Section |
|
|
NYSE Standards |
|
|
SQM practices pursuant to Chilean Stock Exchange regulations |
| 303A.02 |
|
|
No director qualifies as “independent” unless the Board of Directors affirmatively determines that the director has no material relationship with the listed company (either directly or as a partner, shareholder or officer of an organization that has a relationship with the company).
In addition, a director is not independent if:
(i) The director is, or has been within the last three years, an employee of the listed company, or an immediate family member is, or has been within the last three years, an executive officer, of the listed company.
(ii) The director has received, or has an immediate family member who has received, during any twelve-month period within the last three years, more than $120,000 in direct compensation from the listed company, other than director and committee fees and pension or other forms of deferred compensation for prior service (provided such compensation is not contingent in any way on continued service).
(iii) (A) The director is a current partner or employee of a firm that is the listed company’s internal or external auditor; (B) the director has an immediate family member who is a current partner of such a firm; (C) the director has an immediate family member who is a current employee of such a firm and personally works on the listed company’s audit; or (D) the director or an immediate family member was within the last three years a partner or employee of such a firm and personally worked on the listed company’s audit within that time.
(iv) The director or an immediate family member is, or has been with the last three years, employed as an executive officer of another company where any of the listed company’s present executive officers at the same time serves or served on that company’s compensation committee.
(v) The director is a current employee, or an immediate family member is a current executive officer, of a company that has made payments to, or received payments from, the listed company for property or services in an amount which, in any of the last three fiscal years, exceeds the greater of $1 million, or 2% of such other company’s consolidated gross revenues. |
|
|
A director would not be considered independent if, at any time, within the last 18 months he or she:
(i)Maintained any relationship of a relevant nature and amount with the company, with other companies of the same group, with its controlling shareholder or with the principal officers of any of them or has been a director, manager, administrator or officer of any of them;
(ii)Maintained a family relationship with any of the members described in (i) above;
(iii) Has been a director, manager, administrator or principal officer of non-profit organizations that have received contributions from (i) above;
(iv) Has been a partner or a shareholder that has had or controlled, directly or indirectly, 10% or more of the capital stock or has been a director, manager, administrator or principal officer of an entity that has provided consulting or legal services for a relevant consideration or external audit services to the persons listed in (i) above;
(v) Has been a partner or a shareholder that has had or controlled, directly or indirectly, 10% or more of the capital stock or has been a director, manager, administrator or principal officer of the principal competitor, supplier or clients.
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| 303A.03 |
|
|
The non-management directors must meet at regularly scheduled executive sessions without management. |
|
|
These meetings are not needed given that directors cannot serve as executive officers. |
| 303A.04 |
|
|
(a) Listed companies must have a nominating/corporate governance committee composed entirely of independent directors.
(b) The nominating/corporate governance committee must have a written charter that addresses:
(i) the committee’s purpose and responsibilities – which, at minimum, must be to: identify individuals qualified to become board members, consistent with criteria approved by the board, and to select, or to recommend that the board select, the director nominees for the next annual meeting of shareholders; develop and recommend to the board a set of corporate governance guidelines applicable to the corporation; and oversee the evaluation of the board and management; and
(ii) an annual performance evaluation of the committee.
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This committee is not required as such in the Chilean regulations. However, pursuant to Chilean regulations SQM has a Directors’ Committee (see Board practices above). |
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| Section |
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|
NYSE Standards |
|
|
SQM practices pursuant to Chilean Stock Exchange regulations |
| 303A.05 |
|
|
Listed companies must have a compensation committee composed entirely of independent directors, and must have a written charter |
|
|
This committee is not required as such in the Chilean regulations. Pursuant to Chilean regulations, SQM has a Directors’ Committee (see Board practices above) that is responsible for reviewing management’s compensation. |
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303A.06
|
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Listed companies must have an audit committee that satisfies the requirements of Rule 10A-3 of the Securities Exchange Act of 1934, as amended. |
|
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This committee is not required as such in the Chilean regulations. Pursuant to Chilean regulations, SQM has a Directors’ Committee that performs the functions of an audit committee and that complies with the requirements of the NYSE corporate governance rules. |
| 303A.07 |
|
|
The audit committee is subject to requirements that are in addition to Section 303A.06. This includes, among others, the following requirements: the audit committee must have a minimum of three members; all audit committee members must satisfy requirements of independence; the audit committee must have a written charter; each listed company must have an internal audit function to provide management with ongoing assistance of the company’s risk management process and the system of internal controls. |
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Pursuant to Section 303A.00, SQM is not required to comply with requirements in 303A.07. Pursuant to Chilean Regulations SQM has a Directors’ Committee (see Board practices above) that also performs the functions of an audit committee with certain requirements of independence. |
| 303A.08 |
|
|
Shareholders must have the opportunity to vote on all equity-compensation plans and material revisions thereto. |
|
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SQM does not have equity compensation plans. However, as mentioned in Item 6.B. Compensation, SQM does have a long-term cash bonus compensation plan. Directors and executives may only acquire SQM shares by individual purchases. The purchaser must give notice of such purchases to the Company and the Financial Market Commission. |
| 303A.09 |
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Listed companies must adopt and disclose corporate governance guidelines. |
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Chilean law does not require that corporate governance guidelines be adopted. Directors’ responsibilities and access to management and independent advisors are directly provided for by applicable law. Directors’ compensation is approved at the annual meeting of shareholders, pursuant to applicable law. |
| 303A.10 |
|
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Listed companies must adopt and disclose a code of business conduct and ethics for directors, officers and employees and promptly disclose any waivers of the code for directors or executive officers. |
|
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Not required in the Chilean regulations. SQM has adopted and disclosed a Code of Business Conduct and Ethics, available at the Company’s website, www.sqm.com. |
| 303A.11 |
|
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Listed foreign private issuers must disclose any significant ways in which their corporate governance practices differ from those followed by domestic companies under NYSE listed standards. |
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Pursuant to 303A.11, this table shows a comparative summary of differences in corporate governance practices followed by SQM under Chilean regulations and those applicable to U.S. domestic issuers pursuant to Section 303A. |
| 303A.12 |
|
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Each listed company CEO must (a) certify to the NYSE each year that he or she is not aware of any violation by the listed company of NYSE corporate governance listing standards; (b) promptly notify the NYSE in writing after any executive officer becomes aware of any non-compliance with any applicable provisions of Section 303A; and (c) submit an executed Written Affirmation annually to the NYSE. In addition, each listed company must submit an interim Written Affirmation as and when required by the interim Written Affirmation form specified by the NYSE. The annual and interim Written Affirmations must be in the form specified by the NYSE. |
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Not required in the Chilean regulations. The CEO must only comply with Section 303A.12 (b) and (c). |
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| Section |
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NYSE Standards |
|
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SQM practices pursuant to Chilean Stock Exchange regulations |
| 303A.13 |
|
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The NYSE may issue a public reprimand letter to any listed company that violates a NYSE listing standard. |
|
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Not specified in the Chilean regulations. |
303A.14 |
|
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The initial or continued listing of any security of an
issuer that is not in compliance with the recovery policy
for erroneously awarded compensation pursuant to the
provisions of Section 303A.14 is prohibited.
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Not specified in the Chilean regulations. |
6.D.Employees
As of December 31, 2024, we had 8,344 permanent employees, 1,086 of whom were employed outside of Chile. The average tenure of our permanent employees is approximately 6 years.
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As of December 31, |
|
2024 |
|
2023 |
|
2022 |
| Employees in Chile |
7,258 |
|
7,034 |
|
6,533 |
| Employees outside of Chile |
1,086 |
|
648 |
|
464 |
| Total employees |
8,344 |
|
7,682 |
|
6,997 |
Almost 87% of our employees are employed in Chile, of which approximately 76.5% were represented by 22 labor unions as of December 31, 2024. In 2024, collective agreements were renewed with 14 unions, 12 of which belong to the SQM-Iodine- Plant Nutrition Division and 2 to the Lithium division. The terms of these agreements currently in effect are three years, with their expiration dates varying from one agreement to another. Under these agreements, employees receive a salary according to a scale that depends upon job function. Unionized employees also receive certain benefits provided by law and certain benefits provided under the applicable collective bargaining agreement, which vary depending upon the terms of the collective agreement, such as scholarships, holiday bonuses and additional health, death and disability benefits, among others.
In addition, we own all of the equity of Institución de Salud Previsional Norte Grande Limitada (“Isapre Norte Grande”), which is a health care organization that provides medical services primarily to our employees, and of Sociedad Prestadora de Servicios de Salud Cruz de Norte S.A. (“Prestadora”), which is a hospital in María Elena. We make contributions to Isapre Norte Grande and to Prestadora in accordance with Chilean laws and the provisions of our various collective bargaining agreements, but we are not otherwise responsible for their liabilities.
Non-unionized employees receive individually negotiated salaries, benefits provided for by law and certain additional benefits which we provide.
We provide housing and other facilities and services for employees and their families at the María Elena site.
We do not maintain any pension or retirement programs for our Chilean employees. Most workers in Chile are subject to a national pension law, adopted in 1980, which establishes a system of independent pension plans that are administered by the corresponding Pension Fund Administrator (Sociedad Administradora de Fondos de Pensiones). We have no liability for the performance of any of these pension plans or any pension payments to be made to our employees. We do, however, sponsor staff severance indemnities plans for our employees and employees of our Chilean subsidiaries whereby we commit to provide a lump sum payment to each employee at the end of his/her employment, whether due to death, termination, or resignation.
We are exposed to labor strikes and illegal work stoppages by both our own employees and our independent contractors’ employees that could impact our production levels in both our own plants and our independent contractors’ plants. If a strike or illegal work stoppage occurs and continues for a sustained period of time, we could be faced with increased costs and even disruption in our product flow that could have a material adverse effect on our business, financial condition and results of operations.
6.E.Share Ownership
We do not grant stock options or other arrangements involving the capital of SQM to directors, managers or employees. For more information on the shareholdings of current directors and executive officers, see “Item 6. Directors, Senior Management and Employees—Directors and Senior Management.”
6.F.Disclosure of a registrant’s action to recover erroneously awarded compensation
We did not have any accounting restatement that required recovery of erroneously awarded compensation pursuant to the Company's compensation recovery policy, during or after the last completed fiscal year. The complete copy of the Company's incentive-based compensation recovery policy is filed as Exhibit 97 to this Form 20-F.
ITEM 7. MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS
7.A.Major Shareholders
The following table shows certain information concerning beneficial ownership of the Series A and Series B common shares of SQM as of March 31, 2025 with respect to each shareholder known by us to beneficially own more than 5% of the outstanding Series A or Series B common shares. The following information is derived from the shareholder registry of the Depósito Central de Valores S.A. (the “DCV”) and reports filed by certain of the persons named below with the CMF and the Santiago Stock Exchange.
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| Shareholder |
|
Number of
Series A shares
beneficially
owned |
|
% Series
A shares |
|
Number of
Series B
shares
beneficially
owned |
|
% Series
B shares |
|
% total
shares |
Tianqi Lithium Corporation(1) |
|
62,556,568 |
|
43.80 |
% |
|
748,490 |
|
0.55 |
% |
|
22.16 |
% |
Sociedad de Inversiones Pampa Calichera S.A. (2) (3) |
|
44,989,231 |
|
31.50 |
% |
|
1,611,227 |
|
1.13 |
% |
|
16.31 |
% |
The Bank of New York Mellon ADRs (3) |
|
|
|
|
|
46,973,918 |
|
32.89 |
% |
|
16.45 |
% |
Potasios de Chile S.A.(3) |
|
18,179,147 |
|
12.73 |
% |
|
|
|
|
|
6.36 |
% |
Banco de Chile por cuenta de State Street |
|
|
|
|
|
10,848,766 |
|
7.60 |
% |
|
3.80 |
% |
AFP Habitat S.A. |
|
615,559 |
|
0.43 |
% |
|
9,921,018 |
|
6.95 |
% |
|
3.69 |
% |
Inversiones Global Mining Chile Ltda.(3) |
|
8,798,539 |
|
6.16 |
% |
|
— |
|
— |
|
3.08 |
% |
AFP Capital S.A. |
|
— |
|
|
— |
|
|
7,759,704 |
|
5.43 |
% |
|
2.72 |
% |
Banco Santander por Cuenta de Inv Extranj |
|
— |
|
|
— |
|
|
7,631,639 |
|
5.34 |
% |
|
2.67 |
% |
AFP Provida S.A. |
|
— |
|
|
— |
|
|
7,619,850 |
|
5.34 |
% |
|
2.67 |
% |
AFP Cuprum S.A. |
|
— |
|
|
— |
|
|
7,264,046 |
|
5.09 |
% |
|
2.54 |
% |
________________________________________________
(1)SQM has been informed that Tianqi Lithium Corporation (“Tianqi”) (i) owns 100% of the shares of Inversiones TLC SpA, and, accordingly, is the beneficial owner of 62,556,568 Series A common shares held by Inversiones TLC SpA registered in the shareholder registry of the DCV as of March 31, 2025 and (ii) owns directly 748,490 Series B common shares in the form of ADRs. Therefore, Tianqi beneficially owns 22.16%, of SQM’s total shares.
(2)Sociedad de Inversiones Pampa Calichera S.A (“Pampa Calichera”) is a publicly held corporation whose shares are traded on the Santiago Stock Exchange. Originally, the shareholders of Pampa Calichera were employees of SQM. Pampa Calichera was formed to hold the capital stock of SQM contributed by such employees or later acquired in the open market.
(3)SQM has been informed that, as of March 31, 2025, the indirect controller of Norte Grande S.A. is Pacific Atlantic International Holding Corporation. 100% of the shares into which the capital of Pacific Atlantic International Holding Corporation is divided is part of a trust, called The Pacific Trust, constituted by Mr. Julio Ponce Lerou in favor of his children, in equal parts, the following: Julio Ponce Pinochet, Alejandro Ponce Pinochet, Francisca Ponce Pinochet and Daniela Ponce Pinochet. Pacific Atlantic International Holding Corporation owns 100% of the shares into which the capital of the company SQ Grand Corp. is divided, which in turn has 99.99% of the social rights of Inversiones SQ Limitada, who owns the 92% of the shares of Inversiones SQYA SpA. Inversiones SQ limitada owns 0.026% of the shares of Norte Grande S.A., and Inversiones SQYA SpA, for its part, owns 80.80% of the shares of Norte Grande S.A.
(4)Includes 748,490 Series B common shares held by Tianqi in the form of ADRs described in footnote (1) above.
As of March 31, 2025, SQM did not have a Controller Group.
Tianqi Extrajudicial Agreement with the FNE
In August 2018, after an investigation by the FNE in connection with the proposed acquisition by Tianqi of 23.77% of the Company’s then-outstanding total shares, Tianqi and the FNE entered into an extrajudicial agreement (the “Extrajudicial Agreement”) which implemented certain restrictive measures in order to (i) maintain the competitive conditions of the lithium market, (ii) mitigate the risks described in the Extrajudicial Agreement and (iii) limit Tianqi’s access to certain information of the Company and its subsidiaries, which are defined as sensitive under the Extrajudicial Agreement (“Sensitive Information”) (collectively, the “Purpose”). Pursuant to the Extrajudicial Agreement, Tianqi agreed that, among other things:
•Tianqi will not nominate any of its directors, executives or employees to the SQM Board of Directors;
•Tianqi and the directors nominated by it will not influence or intervene for the benefit of Tianqi and prejudice the interests of SQM;
•The directors nominated by Tianqi will not participate nor will they be part of any committees, the management or other decision-making bodies related to lithium of SQM or of any companies controlled by SQM, unless nominated by independent directors;
•Tianqi will inform the FNE of any agreement in the lithium market, with Albemarle and/or SQM, prior to its execution;
•Tianqi will notify the FNE of any event from which it acquires control or decisive influence in SQM;
•Tianqi will disassociate any director, executive or employee appointed by third parties, who assumes a position described above in SQM;
•Tianqi will not request access to Sensitive Information from SQM;
•The directors nominated by Tianqi will not disclose Sensitive Information of SQM;
•The directors nominated by Tianqi will personally bind themselves to the obligations assumed by Tianqi with the FNE; and
•Tianqi will report to the FNE the appointments and periodic compliance with its obligations.
The restrictions will remain in place for a period of six years.
During the approval process for the Extrajudicial Agreement before the FNE, the Company expressed its concerns to the Chilean Antitrust Court regarding the measures contained in the Extrajudicial Agreement, including that (i) it could not effectively resolve the risks that Tianqi and the FNE sought to mitigate, (ii) the restrictions are not correctly oriented to avoid the access to Sensitive Information that, in the possession of a competitor, could damage the Company and the proper functioning of the market and (iii) it could contradict the Chilean Corporations Act. The Extrajudicial Agreement was approved in October 2018 by the Chilean Antitrust Court. A copy of the Extrajudicial Agreement, in Spanish, has been made publicly available on the Company’s website at www.sqm.com and is also available on the FNE’s website at http://www.fne.gob.cl
In light of the Company’s concerns regarding the limitations of the Extrajudicial Agreement measures, the Company’s Board of Directors deemed it necessary to adopt measures aimed at achieving the purpose of the Extrajudicial Agreement, avoiding greater points of contact between Sensitive Information and Tianqi, to complement the Extrajudicial Agreement and adopted a protocol for the presentation and use of Sensitive Information (as defined in the Extrajudicial Agreement) on September 30, 2019. See “Item 10.B. Memorandum and Articles of Association—Board Protocol for Presentation and Use of Sensitive Information” below.
Approximately 1,109 record holders were in Chile as of March 31, 2025.
Series A and Series B common shares have the same economic rights (i.e., both series are entitled to share equally in any dividends declared on the outstanding stock) and voting rights at any shareholders’ meeting, whether ordinary or extraordinary, with the exception of the election of the Board, in which the Series A shareholders elect seven members and the Series B shareholders elect one member.
Additionally, Series B common shares cannot exceed 50% of SQM’s issued, subscribed and paid shares; shareholders of at least 5% of this Series may call an Ordinary or Extraordinary Shareholders’ Meeting; and the director elected by this Series may request an extraordinary Board meeting without the authorization of the Chairman of the Board. These conditions will remain in effect until 2043. Under our By-laws, the maximum individual voting power personally and/or in representation of other shareholders per Series is limited to 37.5% of the subscribed shares of each Series with voting rights and 32% of the total subscribed shares with voting rights, with any excess being deducted from the number of shares such shareholder may vote. To calculate these percentages, shares that belong to the voting shareholder’s related persons must be added. In addition, the director elected by the Series B shareholders cannot vote in the election of the Chairman of the Board if a tie vote has occurred in the prior voting process.
As of April 23, 2025, there were 142,818,904 Series A common shares and 142,818,904 Series B common shares outstanding.
7.B.Related Party Transactions
Title XVI of the Chilean Corporations Act regulates transactions with related parties for publicly held corporations and its related parties.
Articles 146 to 149 of the Chilean Corporations Act requires that our transactions with related parties (i) have as their purpose to contribute to SQM’s interests (ii) be on price, terms and conditions similar to those customarily prevailing in the market at the time of their approval and (iii) satisfy the requirements and procedures established by the Chilean Corporations Act. Violation of such articles may also result in administrative or criminal sanctions and civil liability may be sought by SQM, shareholders or interested third parties that suffer losses as a result of such violations.
In addition, article 89 of the Chilean Corporations Act requires that transactions between affiliates, subsidiaries or related parties of a closed-stock company, such as some of SQM’s main affiliates and subsidiaries, shall also be on terms similar to those customarily prevailing in the market. Directors and executive officers of companies that violate article 89 are liable for losses resulting from such violations.
With respect to SQM, transactions with related parties include negotiations, proceedings, contracts or transactions involving SQM and its directors, managers and officers, and their spouses and relatives, and other companies and persons connected to the abovementioned parties or mentioned in the By-laws or by the Directors’ Committee. Such transactions may only be carried out if (i) their objective is to contribute to SQM’s interests and if their price, terms and conditions conform to prevailing market prices, terms and conditions at the time of their approval and (ii) they satisfy the requirements and procedures established by the Chilean Corporations Act. Such requirements include, among others:
•that the transaction be informed to the Directors’ Committee and to the Board of Directors prior to its execution;
•that the Board of Directors, excluding any Directors involved in the transaction, approves the transaction with an absolute majority of its members, or, if an absolute majority is not feasible, with a unanimous vote by the Directors not involved in the transaction, or, if neither of these options is available, that an Extraordinary Shareholders’ Meeting be held and that shareholders representing 2/3 of the outstanding shares with voting rights approve the transaction. In the latter case, prior to the meeting, the shareholders must be provided with a report by an independent evaluator and with statements by the directors as to whether or not such transaction is in SQM’s interest;
•that the grounds for the decision and for the exclusion be recorded in the respective minutes of the Board meeting; and
•that the agreement and the names of the directors who approved the same be reported at the next shareholders’ meeting. Infractions will not affect the validity of the transaction but they will grant SQM or its shareholders the right to demand that the related party committing such infraction refund the amount equivalent to the benefits received by such party in the transaction to SQM, and that such party indemnify for any corresponding damages.
However, the Board of Directors has authorized the following transactions with related parties to be carried out without following such requirements and procedures, as long as such authorization is obtained in advance: (a) transactions wherein the amount of the transaction is not significant or (b) transactions that, according to the Policy on Customary Transactions with Related Parties, are considered normal based on SQM’s business activities or (c) transactions carried out between legal entities wherein SQM holds at least a 95% ownership interest in the counterpart.
Accounts receivable from and payable to related companies are stated in U.S. dollars and accrue no interest. Other than the above, transactions are made under terms and conditions that are similar to those offered to unrelated third parties. We further believe that we could obtain from third parties all raw materials now being provided by related parties that are not our affiliates. The provision of such raw materials by new suppliers could initially entail additional expenses.
In each case, terms and conditions vary depending on the transaction pursuant to which it was generated.
In March 2022, the Company adopted a Conflict of Interest Policy which is applicable to all directors, executives and employees of the Company. Under the policy, conflicts of interest may arise where there are family relationships, ownership relationships, management relationships or other situations where the director, executive or employee’s impartiality may be diminished or whose decisions may be contrary to the duty of probity that governs their actions. The policy provides procedure for the resolution of the conflict of interest. For directors, the procedures involve the Company’s compliance officer agreeing with the Directors’ Committee to propose a resolution for approval by the Board of Directors. In the event that a director has an interest or participates in a transaction with related parties that constitutes a conflict of interest under the policy, the related party transaction procedures under the Chilean Corporations Act described above would apply in lieu of the policy. Directors are required to present a declaration of conflict of interest within a month following their appointment as a director and each time a new conflict of interest not previously declared is identified.
In November 2024, the Board of Directors amended the Policy on Customary Transactions with Related Parties.
The Company regularly enters into business arrangements with related parties, principally its joint ventures and associates, which are described in Note 3 to our consolidated financial statements.
7.C.Interests of Experts and Counsel
Not applicable.
ITEM 8. FINANCIAL INFORMATION
8.A.Consolidated Statements and Other Financial Information
8.A.1See “Item 18. Financial Statements.”
8.A.2See “Item 18. Financial Statements.”
8.A.3See “Item 19. Exhibits—Index to Financial Statements—Report of Independent Registered Public Accounting Firm.”
8.A.4Not applicable.
8.A.5Not applicable.
8.A.6Export Sales
We derive most of our revenues from sales outside of Chile. The distribution of sales presented below reflects the location of the Company’s subsidiaries making such sales and does not necessarily reflect the final destination of the products sold.
The following is the composition of the consolidated sales for the periods ending on December 31, 2024, 2023 and 2022:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Th. US$ |
|
2024 |
|
2023 |
|
2022 |
| Foreign sales |
|
4,357,210 |
|
|
7,306,869 |
|
|
10,487,430 |
|
| Total sales |
|
4,528,761 |
|
|
7,476,550 |
|
|
10,710,578 |
|
| Foreign sales % |
|
96.2 |
% |
|
97.7 |
% |
|
97.9 |
% |
8.A.7Legal Proceedings
Chilean Tax Litigation
The Chilean Internal Revenue Service (SII) has sought to extend the specific tax on mining activities to lithium mining, which cannot be concessioned under the legal system. As of December 31, 2023, SQM had paid a total of US$986.3 for specific tax on mining activities applied to lithium related to tax years 2012 to 2023 (financial years 2011 to 2022). SQM Salar has filed seven tax claims against the SII. The amount paid included US$59.5 million in over-assessed amounts, US$818.0 million in disputed taxes (net of the corporate income tax impact), and US$108.8 million in interest and penalties. On April 5, 2024, the Santiago Court of Appeals issued a ruling on one of the tax claims, case No. 312-2022, overturning the ruling previously issued by the Santiago Metropolitan Region Tax and Customs Court, which had upheld SQM Salar’s action for annulment on public law grounds regarding tax assessments for tax years 2017 and 2018. Although this ruling by the Santiago Court of Appeals does not affect the other claims filed by SQM Salar against the SII and is still subject to appeal by SQM Salar, it prompted a review of the accounting treatment of the tax claims by the Company’s Board of Directors. As a result, the Company recognized a tax expense of US$1,106.2 million for the year ended December 31, 2023 (US$926.7 million for financial years 2011 to 2022, US$162.8 million for the financial year 2023, and US$16.7 million for financial year 2024). This expense reflects the potential impact of the Santiago Court of Appeals ruling on the tax claims. As of December 31, 2024 and December 31, 2023, the Company recorded non-current tax receivables of US$59.5 million.
Association with Codelco
On July 26, 2024, Inversiones TLC SpA, a subsidiary of Tianqi, filed an appeal of illegality before the Court of Appeals of Santiago against the ordinary ruling No. 74.987 issued on June 18, 2024 by the CMF, which determined that the association between SQM and Codelco, reported as an material event on May 31, 2024, does not require approval by the Company's extraordinary shareholders' meeting. The Company became a party to these proceedings on August 1, 2024. The proceeding is awaiting pleadings before the Court of Appeals of Santiago, a court that on various occasions has decided not to grant Tianqi's requests to suspend the effects of the association.
Request for Information and Subpoena
The Company is required to be in compliance with all applicable laws and regulations in Chile and internationally with respect to anti-corruption, anti-money laundering and other regulatory matters, including the Foreign Corrupt Practices Act (FCPA). The Company has received a request for information and subpoena from the SEC requesting information related to our business operations, compliance program, and allegations of potential violations of the FCPA and other anti-corruption laws. The SEC has said that the investigation is a non-public, fact-finding inquiry and we are not aware that any conclusion has been reached by the SEC. Management has undertaken an internal review to identify information to respond to the SEC's request thus actively cooperating in the review.
Other Matters
In addition, various lawsuits, claims and proceedings, other than those specifically disclosed above, have been or may be instituted or asserted against the Company, relating to the conduct of the company’s business, including those pertaining to mining, civil, tort, commercial, labor and regulatory matters, among others. Although the outcome of other litigation cannot be predicted with certainty, and some lawsuits, claims or proceedings may be disposed of unfavorably to the Company, our management believes the disposition of such other pending matters will not have a material effect on the company’s business, financial condition, results of operations or cash flows.
8.A.8.Dividend Policy
As required by Chilean law and regulations, our dividend policy is decided upon from time to time by our Board of Directors and is announced at the Annual General Shareholders’ Meeting, which is generally held in April of each year. Shareholder approval of the dividend policy is not required. However, each year the Board must submit the declaration of the final dividend or dividends in respect of the preceding year, consistent with the then-established dividend policy, to the Annual General Shareholders’ Meeting for approval. As required by the Chilean Corporations Act, unless otherwise decided by unanimous vote of the holders of issued shares, we must distribute a cash dividend in an amount equal to at least 30% of our consolidated net income for that year (determined in accordance with CMF regulations), unless and to the extent the Company has a deficit in retained earnings.
On March 28, 2024, the Board of Directors, agreed to recommend to the shareholders the payment of a final dividend for 2023. The dividend payment was presented for consideration and approved at the Annual General Shareholders’ Meeting held on April 25, 2024. The amount of the final dividend approved by shareholders was US$2.11386 per share; the amounts paid as interim dividends were deducted from this amount; the balance, in the amount of US$0.21339 per share, was paid and distributed to Company’s shareholders on May 16, 2024.
SQM’s dividend policy for 2024 reported at the Annual General Shareholders’ Meeting held on April 25, 2024, included the following:
(a)Distribute and pay, as a final dividend (dividendo definitivo) to the corresponding shareholders, a percentage of the net income equal to 30% of the 2024 net income1:
(b)Without prejudice to the foregoing, the percentage indicated in letter (a) above may be increased to the extent that the Company's board of directors deems that said increase does not materially and negatively affect the Company's ability to make its investments and to meet estimated future cash requirements, considering, among others, the following financial parameters:
(i)60% of the 2024 net income, when the following financial parameters are met: (a) that the “total current assets”, divided by the “the total current liabilities”, both net of the respective dividend amount, is equal to or greater than 1.5 times, and (b) the sum of the “total current liabilities” and “total non-current liabilities”, excluding both “cash and cash equivalents” and “other current financial assets”, divided by the “total equity” is equal to or less than 1.0 times.
(ii)80% of the 2024 net income, when the following financial parameters are met: (a) that the “total current assets”, divided by the “total current liabilities”, both net of the respective dividend amount, is equal to or greater than 2.0 times, and (b) the sum of the “total current liabilities” and “total non-current liabilities”, excluding both “cash and cash equivalents” and “other current financial assets”, divided by the “total equity” is equal to or less than 0.9 times.
(iii)100% of the 2024 net income, when the following financial parameters are met: (a) that the “total current assets”, divided by the “total current liabilities”, both net of the respective dividend amount, is equal to or greater than 2.5 times, and (b) the sum of the “total current liabilities” and “total non-current liabilities”, excluding both “cash and cash equivalents” and “other current financial assets”, divided by the “total equity” is equal to or less than 0.8 times.
(c)Distribute and pay, if possible and subject to previously mentioned considerations, during 2024 and the first quarter of 2025, interim dividends (dividendos provisorios) that will be charged against the aforementioned final dividend.
(d)At the annual general shareholders’ meeting that will be held in 2025, the Board of Directors shall propose a final dividend discounting the total amount of the interim dividends previously distributed, considering that this does not materially and negatively affect the Company's ability to make its investments, comply with its obligations, and in general, to comply with the investment and financing policies approved by the shareholders at the annual general shareholders’ meeting.
(e)If there is an excess of net income in 2024, this may be retained and assigned or allocated for financing its own operations, to one or more investment projects of the Company, notwithstanding a possible distribution of special dividends (dividendos eventuales) charged to the retained earnings and approved at the shareholders’ meeting, or the possible and future capitalization of all or part of the latter.
(f)The payment of additional dividends (dividendos adicionales) is not considered.
It is expressly stated that the dividend policy described above corresponds to the intention of the Board of Directors, and the compliance of it shall depend on the net income that the Company ultimately obtains, as well as the results of projections that could periodically impact the Company, or to the existence of determined conditions that may affect it, as applicable. If the dividend policy proposed by the Board of Directors suffers a substantial change, the Company must communicate it as an essential fact (hecho esencial).
1 Net income as reported in the financial statements approved by the Annual General Meeting of Shareholders, and filed with the CMF.
We generally declare dividends in U.S. dollars (but may declare dividends in Chilean pesos) and pay such dividends in Chilean pesos. When a dividend is declared in U.S. dollars, the exchange rate to be used to convert the dividend into Chilean pesos is decided by the shareholders at the meeting that approves the dividend, which has usually been the Observed Exchange Rate on the date the dividend is declared. In the case of interim dividends, the exchange rate to be used is the Observed Exchange Rate published a minimum of three business days before the payment date.
Holders of ADRs generally have the right to receive dividends and other distributions we make on Series B common shares held by the ADR custodian under the terms of the deposit agreement in proportion to the number of ADRs held as of the specified record date, after deduction of the applicable fees, taxes and expenses. Receipt of these dividends and distributions may be limited by practical considerations and legal limitations, which may delay the payment and receipt of dividends and distributions by ADR holders.
The depositary will, as promptly as practicable, convert all cash dividends and other cash distributions received by the depositary or the custodian in respect of the deposited Series B common shares into U.S. dollars and, as promptly as practicable, distribute the amount thus received (net of any fees of the depositary) to the holders of ADRs in proportion to the number of ADRs representing such Series B Shares held by each of them. The amount distributed also will be reduced by any amounts required to be withheld by SQM, the depositary or the custodian on account of taxes and the depositary’s foreign currency conversion expenses.
The amount and timing for payment of dividends is subject to revision from time to time, depending upon our then current level of sales, costs, cash flow and capital requirements, as well as market conditions. Accordingly, there can be no assurance as to the amount or timing of declaration or payment of dividends in the future. Any change in dividend policy would ordinarily be effective for dividends declared in the year following adoption of the change, and a notice as to any such change of policy must be filed with Chilean regulatory authorities and would be publicly available information.
Dividends
Each Series A common share and Series B common share is entitled to share equally in any dividends declared on the outstanding capital stock of SQM.
The following table shows the U.S. dollar equivalent of dividends per share and per ADR paid in each of the years indicated, based on the Observed Exchange Rate for the date on which the dividend was declared.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Dividends |
|
Paid in |
|
Per Share |
|
Per ADR |
| Declared for the fiscal year |
|
Year |
|
Ch$ |
|
US$ |
| 2019 (interim) |
|
2019 |
|
215.25 |
|
|
0.30598 |
|
| 2019 (interim) |
|
2019 |
|
192.19 |
|
|
0.26669 |
|
| 2019 (interim) |
|
2019 |
|
190.39 |
|
|
0.22987 |
|
| 2019 |
|
2020 |
|
217.67 |
|
|
0.25414 |
|
| 2020 (interim) |
|
2020 |
|
138.91 |
|
|
0.17092 |
|
| 2020 (interim) |
|
2020 |
|
297.95 |
|
|
0.37994 |
|
| 2020 (interim) |
|
2020 |
|
10.79 |
|
|
0.01530 |
|
| 2020 |
|
2021 |
|
173.82 |
|
|
0.23797 |
|
| 2021 (interim) |
|
2021 |
|
243.70 |
|
|
0.31439 |
|
| n/a (eventual) |
|
2021 |
|
1,202.34 |
|
|
1.40037 |
|
| 2021 |
|
2022 |
|
82.46 |
|
|
0.09691 |
|
| 2022 (interim) |
|
2022 |
|
2,267.02 |
|
|
2.78716 |
|
| 2022 (interim) |
|
2022 |
|
1,776.62 |
|
|
1.84914 |
|
| n/a (eventual) |
|
2022 |
|
2,653.93 |
|
|
3.08057 |
|
| 2022 |
|
2023 |
|
2,537.08 |
|
|
3.22373 |
|
| 2023 (interim) |
|
2023 |
|
640.64 |
|
|
0.78760 |
|
| 2023 (interim) |
|
2023 |
|
537.06 |
|
|
0.60940 |
|
| 2023 (interim) |
|
2023 |
|
437.02 |
|
|
0.50347 |
|
| 2023 |
|
2023 |
|
205.96 |
|
|
0.21339 |
|
Dividends payable to holders of ADRs will be paid net of conversion expenses of the depositary and will be subject to Chilean withholding tax, currently imposed at the rate of 35% (subject to credits in certain cases).
As a general requirement, a shareholder who is not a resident of Chile must register as a foreign investor under one of the foreign investment regimes contemplated by Chilean law to have dividends, sale proceeds or other amounts with respect to its shares remitted outside Chile through the Formal Exchange Market. Under the Foreign Investment Contract, the depositary, on behalf of ADR holders, will be granted access to the Formal Exchange Market to convert cash dividends from Chilean Pesos to U.S. dollars and to pay such U.S. dollars to ADR holders outside Chile net of taxes, and no separate registration of ADR holders is required.
8.B.Significant Changes
No significant change has occurred since the date of the financial statements set forth in Item 18.
ITEM 9. THE OFFER AND LISTING
9.A.Offer and Listing Details
Our Series A common shares and Series B common shares are currently traded on the Santiago Stock Exchange, and the Bolsa Electrónica de Chile Bolsa de Valores S.A., (the Electronic Stock Exchange) under the trading symbols “SQM-A” and “SQM-B”, respectively. ADRs, each representing one share of our Series B common shares are also traded on the New York Stock Exchange ("NYSE") under the trading symbol “SQM”.
9.BPlan of Distribution
Not Applicable.
9.CMarkets
Our Series A common shares and Series B common shares have traded on the Santiago Stock Exchange and the Electronic Stock Exchange.The ADRs representing Series B common shares have traded on the NYSE since September 20, 1993. The depositary bank for these ADRs is The Bank of New York Mellon.
9.DSelling Shareholders
Not applicable.
9.EDilution
Not applicable.
9.FExpenses of the Issue
Not applicable.
ITEM 10. ADDITIONAL INFORMATION
10.A.Share Capital
Not applicable.
10.B.Memorandum and Articles of Association
Sociedad Química y Minera de Chile S.A., headquartered at El Trovador No. 4285, 6th Floor, Santiago, Chile, is an open stock corporation organized under the laws of the Republic of Chile. The Company was constituted by public deed issued on June 17, 1968 by Mr. Sergio Rodríguez Garcés, Notary Public of Santiago. Its existence was approved by Decree No. 1,164 of June 22, 1968, of the Ministry of Finance, and it was registered on June 29, 1968, in the Business Registry of Santiago, on page 4,537 No. 1,992.
Corporate purposes
Our main purposes, which appear in article 4 of our By-laws, are to: (a) perform all kinds of chemical or mining activities and businesses and, among others, those related to researching, prospecting, extracting, producing, working, processing, purchasing, disposing of, and marketing properties, as applicable, of all metallic and non-metallic and fossil mining substances and elements of any type or nature, to be obtained from them or from one or more concessions or mining deposits, and in their natural or converted state, or transformed into different raw materials or manufactured or partially manufactured products, and of all rights and properties thereon; (b) manufacture, produce, work, purchase, transfer ownership, import, export, distribute, transport, and market in any way, all kinds of fertilizers, components, raw materials, chemical, mining, agricultural, and industrial products, and their by-products; (c) generate, produce, distribute, purchase, transfer ownership, and market, in any way, all kinds of electrical, thermal, geothermic or other type of power, and hydric resources or water rights in general; (d) request, manifest, claim, constitute, explore, work, lease, transfer ownership, and purchase, in any way, all kinds of mining concessions; (e) purchase, transfer ownership, and administer, in any way, any kind of telecommunications, railroads, ships, ports, and any means of transport, and represent and manage shipping companies, common carriers by water, airlines, and carries in general; (f) manufacture, produce, market, maintain, repair, assemble, construct, disassemble, purchase and transfer ownership, and in any way, any kind of electromechanical structure, and substructure in general, components, parts, spares, or parts of equipment, and machines, and execute, develop, advice, and market, any kind of electromechanical or smelting activities; (g) purchase, transfer ownership, lease, and market any kind of agro industrial and farm forestry activities, in any way (h) purchase, transfer ownership, lease, and market, in any way, any kind of urban or rural real estate; (i) render any kind of health services and manage hospitals, private clinics, or similar facilities; (j) construct, maintain, purchase, transfer ownership, and manage, in any way, any kind of roads, tunnels, bridges, water supply systems, and other required infrastructure works, without any limitation, regardless of whether they may be public or private, among others, to participate in bids and enter into any kind of contracts, and to be the legal owner of the applicable concessions; and (k) purchase, transfer ownership, and market, in any way, any kind of intangible properties such as stocks, bonds, debentures, financial assets, commercial papers, shares or rights in corporations, and any kind of bearer securities or instruments, and to administer such investments, acting always within the Investment and Financing Policies approved by the applicable General Shareholders Meeting.
We may comply with the foregoing by acting ourselves or through or with other different legal entities or natural persons, within the country or abroad, with properties of our own or owned by third parties, and additionally, in the ways and territories, and with the aforementioned properties and purposes, we may also construct and operate industrial or agricultural facilities or installations; constitute, administer, purchase, transfer ownership, dissolve, liquidate, transform, modify, or form part of partnerships, institutions, foundations, corporations, or associations of any kind or nature; perform all actions, enter into all contracts, and incur in all obligations convenient or necessary for the foregoing; perform any business or activity related to our properties, assets, or patrimony, or with that of our affiliates, associated companies, or related companies; and render financial, commercial, technical, legal, auditing, administrative, advisory, and other pertinent services.
Directors
As stated in article 9 of the Company’s By-laws, the Company has eight Directors. One of the directors must be “independent” as such term is defined in article 50 bis of the Chilean Corporations Act. Moreover, the possession of shares is not a condition necessary to become a director of the Company.
As stated in article 10 of the Company’s By-laws, the term of the directors is of three years and they can be reelected indefinitely; thus, there is no age limit for their retirement.
The Company’s By-laws, in articles 16 and 16 bis, essentially establish that the transactions in which a director has a material interest must comply with the provisions set forth in articles 136 and 146 to 149 of the Chilean Corporations Act and the applicable regulations of the Chilean Corporations Act.
The Board of Directors duties are remunerated, as stated in article 17 of the Company’s By-laws, and the amount of that compensation is fixed yearly by the Annual General Shareholders’ Meeting. Therefore, directors can neither determine nor modify their compensation.
Directors cannot authorize Company loans on their behalf.
The Board of Directors must provide shareholders and the public with sufficient, reliable and timely information pertaining to the Company’s legal, economic and financial situation, as required by the Law or the CMF. The Board of Directors must adopt the appropriate measures in order to avoid the disclosure of such information to persons other than those persons who should possess such information as a result of their title, position or activity within the Company before such information is disclosed to shareholders and the public. The Board of Directors must treat business dealings and other information about the Company as confidential until such information is officially disclosed. No Director may take advantage of the knowledge about commercial opportunities that he has obtained through his position as Director.
Independent Directors and Directors Committee
According to Chilean Law, SQM must appoint at least one Independent Director and a Directors’ Committee, due to the fact that (a) the Company has a market capitalization greater than or equal to UF 1,500,000 and (b) at least 12.5% of the Company’s shares with voting rights are held by shareholders who, on an individual basis, control or possess less than 10% of such shares.
Persons who have not been involved in any of the circumstances described in the Law at any time during the preceding 18 months are considered independent. Candidates for the position of Independent Director must be proposed by shareholders representing 1% or more of the Company’s shares, at least 10 days prior to the date of the shareholders’ meeting that has been called in order to elect the Directors. No less than two days prior to the respective shareholders’ meeting, the candidate must provide the Chief Executive Officer with a sworn statement indicating that he: (a) accepts his candidacy for the position of Independent Director; (b) does not meet any of the conditions that would prevent him from being the Independent Director; (c) is not related to the Company, the other companies of the group to which the Company belongs, the controller of the Company, or any of the Company’s officers in such a way that would deprive a sensible person of a reasonable degree of autonomy, interfere with his ability to perform his duties objectively and effectively, generate a potential conflict of interest, or interfere with his independent judgment; and (d) assumes the commitment to remain independent as long as he holds the position of Director.
The Directors’ Committee shall have the following powers and duties: (a) to examine the reports of the external auditors, the balance sheet and other financial statements presented by the Company’s managers or liquidators to its shareholders and issue an opinion about the same prior to their submission for the approval of the shareholders; (b) to propose to the Board of Directors the external auditors and risk rating agencies to be proposed to the shareholders at the respective shareholders’ meeting.
In the event that an agreement cannot be reached, the Board of Directors shall formulate its own suggestion, and both options shall be submitted for shareholder consideration at such shareholders’ meeting; (c) to examine the information relating to operations referred to in articles 146 to 149 of the Chilean Corporations Act and to prepare a report about such operations. A copy of such report shall be sent to the Board of Directors, and such report must be read at the Board Meeting called for the purpose of approving or rejecting the respective operation or operations; (d) to examine the remuneration system and compensation plans for the Company’s management, officers and employees; (e) to prepare an annual report on its activities, including its main recommendations to the shareholders; (f) to inform the Board of Directors about whether or not it is advisable to hire the external audit firm to provide non-audit services where the audit firm is not prohibited from providing such services because the nature of the same could pose a threat to the audit firm’s independence; and (g) any other issues indicated in the Company’s By-laws or authorized by a shareholders’ meeting or the Board of Directors.
The Directors’ Committee shall be comprised of three members, with at least one independent member. In the event that more than three Directors have the right to form part of the Committee, these same Directors shall unanimously determine who shall make up the Committee. In the event that an agreement cannot be reached, the Directors who were elected with a greater percentage of votes by shareholders controlling or possessing less than 10% of the Company’s shares shall be given priority. If there is only one Independent Director, this Director shall name the other members of the Committee among the other Directors who are not independent. Such other members of the Committee shall have all of the rights associated with such position. The members of the Committee shall be compensated for their role. The amount of their remuneration shall be set annually at the General Shareholders’ Meeting, and it may not be less than the remuneration set for the Company Directors, plus an additional 1/3 of that amount. The General Shareholders’ Meeting shall determine a budget for the expenses of the Committee and its advisors. Such budget may not be less than the sum of the annual remunerations of the Committee members. The Committee may need to hire professional advisory services in order to carry out its duties in accordance with the abovementioned budget. The proposals made by the Committee to the Board of Directors that are not accepted by the latter must be reported to the shareholders’ meeting prior to the vote by shareholders on the corresponding matter or matters. In addition to the responsibilities that are associated with the position of Director, the members of the Committee are jointly and severally liable for any damages they cause in performing their duties as such to the shareholders and to the Company.
Shares
Dividends are annually distributed to the Series A and Series B shareholders of record on the fifth business day prior to the date for payment of the dividends. The By-laws do not specify a time limit after which dividend entitlement lapses, but Chilean regulations establish that after five years, unclaimed dividends are to be donated to the fire department.
Article 5 of the Company’s By-laws establishes that Series B common shares may in no case exceed 50% of SQM’s issued, outstanding and paid stock. SQM Series B common shares have a restricted right to vote as they can only elect one director of the Company, regardless of their capital stock’s share. Series B common shares have the right to call for an Ordinary or Extraordinary Shareholders’ Meeting when the shareholders of at least 5% of the Series B common shares issued request so and for an Extraordinary Board of Directors Meeting without the Chairman’s authorization when it is requested by the director elected by the shareholders of the Series B common shares. Series A common shares have the option to exclude the director elected by Series B shareholders from the voting process in which the Chairman of the Board is to be elected, if there is a tie in the first voting process. However, subject to the second transitory article of the Company’s By-Laws, articles 31 and 31 bis of the Company’s By-laws establish that in General Shareholders’ Meetings each shareholder will have a right to one vote for each share he owns or represents and (a) that no shareholder will have the right to vote for himself or on behalf of other shareholders of the same Series A or Series B common shares representing more than 37.5% of the total outstanding shares with right to vote of each Series and (b) that no shareholder will have the right to vote for himself or on behalf of other shareholders representing more than 32% of the total outstanding shares with a right to vote, with any excess being deducted from the number of shares such shareholder may vote. In calculating a single shareholder’s ownership of Series A or B shares, the shareholder’s stock and those pertaining to third parties related to them are to be added.
The second transitory article provides as follows:
“Throughout the period running from the date of the extraordinary shareholders’ meeting at which this transitory article is incorporated, and December 31, 2030, the restriction against voting on behalf of more than 37.5% of any series of shares in the Company, established in Article 31 hereof, shall be subject to the following exception, applicable only to the election of board members by means of Series A common shares in the Company: If two or more persons, regardless of whether or not they are related parties to each other (the incoming shareholders), act prior to December 31, 2030 such as to acquire a sufficient number of Series A common shares to allow them to hold voting powers for the selection of directors of the Company amounting to more than 37.5% of that series, then any registered shareholder or group of shareholders holding more than 37.5% of all Series A common shares in the Company shall be entitled to vote for the selection of directors of the Company amounting to whichever is less, between a number of the Series A common shares that are held (i) by existing shareholders as of that date, and (ii) by the incoming shareholders with voting rights. Similarly, if for any reason a registered shareholder in the Company as of the date hereof who holds more than 37.5% of Series A common shares in the company between the date hereof and December 31, 2030, comes to hold more voting shares for the selection of directors of the Company than the votes allocated for holding 37.5% of said Series A common shares, either through a joint action agreement with other shareholders, including existing shareholders, or by any other means, then any other shareholder or group of shareholders in the Company that is not a related party to the same and holds more than 37.5% of all voting Series A common shares in the Company, including both existing and incoming shareholders, shall be entitled to vote for the selection of directors of the Company in accordance with whichever number of Series A common shares in the Company is the lesser, between (i) the number held by this shareholder or group of shareholders, and (ii) the existing shareholder may have the capacity to vote in excess of the restriction amounting to 37.5% of said shares.”
Article 5 bis of the Company’s By-laws establishes that no person may directly or by means of related third persons concentrate more than 32% of the Company’s total shares with right to vote.
Each Series A share and Series B share is entitled to share equally in the Company’s profits, (i.e., they have the same rights on any dividends declared on the outstanding shares of SQM).
The Company By-laws do not contain any provision relating to (a) redemption provisions, (b) sinking funds or (c) liability to capital calls by the Company.
As established in article 103 of the Chilean Corporations Act, a company subject to the supervision of the CMF may be liquidated in the following cases:
(a)Expiration of the duration term, if any, as established in its By-laws;
(b)All the shares end up in the possession of one individual for more than ten continuous days;
(c)By agreement of an Extraordinary Shareholders’ Meeting;
(d)By abolition, pursuant to applicable laws, of the decree that authorized its existence;
(e)Any other reason contemplated in its By-laws.
Article 40 of the Company’s By-laws states that in the event of liquidation, the shareholders’ meeting will appoint a three-member receiver committee that will have the authority to carry out the liquidation process. Any surplus will be distributed equally among the shareholders.
The only way to change the rights of the holders of the SQM shares is by modifying its By-laws, which can only be carried out by an Extraordinary Shareholders’ Meeting, as established in article 28 of the Company By-laws.
Shareholders’ Meetings
Article 29 of the Company’s By-laws states that the call to a shareholders’ meeting, either Ordinary or Extraordinary, will be by means of a highlighted public notice that will be published at least three times, and on different days, in the newspaper of the legal address determined by the shareholders’ meeting, and in the way and under the conditions indicated by the regulations. Additionally, a notice will be sent by mail to each shareholder at least fifteen days prior to the date of the Meeting, which shall include a reference of the matters to be addressed at the meeting. However, those meetings with the full attendance of the shares with right to vote may be legally held, even if the foregoing formal notice requirements are not met. Notice of any shareholders’ meeting shall be delivered to the CMF at least fifteen days in advance of such meeting.
Any holder of Series A and/or Series B common shares registered in the Company’s shareholder registry on the fifth business day prior to the date of the meeting will have a right to participate at that meeting Article 67 of the Chilean Corporations Act provides that decisions made at Extraordinary Shareholders’ Meeting on the following matters require the approval of 2/3 of the outstanding shares with voting rights: (1) transformation or division of the Company and its merger with another company; (2) modification of the Company’s term of duration, if any; (3) early dissolution of the Company; (4) change of the corporate domicile; (5) capital decrease; (6) approval of contributions and estimation of non-cash assets; (7) modification of powers reserved for Shareholders Meetings or limitations on powers of the Board of Directors; (8) reduction in the number of members of the Board of Directors; (9) disposal of 50% or more of the Company’s assets; formulation or modification of any business plan exceeding the above percentage; disposal of 50% or more of an asset belonging to a subsidiary that represents at least 20% of the Company’s assets and disposal of shares of the referred subsidiary such that the parent company would lose its position as controller of the same; (10) method in which profits are distributed; (11) granting of real or personal guarantees as sureties for third-party obligations that exceed 50% of the Company assets, except for subsidiaries, in which case approval of the Board of Directors shall suffice; (12) acquisition of own shares as set forth in articles 27A and 27B of the said law; (13) other matters indicated in the By-laws; (14) amendment of the Company By-laws as a result of errors in the constitution process and amendments in the By-laws involving one or more of the matters stated in the preceding numbers; (15) forced sale of shares carried out by the controller who would acquire more than 95% of the Company’s shares in a tender offer, and (16) approval or ratification of proceedings or contracts with related parties in accordance with the provisions of articles 44 and 147 of the Chilean Corporations Act.
Amendments to the By-laws that are intended to create, modify, defer or suspend preferential rights shall be approved by 2/3 of the shares of the affected Series.
The transformation of the Company, the merger of the same, the disposal of assets referred to in number (9) above, the constitution of guarantees set forth in number (11) above, the constitution of preferences or the increase, postponement or decrease of the existing preferences, the reparation of formal nullities incurred in the By-laws and the possession of more than 95% of the Company’s shares and other matters contemplated in the Law or in the By-laws, confer “withdrawal rights.”
Shareholders Restrictions
There are no restrictions on ownership or share concentration, or limiting the exercise of the related right to vote, by local or foreign shareholders other than those discussed under “—Shares”
Change in Control
The Company By-laws provide that no shareholder may hold more than 32% of the Company’s shares, unless the By-laws are modified at an Extraordinary Shareholders’ Meeting. Moreover, on December 12, 2000, the Chilean Government published the Ley de Oferta Pública de Acciones (“Public Share Offering Law” or “OPA law”) that seeks to protect the interests of minority shareholders of open stock corporations in transactions involving a change in control, by requiring that the potential new controller purchase the shares owned by the remaining shareholders either in total or pro rata. The law applies to those transactions in which the controlling party would receive a material premium price compared with the price that would be received by the minority shareholders.
There are three conditions that would make it mandatory to operate under the OPA law:
1)When an investor wants to take control of a company’s stock.
2)When a controlling shareholder holds two-thirds of the company’s stock. If such shareholder buys one more share, it will be mandatory to offer to acquire the rest of the outstanding stock within 30 days of surpassing that threshold.
3)When an investor wants to take control of a corporation, which, in turn, controls an open stock corporation that represents 75% or more of the consolidated assets of the former corporation.
Parties interested in taking control of a company must (i) notify the company of such intention in writing, and notify its controllers, the companies controlled by it, the CMF and the markets where its stocks are traded and (ii) publish a highlighted public notice in two newspapers of national circulation at least 10 business days prior to the date of materialization of the OPA.
Board Protocol for Presentation and Use of Sensitive Information
On December 5, 2018, Inversiones TLC SpA, a subsidiary of Tianqi, acquired 62,556,568 Series A common shares of the Company, representing approximately 23.77% of the total shares issued by SQM.
In connection with the acquisition, Tianqi entered into and Extrajudicial Agreement with the FNE with respect to the implementation of certain measures to maintain competitive market conditions and mitigate any risks identified in the transaction, having as a fundamental principle the limitation of access to commercially sensitive information of SQM by Tianqi. For a description of the Extrajudicial Agreement, see “Item 7.A. Major Shareholders — Tianqi Extrajudicial Agreement with the FNE.” Before this acquisition, and after the approval of this transaction by the Chilean Antitrust Court, the Company’s Board of Directors deemed it necessary to adopt measures aimed at achieving the purpose of the Extrajudicial Agreement, avoiding greater points of contact between Sensitive Information and Tianqi, to complement the Extrajudicial Agreement. On January 23, 2019, the Board of Directors approved a protocol for the presentation and use of Sensitive Information (as defined in the Extrajudicial Agreement), which was amended on April 15, 2019 in response to comments received from the CMF. The amendment was subsequently approved by the Board on September 30, 2019.
10.C.Material Contracts
The Company, during the normal course of business, has entered into different contracts, some of which have been described herein, related to its production, commercial and legal operations. We believe all of these contracts are standard for this type of industry, and none of them is expected to have a material effect on the Company’s results of operations.
SQM-Corfo Agreements
Our subsidiary SQM Salar holds exclusive rights until 2030, subject to the terms and conditions of the concession agreements, to exploit the mineral resources in an area covering approximately 140,000 hectares in the Salar de Atacama, 81,920 hectares of which SQM Salar is entitled to exploit pursuant to (i) a lease agreement over mining exploitation concessions among Corfo, SQM, SQM Salar and SQM Potasio S.A. (the “Corfo Lease Agreement”), originally entered into in 1993, and (ii) the associated Salar de Atacama project agreement among Corfo, SQM, SQM Salar and SQM Potasio (the “Corfo Project Agreement” and together with the Corfo Lease Agreement, the “SQM-Corfo Agreements”). The mining exploitation concessions related to such rights are owned by Corfo and leased to SQM Salar pursuant to the Corfo Lease Agreement in exchange for quarterly lease payments to Corfo based on specified percentages of the final sale prices of the production of minerals extracted from the Salar de Atacama brines. SQM Salar also pays an annual concession fee to the Chilean government for the concession rights. Under the terms of the Corfo Project Agreement, Corfo has agreed that it will not, and will not permit any other person to, explore, exploit or mine any mineral resources in the approximately 140,000 hectares area of the Salar de Atacama. Corfo cannot unilaterally amend the SQM-Corfo Agreements and the rights to exploit the resources cannot be transferred. All of our products originating from the Salar de Atacama, principally lithium carbonate, lithium hydroxide and potassium chloride, are derived from our extraction operations under the SQM-Corfo Agreements.
The SQM-Corfo Agreements were amended and restated effective April 10, 2018 and further amended in 2020 and provide the following terms, among others:
(i)increased lease payments to Corfo as a result of increased lease rates associated with the sale of different products produced in the Salar de Atacama, including lithium carbonate, lithium hydroxide and potassium chloride (see “Item 5.A. Operating Results – Results of Operations – 2022 compared to 2021 – Cost of Sales – Lithium and Derivatives” and “– Potassium” for descriptions of the progressive rate structure based on the final sale price of lithium carbonate and lithium hydroxide and potassium chloride);
(ii)a commitment by SQM Salar to contribute:
(a)between US$10.8 and US$18.9 million per year to research and development efforts;
(b)between US$10 to US$15 million per year to the communities in close proximity to the Salar de Atacama; and
(c)1.7% of total annual sales of SQM Salar to the Antofagasta Regional Government and the municipalities of San Pedro de Atacama, María Elena and Antofagasta for regional development;
(iii)the authorization by Corfo for CCHEN to establish a total production and sales limit for lithium products produced in the Salar de Atacama of up to 349,553 metric tons of lithium metallic equivalent (1,860,671 tons of lithium carbonate equivalent), which is in addition to the approximately 64,816 metric tons of lithium metallic equivalent (345,015 tons of lithium carbonate equivalent) then remaining from the originally authorized amount;
(iv)an obligation of SQM Salar to offer part of its lithium production (up to a maximum of 25%) at a preferential price to value-added producers that will develop lithium-based products in Chile;
(v)an obligation of SQM Salar to strengthen its corporate governance by incorporating various audit, environmental control and coordination mechanisms with Corfo, which shall be set forth in amendments to the By-laws of SQM Salar, including among others:
(a)incorporating specific rules for the management of the company, including that two of the directors of SQM Salar are independent and meet the requirements established for independent directors of a public company; and
(b)requiring the Board of Directors of SQM Salar to designate a committee to monitor compliance with the Corfo Lease Agreement and the Corfo Project Agreement and to establish the regulations that will govern this committee and its functions;
(vi)provisions regarding the return of the leased real estate assets and personal property to Corfo, the transfer of environmental permits to Corfo at no cost and granting Corfo purchase options over production facilities and water rights in the Salar de Atacama upon termination of the SQM-Corfo Agreements; and
(vii)prohibitions against the sale of lithium brine extracted from leased mining concessions by SQM, SQM Salar and SQM Potasio.
The SQM-Corfo Agreements expire on December 31, 2030 and are subject to early termination by Corfo in connection with certain events of default. Under the SQM-Corfo Agreements, Corfo will use its best efforts to initiate a public bidding or contracting process for a contract for the exploitation of the Salar de Atacama properties no later than June 30, 2027 and to complete the process no later than July 30, 2029, except if a force majeure event occurs. The foregoing description of the Corfo Agreements is qualified in its entirety by reference to the SQM-Corfo Agreements filed as Exhibits 10.1, 10.2 and 10.3 to this Form 20-F, and incorporated herein by reference. See also “Item 3.D. Risk Factors – Risks Relating to Our Business – Our inability to extend or renew on favorable terms the mineral exploitation rights relating to the Salar de Atacama concession, upon which our business is substantially dependent, beyond their current expiration date in December 2030 could have a material adverse effect on our business, financial condition and results of operations.” and “— Risks Relating to Chile — The new National Lithium Strategy announced by the Chilean government in April 2023 has created and may continue to create uncertainty in the Chilean lithium industry, which could have a material adverse effect on our business performance or the value of our shares and ADRs.”, “Item 5.A. Operating Results – Results of Operations – 2024 compared to 2023 – Cost of Sales – Lithium and Derivatives” and “– Potassium” and Notes 18.2 to our consolidated financial statements” for additional information regarding the SQM-Corfo Agreements.
Association Agreement between SQM and Codelco
On May 31, 2024, SQM and Codelco, Chilean state-owned copper mining company entered into a partnership agreement which establishes the rights and obligations of the parties to form their partnership for the development of mining and production activities aimed at the production of lithium, potassium and other products from the properties of Corfo in the Salar de Atacama and their subsequent marketing (directly or through its subsidiaries or representative offices) for the period 2025-2060.
The Agreement includes forms of several agreements and documents to be entered into prior to the completion of the transaction, including the shareholders’ agreement, the sales agreement for the Company’s properties in the Salar de Maricunga, the license that the Company will grant to the Association Agreement over certain industrial property rights, the by-laws and powers of attorney of the Joint Venture, and the manner in which the Company will contribute to SQM Salar S.A. those assets and contracts of the Business that are not currently owned by SQM Salar S.A., among others. A number of conditions precedent remain to be satisfied for the formation of the partnership to become effective.
The entire document of the Joint Venture Agreement between SQM and Codelco is filed as Exhibit 4.1 to this Form 20-F.
See also “Item 3.D. Risk Factors – Risks Relating to Our Business – Our inability to extend or renew on favorable terms the mineral exploitation rights relating to the Salar de Atacama concession, upon which our business is substantially dependent, beyond their current expiration date in December 2030 could have a material adverse effect on our business, financial condition and results of operations.”
10.D.Exchange Controls
The Central Bank of Chile is responsible for, among other things, monetary policies and exchange controls in Chile. Appropriate registration of a foreign investment in Chile permits the investor access to the Formal Exchange Market. Foreign investments can be registered with the Foreign Investment Committee under Decree Law No. 600 of 1974, as amended, or can be registered with the Central Bank of Chile under the Central Bank Act, Law No 18,840 of October 1989. The Central Bank Act is an organic constitutional law requiring a “special majority” vote of the Chilean Congress to be modified.
Effective January 1, 2016, Decree Law No. 600 was repealed by Article 9 of the 2014 Tax Reform. Therefore, foreign investments made on or after January 1, 2016 cannot be registered with the Foreign Investment Committee.
Our 1993, 1995, 1998 and 2021 capital increases were carried out under and subject to the then current legal regulations, whose summary is hereafter included:
A Convención Capítulo XXVI del Título I del Compendio de Normas de Cambios Internacionales or Compendium of Foreign Exchange Regulations of the Central Bank of Chile the “Foreign Investment Contract”, was entered into and among the Central Bank of Chile, our Company and the depositary pursuant to Article 47 of the Central Bank Act and to Chapter XXVI of the Compendium of Foreign Exchange Regulations of the Central Bank of Chile, “Chapter XXVI,” which addresses the issuance of ADRs by a Chilean company. Absent the Foreign Investment Contract, under applicable Chilean exchange controls, investors would not be granted access to the Formal Exchange Market for the purposes of converting from Chilean pesos to U.S. dollars and repatriating from Chile amounts received in respect to deposited Series B common shares, or Series B common shares withdrawn from deposit on surrender of ADRs (including amounts received as cash dividends and proceeds from the sale in Chile of the underlying Series B common shares and any rights arising therefrom). The following is a summary of the material provisions contained in the Foreign Investment Contract. This summary does not purport to be complete and is qualified in its entirety by reference to Chapter XXVI and the Foreign Investment Contract.
Under Chapter XXVI and the Foreign Investment Contract, the Central Bank of Chile has agreed to grant to the depositary, on behalf of ADR holders, and to any investor not residing or not domiciled in Chile who withdraws Series B common shares upon delivery of ADRs (such Series B common shares being referred to herein as “Withdrawn Shares”) access to the Formal Exchange Market to convert Chilean pesos to U.S. dollars (and remit such U.S. dollars outside of Chile) in respect of the Withdrawn Shares, including amounts received as (a) cash dividends, (b) proceeds from the sale in Chile of Withdrawn Shares, or from shares distributed because of the liquidation, merger or consolidation of the Company, subject to receipt by the Central Bank of Chile of a certificate from the holder of such shares (or from an institution authorized by the Central Bank of Chile) that such holder’s residence and domicile are outside Chile and a certificate from a Chilean stock exchange (or from a brokerage or securities firm established in Chile) that such shares were sold on a Chilean stock exchange, (c) proceeds from the sale in Chile of preemptive rights to subscribe for additional Series A and Series B common shares, (d) proceeds from the liquidation, merger or consolidation of the Company and (e) other distributions, including without limitation those resulting from any recapitalization, as a result of holding Withdrawn Shares. Transferees of Withdrawn Shares will not be entitled to any of the foregoing rights under Chapter XXVI unless the Withdrawn Shares are redeposited with the depositary. Investors receiving Withdrawn Shares in exchange for ADRs will have the right to redeposit such shares in exchange for ADRs, provided that the conditions to redeposit described hereunder are satisfied.
Chapter XXVI provided that access to the Formal Exchange Market in connection with dividend payments will be conditioned upon certification by the Company to the Central Bank of Chile that a dividend payment has been made and any applicable tax has been withheld. Chapter XXVI also provided that access to the Formal Exchange Market in connection with the sale of Withdrawn Shares or distributions thereon will be conditioned upon receipt by the Central Bank of Chile of certification by the depositary that such shares have been withdrawn in exchange for ADRs and receipt of a waiver of the benefit of the Foreign Investment Contract with respect thereto until such Withdrawn Shares are redeposited.
Chapter XXVI and the Foreign Investment Contract provide that a person who brings certain types of foreign currency into Chile, including U.S. dollars, to purchase Series B common shares with the benefit of the Foreign Investment Contract must convert it into Chilean pesos on the same date and has 5 banking business days within which to invest in Series B common shares in order to receive the benefits of the Foreign Investment Contract. If such person decides within such period not to acquire Series B common shares, he can access the Formal Exchange Market to reacquire foreign currency, provided that the applicable request is presented to the Central Bank within 7 banking business days of the initial conversion into Chilean pesos. Series B common shares acquired as described above may be deposited for ADRs and receive the benefits of the Foreign Investment Contract, subject to receipt by the Central Bank of Chile of a certificate from the depositary that such deposit has been effected and that the related ADRs have been issued and receipt by the Custodian of a declaration from the person making such deposit waiving the benefits of the Foreign Investment Contract with respect to the deposited Series B common shares.
Access to the Formal Exchange Market under any of the circumstances described above is not automatic. Pursuant to Chapter XXVI, such access requires approval of the Central Bank of Chile based on a request presented through a banking institution established in Chile. The Foreign Investment Contract will provide that if the Central Bank of Chile has not acted on such request within seven banking days, the request will be deemed approved.
Under current Chilean law, foreign investments abiding by the Foreign Investment Contract cannot be changed unilaterally by the Central Bank of Chile. No assurance can be given, however, that additional Chilean restrictions applicable to the
holders of ADRs, the disposition of underlying Series B common shares or the repatriation of the proceeds from such disposition could not be imposed in the future, nor can there be any assessment of the duration or impact of such restrictions if imposed.
As of April 19, 2001, Chapter XXVI of Title I of the Compendio de Normas de Cambios Internacionales of the Central Bank of Chile was eliminated and new investments in ADRs by non-residents of Chile, are now governed by Chapter XIV of the Compendio de Normas de Cambios Internacionales of the Central Bank of Chile. This was made with the purpose of simplifying and facilitating the flow of capital to and from Chile. According to the new regulations, such investments must be carried out through Chile’s Formal Exchange Market and only reported to the Central Bank of Chile.
The Central Bank is also responsible for controlling incurrence of loan obligations to be paid from Chile and by a Chilean borrower to banks and certain other financial institutions outside Chile. Chapter XIV establishes what type of loans, investments, capital increases and foreign currency transactions are subject to the current Chapter XIV framework. Foreign currency transactions related to foreign loans must be performed through the Formal Exchange Market, and such transactions and the subsequent modifications of original loans must be properly informed to the Central Bank. Transactions prior to April 19, 2001, will continue to be regulated by the previous legal framework, except in cases where an express request has been presented to the Central Bank surrending previous rights and electing to be regulated by the provisions of Chapter XIV. This summary does not purport to be complete and is qualified in its entirety by reference to the provisions of Chapter XIV.
As of December 31, 2024, we had six series of bonds issued in the international markets under Rule 144A/Regulation S in the principal amounts of US$250 million, US$400 million, US$450 million, US$700 million, U$750 million, and US$ 850 million.
Any purchases of U.S. dollars in connection with payments on these loans will occur with the Formal Exchange Market. There can be no assurance, however, that restrictions applicable to payments in respect to the loans could not be imposed in the future, nor can there be any assessment of the duration or impact of such restrictions if imposed.
10.E.Taxation
Material Chilean Tax Considerations
The following describes the material Chilean income tax consequences of an investment in SQM ADRs by a natural person without domicile or residence in Chile or, to any legal entity that is not organized under the laws of Chile, that does not have a permanent establishment located in Chile and that lacks domicile or residence in Chile, a ("foreign holder").This discussion is based upon Chilean income tax laws presently in force, available in Rule No. 324 (1990) of the Chilean Internal Revenue Service (Servicio de Impuestos Internos) or the “SII”, and other applicable regulations and rulings. The discussion is not intended as tax advice to any particular investor, which can be rendered only in light of that investor’s particular tax situation.
Under Chilean legislation, provisions contained in tax law such as tax rates applicable to foreign holders, the computation of taxable income for Chilean purposes and the manner in which Chilean taxes are imposed and collected may only be amended by another statute. In addition, the SII issue rulings and regulations of either general or specific application and interpret the provisions of Chilean tax law. Chilean taxes cannot be collected retroactively against taxpayers who act in good faith based on those circulars, resolutions or official letters, without prejudice to the fact that the Chilean tax authority may issue new circulars, resolutions or official letters that reflect any change in criteria. regarding its interpretation of the tax law.
Cash Dividends and Other Distributions
On September 29, 2014, Chilean Law No.20,780, the Tax Reform, was published, introducing significant changes to the Chilean taxation system and strengthening the powers of the SII to control and prevent tax avoidance. Subsequently, on February 8, 2016, Law No. 20,899 that simplifies the income tax system and modifies other legal tax provisions was published. On February 24, 2020, Law No. 21,210, a law to modernize the tax legislation, was published. As a result of these reforms, open stock corporations, like SQM, are subject to the partially integrated shareholder income tax regime.
The corporate tax rate applicable to us has been 27% since 2018.
Under the partially integrated system, the tax burden for dividends distributed by companies to their final shareholders (i.e., taxpayers of the Withholding Tax (non-residents) or the Complementary Global Tax (resident individuals)) allows only a portion of the Chilean corporate income tax paid by the company to be applied as a credit against the tax payable on dividends, unless the shareholder is resident in a country that has a treaty to prevent double taxation with Chile in effect or such treaty was signed before January 1, 2020 and until December 31, 2026, even if not yet in effect. In such case, 100% of the Chilean corporate income tax paid by the company may be applied as a credit against the shareholder’s taxes payable on dividends.
As a result of the foregoing, foreign shareholders who are residents of a jurisdiction without a tax treaty will be subject to a higher effective tax rate on dividends than residents of jurisdictions with tax treaties.
In the case of U.S. investors, a tax treaty between the United States and Chile (the “Chile-U.S. Tax Treaty”) was signed prior to January 1, 2020. On December 19, 2023, the procedure for its entry into force was concluded. The Chile-U.S. Tax Treaty entered into force on January 1, 2024. However, in the case of withholding taxes applied by the income-generating country, the Chile-U.S. Tax Treaty shall apply to amounts paid or earned on or after February 1, 2024.
Under the provisions of the Chile-U.S. Tax Treaty, in the case of dividends paid from Chilean companies to their investors
domiciled in the United States, the rate of the Withholding Tax will be 35%, and this shall have the right to credit 100% of the corporate tax paid for profits from which those dividends are distributed.
Cash dividends paid by the Company with respect to the shares, including shares represented by ADRs held by a U.S. Holder (as defined below), will be subject to a 35% Chilean withholding tax, excluding the income tax, which is withheld and paid by the Company (the “Withholding Tax”). The effective rate of Withholding Tax imposed on dividends attributed to 2023 earnings of the Company and distributed during the same period was 23.90411 %.
Capital Gains
Gains from the sale or other disposition by a foreign holder of ADRs outside of Chile will not be subject to Chilean taxation. The deposit and withdrawal of the shares in exchange for ADRs will not be subject to any Chilean taxes.
The tax cost of the shares received in the ADR exchange (repatriation) will be the acquisition value of the shares. Shares exchanged for ADRs are valued at the maximum price at which they are traded on the Chilean Stock Exchange on the date of the exchange or on any two business days prior to the exchange. Consequently, the conversion of ADRs into shares and the immediate sale of such shares at a price equal to or less than the highest price for Series B shares on the Chilean Stock Exchange on those dates will not generate a taxable gain.
The general tax regime applicable to the highest value or gain recognized in a transfer of shares (unlike the sales or exchanges of ADRs that such shares represent) in force to date, establishes that said gain will be subject to the general taxes set out in the Chilean tax law (Ley de Impuesto a la Renta).
However, the profit obtained from the sale of shares of open stock companies with a stock market presence, which is carried out on a stock exchange, or in a process of public offer for the acquisition of shares governed by the Securities Market Law, will be subject to a single capital gain tax rate of 10%.
For the application of this regime the shares that are sold must have been acquired after April 19, 2001, (i) in a local stock exchange authorized by the CMF, (ii) in a public tender offer for the shares governed by the Securities Market Law, (iii) in an initial public offering for the placement of shares due to the creation of a public limited company or a capital increase of an existing company, (iv) in an exchange of publicly offered securities convertible into shares or, (v) in a redemption of an investment fund shares. If the shares do not qualify for the above special tax treatment, capital gains obtained by foreign holders on the sale or exchange of shares (as distinguished from sales or exchanges of ADRs representing such shares) will be subject to a 35% Withholding Tax in Chile. Such rate could be reduced by the application of a double tax treaty subscribed by Chile. Provisional withholding obligations are applicable under the Chilean Income Tax Law based on different rates depending on whether the capital gain can be determined at the time of the sale. For example, the Chile-U.S. Tax Treaty between the United States and Chile limits the maximum tax rate that both countries can apply to capital gains obtained by a resident of a country in the disposal of shares of a closed joint-stock company in the other country, at a maximum rate of 16%.
In accordance with Official Letter No. 224, 2008 of the Chilean Internal Revenue Service, shares received in exchange for ADRs are also considered as "acquired on the stock market" if the ADRs have been acquired on a stock exchange authorized by the CMF (for example, the London Stock Exchange, the New York Stock Exchange or the Madrid Stock Exchange). Ordinary shares are considered to have a high presence in the stock market when they: (a) are listed on the Securities Registry, (b) are listed on the Chilean Stock Exchange, and (c) have an adjusted stock market presence equal to or greater than 25%.
As of June 19, 2001, the higher value obtained in the sale of shares listed on the stock market is also exempt from income tax in Chile, when the sale is made by "foreign institutional investors", such as mutual funds and mutual funds of pensions, provided that the sale is made on a local stock exchange authorized by the CMF, or in accordance with the provisions of the Securities Market Law. To qualify as foreign institutional investors, the aforementioned entities must be incorporated outside of Chile, must not be domiciled in Chile, and must be an "investment fund" under Chilean tax law.
The single tax rate of 10% that affects the highest value or profit obtained in the sale of shares of public limited companies, was established by Law No. 21,420, published in the Official Gazette on February 2, 2022.
This tax must be withheld by the buyer of the shares or by the intervening stockbroker, at a rate of 10% calculated on the highest value or profit, if this is known on the date of payment of the price, remittance, payment to account or making it available to the seller in any way, or, with a rate of 1% on the total price, without any deduction, if the higher value is not known on that same date.
For purposes of determining the highest value subject to tax at the 10% rate, the modification introduced by Law No. 21,420 establishes that taxpayers with domicile or residence in Chile may consider as acquisition value and/or contribution, at their choice: (a) the official closing price of the respective securities, as of December 31 of the year of their acquisition, considering first the oldest securities according to their acquisition date, which may be proposed by the Chilean tax authority in the statement of results of the corresponding tax, or (b) the value of acquisition and/or contribution in accordance with the general rules established in the Income Tax Law. For purposes of item (a), year of acquisition is calculated by virtue of the information that said authority has at its disposal. Said proposal will not exempt the taxpayer from complementing or adjusting the corresponding information in accordance with the general rules.
In the case of taxpayers without domicile or residence in Chile, for purposes of determining the highest value subject to the single tax rate of 10%, they must consider the value of acquisition and/or contribution in accordance with clause (b) above.
The modifications implemented by Law No. 21,420 are effective as of September 1, 2022 and, therefore, apply to sales made after that date.
Other Chilean Taxes
No Chilean inheritance, gift or succession taxes apply to the transfer or disposition of the ADRs by a foreign holder, but such taxes generally will apply to the transfer at death or by gift of the shares by a foreign holder. No Chilean stamp, issue, registration or similar taxes or duties apply to foreign holders of ADRs or shares.
United States-Chile Double Taxation Treaty
With regard to the changes in these matters introduced with the entry into force of the Chile-U.S. Tax Treaty between Chile and the United States, the following effects can be noted:
In relation to Dividends:
In relation to dividends paid by an entity domiciled in Chile to individuals or entities domiciled in the United States, the general rate of 35% Withholding Tax (Impuesto Adicional) is maintained, with the right to use as credit the entire Corporate Tax (Impuesto de Primera Categoría) previously paid for the profits from which the dividend was distributed. The possibility of using 100% of the corporate tax (Impuesto de Primera Categoría), was in force only until 2026 for treaties signed but not in force, so, if the Chile-U.S. Tax Treaty had not entered into force, from 2026 only 65% of corporate tax could have been used as a credit.
In relation to Capital Gains:
Prior to the entry into force of the Chile-U.S. Tax Treaty between Chile and the United States, when a person or entity resident in the United States obtained capital gains from the disposal of shares or rights representatives of the capital of a company resident in Chile, this was taxed with a Withholding Tax (Impuesto Adicional) rate of 35% in Chile.
The Chile-U.S. Tax Treaty limits the maximum tax rate of Withholding Tax that both countries may apply to capital gains earned by the residents of one country in the disposal of shares or rights or interests representing the capital of a company resident in the other country, to a maximum of 16%, with some exceptions. The 16% maximum does not apply in cases where the seller has held, at any time within the 12-month period preceding the disposal, directly or indirectly, shares that represent more than 50% of the capital, or other rights that represent 20% or more of the capital of the company that was disposed of.
Under the Chile-U.S. Tax Treaty, in the cases in which capital gains are obtained by a resident of the United States from sales of shares traded in a stock exchange in Chile; provided that such shares were previously acquired: A) on a recognized stock exchange in Chile; B) in a public offer for the acquisition of shares regulated by law; C) in a placement of shares by the company at the time of the constitution of that company or of a capital increase of that company; or D) in an exchange of bonds convertible into shares, these capital gains would not be subject to Withholding Tax (Impuesto Adicional) in Chile.
Material U.S. Federal Income Tax Considerations
The following discussion summarizes the material U.S. federal income tax consequences to U.S. Holders (defined below) arising from ownership and disposition of the Series A common shares and the Series B common shares, together the “shares”, and the ADRs. The discussion which follows is based on the U.S. Internal Revenue Code of 1986, as amended, the “Code,” the Treasury regulations promulgated thereunder, and judicial and administrative interpretations thereof, all as in effect and available on the date hereof. These authorities are subject to change, possibly with retroactive effect, which could affect the continued validity of this summary. In addition, the summary assumes that the depositary’s activities are clearly and appropriately defined so as to ensure that the U.S. federal income tax treatment of ADRs will be identical to the U.S. federal income tax treatment of the underlying shares.
The discussion that follows is not intended as tax advice to any particular investor and is limited to investors who will hold the shares or ADRs as “capital assets” within the meaning of Section 1221 of the Code and whose functional currency is the U.S. dollar. The summary does not address the tax treatment of holders that may be subject to special U.S. federal income tax rules, such as insurance companies, tax-exempt organizations, financial institutions, persons who are subject to the alternative minimum tax, persons who are broker-dealers in securities or foreign currency or dealers and traders in securities who use a mark-to-market method of tax accounting, persons who hold the shares or ADRs as a hedge against currency risks, as a position in a “straddle” for tax purposes, or as part of a conversion or other integrated transaction, persons holding our shares or ADRs in connection with a trade or business conducted outside of the U.S., partnerships or other entities classified as partnerships or other pass-through entities for U.S. federal income tax purposes or partners in such partnerships or entities, or persons who own (directly, indirectly or by attribution) 10% or more of the combined voting power of all classes of equity in the Company or 10% or more of the combined value of all classes of equity in the Company. PERSONS OR ENTITIES DESCRIBED ABOVE, INCLUDING PARTNERSHIPS HOLDING SHARES OR ADRs OR PARTNERS IN SUCH PARTNERSHIPS, SHOULD CONSULT THEIR OWN TAX ADVISORS AS TO THE PARTICULAR U.S. FEDERAL INCOME TAX CONSEQUENCES OF HOLDING AND DISPOSING OF SHARES OR ADRs.
For purposes of this summary, the term “U.S. Holder” means a beneficial owner of shares or ADRs that is, for U.S. federal income tax purposes, (a) an individual who is a U.S. citizen or resident, (b) a corporation or other entity taxable as a corporation created or organized under the laws of the U.S. or any political subdivision thereof, (c) an estate, the income of which is subject to U.S. federal income tax regardless of the source, or (d) a trust (i) that validly elects to be treated as a U.S. person for U.S. federal income tax purposes or (ii) if (A) a court within the U.S. is able to exercise primary supervision over the administration of the trust and (B) one or more U.S. persons have the authority to control all substantial decisions of the trust.
If a partnership (or any other entity treated as a partnership for U.S. federal income tax purposes) holds shares or ADRs, the tax treatment of the partnership and a partner in such partnership generally will depend on the status of the partner and the tax treatment of the partnership. Such a partner or partnership should consult its own tax advisor as to its consequences.
The discussion below does not address the effect of any U.S. state, local, estate or gift tax law or non-U.S. tax law or tax considerations that arise from rules of general application to all taxpayers on a U.S. Holder of the shares or ADRs. U.S. HOLDERS OF SHARES OR ADRs SHOULD CONSULT THEIR OWN TAX ADVISORS TO DETERMINE THE PARTICULAR CONSEQUENCES UNDER ANY SUCH LAW OF OWNING OR DISPOSING THE SHARES OR ADRs.
For purposes of applying U.S. federal income tax law, any U.S. Holder of an ADR generally will be treated as the owner of the underlying shares represented thereby. The U.S. Treasury has expressed concerns that parties to whom ADRs are released before shares are delivered to the depositary (pre-release) or intermediaries in the chain of ownership between beneficial owners and the issuer of the security underlying the ADRs may be taking actions that are inconsistent with the claiming of foreign tax credits for beneficial owners of depositary shares. Such actions would also be inconsistent with the claiming of the reduced tax rate, described below, applicable to dividends received by certain non-corporate beneficial owners. Accordingly, the analysis of the creditability of Chilean taxes, and the availability of the reduced tax rate for dividends received by certain non-corporate holders, each described below, could be affected by actions taken by such parties or intermediaries.
Cash Dividends and Other Distributions
The following discussion of cash dividends and other distributions is subject to the discussion below under “Passive Foreign Investment Company Rules.” Distributions received by a U.S. Holder on shares or ADRs, including the amount of any Chilean taxes withheld, other than certain pro rata distributions of shares to all shareholders, will constitute foreign-source income to the extent paid out of our current or accumulated earnings and profits (as determined for U.S. federal income tax purposes). Because we do not maintain calculations of our earnings and profits under U.S. federal income tax principles, it is expected that distributions generally will be reported to U.S. Holders as dividends. The amount of dividend income paid in Chilean pesos that a U.S. Holder will be required to include in income will equal the U.S. dollar value of the distributed Chilean peso, calculated by reference to the exchange rate in effect on the date the payment is received, regardless of whether the payment is converted into U.S. dollars on the date of receipt. If the dividend is converted into U.S. dollars on the date of receipt, a U.S. Holder generally will not be required to recognize foreign currency gain or loss in respect of the dividend income. A U.S. Holder may have foreign currency gain or loss if the dividend is converted into U.S. dollars after the date of its receipt, which would be ordinary income or loss and would be treated as income from U.S. sources for foreign tax credit purposes. Dividends will be included in a U.S. Holder’s income on the date of the U.S. Holder’s, or in the case of ADRs, the depositary’s, receipt of the dividend. Corporate U.S. Holders will not be entitled to claim the dividends-received deduction with respect to dividends paid by us.
Subject to certain exceptions for short-term and hedged positions, the discussion above regarding concerns expressed by the U.S. Treasury and the discussion below regarding rules intended to be promulgated by the U.S. Treasury, the U.S. dollar amount of dividends received by a noncorporate U.S. Holder in respect of our shares or ADRs generally will be subject to taxation at preferential rates if the dividends are “qualified dividends.” Dividends paid on our ADRs generally will be treated as qualified dividends if (i) our ADRs are readily tradable on an established securities market in the U.S. (ii) SQM was not, in the year prior to the year in which the dividend was paid, and is not, in the year in which the dividend is paid, a passive foreign investment company (“PFIC”) and (iii) the holder thereof has satisfied certain holding period requirements. Our ADRs are listed on the New York Stock Exchange and generally will qualify as readily tradable on an established securities market in the U.S. so long as they are so listed. We do not believe that we were a PFIC for U.S. federal income tax purposes with respect to our 2024 taxable year. In addition, based on our current expectations regarding the value and nature of our assets, the sources and nature of our income, and relevant market and shareholder data, we do not anticipate becoming a PFIC for our 2025 taxable year. However, because PFIC status depends upon the composition of a company’s income and assets and the market value of its assets from time to time, and because it is unclear whether certain types of our income constitute passive income for PFIC purposes, there can be no assurance that we will not be considered a PFIC for any current, prior or future taxable year. Based on existing guidance, it is not entirely clear whether dividends received with respect to our shares will be treated as qualified dividends, because our shares are not themselves listed on a U.S. exchange. In addition, the U.S. Treasury has announced its intention to promulgate rules pursuant to which holders of ADRs and intermediaries through whom such securities are held will be permitted to rely on certifications from issuers to establish that dividends are treated as qualified dividends. Because such procedures have not yet been issued, it is not clear whether we will be able to comply with them. A U.S. HOLDER SHOULD CONSULT ITS TAX ADVISORS TO DETERMINE WHETHER THE FAVORABLE RATE WILL APPLY TO DIVIDENDS IT RECEIVES AND WHETHER IT IS SUBJECT TO ANY SPECIAL RULES THAT LIMIT ITS ABILITY TO BE TAXED AT THIS FAVORABLE RATE.
The amount of a dividend generally will be treated as foreign-source dividend income to a U.S. Holder for foreign tax credit purposes. As discussed in more detail below under “—Foreign Tax Credits,” it is not free from doubt whether Chilean withholding taxes imposed on distributions on our shares or ADRs will be treated as income taxes eligible for a foreign tax credit for U.S. federal income tax purposes. If a Chilean withholding tax is treated as an eligible foreign income tax, subject to generally applicable limitations, you may claim a credit against your U.S. federal income tax liability for the eligible Chilean taxes withheld from distributions on our shares or ADRs. If the dividends are taxed as qualified dividend income (as discussed above), special rules will apply in determining the amount of the dividend taken into account for purposes of calculating the foreign tax credit limitation. THE RULES RELATING TO FOREIGN TAX CREDITS ARE COMPLEX. YOU ARE URGED TO CONSULT YOUR OWN TAX ADVISORS REGARDING THE TREATMENT OF CHILEAN WITHHOLDING TAXES IMPOSED ON DISTRIBUTIONS ON OUR SHARES OR ADRs.
Sale or Other Disposition of our Shares or ADRs
For U.S. federal income tax purposes, the gain or loss a U.S. Holder realizes on the sale or other disposition of our shares or ADRs generally will be U.S.-source capital gain or loss for foreign tax credit purposes, and generally will be a long-term capital gain or loss if the U.S. Holder has held our shares or ADRs for more than one year. The amount of a U.S. Holder’s gain or loss will equal the difference between the U.S. Holder’s tax basis in our shares or ADRs disposed of and the amount realized on the disposition (including any amount withheld in respect of Chilean withholding taxes), in each case as determined in U.S. dollars.
In certain circumstances, Chilean taxes may be imposed upon the sale of shares. See “—Material Chilean Tax Considerations—Capital Gains” above. As discussed in more detail below under “—Foreign Tax Credits,” subject to generally applicable limitations and substantiation requirements, a U.S. Holder may be eligible to claim a credit against its U.S. federal income tax liability for the eligible Chilean taxes withheld pursuant to a sale or other disposition of our shares or ADRs. U.S. HOLDERS ARE URGED TO CONSULT THEIR OWN U.S. TAX ADVISORS WITH RESPECT TO THE PARTICULAR CONSEQUENCES TO THEM OF OWNING OR DISPOSING OF OUR SHARES OR ADRs.
Foreign Tax Credits
Subject to applicable limitations that may vary depending upon a U.S. Holder’s circumstances and subject to the discussion above regarding concerns expressed by the U.S. Treasury, you may be eligible to claim a credit against your U.S. tax liability for Chilean income taxes (or taxes imposed in lieu of an income tax) imposed in connection with distributions on and proceeds from the sale or other disposition of our shares or ADRs. Chilean dividend withholding taxes generally are expected to be income taxes eligible for the foreign tax credit. Pursuant to the Chile-U.S. Tax Treaty, after the effective date of the Chile-U.S. Tax Treaty (which was February 1, 2024, with respect to taxes withheld at source, and January 1, 2024, for all other taxes), the Chilean dividend withholding taxes and Chilean capital gain tax will be eligible for the foreign tax credit; however, you generally may claim a foreign tax credit only after taking into account any available opportunity to reduce the Chilean capital gains tax, such as the reduction for the credit for Chilean corporate income tax that is taken into account when calculating Chilean withholding tax. If a Chilean tax is imposed on the sale or disposition of our shares or ADRs, and a U.S. Holder does not receive significant foreign source income from other sources, such U.S. Holder may not be able to credit such Chilean tax against its U.S. federal income tax liability. If a Chilean tax is not treated as an income tax (or a tax paid in lieu of an income tax) for U.S. federal income tax purposes, a U.S. Holder would be unable to claim a foreign tax credit for any such Chilean tax withheld; however, a U.S. Holder may be able to deduct such tax in computing its U.S. federal income tax liability, subject to applicable limitations. In addition, instead of claiming a credit, a U.S. Holder may, at the U.S. Holder’s election, deduct such Chilean taxes in computing the U.S. Holder’s taxable income, subject to generally applicable limitations under U.S. law. An election to deduct foreign taxes instead of claiming foreign tax credits applies to all taxes paid or accrued in the taxable year to foreign countries and possessions of the U.S. THE CALCULATION OF FOREIGN TAX CREDITS AND, IN THE CASE OF A U.S. HOLDER THAT ELECTS TO DEDUCT FOREIGN INCOME TAXES, THE AVAILABILITY OF DEDUCTIONS, INVOLVES THE APPLICATION OF COMPLEX RULES THAT DEPEND ON YOUR PARTICULAR CIRCUMSTANCES. U.S. HOLDERS ARE URGED TO CONSULT THEIR TAX ADVISORS REGARDING THE AVAILABILITY OF FOREIGN TAX CREDITS IN THEIR PARTICULAR CIRCUMSTANCES.
Passive Foreign Investment Company Rules
We do not expect to be a PFIC for U.S. federal income tax purposes for our 2024 taxable year and do not anticipate being a PFIC for our 2025 taxable year. However, because PFIC status depends upon the composition of a company’s income and assets and the market value of its assets from time to time, and because it is unclear whether certain types of our income constitute passive income for PFIC purposes, there can be no assurance that we will not be considered a PFIC for any current, prior or future taxable year.
If we were a PFIC for any taxable year during which a U.S. Holder held our shares or ADRs, certain adverse consequences could apply to the U.S. Holder, including the imposition of higher amounts of tax than would otherwise apply, and additional filing requirements. In addition, if we were treated as a PFIC in a taxable year in which we pay a dividend or in the prior taxable year, the favorable dividend rates discussed above with respect to dividends paid to certain non-corporate U.S. Holders would not apply (see “—Cash Dividends and Other Distributions” above). A U.S. Holder should consult its tax advisors regarding the consequences to it if we were a PFIC, as well as the availability and advisability of making any election that might mitigate the adverse consequences of PFIC status.
Information Reporting and Backup Withholding
Required Disclosure with Respect to Foreign Financial Assets
Certain U.S. Holders are required to report information relating to an interest in our shares or ADRs, subject to certain exceptions (including an exception for our shares or ADRs held in accounts maintained by certain financial institutions), by attaching a completed IRS Form 8938, Statement of Specified Foreign Financial Assets, with their tax return for each year in which they hold an interest in our shares or ADRs. U.S. HOLDERS ARE URGED TO CONSULT THEIR OWN U.S. TAX ADVISORS REGARDING INFORMATION REPORTING REQUIREMENTS RELATING TO THEIR OWNERSHIP OF OUR SHARES OR ADRs.
Information Reporting and Backup Withholding
Payments of dividends and sales proceeds that are made within the U.S. or through certain U.S.-related financial intermediaries generally are subject to information reporting and to backup withholding unless (i) the U.S. Holder is an exempt recipient or (ii) in the case of backup withholding, the U.S. Holder provides a correct taxpayer identification number and certifies that it is not subject to backup withholding.
The amount of any backup withholding from a payment to a U.S. Holder will be allowed as a credit against its U.S. federal income tax liability and may entitle it to a refund, provided that the required information is timely furnished to the U.S. Internal Revenue Service.
Medicare Contribution Tax
Legislation enacted in 2010 generally imposes a tax of 3.8% on the “net investment income” of certain individuals, trusts and estates. Among other items, net investment income generally includes gross income from dividends and net gain attributable to the disposition of certain property, like our shares or ADRs, less certain deductions. A U.S. Holder should consult the U.S. Holder’s tax advisor regarding the possible application of this legislation in the U.S. Holder’s particular circumstances.
A U.S. HOLDER SHOULD CONSULT ITS OWN TAX ADVISORS WITH RESPECT TO THE PARTICULAR CONSEQUENCES TO IT OF OWNING AND DISPOSING OF OUR SHARES OR ADRs.
10.F.Dividends and Paying Agents
Not applicable.
10.G.Statement by Experts
Not applicable.
10.H.Documents on Display
We are subject to the information requirements of the Exchange Act, except that as a foreign issuer, we are not subject to the SEC proxy rules (other than general anti-fraud rules) or the short-swing profit disclosure rules of the Exchange Act. In accordance with these statutory requirements, we file or furnish reports and other information with the SEC. Reports, information statements and other information we filed with or furnish to the SEC are available electronically on the SEC’s website http://www.sec.gov, and on our website www.sqm.com.
10.I.Subsidiary Information
See “Item 4.C. Organizational Structure.”
ITEM 11. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
For information regarding quantitative and qualitative information about market risk, see Note 4 to our consolidated financial statements.
ITEM 12. DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES
ITEM 12.A. DEBT SECURITIES
Not applicable.
ITEM 12.B. WARRANTS AND RIGHTS
Not applicable.
ITEM 12.C. OTHER SECURITIES
Not applicable.
ITEM 12.D. AMERICAN DEPOSITARY RECEIPTS
Depositary Fees and Charges
The Company’s American Depositary Shares (“ADS”) program is administered by The Bank of New York Mellon (240 Greenwich Street, 8 Fl. W., New York, NY 10286), as depositary. Under the terms of the Deposit Agreement, an ADR holder may have to pay the following service fees to the depositary:
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|
|
|
|
| Service Fees |
Fees |
| Execution and delivery of ADSs and the surrender of ADRs |
Up to US$0.05 per share |
Depositary Payments Fiscal Year 2024
The depositary has agreed to reimburse certain expenses related to the Company’s ADR program and incurred by the Company in connection with the program. In 2024, the depositary reimbursed expenses related to investor relations for a total amount of US$211,255.21.
PART II
ITEM 13. DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES
None.
ITEM 14. MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS
None.
ITEM 15. CONTROLS AND PROCEDURES
(a)Disclosure Control and Procedures
SQM management, with the participation of the Company’s Chief Executive Officer and Chief Financial Officer and other members of the Company’s executive management, evaluated the effectiveness of our disclosure controls and procedures, pursuant to Rule 13a-15(b) promulgated under the Exchange Act, as of the end of the period covered by this Annual Report. Based upon that evaluation, our Chief Executive Officer and Chief Financial Officer have concluded that the Company’s disclosure controls and procedures were effective in providing reasonable assurance that material information is made known to management and that financial and non-financial information is properly recorded, processed, summarized and reported as of December 31, 2024.
The Company’s disclosure controls and procedures are designed to provide reasonable assurance that information required to be disclosed by the issuer in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the Commission’s rules and forms, and that such information is accumulated and communicated to management of the Company, with the participation of its Chief Executive Officer and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures. However, through the same design and evaluation period of the disclosure controls and procedures, the Company’s management, including the Company’s Chief Executive Officer and Chief Financial Officer, recognized that there are inherent limitations to the effectiveness of any control system regardless of how well designed and operated. In such a way they can provide only reasonable assurance of achieving the desired control objectives, and no evaluation can provide absolute assurance that all control issues or instances of fraud, if any, within the Company have been detected.
(b)Management’s Annual Report on Internal Control Over Financial Reporting
SQM management is responsible for establishing and maintaining adequate internal control over financial reporting as such term is defined in Exchange Act Rule 13a-15(f). The Company’s internal control over financial reporting is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the financial statements for external purposes in accordance with IFRS as issued by the IASB.
Because of its inherent limitations, internal control over financial reporting may not necessarily prevent or detect some misstatements. It can only provide reasonable assurance regarding financial statement preparation and presentation. Also, projections of any evaluation of effectiveness for future periods are subject to the risk that controls may become inadequate because of changes in conditions or because the degree of compliance with the polices or procedures may deteriorate over time.
Management assessed the effectiveness of its internal control over financial reporting as of December 31, 2024. The assessment was based on criteria established in the framework “Internal Controls — Integrated Framework (2013)” issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). Based on the assessment, SQM management has concluded that as of December 31, 2024, the Company’s internal control over financial reporting was effective.
(c)Attestation Report of the Registered Public Accounting Firm
For the report of PricewaterhouseCoopers Consultores Auditores SpA, independent registered public accounting firm on the effectiveness of our internal control over financial reporting as of December 31, 2024, see page F-1 of our consolidated financial statements.
(d)Changes in Internal Control Over Financial Reporting
There has been no change in the Company’s internal control over financial reporting (as defined in Rule 13a-15(f) under the Exchange Act) that occurred during the period covered by this Annual Report that has materially affected, or is reasonably likely to materially affect, internal control over financial reporting.
ITEM 16. [Reserved]
ITEM 16A. AUDIT COMMITTEE FINANCIAL EXPERT
The Board of Directors has determined that the Company does not have an audit committee financial expert within the meaning of the regulations adopted under the Sarbanes-Oxley Act of 2002.
Pursuant to Chilean regulations, the Company has a Directors’ Committee whose main duties are similar to those of an audit committee. Each of the members of the Directors’ Committee is a member of the audit committee. See “Item 6.C. Board Practices.”
Our Board believes that the members of the Directors’ Committee have the necessary expertise and experience to perform the functions of the Directors’ Committee pursuant to Chilean regulations.
ITEM 16B. CODE OF ETHICS
We have adopted a Code of Business Conduct that applies to the Chief Executive Officer, the Chief Financial Officer, the Internal Auditor as well as all our officers and employees. Our Code adheres to the definition set forth in Item 16B. of Form 20-F under the Exchange Act.
No waivers have been granted therefrom to the officers mentioned above.
The full text of the Code is available on our website at http://www.sqm.com in the Investor Relations section under “Corporate Governance.”
Amendments to, or waivers from, one or more provisions of the Code will be disclosed on our website.
ITEM 16C. PRINCIPAL ACCOUNTANT FEES AND SERVICES
The table shows the amount of fees billed to SQM by our independent auditors, PwC for the 2024 and 2023 fiscal years, in relation to audit, tax and other assurance services provided to us (in thousands of US$):
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|
2024 |
|
2023 |
| Audit fees |
1,552 |
|
|
1,570 |
|
| Tax fees |
227 |
|
|
241 |
|
| All other fees |
728 |
|
|
403 |
|
| Total fees |
2,507 |
|
|
2,214 |
|
Audit fees in the above table are the fees approved by the Directors’ Committee for PwC in 2024 and 2023 in connection with the audits of our annual consolidated financial statements Tax fees and all other fees in the above table are aggregate fees approved by the Directors’ Committee for PwC in 2024 and 2023 in connection with services such as transfer pricing and other assurance services that were not related to the audit. These fees were pre-approved by the Directors’ Committee in accordance with our pre-approval policies and procedures.
Directors’ Committee Pre-Approval Policies and Procedures.
Chilean law states that public companies are subject to “pre-approval” requirements under which all audit and non-audit services provided by the independent auditor must be pre-approved by the Directors’ Committee. Our Directors’ Committee approves all audits, audit related, tax and other services provided by our auditors.
Any services provided by our auditors that are not specifically included within the scope of the audit must be pre-approved by the Directors’ Committee prior to any engagement.
ITEM 16D. EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES
None.
ITEM 16E. PURCHASES OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS
None.
ITEM 16F. CHANGE IN REGISTRANT’S CERTIFYING ACCOUNTANT
None.
ITEM 16G. CORPORATE GOVERNANCE
For a summary of the significant differences between our corporate governance practices and the NYSE corporate governance standards, see “Item 6.C. Board Practices.”
ITEM 16H. MINE SAFETY AND DISCLOSURE
Not applicable.
ITEM 16I. DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
ITEM 16J. INSIDER TRADING POLICIES
Since June 2021, the Company has an Insider Trading Policy that is part of the Manual for the Management of Information of Interest to the Market. The entire document (the "Manual") is filed as Exhibit 11 to this Form 20-F.
The purpose of this Insider Trading Policy is to ensure compliance with applicable securities regulations and to prevent the improper use of material non-public information (MNPI) related to SQM securities. This policy outlines the rules governing transactions and holdings of SQM securities by covered individuals, ensuring compliance with applicable insider trading laws, rules and regulations, and NYSE listing standards.
The scope of the Insider Trading Policy applies to all individuals covered under the Manual (the "Recipients of the Manual"), including: Directors, officers, employees, and other individuals with access to MNPI. The Insider Trading Policy is applicable to transactions executed directly or indirectly through controlled entities or third parties acting on behalf of the Recipients of the Manual. All Recipients of the Manual must comply with this policy, as well as relevant provisions of the Chilean Securities Law, the Chilean Corporations Law, and the regulations of the CMF and the U.S. Securities and Exchange Commission (SEC).
The Insider Trading Policy establishes trading restrictions and blackout periods, as follow:
General Policy
Recipients of the Manual may trade SQM securities only if they comply with the Insider Trading Policy and applicable securities regulations. However, trading by the recipients of the Manual is strictly prohibited during the blackout periods as described below.
(a) Pre-Financial Disclosure Blackout:
No trading is permitted during the 30-day period prior to the disclosure of the Company’s quarterly or annual financial statements until the first full trading day following such filing.
The Company publishes planned disclosure dates at least 30 days in advance on its website (www.sqm.com, Investor Relations section) and on the CMF platform.
The Investor Relations department will notify the Recipients of the Manual about the start and end of these blackout periods.
(b) Essential Facts Blackout:
Recipients aware of an essential fact (material event that requires disclosure) must abstain from trading until the first full trading day following its disclosure to the CMF and the market.
(c) Reserved Information Blackout:
Recipients in possession of reserved (confidential) information must not trade SQM securities until the first full trading day following its disclosure to the CMF and the market.
Exceptions
The following transactions are exempt from blackout period restrictions:
(i) Exercise of stock options granted under compensation plans, provided they occur within designated periods. (ii) Subscription of preemptive rights for Company's shares that must be exercised within a specific period.
Compliance & Enforcement
In case of violation of the Insider Trading Policy, the Disclosure Committee will assess the severity of the violations and determine appropriate sanctions. These sanctions are in addition to any penalties imposed under common legislation, the Chilean Securities Law, the Chilean Corporations Law, and the regulations of the CMF and the SEC.
Disclosure of SQM Securities Holdings
SQM discloses holdings of its shares by Directors and Senior Executives in the annual report, in compliance with CMF requirements and in the Form 20-F, in compliance with SEC requirements.
ITEM 16K. CYBERSECURITY
Policies and Procedure
The purpose of information security and cybersecurity is to define the general guidelines regarding the Information Security Governance and Management System (SGGSI) and which must be known, adopted and complied with by all employees of the company, as well as third parties linked to it. SQM defines that the effective Governance and Management of Information and Operation Technology Security (IT/OT) is a business function and as such a critical element for the success and survival of SQM in a globalized and highly competitive world.
An information security strategy is developed and implemented in alliance with business strategies, information technologies (IT) and operational technologies (OT). The scope and extent of the information security strategy depends on the size, complexity of the company, its business activities, risks, vulnerabilities and threats, providing a reasonable defense against any internal or external attack. This cybersecurity strategy addresses preventive, detective, corrective and reactive measures. Also, an important aspect is the information security incident management life cycle, which consists of being able to methodologically analyze Information Security & Cybersecurity (ISC) events/incidents from a point of view of the impact they could cause to the company. Incident response methodologies generally emphasize preparedness, not only establishing an incident response capability, but also preventing incidents by ensuring that systems, networks and applications are sufficiently secure. Preparation involves implementing the appropriate tools and configuring appropriate processes and procedures for treatment before an incident occurs. One of the most important tasks is to identify the assets that must be protected.
We have incorporated cybersecurity related risks into our overall risk management system, which is built considering international standards, such as ISO 31000 and COSO ERM (Committee of Sponsoring Organizations Enterprise Risk Management), and includes the following stages:
Risk Identification: To identify the risks, meetings will be held between the business risk management area and the different process owners of each business unit or business areas, who, due to their responsibilities, can be presumed to understand significant risk situations.
Based on this input, the Business Risk Management Department will prepare a list of the risks identified for each unit. This list will be called a "risk inventory".
Risk Analysis: Risk analysis includes the study of the causes and consequences in the event of a risk materialization. A risk can have multiple causes and consequences, which can affect more than one risk, so its correct identification will provide an in-depth analysis of the risk and its possible consequences. For any critical risk related to our strategic objectives, such as the risk of cybersecurity, a cause-consequence analysis must be performed, which is registered in a Bow-Tie sheet, which will help to better identify the controls that mitigate such risk. This analysis will be reviewed at least once every six months by the Business Risk Management Department and the responsible area.
Risk Assessment: For any critical risk related to the Company's strategic objectives, such as the risk of cybersecurity, a cause-consequence analysis must be performed, which is registered in a Bow-Tie sheet, which will help to better identify the controls that mitigate such risk. The Bow-Tie analysis is a risk management technique that provides a visual representation of potential hazards, the threats that could cause those hazards, the consequences of those threats, and the controls in place to mitigate the risks. The name "bow-tie" comes from the shape of the diagram, which resembles a bow-tie with the hazard in the center and the threats and consequences branching out on either side. This analysis will be reviewed at least once every six months by the Business Risk Management Department and the responsible area.
Risk Treatment: Once the residual risk has been defined, there are different ways of dealing with the risks based on the risk management methodology, which must be considered on a case-by-case basis. The way in which risk is dealt with will depend mainly on the risk appetite defined for each case.
Risk Monitoring: The Business Risk Management Department continuously monitors the action plans committed by each responsible area.
Risk Communication: At least twice a year, the Business Risk Management Department will present SQM's critical risks, such as cybersecurity, to the Board of Directors directly, or through the Directors' Committee, so it may then report to the Board of Directors. Upon receipt of information regarding critical risks, the Board of Directors may request further details during the Board meeting or engage in discussions about the risks and/or mitigation measures with the respective responsible party.
SQM Business Risk Management Department is responsible for performing all the above described stages of the process.
Every three years, SQM's Business Risk Management Department requests a evaluation of SQM's risk management function. This evaluation is conducted by an external audit firm and includes a review of governance, processes, culture, and supporting systems, comparison with an industry benchmark, and recommendations. The most recent evaluation was conducted in 2024.
We believe to have protection mechanisms (controls) in place against unauthorized access, changes or modifications in production, development and testing environments, which may affect the confidentiality, integrity and availability of the company's information or data. Information security is subject to good governance, aligned with other governance arrangements established in the company. This good governance includes clear rules, borders, cybersecurity measures and controls.
Management and Director Cybersecurity Expertise
Our Business Risk Management Department consists of five people and is led by the Department Head who has access and reports to the Directors' Committee. Each member of the Department has training and/or certifications in Risk Management such as ISO 31000 or COSO ERM. All of them have more than five years of experience in Risk Management, Audit and Compliance roles.
SQM manages information security and cybersecurity through its IT Security and Governance Department for both its divisions: SQM Iodine-Plant Nutrition Division, SQM Lithium Chile Division and SQM International Lithium Division. The main responsibility of these departments is to protect the Company's IT infrastructure from cyberattacks and other threats. SQM has an Information Security Management System (ISMS) based on ISO 27001, the Control Objectives for Information and Related Technologies (COBIT), and the National Institute of Standards and Technology (NIST) Cybersecurity Framework (CSF).
The SQM Iodine-Plant Nutrition Division has an IT Security and Governance Department, where the Cybersecurity Leader is responsible for managing security resources, implementing protective measures, continuously monitoring, and developing response plans for cybersecurity incidents. Additionally, the department includes a Cybersecurity Risk team, under the direction of the IT Risk and Compliance Leader, responsible for managing and detecting risks, establishing robust security policies, and ensuring compliance with internal regulations and regulations related to information security and cybersecurity.
The IT Security and Governance Department reports to the Deputy IT Manager and the IT Manager, who bring over 30 years of combined experience in risk management, information asset protection, and operational continuity management in the mining sector. They oversee our divisions globally, providing advice and support to business and operational managers in their activities to ensure that information security and cybersecurity are managed as critical components of our overall sustainability strategy. Through their leadership, they ensure that best practices in cybersecurity and risk management are effectively implemented, promoting a culture of security that protects our assets and strengthens our operational resilience.
The Lithium Chile Division has an IT Security and Governance Department led by the Department Head, who reports directly to the IT Manager. This department has two main missions: Information Security, which manages risks related to the use of information technologies, regulatory compliance, and data protection; and Cybersecurity, which effectively protects, defends, and contains, through advanced monitoring, potential events and incidents that could affect availability, integrity, and confidentiality.
We have not had any major cybersecurity incidents or series of individually immaterial cybersecurity incidents that require disclosure in this Form 20-F.
PART III
ITEM 17. FINANCIAL STATEMENTS
See “Item 18. Financial Statements.”
ITEM 18. FINANCIAL STATEMENTS
For a list of all financial statements filed as part of this Form 20-F Annual Report, see “Item 19. Exhibits.”
ITEM 19. EXHIBITS
(a)Index to Financial Statements
________________________________________________
*All other schedules have been omitted because they are not applicable or the required information is shown in the Consolidated Financial Statements or notes thereto.
(b)Exhibits
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| Exhibit No. |
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Exhibit |
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| 1.1 |
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| 2.1 |
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| 4.1 |
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| 4.2 |
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| 8.1 |
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| 10.1 |
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| 10.2 |
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| 10.3 |
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| 11 |
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| 12.1 |
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| 12.2 |
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| 13.1 |
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| 13.2 |
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| 23.1 |
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| 23.2 |
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| 23.3 |
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| 23.4 |
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| 23.5 |
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| 23.6 |
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| 23.7 |
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| 23.8 |
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| 23.9 |
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| 23.10 |
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| 23.11 |
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| 23.12 |
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| 96.1 |
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| 96.2 |
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| 96.3 |
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| 96.4 |
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| 96.5 |
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| 97 |
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| 99.1 |
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| 101.CAL |
|
Inline XBRL Taxonomy Extension Calculation Linkbase Document |
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| 101.DEF |
|
Inline XBRL Taxonomy Extension Definition Linkbase Document |
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| 101.LAB |
|
Inline XBRL Taxonomy Extension Label Linkbase Document |
|
| 101.PRE |
|
Inline XBRL Taxonomy Extension Presentation Linkbase Document |
|
| 104 |
|
Inline Cover Page Interactive Data File – The Cover Page |
|
1Certain information has been omitted from this exhibit pursuant to Item 4 of the “Instructions As to Exhibits” of Form 20-F because it is both not material and is the type of information that the Company treats as private or confidential. The Company hereby agrees to furnish an unredacted copy of the exhibit and its materiality and privacy or confidentiality analyses to the Securities and Exchange Commission upon request.
The Company will furnish to the Securities and Exchange Commission, upon request, copies of any instruments that define the rights of holders of its long-term debt not filed herewith.
SIGNATURES
The registrant hereby certifies that it meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this annual report on its behalf.
SOCIEDAD QUIMICA Y MINERA DE CHILE S.A.
(CHEMICAL AND MINING COMPANY OF CHILE INC.)
/s/ Gerardo Illanes
Gerardo Illanes G.
Chief Financial Officer
Date: April 23, 2025
SOCIEDAD QUIMICA Y MINERA DE CHILE S.A. AND SUBSIDIARIES
Index to Consolidated Financial Statements
Contents
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| Ch$ |
-Chilean pesos |
| ThCh$ |
-Thousands of Chilean pesos |
| US$ |
-United States dollars |
| ThUS$ |
-Thousands of United States dollars |
| UF |
-The UF is an inflation-indexed, Chilean peso-denominated monetary unit. The UF rate is set daily in advance, based on the change in the Consumer Price Index of the previous month |
Report of Independent Registered Public Accounting Firm
To the Board of Directors and Shareholders of Sociedad Química y Minera de Chile S.A.
Opinions on the Financial Statements and Internal Control over Financial Reporting
We have audited the accompanying consolidated statements of financial position of Sociedad Química y Minera de Chile S.A. and its subsidiaries (the “Company”) as of December 31, 2024 and 2023, and the related consolidated statements of income, of comprehensive income, of changes in equity and of cash flows for each of the three years in the period ended December 31, 2024, including the related notes (collectively referred to as the “consolidated financial statements”). We also have audited the Company’s internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO).
In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the financial position of the Company as of December 31, 2024 and 2023, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2024 in conformity with International Financial Reporting Standards as issued by the International Accounting Standards Board. Also in our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2024, based on criteria established in Internal Control - Integrated Framework (2013) issued by the COSO.
Basis for Opinions
The Company's management is responsible for these consolidated financial statements, for maintaining effective internal control over financial reporting, and for its assessment of the effectiveness of internal control over financial reporting, included in Management's Annual Report on Internal Control over Financial Reporting appearing under Item 15. Our responsibility is to express opinions on the Company’s consolidated financial statements and on the Company's internal control over financial reporting based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.
We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audits to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether effective internal control over financial reporting was maintained in all material respects.
Our audits of the consolidated financial statements included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary in the circumstances. We believe that our audits provide a reasonable basis for our opinions.
Definition and Limitations of Internal Control over Financial Reporting
A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate.
Critical Audit Matters
The critical audit matters communicated below are matters arising from the current period audit of the consolidated financial statements that were communicated or required to be communicated to the audit committee and that (i) relate to accounts or disclosures that are material to the consolidated financial statements and (ii) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.
Bulk Inventories Volume
As described in Notes 3.15, 3.34 and 10 to the consolidated financial statements, the Company’s consolidated products in progress and finished products inventories balances as of December 31, 2024 amounted to US$698 million and US$854 million, respectively, which included bulk inventories amounting to US$ 249 million and US$139 million, respectively. The accounting process the Company uses to record products in progress and finished products bulk inventories volume relies on significant estimates primarily relating to topography measures and product density. To assist in validating the reasonableness of these estimates, management periodically reviews product density and performs cyclical physical inventory during the year and an annual physical inventory.
The principal considerations for our determination that performing procedures relating to the bulk inventories volume is a critical matter are (i) the significant judgment by management in determining the products in progress and finished products bulk inventories volume; (ii) a high degree of auditor judgment, subjectivity, and effort in performing our audit procedures and in evaluating audit evidence related to the estimates made by management; and (iii) the audit effort involved the use of professionals with specialized skill and knowledge.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to the estimation of inventories volumes, including controls over management’s physical inventory process and the determination of the product density. These procedures also included, among others, observing management’s physical inventory and assessing roll forward activity between the time of the inventory and year-end. Professionals with specialized skill and knowledge were used to assist in the evaluation of management’s topography measures, assess the reasonableness of management’s determination of the product density and observe management’s annual physical inventory.
Litigation - Environmental, Tax and Legal Contingencies
As described in Notes 3.27, 3.34, and 20 to the consolidated financial statements, provisions are recognized when the Company has a present legal or constructive obligation as a result of a past event, it is probable that an outflow of resources will be required to settle the obligation, and a reliable estimate of the obligation amount can be made. No provision for an estimated loss is recorded in the consolidated financial statements for unfavorable outcomes when, after assessing the information available, (i) management concludes that it is not probable that a loss has been incurred in any of the pending litigation; or (ii) management is unable to reliably estimate the loss for any of the pending matters. The Company also discloses the contingency in circumstances where management concludes no loss is probable or reliably estimable, but it is reasonably possible that a loss may be incurred.
The principal considerations for our determination that performing procedures relating to the environmental, tax, and legal contingencies is a critical audit matter are (i) the significant judgment by management when assessing whether a loss is probable and when determining whether the amount of the loss can be reasonably estimated and (ii) a high degree of auditor judgment and effort in performing procedures and evaluating audit evidence related to management’s assessment of the loss contingencies associated with environmental, tax and legal matters.
Addressing the matter involved performing procedures and evaluating audit evidence in connection with forming our overall opinion on the consolidated financial statements. These procedures included testing the effectiveness of controls relating to management’s assessment of litigation contingencies, including controls over assessing whether a loss is probable and when determining whether the amount of the loss can be reasonably estimated, as well as financial statement disclosures. These procedures also included, among others (i) confirming with internal and external legal counsel the possibility or probability of an unfavorable outcome and the extent to which the loss is reasonably estimable; (ii) evaluating the reasonableness of management’s assessment regarding whether an unfavorable outcome is reasonably possible or probable and reasonably estimable; and (iii) evaluating the sufficiency of the Company’s litigation contingency disclosures.
/s/ PricewaterhouseCoopers Consultores Auditores y Compañía Limitada
Santiago, Chile
April 23, 2025
We have served as the Company’s auditor since 2011
Consolidated Statements of Financial Position
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| Assets |
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Note |
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As of
December 31,
2024 |
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As of
December 31,
2023 |
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ThUS$ |
|
ThUS$ |
| Current Assets |
|
|
|
|
|
|
| Cash and cash equivalents |
|
9.1 |
|
1,377,851 |
|
1,041,369 |
| Other current financial assets |
|
12.1 |
|
1,079,595 |
|
1,325,843 |
| Other current non-financial assets |
|
16 |
|
200,705 |
|
136,750 |
| Trade and other receivables, current |
|
12.2 |
|
606,137 |
|
907,181 |
| Trade receivables due from related parties, current |
|
11.5 |
|
28,706 |
|
43,253 |
| Current inventories |
|
10 |
|
1,702,185 |
|
1,774,594 |
| Current tax assets |
|
25.1 |
|
583,143 |
|
637,033 |
| Total current assets other than those classified as held for sale or disposal |
|
|
|
5,578,322 |
|
5,866,023 |
| Non-current assets or groups of assets classified as held for sale |
|
|
|
118 |
|
118 |
| Total non-current assets held for sale |
|
|
|
118 |
|
118 |
| Total current assets |
|
|
|
5,578,440 |
|
5,866,141 |
|
|
|
|
|
|
|
| Non-current assets |
|
|
|
|
|
|
| Other non-current financial assets |
|
12.1 |
|
60,706 |
|
248,281 |
| Other non-current non-financial assets |
|
16 |
|
364,166 |
|
373,700 |
| Non-current trade receivables |
|
12.2 |
|
2,727 |
|
2,559 |
| Investments accounted for under the equity method |
|
7.1-8.1 |
|
585,794 |
|
86,417 |
| Intangible assets other than goodwill |
|
14.1 |
|
167,968 |
|
155,874 |
| Goodwill |
|
14.1 |
|
948 |
|
958 |
| Property, plant and equipment, net |
|
15.1 |
|
4,433,645 |
|
3,609,937 |
| Right-of-use assets |
|
13.1 |
|
84,070 |
|
73,193 |
| Non-current tax assets |
|
25.1 |
|
59,541 |
|
59,541 |
| Deferred tax assets |
|
25.3 |
|
157,564 |
|
302,236 |
| Total non-current assets |
|
|
|
5,917,129 |
|
4,912,696 |
| Total assets |
|
|
|
11,495,569 |
|
10,778,837 |
The accompanying notes form an integral part of these consolidated financial statements.
Consolidated Statements of Financial Position
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Liabilities and Equity |
|
Note |
|
As of
December 31,
2024 |
|
As of
December 31,
2023 |
|
|
|
|
ThUS$ |
|
ThUS$ |
| Current liabilities |
|
|
|
|
|
|
| Other current financial liabilities |
|
12.4 |
|
1,163,468 |
|
1,256,499 |
| Lease liabilities, current |
|
13.2 |
|
23,011 |
|
18,192 |
| Trade and other payables, current |
|
12.5 |
|
471,449 |
|
449,633 |
| Current trade payables due to related parties |
|
11.6 |
|
10,265 |
|
2,346 |
| Other current provisions |
|
18.1 |
|
311,197 |
|
392,322 |
| Current tax liabilities |
|
25.2 |
|
79,841 |
|
183,633 |
| Provisions for employee benefits, current |
|
17.1 |
|
31,546 |
|
23,946 |
| Other current non-financial liabilities |
|
18.4 |
|
128,039 |
|
187,305 |
| Total current liabilities |
|
|
|
2,218,816 |
|
2,513,876 |
| Non-current liabilities |
|
|
|
|
|
|
| Other non-current financial liabilities |
|
12.4 |
|
3,600,582 |
|
3,213,422 |
| Non-current lease liabilities |
|
13.2 |
|
60,801 |
|
56,966 |
| Other non-current provisions |
|
18.1 |
|
53,317 |
|
60,450 |
| Deferred tax liabilities |
|
25.3 |
|
298,379 |
|
394,688 |
| Non-current provisions for employee benefits |
|
17.1 |
|
65,607 |
|
62,006 |
| Total non-current liabilities |
|
|
|
4,078,686 |
|
3,787,532 |
| Total liabilities |
|
|
|
6,297,502 |
|
6,301,408 |
|
|
|
|
|
|
|
| Equity |
|
|
|
|
|
|
| Equity attributable to owners of the Parent |
|
19 |
|
|
|
|
| Share capital |
|
|
|
1,577,623 |
|
1,577,643 |
| Retained earnings |
|
|
|
3,620,612 |
|
2,748,686 |
| Other reserves |
|
|
|
(37,416) |
|
|
114,870 |
|
| Equity attributable to owners of the Parent |
|
|
|
5,160,819 |
|
4,441,199 |
| Non-controlling interests |
|
|
|
37,248 |
|
36,230 |
| Total equity |
|
|
|
5,198,067 |
|
4,477,429 |
| Total liabilities and equity |
|
|
|
11,495,569 |
|
10,778,837 |
The accompanying notes form an integral part of these consolidated financial statements.
Consolidated Statements of Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three years in the period ended |
| Consolidated Statements of Income |
|
Note |
|
2024 |
|
2023 |
|
2022 |
|
|
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Revenue |
|
21.1 |
|
4,528,761 |
|
7,467,490 |
|
10,710,578 |
| Cost of sales |
|
21.2 |
|
(3,201,654) |
|
|
(4,392,436) |
|
|
(4,973,953) |
|
| Gross profit |
|
|
|
1,327,107 |
|
3,075,054 |
|
5,736,625 |
| Other income |
|
21.3 |
|
32,229 |
|
40,557 |
|
9,854 |
| Administrative expenses |
|
21.4 |
|
(185,959) |
|
|
(175,765) |
|
|
(142,644) |
|
| Other expenses |
|
21.5 |
|
(104,698) |
|
|
(93,400) |
|
|
(75,971) |
|
| Impairment of financial assets and reversal of impairment losses |
|
21.7 |
|
(639) |
|
202 |
|
|
3,369 |
| Other (losses) gains |
|
21.6 |
|
(2,142) |
|
(2,254) |
|
|
117 |
|
| Income from operating activities |
|
|
|
1,065,898 |
|
2,844,394 |
|
5,531,350 |
| Finance income |
|
21.10 |
|
103,642 |
|
122,726 |
|
47,038 |
| Finance costs |
|
15-21.9 |
|
(197,544) |
|
|
(138,402) |
|
|
(86,651) |
|
| Share of profit of associates and joint ventures accounted for using the equity method |
|
7.1-8.1 |
|
11,025 |
|
593 |
|
20,159 |
| Foreign currency translation differences |
|
24 |
|
(8,607) |
|
|
(22,293) |
|
|
(25,400) |
|
| Income before taxes |
|
|
|
974,414 |
|
2,807,018 |
|
5,486,496 |
| Income tax expense |
|
25.3 |
|
(282,573) |
|
|
(1,876,751) |
|
|
(1,572,212) |
|
| Net income |
|
|
|
691,841 |
|
930,267 |
|
3,914,284 |
| Net income attributable to: |
|
|
|
|
|
|
|
|
| Net income attributable to owners of the parent |
|
|
|
685,117 |
|
923,191 |
|
3,906,311 |
| Net income attributable to non-controlling interests |
|
|
|
6,724 |
|
7,076 |
|
7,973 |
|
|
|
|
691,841 |
|
930,267 |
|
3,914,284 |
|
|
|
|
|
|
|
|
|
| Basic earnings per share (US$ per share) |
|
3.26 |
|
2.3986 |
|
3.2320 |
|
13.6757 |
|
|
|
|
|
|
|
|
|
| Diluted earnings per share (US$ per share) |
|
3.26 |
|
2.3986 |
|
3.2320 |
|
13.6757 |
The accompanying notes form an integral part of these consolidated financial statements.
Consolidated Statements of Comprehensive Income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three years in the period ended |
| Consolidated Statements of Comprehensive Income |
|
2024 |
|
2023 |
|
2022 |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Net income |
|
691,841 |
|
|
930,267 |
|
|
3,914,284 |
|
| Items of other comprehensive income that will not be reclassified to income for the year, before taxes |
|
|
|
|
|
|
| Gains (losses) from measurements of defined benefit plans |
|
3,148 |
|
|
(5,843) |
|
|
(6,350) |
|
| Gains from financial assets measured at fair value through other comprehensive income |
|
3,520 |
|
|
190,509 |
|
|
190 |
|
| Total other comprehensive income (loss) that will not be reclassified to income for the year, before taxes |
|
6,668 |
|
|
184,666 |
|
|
(6,160) |
|
| Items of other comprehensive income that will be reclassified to income for the year, before taxes |
|
|
|
|
|
|
| (Losses) gains from foreign currency exchange |
|
(34,516) |
|
|
3,177 |
|
|
(255) |
|
| Cash flow hedges- effective portion of changes in far value |
|
2,520 |
|
|
126 |
|
|
36,079 |
|
| Cash flow hedges-reclassified to income for the year |
|
8,773 |
|
|
18,566 |
|
|
(9,457) |
|
| Total other comprehensive (losses) income that will be reclassified to income for the year |
|
(23,223) |
|
|
21,869 |
|
|
26,367 |
|
| Other items of other comprehensive (losses) income, before taxes |
|
(16,555) |
|
|
206,535 |
|
|
20,207 |
|
| Income taxes related to items of other comprehensive income that will not be reclassified to income for the year |
|
|
|
|
|
|
| Income tax (expense) benefit related to defined benefit plans measured through other comprehensive income |
|
(860) |
|
|
1,582 |
|
|
1,273 |
|
| Income tax expense related to gains on financial assets irrevocably measured at fair value through other comprehensive income |
|
(2,723) |
|
|
(57,242) |
|
|
(17) |
|
| Total income tax relating to components of other comprehensive income that will be not reclassified to profit for the year |
|
(3,583) |
|
|
(55,660) |
|
|
1,256 |
|
| Income taxes relating to components of other comprehensive income that will be reclassified to income for the year |
|
|
|
|
|
|
| Income tax expense related to gains on cash flow hedges |
|
(3,049) |
|
|
(5,047) |
|
|
(7,172) |
|
| Total income tax (expense) relating to components of other comprehensive income that will be reclassified to income for the year |
|
(3,049) |
|
|
(5,047) |
|
|
(7,172) |
|
|
|
|
|
|
|
|
| Total other comprehensive (loss) income |
|
(23,187) |
|
|
145,828 |
|
|
14,291 |
|
| Total comprehensive income |
|
668,654 |
|
|
1,076,095 |
|
|
3,928,575 |
|
| Comprehensive income attributable to |
|
|
|
|
|
|
| Comprehensive income attributable to owners of the parent |
|
661,727 |
|
|
1,068,968 |
|
|
3,920,781 |
|
| Comprehensive income attributable to non-controlling interest |
|
6,927 |
|
|
7,127 |
|
|
7,794 |
|
|
|
668,654 |
|
|
1,076,095 |
|
|
3,928,575 |
|
See note 19.
The accompanying notes form an integral part of these consolidated financial statements.
Consolidated Statements of Cash Flows
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three years in the period ended |
| Consolidated Statements of Cash Flows |
|
Note |
|
2024 |
|
2023 |
|
2022 |
|
|
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Cash flows generated from (used in) operating activities |
|
|
|
|
|
|
|
|
| Classes of cash receipts generated from operating activities |
|
|
|
|
|
|
|
|
| Cash receipts from sales of goods and rendering of services |
|
|
|
5,102,866 |
|
|
8,162,698 |
|
|
10,954,251 |
|
| Cash receipts from premiums and benefits, annuities and other benefits from policies entered |
|
|
|
1,000 |
|
|
— |
|
|
1,345 |
|
| Cash receipts derived from sub-leases |
|
|
|
— |
|
|
89 |
|
|
129 |
|
| Classes of Payments |
|
|
|
|
|
|
|
|
| Cash payments to suppliers for the provision of goods and services |
|
|
|
(3,399,104) |
|
|
(5,637,224) |
|
|
(5,255,694) |
|
| Cash payments relating to variable leases |
|
21.8 |
|
(6,138) |
|
|
(4,700) |
|
|
(3,631) |
|
| Other payments related to operating activities |
|
|
|
(94,899) |
|
|
(86,291) |
|
|
(24,148) |
|
| Net cash generated from operating activities |
|
|
|
1,603,725 |
|
|
2,434,572 |
|
|
5,672,252 |
|
| Dividends received |
|
7.1-8.1 |
|
18,566 |
|
|
9,328 |
|
|
6,354 |
|
| Interest paid |
|
|
|
(240,825) |
|
|
(121,222) |
|
|
(109,697) |
|
| Interest paid on lease liabilities |
|
21.9 |
|
(2,820) |
|
|
(2,038) |
|
|
(1,226) |
|
| Interest received |
|
|
|
97,077 |
|
|
103,352 |
|
|
48,120 |
|
| Income taxes paid |
|
|
|
(235,155) |
|
|
(2,309,640) |
|
|
(1,648,668) |
|
| Other cash (outflows) inflows (1) |
|
3.4 |
|
34,110 |
|
|
(310,991) |
|
|
110,460 |
|
| Net cash generated from (used in) operating activities |
|
|
|
1,274,678 |
|
|
(196,639) |
|
|
4,077,595 |
|
|
|
|
|
|
|
|
|
|
| Cash flows generated from (used in) investing activities |
|
|
|
|
|
|
|
|
| Proceeds from the sale of equity instruments |
|
|
|
— |
|
|
4,745 |
|
|
4,745 |
|
| Purchase of ownership interest in associates and joint ventures |
|
8.4 |
|
(356,846) |
|
|
(34,547) |
|
|
— |
|
| Acquisition of equity instruments |
|
|
|
(11,063) |
|
|
(30,701) |
|
|
— |
|
| Acquisition of subsidiaries |
|
2.5 |
|
(122,594) |
|
|
— |
|
|
— |
|
| Proceeds from the sale of property, plant and equipment |
|
|
|
23 |
|
|
44 |
|
|
112 |
|
| Payment of loans from related entities |
|
|
|
(6,746) |
|
|
— |
|
|
— |
|
| Acquisition of property, plant and equipment |
|
|
|
(971,792) |
|
|
(1,103,598) |
|
|
(905,247) |
|
| Proceeds from sale of intangible assets |
|
|
|
13,037 |
|
|
5,205 |
|
|
3,624 |
|
| Proceeds related to futures, forward options and swap contracts |
|
|
|
346 |
|
|
18,034 |
|
|
39,878 |
|
| Loans to related parties |
|
|
|
2,093 |
|
|
3,387 |
|
|
873 |
|
| Purchases of other long-term assets |
|
16 |
|
(10,701) |
|
|
(12,002) |
|
|
(11,341) |
|
| Other cash inflows (outflows) (2) |
|
|
|
250,251 |
|
|
(332,060) |
|
|
(42,045) |
|
| Cash flow used in investing activities |
|
|
|
(1,213,992) |
|
|
(1,481,493) |
|
|
(909,401) |
|
________________________________________________
(1)Other inflows (outflows) of cash from operating activities include net increases (decreases) of value added tax and banking expenses, taxes associated with interest payments, costs of issuance of debt and government grants.
(2)Other cash inflows (outflow) include investments and redemptions of time deposits and other financial instruments that do not qualify as cash and cash equivalent in accordance with IAS 7, paragraph 7, since they mature in more than 90 days from the original investment date.
The accompanying notes form an integral part of these consolidated financial statements.
Consolidated Statements of Cash Flows
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the three years in the period ended |
| Consolidated Statements of Cash Flows |
|
Note |
|
2024 |
|
2023 |
|
2022 |
|
|
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Cash flows generated from (used in) financing activities |
|
|
|
|
|
|
|
|
| Payment of lease liabilities |
|
|
|
(22,288) |
|
|
(15,914) |
|
|
(10,478) |
|
| Proceeds from long-term loans |
|
|
|
886,000 |
|
850,000 |
|
200,000 |
| Proceeds from short-term loans |
|
|
|
1,250,000 |
|
1,215,000 |
|
60,000 |
| Loan repayments |
|
|
|
(1,764,869) |
|
|
(530,717) |
|
|
(13,117) |
|
| Proceeds (payments) from hedges associated to loans |
|
|
|
759 |
|
|
18,927 |
|
|
(993) |
|
| Dividends paid |
|
|
|
(67,219) |
|
|
(1,471,035) |
|
|
(2,238,381) |
|
| Net cash flow generated from financing activities |
|
|
|
282,383 |
|
|
66,261 |
|
|
(2,002,969) |
|
|
|
|
|
|
|
|
|
|
| Net increase (decrease) in cash and cash equivalents before the effect of changes in the exchange rate |
|
|
|
343,069 |
|
(1,611,871) |
|
1,165,225 |
|
| Effects of exchange rate fluctuations on cash and cash equivalents |
|
|
|
(6,587) |
|
|
(1,996) |
|
|
(25,040) |
|
| Increase (decrease) in cash and cash equivalents |
|
|
|
336,482 |
|
(1,613,867) |
|
1,140,185 |
| Cash and cash equivalents at beginning of year |
|
|
|
1,041,369 |
|
2,655,236 |
|
1,515,051 |
| Cash and cash equivalents at end of year |
|
9 |
|
1,377,851 |
|
1,041,369 |
|
2,655,236 |
The accompanying notes form an integral part of these consolidated financial statements.
Consolidated Statements of Changes in Equity
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Statements of
Changes in Equity |
|
Share capital |
|
Foreign
currency
translation
reserve |
|
Hedge
reserve |
|
Gains and
losses from
financial
assets
reserve |
|
Actuarial
gains and
losses from
defined
benefit plans
reserve |
|
Accumulated
other
comprehensive
income |
|
Other
miscellaneous
reserves |
|
Total
reserves |
|
Retained
earnings |
|
Equity
attributable
to owners of
the Parent |
|
Non-
controlling
interests |
|
Total Equity |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Equity at January 1, 2024 |
|
1,577,643 |
|
|
(4,921) |
|
|
(930) |
|
|
122,294 |
|
|
(13,454) |
|
|
102,989 |
|
|
11,881 |
|
|
114,870 |
|
|
2,748,686 |
|
|
4,441,199 |
|
|
36,230 |
|
|
4,477,429 |
|
| Net income |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
685,117 |
|
|
685,117 |
|
|
6,724 |
|
|
691,841 |
|
| Other comprehensive (loss) income |
|
— |
|
|
(34,706) |
|
|
8,244 |
|
|
797 |
|
|
2,275 |
|
|
(23,390) |
|
|
— |
|
|
(23,390) |
|
|
— |
|
|
(23,390) |
|
|
203 |
|
|
(23,187) |
|
| Comprehensive income |
|
— |
|
|
(34,706) |
|
|
8,244 |
|
|
797 |
|
|
2,275 |
|
|
(23,390) |
|
|
— |
|
|
(23,390) |
|
|
685,117 |
|
|
661,727 |
|
|
6,927 |
|
|
668,654 |
|
| Equity instruments irrevocably recognized in other comprehensive income (loss) |
|
— |
|
|
— |
|
|
— |
|
|
(128,793) |
|
|
— |
|
|
— |
|
|
— |
|
|
(128,793) |
|
|
186,809 |
|
|
58,016 |
|
|
— |
|
|
58,016 |
|
| Dividends (1) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(5,909) |
|
|
(5,909) |
|
| Capital decrease |
|
(20) |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
20 |
|
|
20 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
| Other increases in equity |
|
— |
|
|
1,603 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(1,726) |
|
|
(123) |
|
|
— |
|
|
(123) |
|
|
— |
|
|
(123) |
|
| Total changes in equity |
|
(20) |
|
|
(33,103) |
|
|
8,244 |
|
|
(127,996) |
|
|
2,275 |
|
|
(23,390) |
|
|
(1,706) |
|
|
(152,286) |
|
|
871,926 |
|
|
719,620 |
|
|
1,018 |
|
|
720,638 |
|
| Equity as of December 31, 2024 |
|
1,577,623 |
|
|
(38,024) |
|
|
7,314 |
|
|
(5,702) |
|
|
(11,179) |
|
|
79,599 |
|
|
10,175 |
|
|
(37,416) |
|
|
3,620,612 |
|
|
5,160,819 |
|
|
37,248 |
|
|
5,198,067 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Statements of
Changes in Equity |
|
Share capital |
|
Foreign
currency
translation
reserve |
|
Hedge
reserves |
|
Gains and
losses from
financial
assets
reserve |
|
Actuarial
gains and
losses from
defined
benefit plans
reserve |
|
Accumulated
other
comprehensive
income |
|
Other
miscellaneous
reserves |
|
Total
reserves |
|
Retained
earnings |
|
Equity
attributable
to owners of
the Parent |
|
Non-
controlling
interests |
|
Total Equity |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Equity at January 1, 2023 |
|
1,577,643 |
|
|
(8,042) |
|
|
(14,575) |
|
|
(10,973) |
|
|
(9,198) |
|
|
(42,788) |
|
|
11,663 |
|
|
(31,125) |
|
|
3,350,114 |
|
|
4,896,632 |
|
|
35,369 |
|
|
4,932,001 |
|
| Net income |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
923,191 |
|
|
923,191 |
|
|
7,076 |
|
|
930,267 |
|
| Other comprehensive income |
|
— |
|
|
3,121 |
|
|
13,645 |
|
|
133,267 |
|
|
(4,256) |
|
|
145,777 |
|
|
— |
|
|
145,777 |
|
|
— |
|
|
145,777 |
|
|
51 |
|
|
145,828 |
|
| Comprehensive income |
|
— |
|
|
3,121 |
|
|
13,645 |
|
|
133,267 |
|
|
(4,256) |
|
|
145,777 |
|
|
— |
|
|
145,777 |
|
|
923,191 |
|
|
1,068,968 |
|
|
7,127 |
|
|
1,076,095 |
|
| Dividends (1) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(1,524,619) |
|
|
(1,524,619) |
|
|
(6,266) |
|
|
(1,530,885) |
|
| Other (decreases) increases in equity |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
218 |
|
|
218 |
|
|
— |
|
|
218 |
|
|
— |
|
|
218 |
|
| Total changes in equity |
|
— |
|
|
3,121 |
|
|
13,645 |
|
|
133,267 |
|
|
(4,256) |
|
|
145,777 |
|
|
218 |
|
|
145,995 |
|
|
(601,428) |
|
|
(455,433) |
|
|
861 |
|
|
(454,572) |
|
| Equity as of December 31, 2023 |
|
1,577,643 |
|
|
(4,921) |
|
|
(930) |
|
|
122,294 |
|
|
(13,454) |
|
|
102,989 |
|
|
11,881 |
|
|
114,870 |
|
|
2,748,686 |
|
|
4,441,199 |
|
|
36,230 |
|
|
4,477,429 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Consolidated Statements of
Changes in Equity |
|
Share capital |
|
Foreign
currency
translation
reserve |
|
Hedge
reserve |
|
Gains and
losses from
financial
assets
reserve |
|
Actuarial
gains and
losses from
defined
benefit plans
reserve |
|
Accumulated
other
comprehensive
income |
|
Other
miscellaneous
reserves |
|
Total
reserves |
|
Retained
earnings |
|
Equity
attributable
to owners of
the Parent |
|
Non-
controlling
interests |
|
Total Equity |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Equity at January 1, 2022 |
|
1,577,643 |
|
|
(7,913) |
|
|
(34,025) |
|
|
(11,146) |
|
|
(4,174) |
|
|
(57,258) |
|
|
13,103 |
|
|
(44,155) |
|
|
1,648,032 |
|
|
3,181,520 |
|
|
34,451 |
|
|
3,215,971 |
|
| Net income |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
3,906,311 |
|
|
3,906,311 |
|
|
7,973 |
|
|
3,914,284 |
|
| Other comprehensive (loss) |
|
— |
|
|
(129) |
|
|
19,450 |
|
|
173 |
|
|
(5,024) |
|
|
14,470 |
|
|
— |
|
|
14,470 |
|
|
— |
|
|
14,470 |
|
|
(179) |
|
|
14,291 |
|
| Comprehensive income |
|
— |
|
|
(129) |
|
|
19,450 |
|
|
173 |
|
|
(5,024) |
|
|
14,470 |
|
|
— |
|
|
14,470 |
|
|
3,906,311 |
|
|
3,920,781 |
|
|
7,794 |
|
|
3,928,575 |
|
| Sale of equity instruments irrevocably recognized in OCI |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
| Dividends (1) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(2,204,229) |
|
|
(2,204,229) |
|
|
(7,369) |
|
|
(2,211,598) |
|
| Capital stock increase |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
| Other decreases in equity |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(1,440) |
|
|
(1,440) |
|
|
— |
|
|
(1,440) |
|
|
493 |
|
|
(947) |
|
| Total changes in equity |
|
— |
|
|
(129) |
|
|
19,450 |
|
|
173 |
|
|
(5,024) |
|
|
14,470 |
|
|
(1,440) |
|
|
13,030 |
|
|
1,702,082 |
|
|
1,715,112 |
|
|
918 |
|
|
1,716,030 |
|
| Equity as of December 31, 2022 |
|
1,577,643 |
|
|
(8,042) |
|
|
(14,575) |
|
|
(10,973) |
|
|
(9,198) |
|
|
(42,788) |
|
|
11,663 |
|
|
(31,125) |
|
|
3,350,114 |
|
|
4,896,632 |
|
|
35,369 |
|
|
4,932,001 |
|
________________________________________________
(1)See Note 19.7
Glossary
The Following capitalized terms in these financial statements (including their notes) will have the following meaning:
“ADS’’ American Depositary Shares;
"ADR" American Depositary Receipt
“CAM’’ Arbitration and Mediation Center of the Santiago Chamber of Commerce;
“CCHEN’’ Chilean Nuclear Energy Commission;
“CCS’’ cross currency swap;
“CINIIF’’ International Financial Reporting Interpretations Committee;
“CMF’’ Financial Market Commission;
“Codelco’’ Chilean Corporación Nacional del Cobre;
“Company” Sociedad Química y Minera de Chile S.A.;
“Corfo” Chilean Economic Development Agency;
“Corporate Governance Committee’’ The Company’s Corporate Governance Committee;
“Corporate Law’’ Law No. 18,046 on corporations;
“CPI” Consumer Price Index
“DCV’’ Central Securities Depository;
“DGA’’ General Directorate of Water Resources;
“Directors’ Committee” The Company’s Directors’ Committee;
“Dollar’’ or “US$’’ Dollars of the United States of America;
“DPA’’ Deferred Prosecution Agreement;
“FNE’’ Chilean National Economic Prosecutor’s Office;
“Health, Safety and Environment Committee’’ The Company’s Health, Safety and Environment Committee;
“IAS” International Accounting Standard;
“IASB’’ International Accounting Standards Board;
“IFRIC’’ International Financial Reporting Standard Interpretations Committee;
“IFRS” International Financial Reporting Standards;
“ILO” International Labour Organization;
“IRSW” interest rate swap;
“Lease Agreement’’ the mining concessions lease agreement signed by SQM Salar and Corfo in 1993, as subsequently amended; “Pampa Group’’ Jointly Sociedad de Inversiones Pampa Calichera S.A., Potasios de Chile S.A. and Inversiones Global Mining Chile Limitada;
“Management’’ the Company’s management;
“MUS$’’ millions of Dollars;
“Pesos’’ or “Ch$” Chilean pesos, legal tender in Chile;
“PFIC’’ Passive foreign investment company;
“Project Agreement” project agreement for the Salar de Atacama signed by Corfo and SQM Salar in 1993, as subsequently amended;
“PPM” The monthly provisional payments.
“SEC’’ Securities and Exchange Commission;
“Securities Market Law” Securities Market Law No. 18,045;
“Sernageomin” Chilean National Geology and Mining Service;
“SIC’’ Standard Interpretations Committee;
“IRS” Chilean Internal Revenue Service;
“SMA” Environmental Superintendent’s Office;
“SOFR” Secured overnight financing rate;
“SQM Group’’ The corporate group composed of the Company and its subsidiaries
“SQM Industrial” SQM Industrial S.A.;
“SQM NA” SQM North America Corporation;
“SQM Nitratos” SQM Nitratos S.A.;
“SQM Potasio” SQM Potasio S.A.;
“SQM Salar” SQM Salar SpA., formerly SQM Salar S.A.;
“SSI’’ Staff severance indemnities;
“ThUS$’’ thousands of Dollars;
“Tianqi” Tianqi Lithium Corporation;
“UF” Unidad de Fomento (a Chilean Peso based inflation indexed currency unit);
“United States” United States of America;
Note 1 Identification and activities of the Company and Subsidiaries
1.1 Historical background
Sociedad Química y Minera de Chile S.A. (the “Company” or “SQM”) is an open stock corporation organized under the laws of the Republic of Chile and its Chilean Tax Identification Number is 93.007.000-9.
The Company was incorporated through a public deed dated June 17, 1968 by the public notary of Santiago Mr. Sergio Rodríguez Garcés. Its existence was approved by Decree No. 1,164 of June 22, 1968 of the Ministry of Finance, and it was registered on June 29, 1968 in the Registry of Commerce of Santiago, on page 4,537 No. 1,992. SQM’s headquarters are located at El Trovador 4285, Floor 6, Las Condes, Santiago, Chile, The Company’s telephone number is +(56 2) 2425-2000.
The Company is registered in the CMF under number 184 of March 18, 1983 and is therefore subject to oversight by that entity.
1.2 Main domicile where the Company performs its production activities
The Company’s main domiciles are: Calle Dos Sur plot No. 5 - Antofagasta; Arturo Prat 1060 - Tocopilla; Administration Building w/n - Maria Elena; Administration Building w/n Pedro de Valdivia - María Elena, Anibal Pinto 3228 - Antofagasta, Kilometer 1378 Ruta 5 Norte Highway - Antofagasta, Coya Sur Plant w/n - Maria Elena, kilometer 1760 Ruta 5 Norte Highway - Pozo Almonte, Salar de Atacama (Atacama Saltpeter deposit) potassium chloride plant w/n - San Pedro de Atacama, potassium sulfate plant at Salar de Atacama w/n – San Pedro de Atacama, Minsal Mining Camp w/n CL Plant CL, Potassium– San Pedro de Atacama, formerly the Iris Saltpeter office w/n, Commune of Pozo Almonte, Iquique; Level 1; 225 Dt Georges Tce Perth WA 6000, Australia.
1.3 Codes of main activities
The codes of the main activities as established by the CMF, as follows:
•1700 (Mining)
•2200 (Chemical products)
•1300 (Investment)
1.4 Description of the nature of operations and main activities
The products of the Company are mainly derived from mineral deposits found in northern Chile where mining takes place and caliche and brine deposits are processed.
(a)Specialty plant nutrition: Four main types of specialty plant nutrients are produced: potassium nitrate, sodium nitrate, sodium potassium nitrate and specialty blends. In addition, other specialty fertilizers are sold including third party products.
(b)Iodine: The Company produces iodine and iodine derivatives, which are used in a wide range of medical, pharmaceutical, agricultural and industrial applications, including x-ray contrast media, polarizing films for LCD and LED, antiseptics, biocides and disinfectants, in the synthesis of pharmaceuticals, electronics, pigments and dye components.
(c)Lithium: The Company produces lithium carbonate, which is used in a variety of applications, including electrochemical materials for batteries, frits for the ceramic and enamel industries, and it is an important ingredient in the manufacture of gunpowder, heat-resistant glass (ceramic glass), air conditioning chemicals, continuous casting powder for steel extrusion, primary aluminum smelting process, pharmaceuticals and lithium derivatives. We are also a leading supplier of lithium hydroxide, which is primarily used as an input for the lubricating greases industry and for certain cathodes for batteries.
(d)Industrial chemicals: The Company produces three industrial chemicals: sodium nitrate, potassium nitrate and potassium chloride. Sodium nitrate is used primarily in the production of glass, explosives, and metal treatment. Potassium nitrate is used in the manufacturing of specialty glass, and it is also an important raw material to produce of frits for the ceramics and enamel industries. Solar salts, a combination of potassium nitrate and sodium nitrate, are used as a thermal storage medium in concentrated solar power plants. Potassium chloride is a basic chemical used to produce potassium hydroxide, and it is also used oil drilling, and to produce carrageenan.
(e)Potassium: The Company produces potassium chloride and potassium sulfate from brines extracted from the Salar de Atacama. Potassium chloride is a commodity fertilizer used to fertilize a variety of crops including corn, rice, sugar, soybean and wheat. Potassium sulfate is a specialty fertilizer used mainly in crops such as vegetables, fruits and industrial crops.
(f)Other products and services: The Company also sells other fertilizers and blends, some of which we do not produce, mainly potassium nitrate, potassium sulfate and potassium chloride. This business line also includes revenue from commodities, services, interests, royalties and dividends.
1.5 Other background
(a)Employees
As of December 31, 2024, and 2023, the workforce was as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2024 |
|
As of December 31, 2023 |
| Employees |
|
SQM S.A. |
|
Other
subsidiaries |
|
Total |
|
SQM S.A. |
|
Other
subsidiaries |
|
Total |
| Executives |
|
25 |
|
167 |
|
192 |
|
33 |
|
137 |
|
170 |
| Professionals |
|
211 |
|
3,179 |
|
3,390 |
|
190 |
|
2,663 |
|
2,853 |
| Technicians and operators |
|
411 |
|
4,351 |
|
4,762 |
|
364 |
|
4,295 |
|
4,659 |
| Total |
|
647 |
|
7,697 |
|
8,344 |
|
587 |
|
7,095 |
|
7,682 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2024 |
|
As of December 31, 2023 |
| Place of work |
|
SQM S.A. |
|
Other
subsidiaries |
|
Total |
|
SQM S.A. |
|
Other
subsidiaries |
|
Total |
| In Chile |
|
647 |
|
6,611 |
|
7,258 |
|
587 |
|
6,447 |
|
7,034 |
| Outside Chile |
|
— |
|
1,086 |
|
1,086 |
|
— |
|
648 |
|
648 |
| Total |
|
647 |
|
7,697 |
|
8,344 |
|
587 |
|
7,095 |
|
7,682 |
(b)Main shareholders
As of December 31, 2024, there were 1,115 shareholders.
Following table shows information about the main shareholders of the Company’s Series A or Series B shares in circulation as of December 31, 2024 and 2023, in line with information provided by the DCV, with respect to each shareholder that, to our knowledge, owns more than 5% of the outstanding Series A or Series B shares. The following information is derived from our registry and reports managed by the DCV and informed to the CMF and the Chilean Stock Exchange:
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|
|
|
| Shareholders as of December 31, 2024 |
|
No. of Series A |
|
% of Series A
shares |
|
No. of Series B |
|
% of Series B
shares |
|
% of total
shares |
| Inversiones TLC SpA |
|
62,556,568 |
|
43.80 % |
|
— |
|
— |
|
21.90 |
% |
| The Bank of New York Mellon, ADRs |
|
— |
|
— |
|
42,599,351 |
|
29.83 % |
|
14.91 |
% |
| Sociedad de Inversiones Pampa Calichera S.A. |
|
41,885,389 |
|
29.33 |
% |
|
1,611,227 |
|
1.13 |
% |
|
15.23 |
% |
| Potasios de Chile S.A. |
|
18,179,147 |
|
12.73 |
% |
|
— |
|
— |
|
6.36 |
% |
| Banco de Chile on behalf of State Street |
|
— |
|
— |
|
11,210,700 |
|
7.85 |
% |
|
3.92 |
% |
| AFP Habitat S.A. |
|
614,872 |
|
0.43 % |
|
9,927,240 |
|
6.95 |
% |
|
3.69 |
% |
| Global Mining Spa |
|
8,798,539 |
|
6.16 |
% |
|
— |
|
— |
|
3.08 |
% |
| Banco Santander on behalf of foreign investors |
|
— |
|
— |
|
7,809,941 |
|
5.47 |
% |
|
2.73 |
% |
| AFP Provida S.A. |
|
— |
|
— |
|
8,160,173 |
|
5.71 |
% |
|
2.86 |
% |
| AFP Cuprum S.A. |
|
— |
|
— |
|
7,867,910 |
|
5.51 |
% |
|
2.75 |
% |
| AFP Capital S.A. |
|
— |
|
— |
|
7,924,281 |
|
5.55 |
% |
|
2.77 |
% |
| Banco De Chile on Behalf of Non-Resident Third Parties |
|
55,980 |
|
0.04 % |
|
4,965,585 |
|
3.48 |
% |
|
1.76 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Shareholders as of December 31, 2023 |
|
No. of Series A |
|
% of Series A
shares |
|
No. of Series B |
|
% of Series B
shares |
|
% of total
shares |
| Inversiones TLC SpA |
|
62,556,568 |
|
43.80 % |
|
— |
|
— |
|
21.90 % |
| The Bank of New York Mellon, ADRs |
|
— |
|
— |
|
46,174,681 |
|
32.33 % |
|
16.17 % |
| Sociedad de Inversiones Pampa Calichera S.A. |
|
42,640,389 |
|
29.86 % |
|
1,611,227 |
|
1.13 % |
|
15.49 % |
| Potasios de Chile S.A. |
|
18,179,147 |
|
12.73 % |
|
— |
|
— |
|
6.36 % |
| Banco de Chile on behalf of State Street |
|
— |
|
— |
|
11,744,230 |
|
8.22 |
% |
|
4.11 % |
| AFP Habitat S.A. |
|
603,789 |
|
0.42 % |
|
9,991,619 |
|
7.00 % |
|
3.71 % |
| Global Mining Spa |
|
8,798,539 |
|
6.16 % |
|
— |
|
— |
|
3.08 % |
| Banco Santander on behalf of foreign investors |
|
— |
|
— |
|
8,499,930 |
|
5.95 % |
|
2.98 % |
| AFP Provida S.A. |
|
— |
|
— |
|
8,299,626 |
|
5.81 % |
|
2.91 % |
| AFP Cuprum S.A. |
|
— |
|
— |
|
7,979,983 |
|
5.59 % |
|
2.79 % |
| AFP Capital S.A. |
|
— |
|
— |
|
7,525,912 |
|
5.27 % |
|
2.63 % |
| Banco De Chile on behalf of Citi NA New York. |
|
67,463 |
|
0.05 % |
|
6,339,986 |
|
4.44 % |
|
2.24 % |
________________________________________________
(1)As reported by DCV, which records the Company’s shareholders’ register as of December 31, 2024 and 2023 Inversiones TLC SpA, a subsidiary wholly owned by Tianqi Lithium Corporation, is the direct owner of 62,556,568 Series A shares of the Company equivalent to 21.90% of SQM’s shares. In addition, as reported by Tianqi Lithium Corporation, it owns 748,490 Series B shares as reported by Inversiones TLC SpA. Accordingly, as of December 31, 2024, and 2023, Tianqi Lithium Corporation owns 22.16% of SQM's shares through Series A shares and ADR of Series B shares.
(2)As of December 31, 2024, and 2023, Sociedad de Inversiones Pampa Calichera S.A. owned 46,600,458 Series A and B shares; 3,103,842 Series A shares held in custody by stockbrokers and as of December 31, 2023 the Sociedad de Inversiones Pampa Calichera S.A. owned 46,600,458 Series A and B shares with 2,348,842 Series A shares held in custody by stockbrokers.
Note 2 Basis of presentation for the consolidated financial statements
2.1 Accounting period
These consolidated financial statements cover the following periods:
(a)Consolidated statements of financial position as of December 31, 2024 and 2023.
(b)Consolidated statements of income for the three years in the period ended December 31, 2024, 2023 and 2022.
(c)Consolidated statements of comprehensive income for the three years in the period ended January 1 to December 31, 2024, 2023 and 2022.
(d)Consolidated statements of changes in equity for the three years in the period ended December 31, 2024, 2023 and 2022.
(e)Consolidated statements of cash flows for the three years in the period ended December 31, 2024, 2023 and 2022.
2.2 Consolidated financial statements
The consolidated financial statements of the Company and subsidiaries have been prepared in accordance with IFRS, as issued by the IASB.
These consolidated financial statements fairly present the Company’s financial position as of December 31,2024 and 2023 and the results of its operations, changes in equity and cash flows for the three years in the period ended December 31, 2024, 2023 and 2022.
IFRS establish certain alternatives for their application, those applied by the Company are detailed in this Note and Note 3.
The accounting policies used in the preparation of these consolidated financial statements comply with each IFRS in force at their date of presentation.
2.3 Basis of measurement
The consolidated financial statements have been prepared on the historical cost basis except for the following:
(a)Inventories are recorded at the lower of cost and net realizable value.
(b)Financial derivatives measured at fair value.
(c)Certain financial investments measured at fair value with an offsetting entry in other comprehensive income.
2.4 Accounting pronouncements
New accounting pronouncements
(a)The following standards, interpretations and amendments are mandatory for the first time for annual periods beginning on January 1, 2024:
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|
| Amendments and improvements |
|
Description |
|
Mandatory for annual periods
beginning on or after |
| Amendments to IAS 1 "Presentation of Financial Statements" about the classification of liabilities. |
|
This amendment clarifies that liabilities are classified as either current or non-current, depending on their rights as of the reporting date. The classification is not affected by the expectations of the entity or events after the reporting date. For example, the receipt of a waiver or non-compliance with an agreement. The amendment also clarifies what IAS 1 means when it refers to the “settlement" of a liability. The amendment should be applied retrospectively in accordance with IAS 8. |
|
01-01-2024 |
| Amendment to IAS 1 “Non-current Liabilities with Covenants”. |
|
The amendment improves the information that an entity discloses when its payment terms are deferred, provided it complies with covenants within twelve months of issuing the financial statements. |
|
01-01-2024 |
| Amendment to IFRS 16, “Leases”. |
|
Amendments to sale and leaseback transactions, including explanations of how an entity should recognize its right of use leased assets and how the gains or losses arising from sale and leaseback transactions should be recognized in the financial statements. |
|
01-01-2024 |
| Amendments to IAS 7 “Statement of Cash Flows” and IFRS 7 “Financial Instruments: Disclosures” on supplier finance arrangements. |
|
These amendments require disclosures that improve the transparency of supplier finance arrangements and their effects on a company’s liabilities, cash flows and exposure to liquidity risk. |
|
01-01-2024 |
Management determined that the adoption of the aforementioned standards, amendments and interpretations did not significantly impact the Company’s consolidated financial statements.
(b)Standards, interpretations and amendments issued that had not become effective for financial statements beginning on January 1, 2024 and which the Company has not adopted early are as follows:
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|
| Standards and Interpretations |
|
Description |
|
Mandatory for annual periods
beginning on or after |
| Amendments to IAS 21 - Lack of exchangeability. |
|
This amendment affects an entity that has a transaction in a foreign currency that cannot be exchanged with another currency for a specific purpose as of the measurement date. One currency is exchangeable into another when the other currency can be obtained with a normal administrative delay, and the transaction is performed using a market or exchange mechanism that creates enforceable rights and obligations. This amendment contains instructions regarding the exchange rate to be used when the currency is not exchangeable, as previously described. Early adoption is permitted. |
|
01-01-2025 |
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|
|
| Amendments to IFRS 9 and IFRS 7 - Classification and Measurement of Financial Instruments. Issued in May 2024 |
|
This amendment:
- Clarifies the requirements for the timing of recognition and derecognition of certain financial assets and liabilities, introducing a new exception for certain financial liabilities settled through an electronic cash transfer system;
- Clarifies and provides additional guidance for assessing whether a financial asset meets the criterion of solely payment of principal and interest (SPPI);
- Adds new disclosures for certain instruments with contractual terms that can change cash flows (such as some instruments with features linked to the achievement of environmental, social and governance (ESG) objectives); and
- Updates the disclosures for equity instruments at fair value through other comprehensive income (FVOCI).
|
|
01-01-2026 |
| Annual Improvements to IFRSs |
|
The following improvements were published in July 2024:
-IFRS 1 First-time Adoption of International Financial Reporting Standards. Some cross-references to IFRS 9 in paragraphs B5-B6 regarding the retrospective application exception for hedge accounting were improved.
-IFRS 7 Financial Instruments: Disclosures. In relation to disclosures of gains/losses arising from derecognition of financial assets with continuing involvement, a reference to IFRS 13 is incorporated in order to disclose whether there are significant unobservable inputs with an impact on the fair value and, therefore, on part of the gain/loss from derecognition.
-IFRS 9 Financial Instruments. A reference to the initial measurement of receivables was amended by eliminating the term "transaction price".
-IFRS 10 Consolidated Financial Statements Some improvements were included in the description of the control assessment when there are “de facto agents”.
-IAS 7 Statement of Cash Flows. Paragraph 37 regarding the concept of “equity method” was amended by eliminating the reference to the “cost method”.
|
|
01-01-2026 |
| IFRS 18 Presentation and Disclosure in Financial Statements |
|
The new standard on presentation and disclosure in financial statements, with a focus on updates to the statement of profit or loss. The key new concepts introduced in IFRS 18 relate to:
- the structure of the statement of profit or loss;
- required disclosures in the financial statements for certain profit or loss performance measures that are reported outside an entity’s financial statements (that is, management-defined performance measures); and
- enhanced principles on aggregation and disaggregation which apply to the primary financial statements and notes in general.
|
|
01-01-2027 |
| Amendment to IFRS 9 and IFRS 7: Contracts referencing nature-dependent electricity. |
|
Published in December 2024. This amendment includes: - Clarifying the application of the “own-use” requirements; - Permitting hedge accounting if these contracts are used as hedging instruments; - Adding new disclosure requirements to enable investors to understand the effect of these contracts on a company’s financial performance and cash flows. |
|
01-01-2026 |
Management believes that the adoption of the above standards, amendments and interpretations will not have a significant impact on the Company’s financial statements.
2.5 Basis of consolidation
(a)Subsidiaries
The Company established control as the basis for consolidation of its financial statements. The Company controls a subsidiary when it is exposed, or has rights, to variable returns from its involvement with the subsidiary and has the ability to affect those returns through its power over the subsidiary.
The consolidation of a subsidiary starts when the Group controls it and it is no longer included in the consolidation when this control is lost.
Subsidiaries are consolidated through a line by line method, adding items that represent assets, liabilities, income and expenses with a similar content, and eliminating operations between companies within the SQM Group.
Results for dependent companies acquired or disposed of during the period are included in the consolidated accounts from the date on which control is transferred to the Company or until the date when this control ends, as relevant.
To account for an acquisition of a business, the Company uses the acquisition method. Under this method, the acquisition cost is the fair value of assets delivered, equity securities issued and incurred or assumed liabilities at the date of exchange. Assets, liabilities and contingencies identifiable assumed in a business combination are measured initially at fair value at the acquisition date. For each business combination, the Company will measure the non-controlling interest of the acquiree either at fair value or as proportional share of net identifiable assets of the acquire.
The following tables detail general information as of December 31, 2024 and 2023 on the companies in which the group exercises control:
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Country of |
|
Functional |
|
Ownership Interest |
| Subsidiaries |
|
TAX ID No. |
|
Address |
|
Incorporation |
|
Currency |
|
Direct |
|
Indirect |
|
Total |
| SQM Nitratos S.A. |
|
96.592.190-7 |
|
El Trovador 4285, Las Condes |
|
Chile |
|
Dollar |
|
99.9999 |
|
0.0001 |
|
100.0000 |
| SQM Potasio SpA (9) |
|
96.651.060-9 |
|
El Trovador 4285, Las Condes |
|
Chile |
|
Dollar |
|
100.0000 |
|
- |
|
100.0000 |
| Serv. Integrales de Tránsito y Transf. S.A. |
|
79.770.780-5 |
|
Arturo Prat 1060, Tocopilla |
|
Chile |
|
Dollar |
|
0.0003 |
|
99.9997 |
|
100.0000 |
| Isapre Norte Grande Ltda. |
|
79.906.120-1 |
|
Aníbal Pinto 3228, Antofagasta |
|
Chile |
|
Peso |
|
1.0000 |
|
99.0000 |
|
100.0000 |
| Ajay SQM Chile S.A. |
|
96.592.180-K |
|
Av. Pdte. Eduardo Frei 4900, Santiago |
|
Chile |
|
Dollar |
|
51.000 |
|
- |
|
51.000 |
| Almacenes y Depósitos Ltda. |
|
79.876.080-7 |
|
El Trovador 4285, Las Condes |
|
Chile |
|
Peso |
|
1.0000 |
|
99.0000 |
|
100.0000 |
| SQM Salar SpA (10) |
|
79.626.800-K |
|
El Trovador 4285, Las Condes |
|
Chile |
|
Dollar |
|
- |
|
100.0000 |
|
100.0000 |
| SQM Industrial S.A. |
|
79.947.100-0 |
|
El Trovador 4285, Las Condes |
|
Chile |
|
Dollar |
|
99.0470 |
|
0.9530 |
|
100.0000 |
| Exploraciones Mineras S.A. |
|
76.425.380-9 |
|
El Trovador 4285, Las Condes |
|
Chile |
|
Dollar |
|
0.2691 |
|
99.7309 |
|
100.0000 |
| Sociedad Prestadora de Servicios de Salud Cruz del Norte S.A. |
|
76.534.490-5 |
|
Aníbal Pinto 3228, Antofagasta |
|
Chile |
|
Peso |
|
- |
|
100.0000 |
|
100.0000 |
| Soquimich Comercial S.A. |
|
79.768.170-9 |
|
El Trovador 4285, Las Condes |
|
Chile |
|
Dollar |
|
- |
|
60.6383 |
|
60.6383 |
| Comercial Agrorama Ltda. (1) |
|
76.064.419-6 |
|
El Trovador 4285, Las Condes |
|
Chile |
|
Dollar |
|
- |
|
60.6383 |
|
60.6383 |
| Comercial Hydro S.A. |
|
96.801.610-5 |
|
El Trovador 4285, Las Condes |
|
Chile |
|
Dollar |
|
- |
|
100.0000 |
|
100.0000 |
| Agrorama S.A. |
|
76.145.229-0 |
|
El Trovador 4285, Las Condes |
|
Chile |
|
Dollar |
|
- |
|
60.6383 |
|
60.6383 |
| Orcoma Estudios SpA |
|
76.359.919-1 |
|
Apoquindo 3721 OF 131, Las Condes |
|
Chile |
|
Dollar |
|
100.0000 |
|
- |
|
100.0000 |
| Orcoma SpA |
|
76.360.575-2 |
|
Los Militares 4290, Las Condes |
|
Chile |
|
Dollar |
|
100.0000 |
|
- |
|
100.0000 |
| SQM MaG SpA |
|
76.686.311-9 |
|
Los Militares 4290, Las Condes |
|
Chile |
|
Dollar |
|
- |
|
100.0000 |
|
100.0000 |
| SQM Nueva Potasio SpA (11) |
|
76.630.159-2 |
|
Los Militares 4290, Las Condes |
|
Chile |
|
Dollar |
|
99.6703 |
|
0.3297 |
|
100.0000 |
| SQM Lab SpA (17) |
|
78.009.141-K |
|
Los Militares 4290, Las Condes |
|
Chile |
|
Dollar |
|
- |
|
100.0000 |
|
100.0000 |
| Sociedad Contractual Minera Búfalo |
|
77.114.779-8 |
|
Los Militares 4290, Las Condes |
|
Chile |
|
Dollar |
|
99.9000 |
|
0.1000 |
|
100.0000 |
| SQM North America Corp. |
|
Foreign |
|
2727 Paces Ferry Road, Building Two, Suite 1425, Atlanta, GA |
|
United States of America |
|
Dollar |
|
40.0000 |
|
60.0000 |
|
100.0000 |
| RS Agro Chemical Trading Corporation A.V.V. (5) |
|
Foreign |
|
Caya Ernesto O. Petronia 17, Orangestad |
|
Aruba |
|
Dollar |
|
- |
|
- |
|
— |
| Nitratos Naturais do Chile Ltda. |
|
Foreign |
|
Al. Tocantis 75, 6° Andar, Conunto 608 Edif. West Gate, Alphaville Barureri, CEP 06455-020, Sao Paulo |
|
Brazil |
|
Dollar |
|
- |
|
100.0000 |
|
100.0000 |
| SQM Corporation N.V. |
|
Foreign |
|
Pietermaai 123, P.O. Box 897, Willemstad, Curacao |
|
Curacao |
|
Dollar |
|
0.0002 |
|
99.9998 |
|
100.0000 |
| SQM Ecuador S.A. |
|
Foreign |
|
Av. José Orrantia y Av. Juan Tanca Marengo Edificio Executive Center Piso 2 Oficina 211 |
|
Ecuador |
|
Dollar |
|
0.00401 |
|
99.9960 |
|
100.0000 |
| SQM Brasil Ltda. |
|
Foreign |
|
Al. Tocantis 75, 6° Andar, Conunto 608 Edif. West Gate, Alphaville Barureri, CEP 06455-020, Sao Paulo |
|
Brazil |
|
Dollar |
|
0.4700 |
|
99.5300 |
|
100.0000 |
| SQMC Holding Corporation. |
|
Foreign |
|
2727 Paces Ferry Road, Building Two, Suite 1425, Atlanta |
|
United States of America |
|
Dollar |
|
0.1000 |
|
99.9000 |
|
100.0000 |
| SQM Japan Co. Ltd. |
|
Foreign |
|
From 1st Bldg 207, 5-3-10 Minami- Aoyama, Minato-ku, Tokio |
|
Japan |
|
Dollar |
|
0.1597 |
|
99.8403 |
|
100.0000 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
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|
|
Country of
Incorporation |
|
Functional
Currency |
|
Ownership Interest |
| Subsidiaries |
|
TAX ID No. |
|
Address |
|
|
|
Direct |
|
Indirect |
|
Total |
| SQM Europe N.V. (3) |
|
Foreign |
|
Houtdok-Noordkaai 25a B-2030 Amberes |
|
Belgium |
|
Dollar |
|
0.5800 |
|
99.4200 |
|
100.0000 |
| SQM International N.V. |
|
Foreign |
|
Houtdok-Noordkaai 25a B-2030 Amberes |
|
Belgium |
|
Dollar |
|
- |
|
- |
|
- |
| SQM Indonesia S.A. |
|
Foreign |
|
Perumahan Bumi Dirgantara Permai, Jl Suryadarma Blok Aw No 15 Rt 01/09 17436 Jatisari Pondok Gede |
|
Indonesia |
|
Dollar |
|
- |
|
80.0000 |
|
80.0000 |
| North American Trading Company (4) |
|
Foreign |
|
2727 Paces Ferry Road, Building Two, Suite 1425, Atlanta, GA |
|
United States of America |
|
Dollar |
|
- |
|
- |
|
- |
| SQM Virginia LLC (4) |
|
Foreign |
|
2727 Paces Ferry Road, Building Two, Suite 1425, Atlanta, GA |
|
United States of America |
|
Dollar |
|
- |
|
- |
|
- |
| SQM Comercial de México S.A. de C.V. |
|
Foreign |
|
Av. Moctezuma 144-4 Ciudad del Sol. CP 45050, Zapopan, Jalisco México |
|
México |
|
Dollar |
|
0.0100 |
|
99.9900 |
|
100.0000 |
| SQM Investment Corporation N.V. |
|
Foreign |
|
Pietermaai 123, P.O. Box 897, Willemstad, Curacao |
|
Curacao |
|
Dollar |
|
1.0000 |
|
99.0000 |
|
100.0000 |
| Royal Seed Trading Corporation A.V.V. (6) |
|
Foreign |
|
Caya Ernesto O. Petronia 17, Orangestad |
|
Aruba |
|
Dollar |
|
1.6700 |
|
98.3300 |
|
100.0000 |
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| SQM Lithium Specialties Limited Partnership (4) |
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Foreign |
|
2727 Paces Ferry Road, Building Two, Suite 1425, Atlanta, GA |
|
United States of America |
|
Dollar |
|
- |
|
100.0000 |
|
100.0000 |
| Comercial Caimán Internacional S.A. (2) |
|
Foreign |
|
Edificio Plaza Bancomer |
|
Panamá |
|
Dollar |
|
- |
|
100.0000 |
|
100.0000 |
| SQM France S.A. |
|
Foreign |
|
ZAC des Pommiers 27930 Fauville |
|
France |
|
Dollar |
|
- |
|
100.0000 |
|
100.0000 |
| Administración y Servicios Santiago S.A. de C.V. |
|
Foreign |
|
Av. Moctezuma 144-4 Ciudad del Sol, CP 45050, Zapopan, Jalisco México |
|
México |
|
Dollar |
|
- |
|
100.0000 |
|
100.0000 |
| SQM Nitratos México S.A. de C.V. |
|
Foreign |
|
Av. Moctezuma 144-4 Ciudad del Sol, CP 45050, Zapopan, Jalisco México |
|
México |
|
Dollar |
|
- |
|
100.0000 |
|
100.0000 |
| Soquimich European Holding B.V. |
|
Foreign |
|
Luna Arena, Herikerbergweg 238 1101 CM Amsterdan |
|
Holland |
|
Dollar |
|
- |
|
100.0000 |
|
100.0000 |
| SQM Iberian S.A. |
|
Foreign |
|
Provenza 251 Principal 1a CP 08008, Barcelona |
|
Spain |
|
Dollar |
|
- |
|
100.0000 |
|
100.0000 |
| SQM África Pty Ltd. |
|
Foreign |
|
Tramore House, 3 Wterford Office Park, Waterford Drive, 2191 Fourways, Johannesburg |
|
South Africa |
|
Dollar |
|
- |
|
100.0000 |
|
100.0000 |
| SQM Oceanía Pty Ltd. |
|
Foreign |
|
Level 9, 50 Park Street, Sydney NSW 2000, Sydney |
|
Australia |
|
Dollar |
|
- |
|
100.0000 |
|
100.0000 |
| SQM Beijing Commercial Co. Ltd. |
|
Foreign |
|
Room 1001C, CBD International Mansion N 16 Yong An Dong Li, Jian Wai Ave Beijing 100022, P.R. |
|
China |
|
Dollar |
|
- |
|
100.0000 |
|
100.0000 |
| SQM Thailand Limited (18) |
|
Foreign |
|
Unit 2962, Level 29, N° 388, Exchange Tower Sukhumvit Road, Klongtoey Bangkok |
|
Thailand |
|
Dollar |
|
- |
|
99.9980 |
|
99.9980 |
| SQM Colombia SAS |
|
Foreign |
|
Cra 7 No 32 – 33 piso 29 Pbx: (571) 3384904 Fax: (571) 3384905 Bogotá D.C. – Colombia. |
|
Colombia |
|
Dollar |
|
- |
|
100.0000 |
|
100.0000 |
| SQM Australia Pty |
|
Foreign |
|
Level 16, 201 Elizabeth Street Sydney |
|
Australia |
|
Dollar |
|
- |
|
100.0000 |
|
100.0000 |
| SQM (Shanghai) Chemicals Co. Ltd. |
|
Foreign |
|
Room 4703-33, 47F, No.300 Middle Huaihai Road, Huangpu district, Shanghai |
|
China |
|
Dollar |
|
- |
|
100.0000 |
|
100.0000 |
| Soquimich LLC |
|
Foreign |
|
Suite 22, Kyobo Building, 15th Floor, 1 Jongno Jongno-gu, Seoul, 03154 South Korea |
|
South Korea |
|
Dollar |
|
- |
|
100.0000 |
|
100.0000 |
| SQM Holland B.V. |
|
Foreign |
|
Herikerbergweg 238, 1101 CM Amsterdam Zuidoost |
|
Holland |
|
Dollar |
|
- |
|
100.0000 |
|
100.0000 |
| Soquimich Comercial Brasil Ltda. |
|
Foreign |
|
Avenida Bento Rocha, N° 821, Vila Alboitt, CEP 83221-565. Paranaguá |
|
Brazil |
|
Dollar |
|
- |
|
100.0000 |
|
100.0000 |
| Blue Energy Business and Trade (Shanghai) Co., Ltd. (7) |
|
Foreign |
|
300 Huaihai Middle Road, distrito de Huangpu, Shanghai |
|
China |
|
Dollar |
|
- |
|
100.0000 |
|
100.0000 |
| SQM Comercial Perú S.A.C. (8) |
|
Foreign |
|
Av. Juan de Arona 187, Torre B, Oficina 301-II, San Isidro, Lima |
|
Peru |
|
Dollar |
|
0.00001 |
|
99.99999 |
|
100.0000 |
| SQM India Private Limited (12) |
|
Foreign |
|
LEVAL 3A WING, TOWER B1 Symphony IT park, NANDED, Nanded, Pune City, Pune - 411041, Maharashtra |
|
India |
|
Indian Rupee |
|
0.0202 |
|
99.9798 |
|
100.0000 |
| Sichuan Dixin New Energy Co., Ltd. (*) |
|
Foreign |
|
No.8 Yuhui Road, Xiu wen Town, Dong po District, Meishan, Sichuan Province |
|
China |
|
Chinese Yuan |
|
- |
|
100.0000 |
|
100.0000 |
| SQM (Shanghai) Industrial Co, Ltd. (13) |
|
Foreign |
|
West Nanjing Road Branch, Shanghai. |
|
China |
|
Dollar |
|
- |
|
100.0000 |
|
100.0000 |
| Sociedad Química y Minera Maroc (14) |
|
Foreign |
|
Entrée Ouest, Niveau 1 Anfa Place BD de la corniche Ain diab 20180, Casablanca, Marocco. |
|
Marocco |
|
Dollar |
|
- |
|
100.0000 |
|
100.0000 |
| SQM Lithium North America Corporation (15) |
|
Foreign |
|
2727 Paces Ferry Rd SE, Building 2, Suite 1425, Atlanta, GA. |
|
United States of America |
|
Dollar |
|
- |
|
100.0000 |
|
100.0000 |
| SQM Lithium Europe NV (16) |
|
Foreign |
|
Houtdok-Noordkaai 25A, 2030 ANTWERP, Belgium |
|
Belgium |
|
Dollar |
|
- |
|
100.0000 |
|
100.0000 |
| SQM Japan Lithium Co. Ltd. (19) |
|
Foreign |
|
#207 From 1st Bldg., 5-3-10 Minami Aoyama, Minato-ku, Tokyo, 107-00762 Japan |
|
Japan |
|
Dollar |
|
- |
|
100.0000 |
|
100.0000 |
| Harding Battery Minerals (Novo JV) |
|
Foreign |
|
Level 19, 109 St Georges Tce, WA 6000 |
|
Australia |
|
Australian dollar |
|
- |
|
75.0000 |
|
75.0000 |
(1)SQM has control over Comercial Agrorama Ltda.´s management
(2)Comercial Caiman Internacional S.A. was liquidated on September 30, 2023.
(3)On July 1, 2023, SQM Europe N.V. absorbed its affiliate SQM International N.V. As of December 31, 2022, ownership interest over SQM International was 100% indirect.
(4)During the fourth quarter, SQM Virginia LLC, North American Trading Company and SQM Lithium Specialties Limited Partnership were liquidated. As of December 31, 2022, ownership interest over these entities were 100% indirect.
(5)During the first quarter of 2024, RS Agro Chemical Trading Corporation A.V.V. was liquidated.
(6)During the first quarter of 2024, Royal Seed Trading Corporation A.V.V. was liquidated.
(7)Blue Energy Business and Trade (Shanghai) Co., Ltd. was incorporated on March 21, 2024.
(8)On March 27, 2024, 100% of SQM Vitas Perú S.A.C. was acquired.
(9)On May 31, 2024, SQM Potasio S.A. was transformed from SQM Potasio S.A. to SQM Potasio SpA.
(10)On May 31, 2024, SQM Salar S.A. was transformed from SQM Salar S.A. to SQM Salar SpA.
(11)On May 31, 2024, SQM Potasio SpA was divided creating SQM Nueva Potasio SpA.
(12)On April 22, 2024, the subsidiary SQM India Private Limited was incorporated.
(13)On September 18, 2024, the company SQM (Shanghai) Industrial Co., Ltd. was incorporated.
(14)On July 18, 2024, Sociedad Química y Minera Maroc was incorporated.
(15)On September 17, 2024, SQM Lithium North America Corporation was incorporated.
(16)On September 9, 2024, SQM Lithium Europe NV was incorporated.
(17)On December 16, 2024, SQM Lab SpA was incorporated.
(18)In the fourth quarter of 2024, SQM Thailand Limited was liquidated.
(19)On October of 2024, SQM Japan Lithium Co. Ltd. was incorporated.
(*) On April 30, 2024 The Company acquired the total interest ownership in Sichuan Dixin New Energy Co. Ltd. for an amount of ThUS$ 127,152 (ThUS$ 12,489 are yet to be paid and it is recognized as a liability at the reporting date) and recognizing an identified intangible asset for ThUS$ 10,130 (see note 14 on intangible assets). The Company entered this transaction to acquire a battery-grade lithium hydroxide monohydrate plant with a production capacity of approximately 20,000 tons per year for the Company’s lithium sulfate salts. See additional details in note 12.2. Assets and liabilities recognized upon acquisition consider the following:
|
|
|
|
|
|
|
|
|
| Certain financial statement items |
|
ThUS$ |
| Property, plant and equipment |
|
101,357 |
| Intangible assets (including identified intangible assets) |
|
12,861 |
| Cash and cash equivalents |
|
1,093 |
| Current assets |
|
33,056 |
| Total liabilities |
|
(21,215) |
| Total |
|
127,152 |
2.6 Investments in associates and joint ventures
Investments in joint arrangements are classified as joint operations or joint ventures. The classification depends on the contractual rights and obligations of each investor, rather than the legal structure of the joint arrangement.
(a)Joint operations
The Company recognizes its direct right to the assets, liabilities, income and expenses of the joint arrangement.
(b)Joint ventures and investments in associates
Interests in companies over which joint control is exercised (joint ventures) or where an entity has significant influence (associates) are recognized using the equity method. Significant influence is presumed to exist when the investor owns over 20% of the investee’s share capital. Under the equity method, the investment is recognized in the statement of financial position at cost and is adjusted to recognize changes in the Company's share of the net assets of the associate or joint venture since the date of acquisition. The Company's statement of income reflects the portion of the operating results of the associate or joint venture and any changes in other comprehensive income or direct changes in the associate's equity are reflected in the Company's equity. For such purposes, the percentage of ownership interest in the associate is used. At the time of acquisition, the difference between the investment cost and the net fair value of identifiable assets and liabilities of the investee is recognized as goodwill, which is presented as part of the carrying value of the investee and is not amortized. The debit or credit to the income statement reflects the proportional share of the associate's net income (loss).
Changes in associate’s or joint ventures equity are recognized proportionally with a charge or credit to "Other Reserves" and are classified according to their origin. The reporting dates of the associate or joint ventures, the Company and related policies are similar for equivalent transactions and events in similar circumstances. In the event that significant influence is lost, or the investment is sold, or held for sale, the equity method is suspended, not recognizing the proportional share of the gain or loss. If the resulting value under the equity method is negative, the share of income is reflected as zero in the consolidated financial statements, unless there is a commitment by the Company to restore the capital position of the Company, in which case the related risk provision and expense are recorded.
Dividends received by these companies are recorded by reducing the value of the investment and are shown in cash flows from operating activities, and the proportional share of the gain or loss recognized in accordance with the equity method is included in the consolidated income statement under "Share of Gains (Losses) of Associates and Joint Ventures Accounted for Using the Equity Method’’.
Unrealized gains from transactions with joint ventures or associates are eliminated in accordance with the Company’s percentage interest in such entities. Any unrealized losses are also eliminated, unless that transaction provides evidence that the transferred asset is impaired.
Note 3 Significant accounting policies
3.1 Classification of balances as current and non-current
In the consolidated statement of financial position, balances are classified in consideration of their recovery maturity dates; i.e., those maturing within a period equal to or less than 12 months are classified as current counted from the closing date of the consolidated financial statements and those with maturity dates exceeding the aforementioned period are classified as non-current.
The exception to the foregoing relates to deferred taxes, which are classified as non-current, regardless of the maturity they have.
3.2 Functional and presentation currency
The Company’s consolidated financial statements are presented in United States dollars, without decimal places, which is the Company’s functional and presentation currency and is the currency of the main economic environment in which it operates. Consequently, the term foreign currency is defined as any currency other than the U.S. dollar.
3.3 Accounting policy for foreign currency translation
(a)SQM group entities:
The revenue, expenses, assets and liabilities of all entities that have a functional currency other than the presentation currency are converted to the presentation currency as follows:
-Assets and liabilities are converted at the closing exchange rate prevailing on the reporting date.
-Revenues and expenses of each statement of income account are converted at monthly average exchange rates.
-All resulting foreign currency translation gains and losses are recognized as a separate component in translation reserves.
In consolidation, foreign currency differences arising from the translation of a net investment in foreign entities are recorded in shareholder’s equity (“foreign currency translation reserve”). At the date of disposal, such foreign currency translation differences are recognized in the statement of income as part of the gain or loss from the sale.
The main exchange rates and UF used to translate monetary assets and liabilities, expressed in foreign currency at the end and average of each period in respect to U.S. dollars, are as follows:
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|
|
|
|
|
|
|
Closing exchange rates |
|
Average exchange rates |
| Currencies |
|
As of
December 31,
2024 |
|
As of
December 31,
2023 |
|
As of
December 31,
2024 |
|
As of
December 31,
2023 |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Brazilian real |
|
6.18 |
|
4.85 |
|
6.10 |
|
4.90 |
| New Peruvian sol |
|
3.77 |
|
3.70 |
|
3.73 |
|
3.73 |
| Japanese yen |
|
157.21 |
|
140.90 |
|
153.66 |
|
143.94 |
| Euro |
|
0.96 |
|
0.90 |
|
0.95 |
|
0.92 |
| Mexican peso |
|
20.55 |
|
16.92 |
|
20.23 |
|
17.18 |
| Australian dollar |
|
1.61 |
|
1.46 |
|
1.58 |
|
1.49 |
| Pound Sterling |
|
0.80 |
|
0.78 |
|
0.79 |
|
0.79 |
| South African rand |
|
18.82 |
|
18.27 |
|
18.19 |
|
18.61 |
| Chilean peso |
|
996.46 |
|
877.12 |
|
983.24 |
|
875.06 |
| Chinese yuan |
|
7.31 |
|
7.12 |
|
7.29 |
|
7.15 |
| Indian rupee |
|
85.53 |
|
83.21 |
|
84.95 |
|
83.26 |
| Thai Baht |
|
34.21 |
|
34.36 |
|
34.13 |
|
34.95 |
| Turkish lira |
|
35.33 |
|
29.52 |
|
34.96 |
|
29.09 |
| Korean Won |
|
1,472.30 |
|
1,290.70 |
|
1,438.07 |
|
1,304.17 |
| Indonesian Rupiah |
|
16,138.00 |
|
15,399.00 |
|
16,035.15 |
|
15,502.63 |
| United Arab Emirates dirham |
|
3.67 |
|
3.67 |
|
3.67 |
|
3.67 |
| Polish Zloty |
|
4.12 |
|
3.93 |
|
4.07 |
|
3.97 |
| UF (*) |
|
38.55 |
|
41.94 |
|
39.07 |
|
42.04 |
________________________________________________
(*)US$ per UF
(b)Transactions and balances
The Company’s non-monetary transactions in currencies other than the functional currency (Dollar) are translated to the respective functional currencies of Group entities at the exchange rate on the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the functional currency at the exchange rate at that date. All differences are recorded in the statement of income except for all monetary items that provide an effective hedge for a net investment in a foreign operation. These items are recognized in other comprehensive income until disposal of the investment, when they are recognized in the statement of income. Charges and credits attributable to foreign currency translation differences on those hedge monetary items are also recognized in other comprehensive income.
Non-monetary assets and liabilities that are measured at historical cost in a foreign currency are retranslated to the functional currency at the historical exchange rate of the transaction. Non-monetary items that are measured based on fair value in a foreign currency are translated using the exchange rate at the date on which the fair value is determined.
3.4 Consolidated statement of cash flows
Cash equivalents correspond to highly liquid short-term investments that are easily convertible into known amounts of cash and subject to insignificant risk of changes in their value and mature in less than three months from the date of acquisition of the instrument.
For the purposes of the statement of cash flows, cash and cash equivalents comprise cash and cash equivalents as defined above.
The statement of cash flows present cash transactions performed during the period, determined using the direct method.
The Company’s accounting policy is to consider interest paid and finance costs, interest received and dividends received as net cash flows from operations and dividends paid as cash flows from (used in) financing activities.
Other (outflows) inflows of cash from operating activities are composed as follows:
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|
|
|
|
|
|
|
|
|
|
|
| For the year ended |
December 31,
2024 |
|
December 31,
2023 |
|
December 31,
2022 |
| Banking expenses |
(11,046) |
|
|
(15,603) |
|
|
(3,783) |
|
| Tax credits |
(6,255) |
|
|
(3,353) |
|
|
(3,474) |
|
| Government grants |
13,076 |
|
|
24,387 |
|
|
— |
|
| Value added tax |
61,426 |
|
|
(298,076) |
|
|
120,283 |
|
| Debt issuance costs |
(23,091) |
|
|
(18,346) |
|
|
(2,566) |
|
|
34,110 |
|
(310,991) |
|
110,460 |
3.5 Financial assets accounting policy
Management determines the classification of its financial assets at fair value (either through other comprehensive income, or through profit or loss), and at amortized cost. The classification depends on the business model of the entity to manage the financial assets and the contractual terms of the cash flows.
The initial value of the Company's financial assets valued at fair value through other comprehensive income includes the transaction costs that are directly attributable to acquiring that financial asset on the date the Company commits to acquiring it, whereas the transaction costs for financial assets valued at fair value through profit or loss are expensed. The initial value of trade and other receivables that do not include a significant financial component is their transaction price.
After initial recognition, the Company measures its financial assets according to the Company’s business model for managing its financial assets and the contractual terms of its cash flows:
(a)Financial debt instruments measured at amortized cost. Financial assets that meet the following conditions are included in this category (i) the business model that supports it aims to maintain the financial assets to obtain the contractual cash flows and (ii) the contractual conditions of the financial asset give place, on specified dates, to cash flows that are only payments of the principal and interest on the outstanding principal amount. The Company’s financial assets that meet these conditions are: (i) cash equivalents; (ii) related party receivables; (iii) trade debtors; (iv) other receivables.
(b)Financial instruments at fair value. A financial asset should be measured at fair value through income or fair value through other comprehensive income, depending on the following:
(i)"Fair value through other comprehensive income": Assets held to collect contractual cash flows and to be sold, where the asset cash flows are only capital and interest payments, are measured at fair value through other comprehensive income. Changes in book values are through other comprehensive income, except for the recognition of impairment losses, interest income and exchange gains and losses, which are recognized in the income statement. When a financial asset is derecognized, the cumulative gain or loss previously recognized in other comprehensive income is reclassified from equity to the income statement. Interest income from these financial assets is included in financial income using the effective interest method.
(ii)"Fair value through profit or loss": Assets that do not meet the amortized cost or "Fair value through other comprehensive income" criteria are valued at "Fair value through income".
(c)Financial equity instruments at fair value through other comprehensive income. Equity instruments that are not classified as held for trading and which the Group has irrevocably chosen to recognize in this category from its initial recognition to the reporting date. Amounts presented in other comprehensive income will not be subsequently transferred to the statement of income.
3.6 Financial assets impairment
The Company evaluates expected credit losses associated with its debt instruments carried at amortized cost and fair value through other comprehensive income. The impairment method used depends on whether there has been a significant increase in credit risk.
The Company assumes that the credit risk of a financial asset has increased significantly when it is more than 30 days past due. It is in default when the financial asset is more than 90 days past due and an individual analysis has concluded that it has a negative credit impairment.
–Significant financial hardship
–Breach of contract due to default
–Probability of going bankrupt
The Company assesses the credit impairment of its receivables as of each reporting date. A financial asset has credit impairment when one or more events have a negative impact on the expected cash flows from it. Evidence of credit impairment for a debtor is as follows:
The Company applies the simplified approach to measure expected credit losses using the lifetime expected loss on all trade receivables. Expected credit losses are measured by grouping receivables by their shared credit risk characteristics and days overdue.
The Company has concluded that the expected loss rates for trade receivables are a reasonable approximation of the loss rates for these assets. Expected loss rates are based on sales payment profiles and historical credit losses within this period. Historical loss rates are adjusted to reflect current expectations and information regarding macroeconomic factors that affect the ability of customers to meet their commitments. Impairment losses from receivables and contract assets are shown as net impairment losses in the line “Impairment of financial assets and reversal of impairment losses,” see Note 21.7. Any subsequent recoveries of financial assets previously charged off are credited to the same line.
The gross value of a financial asset is charged off to the income statement when the Company has no reasonable expectation of recovering all or a portion of it, following an individual analysis prepared by management.
3.7 Financial liabilities
Management accounts for its financial liabilities at amortized cost.
Upon initial recognition, the Company measures its financial liabilities by their fair value less the transaction costs that are directly attributable to the acquisition of the financial liability. The Company subsequently measures its financial liabilities at amortized cost.
Financial liabilities measured at amortized cost are commercial accounts payable and other accounts payable and other financial liabilities.
Amortized cost is based using the effective interest rate method. Amortized cost is calculated by considering any premium or discount on the acquisition and includes transaction costs that are an integral part of the effective interest rate.
3.8 Estimated fair value of financial instruments
The fair value of financial assets and liabilities is estimated using the following information. Although the data represents Management's best estimates, it is subjective and involves significant estimates regarding current economic conditions, market conditions and risk characteristics.
Methodologies and assumptions used depend on the risk terms and characteristics of instruments and include the following as a summary:
Fair value estimation
Financial assets and liabilities measured at fair value consist of forwards hedging the mismatch in the balance sheet and cash flows, options hedging the mismatch in the balance sheet and cross currency swaps to hedge bonds issued in local currency (Peso/UF).
The fair value of the Company’s assets and liabilities recognized by cross currency swaps contracts is calculated as the difference between the present value of discounted cash flows of the asset (Peso/UF) and liability (Dollar) parts of the derivative. In the case of the IRS, the asset value recognized is calculated as the difference between the discounted cash flows of the asset (variable rate) and liability (fixed rate) parts of the derivative. Forwards are calculated as the difference between the strike price of the contract and the spot price plus the forwards points at the date of the contract. Financial options: the value recognized is calculated using the Black-Scholes method.
In the case of CCS, the entry data used for the valuation models are UF, Peso, Dollar and basis swap rates. In the case of fair value calculations for interest rate swaps, the Forward Rate Agreement rate and ICVS 23 Curve (Bloomberg: cash/deposits rates, futures, swaps). In the case of forwards, the forwards curve for the currency in question is used. Finally, for options, the spot price, risk-free rate and volatility of exchange rate are used, all in accordance with the currencies used in each valuation. The financial information used as entry data for the Company’s valuation models is obtained from Bloomberg, the well-known financial software company. Conversely, the fair value provided by the counterparties of derivatives contracts is used only as a control and not for valuation purposes.
Fair value estimates for disclosure purposes
•Cash equivalent approximates fair value due to the short-term maturities of these instruments.
•Fair value of current trade receivables is considered to be equal to the carrying amount due to the maturity of such accounts at short-term.
•Payables, current lease liabilities and other current financial liabilities’s fair value equal to book value due to the short-term maturity of these accounts.
•The fair value of the debt (long-term secured and unsecured debentures; bonds denominated in local currency (Peso/UF) and foreign currency (Dollar), borrowings denominated in foreign currency (Dollar) of the Company are calculated at current value of cash flows subtracted from market rates upon valuation, considering the terms of maturity and exchange rates. The UF and Peso rate curves are used as inputs for the valuation model. This information is obtained through from the renowned financial software company, Bloomberg, and the Chilean Association of Banks and Financial Institutions.
3.9 Reclassification of financial instruments
When the Company changes its business model for managing financial assets, it will reclassify all its financial assets affected by the new business model. Financial liabilities cannot be reclassified.
3.10 Financial instruments derecognition
The Company derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred; and the control of the financial assets has not been retained.
The Company derecognizes a financial liability when its contractual obligations or a part of these are discharged, paid to the creditor or legally extinguished from the principle responsibility contained in the liability.
3.11 Derivative and hedging financial instruments
Derivative financial instruments are recognized initially at fair value as of the date on which the derivatives contract is signed and, they are subsequently assessed at fair value. The method for recognizing the resulting gain or loss depends on whether the derivative has been designated as an accounting hedge instrument and, if so, it depends on the type of hedging, which may be as follows:
a)Fair value hedge of assets and liabilities recognized (fair value hedges).
b)Hedging of a single risk associated with a recognized asset or liability or a highly probable forecast transaction (cash flow hedge).
At the beginning of the transaction, the Company documents the relationship that exists between hedging instruments and hedged items, as well as their objectives for risk management purposes and strategy to conduct the different hedging operations.
The Company also documents its evaluation both at the beginning and at the end of each period if the derivatives used in hedging transactions are highly effective to offset changes in the fair value or in cash flows of hedged items.
The fair value of derivative instruments used for hedging purposes is shown in Note 12.3.
Derivatives that are not designated or do not qualify as hedging derivatives are classified as current assets or liabilities, and changes in the fair value are directly recognized through income.
a)Fair value hedge
Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recorded in the statement of income, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk. The gain or loss relating to the effective portion of interest rate swaps that hedge fixed rate borrowings is recognized in the statement of income within finance costs, together with changes in the fair value of the hedged fixed rate borrowings attributable to interest rate risk. The gain or loss relating to the ineffective portion is recognized in income within other income or other expenses captions. If the hedge no longer meets the criteria for hedge accounting, the adjustment to the carrying amount of a hedged item for which the effective interest method is used is amortized to income over the period to maturity using a recalculated effective interest rate.
b)Cash flow hedges
The effective portion of the gain or loss on the hedging instrument is initially recognized with a debit or credit to other comprehensive income, while any ineffective portion is immediately recognized to income, as appropriate, depending on the nature of the hedged risk. The amounts accumulated in other comprehensive income are carried over to results when the hedged items are settled or when these have an impact on income.
When a hedging instrument no longer meets the criteria for hedge accounting, any cumulative deferred gain or loss and deferred costs of hedging in equity at that time remains in equity until the forecast transaction occurs.
When the forecast transaction is no longer expected to occur, the cumulative gain or loss and deferred costs of hedging that were reported in other comprehensive income are immediately reclassified to the statement of income.
3.12 Derivative financial instruments not considered as hedges
Derivative financial instruments not considered as hedges are recognized at fair value with the effect in the statement of income for the year. The Company has derivative financial instruments to hedge foreign currency risk exposure.
The Company continually evaluates the existence of embedded derivatives in both its contracts and in its financial instruments. As of December 31, 2024, and 2023, the Company does not have any embedded derivatives.
3.13 Deferred acquisition cost from insurance contracts
Acquisition costs from insurance contracts are classified as prepayments and correspond to insurance contracts in force, recognized using the straight-line method and on an accrual basis independent of payment date. These are recognized under other non-financial assets current.
3.14 Leases
(a)Right-of-use assets
The Company recognizes right-of-use assets on the initial lease date (i.e., the date on which the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, adjusted by any new measurement of the lease liability. The cost of right-of-use assets includes the amount of recognized lease liabilities, direct initial costs incurred and lease payments made on the start date or sooner, less the lease incentives received. Unless the Company is reasonably sure it will take ownership of the leased asset at the end of the lease period, the assets recognized through right-of-use are depreciated in a straight line during the shortest period of their estimated useful life and lease period. Right-of-use assets are subject to impairment.
(b)Lease liabilities
On the lease start date, the Company recognizes lease liabilities measured at present value of lease payments that will be made during the lease period. Lease payments include fixed payments (including payments that are essentially fixed), less incentives for lease receivables, variable lease payments that are dependent on an index or rate and amounts that are expected to be paid as guaranteed residual value. Lease payments also include the exercise price of a purchase option if the Company is reasonably sure it will exercise this and penalty payments for terminating a lease, if the lease period reflects that the Company will exercise the option to terminate. Variable lease payments that are not dependent on an index or rate are recognized as expenses in the period that produces the event or condition that triggers payment.
When calculating the present value of lease payments, the Company uses the incremental borrowing rate on the initial lease date if the interest rate implicit in the lease cannot be determined easily. After the start date, the lease liability balance will increase to reflect the accumulation of interest and will diminish as lease payments are made. Furthermore, the book value of lease liabilities is remeasured in the event of an amendment, a change in the lease period, a change in the fixed lease payments in substance or a change in the assessment to buy the underlying asset.
Payments made that affect lease liabilities are presented as part of the financing activities in the cash flow statement.
(c)Short-term leases and low-value asset leases
The Company applies the short-term lease recognition exemption to leases with a lease term of 12 months or less starting on the start date and that don’t have a purchase option. It also applies the low-value asset lease recognition exemptions to leases less than the limit specified in the respective accounting standard. Lease payments in short-term leases and low-value asset leases are recognized as lineal expenses during the lease term.
(d)Significant judgments in the determination of the lease term for contracts with renewal options.
The Company determines the lease term as the non-cancellable period of the lease, together with periods covered by an option to extend the lease if it is reasonably certain that this will be exercised, or any period covered by an option to terminate the lease, if it is reasonably certain that this will not be exercised.
The Company has the option, under some of its leases, to lease assets on additional terms. The Company applies its judgment when assessing whether it is reasonably certain that it will exercise the option to renovate. In other words, it considers all the relevant factors that create an economic incentive for it to exercise the option to renovate. After the start date, the Company reevaluates the lease term if there is a significant event or change in the circumstances that are under its control and affect its capacity to exercise (or not exercise) the option to renovate.
3.15 Inventory measurement
The method used to determine the cost of inventories is the weighted average monthly cost of warehouse storage. In determining production costs for own products, the company includes the costs of labor, raw materials, materials and supplies used in production, depreciation and maintenance of the goods that participate in the production process, the costs of product movement necessary to maintain stock on location and in the condition in which they are found, and also includes the indirect costs of each task such as laboratories, process and planning areas, and personnel expenses related to production, among others.
For finished and in-process products, the company has three types of provisions, which are reviewed quarterly:
(a)Provision associated with the lower value of stock: The provision is directly identified with the product that generates it and involves three types: (i) provision of lower realizable value, which corresponds to the difference between the inventory cost of intermediary or finished products, and the sale price minus the necessary costs to bring them to the same conditions and location as the product with which they are compared; (ii) provision for future uncertain use that corresponds to the value of those products in process that are likely not going to be used in sales based on the company’s long-term plans; (iii) reprocessing costs of products that are unfeasible for sale due to current specifications.
(b)Provision associated with physical differences in inventory: A provision is made for differences that exceed the tolerance considered in the respective inventory process (physical and annual inventories are taken for the productive units in Chile and the port of Tocopilla; the business subsidiaries depend on the last zero ground obtained, but in general it is at least once a year), these differences are recognized immediately.
(c)Potential errors in the determination of stock: The company has an algorithm (reviewed at least once a year) that corresponds to diverse percentages assigned to each inventory based on the product, location, complexity involved in the associated measurement, rotation and control mechanisms.
Inventories of raw materials, materials and supplies for production are recorded at acquisition cost. Cyclical inventories are performed in warehouses, as well as general inventories every three years. Differences are recognized at the moment they are detected. The company has a provision based on quarterly calculations from percentages associated with each type of material (classification by warehouse and rotation), these percentages use the lower value resulting from deterioration or obsolescence as well as potential losses. This provision is reviewed at least annually, and considers the historical results obtained in the inventory processes.
3.16 Non-controlling interests
Non-controlling interests are recorded in the consolidated statement of financial position within equity but separate from equity attributable to the owners of the Parent.
3.17 Related party transactions
Transactions between the Company and its subsidiaries are part of the Company’s normal operations within its scope of business activities. Conditions for such transactions are those normally effective for those types of operations with regard to terms and market prices. The maturity conditions vary according to the originating transaction.
3.18 Property, plant and equipment
Property, plant and equipment are stated at acquisition cost, net of the related accumulated depreciation, amortization and impairment losses that they might have experienced.
In addition to the price paid for the acquisition of tangible property, plant and equipment, the Company has considered the following concepts as part of the acquisition cost, as applicable:
(a)Accrued interest expenses during the construction period that are directly attributable to the acquisition, construction or production of qualifying assets, which are those that require a substantial period prior to being ready for use. The interest rate used is that related to the project’s specific financing or, should this not exist, the average financing rate of the investor company.
Financing costs are not capitalized for periods that exceed the normal term of acquisition, construction or installation of an asset, such as delays, interruptions or temporary suspension of the project due to technical, financial or other problems that prevent the asset from reaching a usable condition.
(b)The future costs that the Company will have to experience, related to the closure of its facilities at the end of their useful life, are included at the present value of disbursements expected to be required to settle the and its subsequent variation is recorded directly in results.
Having initially recognized provisions for closure and refurbishment, the corresponding cost is capitalized as an asset in “Property, plant and equipment” and amortized in line with the amortization criteria for the associated assets.
Construction-in-progress is transferred to property, plant and equipment in operation once the assets are available for use and the related depreciation and amortization begins on that date.
Extension, modernization or improvement costs that represent an increase in productivity, ability or efficiency or an extension of the useful lives of property, plant and equipment are capitalized as a higher cost of the related assets. All the remaining maintenance, preservation and repair expenses are charged to expense as they are incurred.
The replacement of assets, which increase the asset’s useful life or its economic capacity, are recorded as a higher value of property, plant and equipment with the related derecognition of replaced or renewed elements.
Gains or losses which are generated from the sale or disposal of property, plant and equipment are recognized as income (loss) and calculated as the difference between the asset’s sales value and its net carrying value.
The cost of interest is recognized by applying an average or average weighted interest rate for all financing costs incurred by the Company to the final monthly balances for works underway and comply with the requirements of the required standard.
3.19 Depreciation of property, plant and equipment
Property, plant and equipment are depreciated through the straight-line distribution of cost over the estimated technical useful life of the asset, which is the period in which the Company expects to use the asset. When components of one item of property, plant and equipment have different useful lives, they are recorded as separate assets and depreciated over their expected useful lives. Useful lives are reviewed on an annual basis.
Fixed assets located in the Salar de Atacama consider useful life to be the lesser value between the technical useful life and the years remaining until 2030.
In the case of certain mobile equipment, depreciation is performed depending on the hours of operation.
The useful lives used for the depreciation and amortization of assets included in property, plant and equipment are presented below:
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|
|
|
| Classes of property, plant and equipment |
|
Minimum life or
rate (years) |
|
Maximum life or
rate (years) |
|
Life or average rate
in years |
| Mining assets (*) |
|
5 |
|
10 |
|
8 |
| Energy generating assets |
|
5 |
|
15 |
|
8 |
| Buildings |
|
3 |
|
25 |
|
12 |
| Supplies and accessories |
|
4 |
|
15 |
|
8 |
| Office equipment |
|
5 |
|
10 |
|
9 |
| Transport equipment |
|
7 |
|
20 |
|
9 |
| Network and communication equipment |
|
4 |
|
15 |
|
8 |
| IT equipment |
|
3 |
|
11 |
|
7 |
| Machinery, plant and equipment |
|
3 |
|
28 |
|
11 |
| Other fixed assets |
|
3 |
|
20 |
|
9 |
(*) Mining equipment includes SQM Australia's exploration assets, which are depreciated on a unit of production basis.
3.20 Goodwill
Goodwill acquired represents the excess in acquisition cost on the fair value of the Company’s ownership of the net identifiable assets of the subsidiary on the acquisition date. Goodwill acquired related to the acquisition of subsidiaries is included in the line item goodwill, which is subject to impairment tests annually or more frequently if events or changes in circumstances indicate that it might be impaired and is stated at cost less accumulated impairment losses. Gains and losses related to the sale of an entity include the carrying value of goodwill related to the entity sold.
This intangible asset is assigned to cash-generating units with the purpose of testing impairment losses. It is allocated based on cash-generating units expected to obtain benefits from the business combination from which the aforementioned goodwill acquired arose.
3.21 Intangible assets other than goodwill
Intangible assets other than goodwill mainly relate to water rights, costs for rights of way for electricity lines, software and licensing costs, the development of computer software and mining property and concession rights.
(a)Water rights
Water rights acquired by the Company relate to water from natural sources and are recorded at acquisition cost. The Company separates water rights into:
i)Finite rights with amortization using the straight-line method, and
ii)Indefinite rights, which are not amortized, given that these assets represent rights granted in perpetuity to the Company and subject to an annual impairment assessment.
(b)Rights of way for electric lines
As required for the operation of industrial plants, the Company has paid rights of way in order to install wires for the different electric lines on third party land.
(c)Computer software
Licenses for IT programs acquired are capitalized based on their acquisition and customization costs. These costs are amortized over their estimated useful lives. The useful lives of IT programs are defined by their contracts or rights.
Expenses related to the development or maintenance of IT programs are recognized as an expense as and when incurred. Costs directly related to the production of unique and identifiable IT programs controlled by the Group, and which will probably generate economic benefits that are higher than its costs during more than a year, are recognized as intangible assets. Direct costs include the expenses of employees who develop information technology software and general expenses in accordance with corporate charges received.
The costs of development for IT programs are recognized as assets are amortized over their estimated useful lives.
(d)Mining property and concession rights
The Company holds mining property and concession rights from the Chilean and Western Australian Governments. Property rights from the State of Chile are usually obtained at no initial cost (other than the payment of mining patents and minor recording expenses) and once the rights on these concessions have been obtained, they are retained by the Company while annual patents are paid. Such patents, which are paid annually, are recorded as prepaid assets and amortized over the following twelve months. Amounts attributable to mining concessions acquired from third parties that are not from the Chilean Government are recorded at acquisition cost within intangible assets.
The finite useful life of mining properties is calculated using the productive unit method, except for the mining properties owned by Corfo, which have been leased to the Company and grant it the right to exclusively exploit them until December 31, 2030.
Minimum and maximum amortization lives or rates of intangible assets:
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| Estimated useful life or amortization rate |
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Minimum Life or
Rate |
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Maximum Life or
Rate |
| Water rights |
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1 year |
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Indefinite |
| Rights of way |
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Indefinite |
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Indefinite |
| Corfo Mining properties (1) |
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6 years |
|
6 years |
| Mining rights |
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Unit-production method |
| Intellectual property |
|
9 years |
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14 years |
| IT programs |
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1 year |
|
7 years |
________________________________________________
(1)Mining properties owned by Corfo and leased to the Company, which grant it the exclusive right to exploit them until December 31, 2030.
3.22 Research and development expenses
Research and development expenses are charged to the statement of income in the period in which the expenditure was incurred.
3.23 Exploration and evaluation expenses
The Company holds mining concessions for exploration and exploitation of ore, the Company gives the following treatment to the associated expenses:
Once the rights have been obtained, the Company records the disbursements directly associated with the exploration and evaluation of the deposit in execution as property, plant and equipment (construction in progress) at its cost. These disbursements include the following items: geological surveys, drilling, borehole extraction and sampling, activities related to the technical assessment and commercial viability of the extraction, and in general, any disbursement directly related to specific projects where the objective is to find ore resources. If the technical studies determine that the ore grade is not economically viable, the asset is directly charged to the statement of income. If determined otherwise, the asset described above is associated with the extractable ore tonnage which is amortized as it is used.
(a)Limestone and metallic exploration
These assets are included in Other non-current non-financial assets, and the portion related to the area to be exploited in the year is reclassified to Current inventories, if applicable. Costs related to metal exploration are charged the statement of income in the period in which they are recognized if the project assessed doesn’t qualify as advanced exploration otherwise, these are amortized during the development stage.
(b)Exploration and evaluation at the Mt. Holland Project
Exploration and evaluation costs incurred prior to the commencement of mining are presented in Construction in progress, until mining had commenced, subsequently these are reclassified to Mining assets as part of its property, plant and equipment.
3.24 Impairment of non-financial assets
Assets subject to depreciation and amortization are also subject to impairment testing, provided that an event or change in the circumstances indicates that the amounts in the accounting records may not be recoverable, an impairment loss is recognized for the excess of the book value of the asset over its recoverable amount.
For assets other than goodwill, the Group annually assesses whether there is any indication that a previously recognized impairment loss may no longer exist or may have decreased. Should such indications exist, the recoverable amount is estimated.
The recoverable amount of an asset is the higher between the fair value of an asset or cash generating unit less costs of sales and its value in use, and is determined for an individual asset unless the asset does not generate any cash inflows that are clearly independent from other assets or groups of assets.
In evaluating value in use, estimated future cash flows are discounted using a pre-tax discount rate that reflects current market assessment, the value of money over time and the specific asset risks.
Impairment losses from continuing operations are recognized with a debit to the statement of income in the categories of expenses associated with the impaired asset function.
For assets other than goodwill, a previously recognized impairment loss is only reversed if there have been changes in the estimates used to determine the asset’s recoverable amount since the last time an impairment loss was recognized. If this is the case, the carrying value of the asset is increased to its recoverable amount. This increased amount cannot exceed the carrying value that would have been determined, net of depreciation, if an asset impairment loss had not been recognized in prior years. This reversal is recognized with a credit to the statement of income.
Assets with indefinite lives are assessed for impairment annually.
3.25 Minimum dividend
As required by Chilean law and regulations, our dividend policy is decided upon from time to time by our Board of Directors and is announced at the Annual Ordinary Shareholders’ Meeting, which is generally held in April of each year. Shareholder approval of the dividend policy is not required. However, each year the Board must submit the declaration of the final dividend or dividends in respect of the preceding year, consistent with the then-established dividend policy, to the Annual Ordinary Shareholders’ Meeting for approval. As required by the Chilean Companies Act, unless otherwise decided by unanimous vote of the holders of issued shares, we must distribute a cash dividend in an amount equal to at least 30% of our consolidated net income for that year unless and to the extent the Company has a deficit in retained earnings. (See Note 19.5).
3.26 Earnings per share
The basic earnings per share amounts are calculated by dividing the net income for the year attributable to the ordinary owners of the parent by the weighted average number of ordinary shares outstanding during the year.
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|
|
| Earnings per Share |
|
For the year ended December 31 |
|
|
2024 |
|
2023 |
|
2022 |
|
|
|
|
|
|
|
|
|
| Net income attributable to the owners of the parent (ThUS$) |
|
685,117 |
|
923,191 |
|
3,906,311 |
|
| Weighted average number of shares |
|
285,637,916 |
|
285,638,456 |
|
285,638,456 |
|
| Basic earnings per share (US$) |
|
2.3986 |
|
3.2320 |
|
13.6757 |
|
| Net income attributable to the owners of the parent (ThUS$) |
|
685,117 |
|
923,191 |
|
3,906,311 |
|
| Weighted average number of shares |
|
285,637,916 |
|
285,638,456 |
|
285,638,456 |
|
| Diluted earnings per share (US$) |
|
2.3986 |
|
3.2320 |
|
13.6757 |
|
|
|
|
|
|
|
|
|
| Series A common shares |
|
142,819,012 |
|
142,819,552 |
|
142,819,552 |
|
| Series B common shares |
|
142,818,904 |
|
142,818,904 |
|
142,818,904 |
|
| Total weighted average number of shares |
|
285,637,916 |
|
285,638,456 |
|
285,638,456 |
|
The Company has no instruments that could potentially dilute earnings per share for the three years ended December 31, 2024.
3.27 Other provisions
Provisions are recognized when:
•The Company has a present, legal or constructive obligation as the result of a past event.
•It is more likely than not that certain resources must be used, to settle the obligation.
•A reliable estimate can be made of the amount of the obligation.
In the event that the provision or a portion of it is reimbursed, the reimbursement is recognized as a separate asset solely if there is certainty of income.
In the consolidated statement of income, the expense for any provision is presented net of any reimbursement.
Should the effect of the value of money over time be significant, provisions are discounted using a discount rate before tax that reflects the liability’s specific risks. When a discount rate is used, the increase in the provision over time is recognized as a finance cost.
The Company’s policy is to maintain provisions to cover risks and expenses based on a better estimate to deal with possible or certain and quantifiable responsibilities from current litigation, compensations or obligations, pending expenses for which the amount has not yet been determined, collaterals and other similar guarantees for which the Company is responsible. These are recorded at the time the responsibility or the obligation that determines the compensation or payment is generated.
3.28 Obligations related to employee termination benefits and pension commitments
Obligations towards the Company’s employees comply with the provisions of the collective bargaining agreements in force, which are formalized through collective employment agreements and individual employment.
These obligations are valued using actuarial calculations, according to the projected unit credit method which considers such assumptions as the mortality rate, employee turnover, interest rates, retirement dates, effects related to increases in employees’ salaries, as well as the effects on variations in services derived from variations in the inflation rate.
Actuarial gains and losses that may be generated by variations in defined, pre-established obligations are directly recorded in “Other comprehensive income”.
Actuarial losses and gains have their origin in deviations between the estimate and the actual behavior of actuarial assumptions or in the reformulation of established actuarial assumptions.
The above is applicable except in the United States, where our subsidiary SQM North America has established pension plans for its retired employees that are calculated by measuring the projected obligation using a net salary progressive rate net of adjustments for inflation, mortality and turnover assumptions, deducting the resulting amounts at present value. The net balance of this obligation is presented under the “Non-current provisions for employee benefits” (refer to Note 17.4).
3.29 Compensation plans
Compensation plans implemented through benefits provided in share-based payments settled in cash are recognized in the financial statements at their fair value, in accordance with IFRS 2. Changes in the fair value of options granted are recognized with a charge to payroll in the statement of income (see Note 17.6).
3.30 Revenue recognition
Revenue is an amount that reflects the consideration that the Company expects to earn in exchange for the sale of goods and services in the regular course of business. Revenue is presented net of value added tax, estimated returns, rebates and discounts and after the elimination of sales among subsidiaries.
Revenues are recognized when the specific conditions for each income stream are met, as follows:
(a)Sale of goods
The sale of goods is recognized when the Company has delivered products to the customer, and there is no obligation pending compliance that could affect the acceptance of products by the customer. The delivery does not occur until products have been shipped to the customer or confirmed as received by the customer, and the related risks of obsolescence and loss have been transferred to the customer and the customer has accepted the products in accordance with the conditions established in the sale, when the acceptance period has ended, or when there is objective evidence that those criteria required for acceptance have been met.
Sales are recognized in consideration of the price set in the sales agreement, net of volume discounts and estimated returns at the date of the sale. Volume discounts are evaluated in consideration of annual expected purchases and in accordance with the criteria defined in agreements.
(b)Sale of services
Revenue associated with the rendering of services is recognized considering the degree of completion of the service as of the date of presentation of the consolidated classified statement of financial position, provided that the result from the transaction can be estimated reliably.
(c)Income from dividends
Income from dividends is recognized when the right to receive the payment is established.
3.31 Finance income and finance costs
Finance income is mainly composed of interest income from financial instruments such as term deposits and mutual fund deposits. Interest income is recognized in the statement of income at amortized cost, using the effective interest rate method.
Finance costs are mainly composed of interest on bank borrowing expenses, interest on bonds issued and interest capitalized for borrowing costs for the acquisition, construction or production or qualifying assets. Borrowing costs and bonds issued are also recognized in the statement of income using the effective interest rate method.
3.32 Current income tax and deferred
Corporate income tax for the year is determined as the sum of current and deferred income taxes from the different consolidated companies.
Current taxes are based on the application of the various types of taxes attributable to taxable income for the period. The Company periodically assesses the positions taken in the determination of taxes with respect to situations in which the applicable tax regulation is subject to interpretation and considers whether it is probable that a tax authority will accept an uncertain tax treatment. A provision is created if it is probable that payment will be required to a taxation authority. The Company measures its tax balances based on the most likely amount or expected value, depending on which method provides a better prediction of the resolution of uncertainty.
Differences between the book value of assets and liabilities and their tax basis generate the balance of deferred tax assets or liabilities, which are calculated using the tax rates expected to be applicable when the assets and liabilities are realized.
In conformity with current tax regulations, the provision for corporate income tax and taxes on mining activity is recognized on an accrual basis, presenting the net balances of accumulated monthly tax provisional payments for the fiscal period and associated credits. The balances of these accounts are presented in current income taxes recoverable or current taxes payable, as applicable.
Current taxes and changes in deferred tax assets and liabilities that do not arise from business combinations are recognized in the statement of net income or in equity in the consolidated statement of financial position, depending on where the gains or losses that caused them were recognized.
Deferred tax assets and liabilities are offset when a legally enforceable right exists to offset tax assets with tax liabilities and the deferred tax is levied by the same tax authority on the same entity.
The recognized deferred tax liabilities refer to the amount of income tax to pay in a future period, related to taxable temporary differences.
The company does not recognize deferred tax liabilities for taxable temporary differences associated with investments in subsidiaries, branches and associates, or with interests in joint ventures, because in accordance with the standard, the following two conditions are jointly met:
i.the parent company, investor or participant is able to control the timing of the reversal of the temporary difference; and
ii.it is probable that the temporary difference will not be reversed in the foreseeable future.
Recognized deferred tax assets are income taxes recoverable in future periods, related to:
a)deductible temporary differences;
b)compensation for losses obtained in prior periods, which have not yet been subject to tax deduction; and
c)compensation for unused credits from prior periods.
The Company recognizes deferred tax assets when it has the certainty that they can be offset with tax income from subsequent periods, unused tax losses or credits to date, but only when this availability of future tax income is probable and can be used for offsetting these unused tax losses or credits.
Moreover, the Company does not recognize deferred tax assets for all the deductible temporary differences that originate from investments in subsidiaries, branches and associates, or from joint ventures, because it is unlikely that they meet the following requirements:
(i)temporary differences are reversed in the foreseeable future; and
(ii)there is taxable profit available against which temporary differences can be used.
3.33 Operating segment reporting
IFRS 8 requires that companies adopt a management approach to disclose information on the operations generated by their operating segments. In general, this is the information that management uses internally for the evaluation of segment performance and making the decision on how to allocate resources for this purpose.
An operating segment is a group of assets and operations responsible for providing products or services subject to risks and performance that are different from those of other business segments. A geographical segment is responsible for providing products or services in a given economic environment subject to risks and performance that are different from those of other segments operating in other economic environments.
Allocation of assets and liabilities, to each segment is not possible given that these are associated with more than one segment, except for depreciation, amortization and impairment of assets, which are directly allocated in accordance with the criteria established in the costing process for product inventories to the corresponding segments.
3.34 Primary accounting criteria, estimates and assumptions
Management is responsible for the information contained in these consolidated annual accounts, which expressly indicate that all the principles and criteria included in IFRS, as issued by the IASB, have been applied in full.
In preparing the consolidated financial statements of the Company and its subsidiaries, management has made significant judgments and estimates to quantify certain assets, liabilities, revenues, expenses and commitments included therein. Basically, these estimates refer to:
•Estimated useful lives are determined based on current facts and past experience and take into consideration the expected physical life of the asset, the potential for technological obsolescence, and regulations. (See Notes 3.21, 14 and 15).
•Impairment losses of certain assets - Goodwill and intangible assets that have an indefinite useful life are not amortized and are assessed for impairment on an annual basis, or more frequently if the events or changes in circumstances indicate that these may have deteriorated Other assets, including property, plant and equipment, exploration assets, goodwill and intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amounts exceed their recoverable amounts. If an impairment assessment is required, the assessment of fair value or value in use often requires estimates and assumptions such as discount rates, exchange rates, commodity prices, future capital requirements and future operating performance. Changes in such estimates could impact on the recoverable values of these assets. Estimates are reviewed regularly by management (See Notes 3.21, 14 and 15).
•Assumptions used in calculating the actuarial amount of pension-related and severance indemnity payment benefit commitments (See Note 17).
•Contingencies – The amount recognized as a provision, including legal, contractual, constructive and other exposures or obligations, is the best estimate of the consideration required to settle the related liability, including any related interest charges, considering the risks and uncertainties surrounding the obligation. In addition, contingencies will only be resolved when one or more future events occur or fail to occur. Therefore, the assessment of contingencies inherently involves the exercise of significant judgment and estimates of the outcome of future events. The Company assesses its liabilities and contingencies based upon the best information available, relevant tax laws and other appropriate requirements (See Note 20). If the Company is unable to rationally estimate the obligation or concluded no loss is probable but it is reasonably possible that a loss may be incurred, no provision is recorded but disclosed in the notes to the consolidated financial statements.
•Volume determination for certain in-process and finished products is based on topographical measurements and technical studies that cover the different variables (density for bulk inventories and density and porosity for the remaining stock, among others), and related allowance.
•Estimates for obsolescence provisions to ensure that the carrying value of inventory is not in excess of the net realizable inventory valuation. (See Note 10).
Even though these estimates have been made on the basis of the best information available on the date of preparation of these consolidated financial statements, certain events may occur in the future and oblige their amendment (upwards or downwards) over the next few years, which would be made prospectively.
3.35 Government grants
The Company recognizes an unconditional government grant in the income statement as part of other income when the associated cash flows are received.
Note 4 Financial risk management
4.1 Financial risk management policy
The Company’s financial risk management policy is focused on safeguarding the stability and sustainability of the Company and its subsidiaries with regard to all such relevant financial uncertainty components.
The Company’s operations are subject to certain financial risk factors that may affect its financial position or results. The most significant risk exposures are market risk, liquidity risk, currency risk, credit risk, and interest rate risk, among others.
There could also be additional risks, which are either unknown or known but not currently deemed to be significant, which could also affect the Company’s business operations, its business, financial position, or statement of income.
The financial risk management structure includes identifying, determining, analyzing, quantifying, measuring and controlling these events. Management and in particular, Finance Management, is responsible for constantly assessing the financial risk.
4.2 Risk Factors
(a)Credit risk
A global economic contraction may have potentially negative effects on the financial assets of the Company, which are primarily made up of financial investments and trade receivables, and the impact on of our customers could extend the payment terms of the Company’s receivables by increasing its exposure to credit risk. Although measures are taken to minimize the risk, this global economic situation could mean losses with adverse material effects on the business, financial position or statement of income of the Company’s operations.
Trade receivables: to mitigate credit risk, the Company maintains active control of collection and requires the use of credit insurance. Credit insurance covering the risk of insolvency and unpaid invoices correspond to 90% of all receivables with third parties. The credit risk associated with receivables is analyzed in Note 12.2 b) and the related accounting policy can be found in Note 3.6.
Bank promissory notes: These are negotiable promissory notes issued by a bank payable upon maturity at the request of customers to guarantee collection of the Company. Bank promissory notes are accepted based on the classification used by the industrial and Commercial Bank of China Limited (ICBC), which provides a list of accepted banks for clearing and/or collection of these documents based on their credit rating.
The classification used for bank promissory notes is as follows:
–S: Large Banks
–T: Small-to-medium-sized banks
–T1: Financial services companies
–Others
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| ICBC Classification |
|
As of December 31, 2024 |
|
As of December 31, 2023 |
| S |
|
5,894 |
|
112,545 |
| T |
|
13,626 |
|
13,218 |
| T1 |
|
12,744 |
|
168 |
| Others |
|
7,476 |
|
- |
| Total |
|
39,740 |
|
125,931 |
Concentrations of credit risk with regard to trade receivables are reduced, owing to the Company’s large number of clients and their distribution around the globe.
No significant modifications have been made during the period to risk models or parameters used in comparison to December 31, 2023, and no modifications have been made to contractual cash flows that have been significant during this period, except for considering in December 31, 2023 the incorporation of cash flows received from insurance claims in the determination of the allowance for doubtful accounts. The effect of this change was not significant to the overall financial statements as of December 31, 2023.
Financial investments: correspond to time deposits whose maturity date is greater than 90 days and less than 360 days from the date of investment, so they are not exposed to excessive market risks. The counterparty risk in implementation of financial operations is assessed on an ongoing basis for all financial institutions in which the Company holds financial investments.
The credit quality of financial assets that are not past due or impaired can be evaluated by reference to external credit ratings (if they are available) or historical information on counterparty late payment rates:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Financial institution |
|
Financial assets |
|
Rating |
|
As of
December 31,
2024 |
|
|
|
|
Moody´s |
|
S&P |
|
Fitch |
|
ThUS$ |
| Banco Santander |
|
Time deposits |
|
P-1 |
|
A-1 |
|
F1 |
|
104,542 |
|
| Banco Crédito e Inversiones |
|
Time deposits |
|
P-1 |
|
A-2 |
|
F2 |
|
1,003 |
|
| Banco Estado |
|
Time deposits |
|
P-1 |
|
A-1 |
|
F2 |
|
104,084 |
|
| Banco de Chile |
|
Time deposits |
|
P-1 |
|
A-1 |
|
- |
|
6,307 |
|
| Scotiabank Chile |
|
Time deposits |
|
- |
|
- |
|
F1+ |
|
106,564 |
|
| Banco Crédito e Inversiones |
|
Investment fund |
|
AA+ |
|
- |
|
- |
|
4,997 |
|
| JP Morgan US dollar Liquidity Fund Institutional |
|
Investment fund |
|
Aaa-mf |
|
- |
|
- |
|
1,974 |
|
| Legg Mason - Western Asset Institutional cash reserves |
|
Investment fund |
|
- |
|
- |
|
AAAmmf |
|
122,337 |
|
| Total |
|
|
|
|
|
|
|
|
|
451,808 |
|
| Banco Crédito e Inversiones |
|
Time deposits |
|
P-1 |
|
A-2 |
|
F2 |
|
174,684 |
|
| Banco Estado |
|
Time deposits |
|
P-1 |
|
A-2 |
|
F2 |
|
90,975 |
|
| Banco Santander |
|
Time deposits |
|
P-1 |
|
A-1 |
|
F1 |
|
415,851 |
|
| Banco Itaú CorpBanca |
|
Time deposits |
|
P-1 |
|
A-2 |
|
- |
|
66,166 |
|
| Scotiabank Chile |
|
Time deposits |
|
- |
|
- |
|
F1+ |
|
240,164 |
|
| Bank of Nova Scotia |
|
Time deposits |
|
P-1 |
|
A-1 |
|
F1+ |
|
51,025 |
|
| KBC Bank |
|
Time deposits |
|
- |
|
A-2 |
|
F1 |
|
22,397 |
|
| Total |
|
|
|
|
|
|
|
|
|
1,061,262 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Financial institution |
|
Financial assets |
|
Rating |
|
As of
December 31,
2023 |
|
|
|
|
Moody´s |
|
S&P |
|
Fitch |
|
ThUS$ |
| Banco Santander- Santiago |
|
Time deposits |
|
P-1 |
|
A-2 |
|
- |
|
6,318 |
| Banco Crédito e Inversiones |
|
Time deposits |
|
P-1 |
|
A-2 |
|
F2 |
|
1,001 |
| Corpbanca |
|
Time deposits |
|
P-2 |
|
A-2 |
|
- |
|
5,014 |
| Banco de Chile |
|
Time deposits |
|
P-1 |
|
A-1 |
|
- |
|
4,460 |
| Scotiabank Sud Americano |
|
Time deposits |
|
- |
|
- |
|
F1+ |
|
6,752 |
| Banco Crédito e Inversiones |
|
Time deposits |
|
AA+ |
|
- |
|
- |
|
5,031 |
| JP Morgan US dollar Liquidity Fund Institutional |
|
Investment fund |
|
Aaa-mf |
|
AAAm |
|
AAAmmf |
|
22,845 |
| Legg Mason - Western Asset Institutional cash reserves |
|
Investment fund |
|
- |
|
AAAm |
|
AAAmmf |
|
312,924 |
| Total |
|
|
|
|
|
|
|
|
|
364,345 |
| Banco Crédito e Inversiones |
|
Time deposits |
|
P-1 |
|
A-2 |
|
F2 |
|
74,459 |
| Banco Morgan Stanley |
|
Time deposits |
|
P-1 |
|
A-2 |
|
F1 |
|
5,590 |
| Banco Santander |
|
Time deposits |
|
P-1 |
|
A-2 |
|
- |
|
100,083 |
| Banco Itaú CorpBanca |
|
Time deposits |
|
P-2 |
|
A-2 |
|
- |
|
372,061 |
| Scotiabank Sud Americano |
|
Time deposits |
|
- |
|
- |
|
F1+ |
|
319,128 |
| Bank of Nova Scotia |
|
Time deposits |
|
P-1 |
|
- |
|
- |
|
353,592 |
| Sumitomo Mitsui Banking |
|
Time deposits |
|
P-1 |
|
- |
|
F1 |
|
91,884 |
| Total |
|
|
|
|
|
|
|
|
|
1,316,797 |
(b)Exchange risk
The functional currency of the company is the US dollar, due to its influence on the determination of price levels, its relation to the cost of sales and considering that a significant part of the Company’s business is conducted in this currency. However, the global nature of the Company’s business generates an exposure to exchange rate variations of several currencies with the US dollar. Therefore, the Company maintains hedge contracts to mitigate the exposure generated by its main mismatches (net between assets and liabilities) in currencies other than the US dollar against the exchange rate variation, updating these contracts periodically depending on the amount of mismatches to be covered in these currencies.
Occasionally, subject to the approval of the Board, the Company ensures short-term cash flows from certain specific line items in currencies other than the US dollar.
A significant portion of the Company’s costs, especially salary payments, are associated with the Peso. Therefore, an increase or decrease in its exchange rate with the US dollar will provoke a respective decrease or increase in these accounting costs, which would be reflected in the Company’s statement of income. By the fourth quarter of 2024, approximately US$831 million accumulated in expenses are associated with the Peso.
As of December 31, 2024, the Company held derivative instruments classified as hedges of foreign exchange risks associated with 100% of all the bond obligations denominated in UF, for a net liability fair value of US$25.83 million, this significant variation is explained primarily by the USD/CLP exchange rate observed at the end of the period. As of December 31, 2023, this value corresponds to a net asset amounting US$ 2.52 million.
Furthermore, on of December 31, 2024, the Company held derivative instruments classified as hedges of foreign exchange risks associated with 100% of all nominative term deposits in UF and in pesos, at a net asset fair value of US$15.40 million. As of December 31, 2023, a net liability fair value was recognized for an amount of US$18.30 million.
The Company contracted derivatives classified as foreign exchange hedges for all the expected disbursements in Australian dollars for the Mt Holland project (See note 8.5), to hedge its exposure to cash flow variations. The fair value of this hedge was a net asset of US$ 1.44 million as of December 31, 2023.
The Company had the following derivative contracts as of December 31, 2024 (at the absolute value of the sum of their notional values), to hedge the difference between its assets and liabilities: US$ 5.90 million CLP/US dollar derivative contracts, US$ 40.35 million Euro/US dollar derivative contracts, US$ 28.92 million in South African rand/US dollar derivative contracts, US$ 302.65 million in Chinese renminbi/US dollar derivative contracts, US$ 7.79 million in Australian dollar/US dollar derivative contracts and US$ 8.00 million in other currencies.
These derivative contracts are held with domestic and foreign banks, which have the following credit ratings as of December 31, 2024.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Financial institution |
|
Financial assets |
|
Rating |
|
|
|
|
Moody´s |
|
S&P |
|
Fitch |
| MUFG |
|
Derivative |
|
P-1 |
|
- |
|
F1 |
| Merrill Lynch International |
|
Derivative |
|
P-1 |
|
A-2 |
|
F1+ |
| JP Morgan |
|
Derivative |
|
P-1 |
|
A-1 |
|
F1+ |
| Morgan Stanley |
|
Derivative |
|
P-1 |
|
A-2 |
|
F1 |
| The Bank of Nova Scotia |
|
Derivative |
|
P-1 |
|
A-1 |
|
F1+ |
| Banco Itaú-Corpbanca |
|
Derivative |
|
P-2 |
|
A-2 |
|
- |
| Banco de Chile |
|
Derivative |
|
P-1 |
|
A-1 |
|
- |
| Barclays |
|
Derivative |
|
P-2 |
|
A-2 |
|
F1 |
| HSBC |
|
Derivative |
|
P-2 |
|
A-2 |
|
F1+ |
(c)Interest rate risk
Interest rate fluctuations, primarily due to the uncertain future behavior of markets, may have a material impact on the financial results of the Company. Significant increases in the rate could make it difficult to access financing at attractive rates for the Company’s investment projects.
The Company maintains current and non-current financial debt at fixed rates and SOFR rate plus spread.
As of December 31, 2024, the Company has 7.1% of its financial liabilities subject to variations SOFR rate.
(d)Liquidity risk
Liquidity risk relates to the funds needed to comply with payment obligations. The Company’s objective is to maintain financial flexibility through a comfortable balance between fund requirements and cash flows from regular business operations, bank borrowings, bonds, short-term investments and marketable securities, among others. For this purpose, the Company keeps a high liquidity ratio2, which enables it to cover current obligations with clearance. (As of December 31, 2024 this was 2.51 and 2.50 for December 31, 2023).
The Company has an important capital expense program which is subject to change over time.
On the other hand, world financial markets go through periods of contraction and expansion that are unforeseeable in the long-term and may affect the Company’s access to financial resources. Such factors may have a material adverse impact on the Company’s business, financial position and results of operations.
The Company constantly monitors the matching of its obligations with its investments, taking due care of the maturities of both, from a conservative perspective, as part of this financial risk management strategy. As of December 31, 2024, the Company had unused, available revolving credit facilities with banks, for a total of US$1,676 million.
Cash and cash equivalents are invested in highly liquid mutual funds with an AAA risk rating.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nature of undiscounted cash flows |
| As of December 31, 2024 |
|
Carrying
amount |
|
Less than 1 year |
|
1 to 5 years |
|
Over 5 years |
|
Total |
| (figures expressed in millions of US dollars) |
|
|
|
|
|
| Bank borrowings |
|
984.80 |
|
907.07 |
|
77.49 |
|
71.89 |
|
1,056.45 |
| Unsecured obligations |
|
3,815.34 |
|
433.76 |
|
1,258.08 |
|
3,355.57 |
|
5,047.41 |
| Sub total |
|
4,800.14 |
|
1,340.83 |
|
1,335.57 |
|
3,427.46 |
|
6,103.86 |
| Hedging liabilities |
|
28.76 |
|
6.40 |
|
40.33 |
|
10.34 |
|
57.07 |
| Derivative financial instruments |
|
0.16 |
|
0.16 |
|
— |
|
— |
|
0.16 |
| Sub total |
|
28.92 |
|
6.56 |
|
40.33 |
|
10.34 |
|
57.23 |
| Current and non-current lease liabilities (1) |
|
83.81 |
|
25.12 |
|
62.49 |
|
0.67 |
|
88.28 |
| Trade accounts payable and other accounts payable |
|
471.45 |
|
471.45 |
|
— |
|
— |
|
471.45 |
| Total |
|
5,384.32 |
|
1,843.96 |
|
1,438.39 |
|
3,438.47 |
|
6,720.82 |
(1) Leases subject to variability are not included.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nature of undiscounted cash flows |
| As of December 31, 2023 |
|
Carrying
amount |
|
Less than 1 year |
|
1 to 5 years |
|
Over 5 years |
|
Total |
| (figures expressed in millions of US dollars) |
|
|
|
|
|
| Bank borrowings |
|
1,464.26 |
|
1,117.86 |
|
268.80 |
|
62.05 |
|
1,448.71 |
| Unsecured obligations |
|
2,999.17 |
|
98.88 |
|
729.56 |
|
2,733.92 |
|
3,562.36 |
| Sub total |
|
4,463.43 |
|
1,216.74 |
|
998.36 |
|
2,795.97 |
|
5,011.07 |
| Hedging liabilities |
|
25.37 |
|
24.11 |
|
30.08 |
|
1.30 |
|
55.49 |
| Derivative financial instruments |
|
14.81 |
|
14.81 |
|
— |
|
— |
|
14.81 |
| Sub total |
|
40.18 |
|
38.92 |
|
30.08 |
|
1.30 |
|
70.30 |
| Current and non-current lease liabilities |
|
75.16 |
|
19.94 |
|
56.45 |
|
3.79 |
|
80.18 |
| Trade accounts payable and other accounts payable |
|
449.63 |
|
449.63 |
|
— |
|
— |
|
449.63 |
| Total |
|
5,028.40 |
|
1,725.23 |
|
1,084.89 |
|
2,801.06 |
|
5,611.18 |
As of December 31, 2024, the nominal value of the agreed cash flows in US dollars of the CCS contracts were ThUS$ 374,140 (ThUS$ 504,393 as of December 31, 2023).
2 All current assets divided by all current liabilities.
4.3 Financial risk management
The Company documents and maintains methods for qualitatively measuring the effectiveness and efficiency of financial risk management strategies. These methods are consistent with SQM Group’s risk management profile.
Note 5 Separate information on the main office, parent entity and joint action agreements
5.1 Parent’s stand-alone assets and liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Parent’s stand-alone assets and liabilities |
|
As of
December 31,
2024 |
|
As of
December 31,
2023 |
|
|
ThUS$ |
|
ThUS$ |
| Assets |
|
9,794,433 |
|
8,824,362 |
| Liabilities |
|
(4,633,614) |
|
|
(4,383,163) |
|
| Equity |
|
5,160,819 |
|
4,441,199 |
5.2 Parent entity
Pursuant to Article 99 of the Securities Market Law, the CMF may determine that a company does not have a controlling entity in accordance with the distribution and dispersion of its ownership. On November 30, 2018, the CMF issued the ordinary letter No. 32,131 whereby it determined that the Pampa Group do not exert decisive power over the management of the Company since it does not have a predominance in the ownership that allows it to make management decisions. Therefore, the CMF has determined not to consider Pampa Group the controlling entity of the Company and that the Company does not have a controlling entity given its current ownership structure.
Note 6 Board of Directors, Senior Management and Key management personnel
6.1 Remuneration of the Board of Directors and Senior Management
(a)Board of directors
SQM S.A. is managed by a Director’s Committee which is composed of 8 directors, who are elected for a three-year period. The Board of Directors was elected during the ordinary shareholders’ meeting held on April 25, 2024, which included the election of 2 independent directors. Subsequent to such election, the following is the integration of the Company's committees:
-Directors’ Committee: This committee is comprised by Gina Ocqueteau Tacchini, Antonio Gil Nievas and Hernán Büchi Buc, with Ms. Ocqueteau and Mr. Gil as independent members.
-The Company’s Health, Safety and Environment Committee: This committee is comprised of Georges de Bourguignon, Patricio Contesse Fica and Gonzalo Guerrero Yamamoto.
-Corporate Governance Committee: This committee is comprised of Patricio Contesse Fica, Hernán Büchi Buc and Xu Tieying.
During the periods covered by these financial statements, there are no pending receivable and payable balances between the Company, its directors or members of Senior Management, other than those related to remuneration, fee allowances and profit-sharing.There were no transactions between the Company, its directors and senior management for the three years ended December 31, 2024.
(b)Board of Directors’ Compensation
Board members’ compensation for 2024, that is from April 25, 2024 to April 26, 2025, was determined by the Annual General Shareholders Meeting held on April 25, 2024. It is as follows:
(i)The payment of a fixed, gross and monthly amount of UF 800 in favor of the Chairman of the Board of Directors, of UF 700 in favor of the vice-president of the board of directors and of UF 600 in favor of the remaining six directors and regardless of the number of Board of Directors’ Meetings held or not held during the related month.
(ii)A variable gross amount payable to the Chairman and Vice President of the board of directors equivalent to 0.12% of the net liquid income earned by the Company in the respective business year for each; and
(iii)A variable gross amount payable to each Company director, excluding the Chairman and Vice President of the board of directors, equivalent to 0.06% of the net liquid income earned in the respective business year.
For calculation of the variable compensation for 2024 that directors will be entitled to receive, the upper threshold will be set at 110% of the amount paid to the Company’s directors as variable compensation for the 2023 business year.
Compensation of the Board for 2023, that is from April 25, 2023 to April 25, 2024, was determined by the Annual General Shareholders Meeting held on April 25, 2023. It is as follows:
(i)The payment of a fixed, gross and monthly amount of UF 800 in favor of the Chairman of the Board of Directors, of UF 700 in favor of the vice-president of the board of directors and of UF 600 in favor of the remaining six directors and regardless of the number of Board of Directors’ Meetings held or not held during the related month.
(ii)A variable gross amount payable to the Chairman and Vice President of the board of directors equivalent to 0.12% of the net liquid income that the Company effectively obtains during the respective business year for each; and
(iii)A variable gross amount payable in local currency to each Company directors, excluding the Chairman and Vice President of the Company, equivalent to 0.06% of the net liquid income that the Company effectively obtains during the respective business year.
Net income for the 2023 fiscal year will be considered for the calculation of variable compensation for 2023. The amount of variable compensation for 2023 will be capped at 110% of the amount paid to the Company’s directors for variable compensation in 2022.
These fixed and variable amounts for both periods shall not be challenged and those expressed in percentage terms shall be paid immediately after the respective annual general shareholders meeting approves the financial statements, the annual report, the account inspectors report and the external auditors report for the respective year.
Accordingly, the compensation and profit sharing paid to members of the Directors' Committee and the directors as of December 31, 2024, amounted to ThUS$ 7,653 and as of December 31, 2023 to ThUS$ 7,516, and as of December 31, 2022 to ThUS$ 6,711.
(c)Directors’ Committee compensation
Compensation for the Directors' committee is the same for 2024, 2023 and 2022, as follows:
(i)The payment of a fixed, gross and monthly amount of UF 200 in favor of each of the 3 directors who were members of the Directors’ Committee, regardless of the number of meetings of the Directors’ Committee that have or have not been held during the month concerned.
(ii)The payment in domestic currency and in favor of each of the 3 directors of a variable and gross amount equivalent to 0.02% of total net income from the respective business year 2024.
To calculate the variable compensation amount for 2024, the net income from 2023 will be considered, up to a maximum of 110% of the 2022 net income.
Profit for the 2023 fiscal year will be considered for the calculation of variable compensation for 2023. The amount of variable compensation for 2023 will be capped at 110% of the amount paid to the Company’s directors for variable compensation in 2022.
These fixed and variable amounts for both periods shall not be challenged and those expressed in percentage terms shall be paid immediately after the respective annual general shareholders meeting approves the financial statements, the annual report, the account inspectors report and the external auditors report for the respective year.
(d)Health, Safety and Environmental Matters Committee:
The remuneration of this committee for the 2023 period was composed of the payment of a fixed, gross, monthly amount of UF 100 for each of the 3 directors on the committee regardless of the number of meetings it has held. For the 2024 period, this remuneration remains unchanged.
(e)Corporate Governance Committee
The remuneration for this committee for the 2023 period was composed of the payment of a fixed, gross, monthly amount of UF 100 for each of the 3 directors on the committees regardless of the number of meetings it has held. For the 2024 period, this remuneration remains unchanged.
(f)Guarantees constituted in favor of the directors
No guarantees have been constituted in favor of the directors.
(g)Senior management compensation:
(i)This includes a monthly fixed salary and variable performance bonuses. (See Note 6.2)
(ii)The Company has an annual bonus plan based on goal achievement and individual contribution to the Company’s results. These incentives are structured as a minimum and maximum number of gross monthly salaries and are paid once a year.
(iii)In addition, there are retention bonuses for its executives (see Note 17.6)
(h)Guarantees pledged in favor of the Company’s management
No guarantees have been pledged in favor of the Company’s management.
(i)Pensions, life insurance, paid leave, shares in earnings, incentives, disability loans, other than those mentioned in the above points.
The Company’s Management and Directors do not receive or have not received any benefit during the years ended December 31, 2024, 2023 and 2022 or compensation for the concept of pensions, life insurance, paid time off, profit sharing, incentives, or benefits due to disability other than those mentioned in the preceding points.
6.2 Key management personnel compensation
As of December 31, 2024, and 2023, the number of the key management personnel is 176 and 153, respectively.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Key management personnel compensation |
|
For the year ended
December 31,
2024 |
|
For the year ended
December 31,
2023 |
|
For the year ended
December 31,
2022 |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Key management personnel compensation |
|
31,061 |
|
|
37,418 |
|
|
29,633 |
|
Please also see the description of the compensation plan for executives in Note 17.6.
Note 7 Equity-accounted investees
7.1 Investments in associates recognized according to the equity method of accounting
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity-accounted investees |
|
Share in income of associates
accounted for using the equity
method |
|
Share in other comprehensive income of
associates accounted for using the equity
method |
|
Share in total comprehensive income of
associates accounted for using the equity
method |
| Associate |
|
As of
December
31, 2024 |
|
As of
December
31, 2023 |
|
|
For the year
ended
December
31, 2024 |
|
For the year
ended
December
31, 2023 |
|
For the year
ended
December
31, 2022 |
|
For the year
ended
December
31, 2024 |
|
For the year
ended
December
31, 2023 |
|
For the year
ended
December
31, 2022 |
|
For the year
ended
December
31, 2024 |
|
For the year
ended
December
31, 2023 |
|
For the year
ended
December
31, 2022 |
|
|
ThUS$ |
|
ThUS$ |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Ajay North America |
|
17,470 |
|
|
17,657 |
|
|
|
5,721 |
|
|
3,733 |
|
|
5,351 |
|
|
— |
|
|
— |
|
|
— |
|
|
5,721 |
|
|
3,733 |
|
|
5,351 |
|
| Ajay Europe SARL |
|
6,403 |
|
|
7,722 |
|
|
|
3,387 |
|
|
4,013 |
|
|
6,130 |
|
|
(643) |
|
|
382 |
|
|
(498) |
|
|
2,744 |
|
|
4,395 |
|
|
5,632 |
|
| SAS Adionics (1) |
|
— |
|
|
19,514 |
|
|
|
(763) |
|
|
(985) |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(763) |
|
|
(985) |
|
|
— |
|
| Electric Era Technologies Inc. (1) |
|
— |
|
|
3,000 |
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
| Altilium Metals Ltd. (1) |
|
— |
|
|
7,620 |
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
| Total |
|
23,873 |
|
|
55,513 |
|
|
|
8,345 |
|
|
6,761 |
|
|
11,481 |
|
|
(643) |
|
|
382 |
|
|
(498) |
|
|
7,702 |
|
|
7,143 |
|
|
10,983 |
|
(1) These investments were reclassified to other non-current financial assets. For further detail see disclosure in note 7.3 a).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends received for the year ending |
| Associate |
|
Description of the nature
of the relationship |
|
Address |
|
Country of
incorporation |
|
Share of
ownership in
associates |
|
December 31,
2024 |
|
December 31,
2023 |
|
December 31,
2022 |
|
|
|
|
|
|
|
|
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Abu Dhabi Fertilizer Industries WWL |
|
Distribution and commercialization of specialty plant nutrients in the Middle East. |
|
PO Box 71871, Abu Dhabi |
|
United Arab Emirates |
|
37 |
% |
|
— |
|
|
633 |
|
|
3,000 |
|
| Ajay North America |
|
Production and distribution of iodine and iodine derivatives. |
|
1400 Industry RD Power Springs GA 30129 |
|
United States of North America |
|
49 |
% |
|
2,799 |
|
|
4,013 |
|
|
1,576 |
|
| Ajay Europe SARL |
|
Production and distribution of iodine and iodine derivatives. |
|
Z.I. du Grand Verger BP 227 53602 Evron Cedex |
|
France |
|
50 |
% |
|
3,049 |
|
|
4,682 |
|
|
1,778 |
|
| SAS Adionics |
|
Lithium extraction, salt separation, water treatment for production and lithium cleaning. |
|
17 bis Avenue des Andes Les Ulis, 91940 |
|
France |
|
20 |
% |
|
— |
|
|
— |
|
|
— |
|
| Electric Era Technologies, Inc. |
|
Electric vehicle charging infrastructure, smart grid, renewable technology, demand management, battery storage. |
|
3257 17th Ave W Suite 101 Seattle, Washington 98119. |
|
United States of America |
|
6.82 |
% |
|
— |
|
|
— |
|
|
— |
|
| Altilium Metals Ltd. |
|
Production of battery-ready cathode materials from electric vehicle batteries. |
|
Phase 2 Room 205 Davy Road, Derrifod, Plymouth. |
|
United Kingdom |
|
3 |
% |
|
— |
|
|
— |
|
|
— |
|
| Total |
|
|
|
|
|
|
|
|
|
5,848 |
|
|
9,328 |
|
|
6,354 |
|
7.2 Assets, liabilities, revenue and expenses of associates
The information disclosed reflects the amounts presented in the financial statements of the relevant associates and not the Company's share of those amounts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2024 |
|
For the year ended December 31, 2024 |
|
|
Assets |
|
Liabilities |
|
Revenue |
|
Net income (loss) |
|
Other
comprehensive
income |
|
Comprehensive
income |
| Associate |
|
Current |
|
Non-current |
|
Current |
|
Non-current |
|
|
|
|
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Ajay North America |
|
28,246 |
|
|
16,438 |
|
|
9,032 |
|
|
— |
|
|
72,487 |
|
|
11,677 |
|
|
— |
|
|
11,677 |
|
| Ajay Europe SARL |
|
27,615 |
|
|
3,953 |
|
|
18,762 |
|
|
— |
|
|
68,962 |
|
|
6,772 |
|
|
(23) |
|
|
6,749 |
|
| Total |
|
55,861 |
|
|
20,391 |
|
|
27,794 |
|
|
— |
|
|
141,449 |
|
|
18,449 |
|
|
(23) |
|
|
18,426 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2023 |
|
For the year ended December 31, 2023 |
|
|
Assets |
|
Liabilities |
|
Revenue |
|
Net income (loss) |
|
Other
comprehensive
income |
|
Comprehensive
income |
| Associate |
|
Current |
|
Non-current |
|
Current |
|
Non-current |
|
|
|
|
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Ajay North America |
|
26,280 |
|
|
16,307 |
|
|
6,553 |
|
|
— |
|
|
60,019 |
|
|
7,617 |
|
|
— |
|
|
7,617 |
|
| Ajay Europe SARL |
|
27,263 |
|
|
3,197 |
|
|
15,015 |
|
|
— |
|
|
73,952 |
|
|
8,025 |
|
|
12 |
|
|
8,037 |
|
| SAS Adionics |
|
19,645 |
|
|
12,294 |
|
|
5,141 |
|
|
917 |
|
|
4,156 |
|
|
(4,924) |
|
|
— |
|
|
(4,924) |
|
| Electric Era Technologies, Inc. |
|
15,486 |
|
|
242 |
|
|
3,702 |
|
|
— |
|
|
674 |
|
|
(3,177) |
|
|
— |
|
|
(3,177) |
|
| Altilium Metals Ltd |
|
1,896 |
|
|
118,228 |
|
|
24,679 |
|
|
— |
|
|
— |
|
|
(1,912) |
|
|
— |
|
|
(1,912) |
|
| Total |
|
90,570 |
|
|
150,268 |
|
|
55,090 |
|
|
917 |
|
|
138,801 |
|
|
5,629 |
|
|
12 |
|
|
5,641 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the year ended December 31, 2022 |
|
|
|
Revenue |
|
Net income (loss) |
|
Other
comprehensive
income |
|
Comprehensive
income |
| Associate |
|
|
|
|
|
|
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Ajay North America |
|
|
63,482 |
|
|
10,919 |
|
|
— |
|
|
10,919 |
|
| Ajay Europe SARL |
|
|
64,060 |
|
|
12,261 |
|
|
(21) |
|
|
12,240 |
|
| Total |
|
|
127,542 |
|
|
23,180 |
|
|
(21) |
|
|
23,159 |
|
7.3 Disclosures regarding interests in associates
(a)Transactions for the year ended December 31, 2024:
•During the third quarter of 2024, the Company lost significant influence over the investment of ThUS$ 18,756 in SAS Adionics and, therefore, this amount was reclassified to "Other non-current financial assets".
(b)Transactions for the year ended December 31, 2023:
•During the second quarter of 2023, the Company received dividends from Abu Dhabi Fertilizer Industries WWL amounting ThUS$ 633, which were presented under "Other gains (losses).
•During the third quarter of 2023, the Company invested ThUS$20,383 to acquire a 20% interest in Adionics Société par actions simplifiée.
•During the third quarter of 2023, the Company invested ThUS$7,620 to acquire a 3% interest in Altilium Metals Ltd., and ThUS$3,000 to acquire a 6.82% interest in Electric Era Technologies Inc. The Company has certain protective rights, specific rights over share transfers, and first refusal rights in future capital increases over these investments. The Company concluded that the Group does not have significant influence over these investments and as such these investments have been reclassified to Other non-current financial assets.
(c)Transactions for the year ended December 31, 2022:
•During February 2022, the Company received dividends of ThUS$ 3,000 from Abu Dhabi Fertilizer Industries WWL which triggered a income of ThUS$ 523 recorded in the line item other (losses), corresponding to the excess over the account receivable recognized in December 2021.
Note 8 Joint Ventures
8.1 Investment in joint ventures accounted for under the equity method of accounting.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity-accounted investees |
|
Share in income (loss) of joint ventures
accounted for using the equity method |
|
| Joint Venture |
|
As of
December 31,
2024 |
|
As of
December 31,
2023 |
|
|
For the year ended
December 31,
2024 |
|
For the year ended
December 31,
2023 |
|
For the year ended
December 31,
2022 |
|
|
|
ThUS$ |
|
ThUS$ |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
| SQM Vitas Fzco. |
|
8,422 |
|
|
19,490 |
|
|
|
2,491 |
|
|
(6,564) |
|
|
8,208 |
|
|
| Pavoni & C. Spa |
|
7,508 |
|
|
7,870 |
|
|
|
189 |
|
|
396 |
|
|
470 |
|
|
| Covalent Lithium Pty Ltd. (1) |
|
— |
|
|
— |
|
|
|
(758) |
|
|
107 |
|
|
— |
|
|
| Pirra Lithium Pty Ltd. |
|
3,535 |
|
|
3,544 |
|
|
|
— |
|
|
— |
|
|
— |
|
|
| Azure Minerals |
|
542,456 |
|
|
— |
|
|
|
— |
|
|
— |
|
|
— |
|
|
| Total |
|
561,921 |
|
|
30,904 |
|
|
|
1,922 |
|
|
(6,061) |
|
|
8,678 |
|
|
(1) Investments accounted for using the equity method with a negative value are included within “Other non-current provisions” in the amount of ThUS$1,259 and ThUS$ 766 as of December 31, 2024 and 2023 respectively. The effects resulting from the share in the profit (loss) of this joint venture for the years ended December 31, 2024 and 2023 for an amount to ThUS$ (758) and ThUS$ 107, and are included within “other (losses) gains”.
Share on other comprehensive income joint ventures accounted for using the equity method Share on total comprehensive income of joint ventures accounted for using the equity method Joint Venture For the year ended December 31, 2024 For the year ended December 31, 2023 For the year ended December 31, 2022 For the year ended December 31, 2024 For the year ended December 31, 2023 For the year ended December 31, 2022 ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ ThUS$ SQM Vitas Fzco. (577) 2,450 674 1,914 (4,114) 8,882 Pavoni & C. Spa (276) 139 (210) (87) 535 260 Covalent Lithium Pty Ltd. (*) 265 1,583 90 (493) 1,690 90 Total (588) 4,172 554 1,334 (1,889) 9,232
The following companies were included in the consolidation:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Equity-accounted investees |
|
Share in income (loss) of joint ventures
accounted for using the equity method |
| Joint Venture |
|
As of
December 31,
2024 |
|
As of
December 31,
2023 |
|
|
For the year ended
December 31,
2024 |
|
For the year ended
December 31,
2023 |
|
For the year ended
December 31,
2022 |
|
|
ThUS$ |
|
ThUS$ |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| SQM Vitas Brasil Agroindustria (**) |
|
— |
|
|
— |
|
|
|
— |
|
|
— |
|
|
5,834 |
|
| SQM Vitas Perú S.A.C. (1) |
|
— |
|
|
2,488 |
|
|
|
(866) |
|
|
(2,302) |
|
|
2,293 |
|
| Total |
|
— |
|
|
2,488 |
|
|
|
(866) |
|
|
(2,302) |
|
|
8,127 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Share on other comprehensive income of
joint ventures accounted for using
the equity method |
|
Share on total comprehensive income of
joint ventures accounted for using
the equity method |
| Joint Venture |
|
For the year ended
December 31,
2024 |
|
For the year ended
December 31,
2023 |
|
For the year ended
December 31,
2022 |
|
For the year ended
December 31,
2024 |
|
For the year ended
December 31,
2023 |
|
For the year ended
December 31,
2022 |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| SQM Vitas Brasil Agroindustria (*) |
|
— |
|
|
— |
|
|
551 |
|
|
— |
|
|
— |
|
|
6,385 |
|
| SQM Vitas Perú S.A.C. (**) |
|
— |
|
|
— |
|
|
— |
|
|
(866) |
|
|
(2,302) |
|
|
2,293 |
|
| Total |
|
— |
|
|
— |
|
|
551 |
|
|
(866) |
|
|
(2,302) |
|
|
8,678 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Dividends received for the year ending |
| Joint venture |
|
Description of the nature
of the relationship |
|
Domicile |
|
Country of
incorporation |
|
Share of
ownership in
associates |
|
As of
December 31,
2024 |
|
As of
December 31,
2023 |
|
As of
December 31,
2022 |
|
|
|
|
|
|
|
|
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| SQM Vitas Fzco. |
|
Production and commercialization of specialty plant, animal nutrition and industrial hygiene. |
|
Jebel ALI Free Zone P.O. Box 18222, Dubai |
|
United Arab Emirates |
|
50 |
% |
|
12,500 |
|
|
— |
|
|
— |
|
| Pavoni & C. Spa |
|
Production of specialty fertilizers and others for distribution in Italy and other countries. |
|
Corso Italia 172, 95129 Catania -CT, Sicilia |
|
Italy |
|
50 |
% |
|
218 |
|
|
— |
|
|
— |
|
| Covalent Lithium Pty Ltd. |
|
Development and operation of the Mt. Holland Lithium project, which will include the construction of a lithium extraction and refining mine. |
|
L18, 109 St Georges Tce Perth WA 6000 |PO Box Z5200 St Georges Tce Perth WA 6831 |
|
Australia |
|
50 |
% |
|
— |
|
|
— |
|
|
— |
|
| SQM Vitas Brasil Agroindustria (*) |
|
Production and trading of specialty vegetable and animal nutrition and industrial hygiene. |
|
Via Cndeias, Km. 01 Sem Numero, Lote 4, Bairro Cia Norte, Candeias, Bahia. |
|
Brazil |
|
— |
% |
|
— |
|
|
— |
|
|
— |
|
| SQM Vitas Perú S.A.C. (**) |
|
Production and trading of specialty vegetable and animal nutrition and industrial hygiene |
|
Av. Juan de Arona 187, Torre B, Oficina 301-II, San Isidro, Lima |
|
Peru |
|
— |
% |
|
— |
|
|
— |
|
|
— |
|
| Pirra Lithium Pty Ltd. |
|
Exploration and development of lithium assets.. |
|
Suite 12, 11 Ventnor Avenue, West Perth, WA 6605. |
|
Australia |
|
40.0 |
% |
|
— |
|
|
— |
|
|
— |
|
| Azure Minerals (***) |
|
In charge of the development of the world-class Andover lithium deposits. |
|
51 Point Samson-Roebourne Rd, Roebourne WA 6718 |
|
Australia |
|
50.0 |
% |
|
— |
|
|
— |
|
|
— |
|
| Total |
|
|
|
|
|
|
|
|
|
12,718 |
|
|
— |
|
|
— |
|
(*) As of December 31, 2023, the investment in SQM Vitas Brasil Agroindustria was sold.
(**) As of March 27, 2024, all SQM Vitas Perú S.A.C. shares had been acquired by the Company. As of December 31, 2023, Vitas Fzco's ownership interest in SQM Vitas Peru was 99.99999%.
(***) SH Mining Pty Ltd. holds 30.57% interest in Azure Minerals.
8.2 Assets, liabilities, revenue and expenses from joint ventures
The information disclosed reflects the amounts presented in the financial statements of the relevant joint ventures and not the Company's share of those amounts.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2024 |
|
For the year ended December 31, 2024 |
|
|
Assets |
|
Liabilities |
|
Revenue |
|
Net income (loss) |
|
Other
comprehensive
income |
|
Comprehensive
income |
| Joint Venture |
|
Current |
|
Non-current |
|
Current |
|
Non-current |
|
|
|
|
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| SQM Vitas Fzco. (*) |
|
16,882 |
|
|
— |
|
|
38 |
|
|
— |
|
|
— |
|
|
(5,970) |
|
|
— |
|
|
(5,970) |
|
| SQM Vitas Perú S.A.C. (*) |
|
39,072 |
|
|
8,578 |
|
|
33,547 |
|
|
196 |
|
|
17,672 |
|
|
1,731 |
|
|
— |
|
|
1,731 |
|
| Pavoni & C. Spa (*) |
|
11,416 |
|
|
5,919 |
|
|
7,855 |
|
|
877 |
|
|
23,878 |
|
|
379 |
|
|
(229) |
|
|
150 |
|
| Covalent Lithium Pty Ltd. |
|
10,576 |
|
|
915 |
|
|
11,868 |
|
|
2,141 |
|
|
— |
|
|
(1,516) |
|
|
— |
|
|
(1,516) |
|
| Pirra Lithium Pty Ltd. |
|
2,720 |
|
|
2,006 |
|
|
10 |
|
|
— |
|
|
— |
|
|
3 |
|
|
— |
|
|
3 |
|
| Azure Mineral |
|
32,907 |
|
|
9,071 |
|
|
3,561 |
|
|
24,254 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
| Total |
|
113,573 |
|
|
26,489 |
|
|
56,879 |
|
|
27,468 |
|
|
41,550 |
|
|
(5,373) |
|
|
(229) |
|
|
(5,602) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2023 |
|
For the year ended December 31, 2023 |
|
|
Assets |
|
Liabilities |
|
|
|
Net income (loss) |
|
Other
comprehensive
income |
|
Comprehensive
income |
| Joint Venture |
|
Current |
|
Non-current |
|
Current |
|
Non-current |
|
Revenue |
|
|
|
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| SQM Vitas Fzco. (*) |
|
34,056 |
|
|
— |
|
|
52 |
|
|
— |
|
|
— |
|
|
359 |
|
|
— |
|
|
359 |
|
| SQM Vitas Brasil Agroindustria (*) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
| SQM Vitas Perú S.A.C. (*) |
|
40,327 |
|
|
8,954 |
|
|
36,898 |
|
|
220 |
|
|
53,477 |
|
|
(4,603) |
|
|
— |
|
|
(4,603) |
|
| Pavoni & C. Spa (*) |
|
11,879 |
|
|
6,407 |
|
|
8,146 |
|
|
814 |
|
|
21,439 |
|
|
792 |
|
|
115 |
|
|
907 |
|
| Covalent Lithium Pty Ltd. |
|
6,980 |
|
|
2,602 |
|
|
7,106 |
|
|
4,009 |
|
|
— |
|
|
215 |
|
|
— |
|
|
215 |
|
| Pirra Lithium Pty Ltd. |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
| Total |
|
93,242 |
|
|
17,963 |
|
|
52,202 |
|
|
5,043 |
|
|
74,916 |
|
|
(3,237) |
|
|
115 |
|
|
(3,122) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the year ended December 31, 2022 |
|
|
|
Revenue |
|
Net income (loss) |
|
Other
comprehensive
income |
|
Comprehensive
income |
| Joint Venture |
|
|
|
|
|
|
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| SQM Vitas Fzco. (*) |
|
|
— |
|
|
165 |
|
|
— |
|
|
165 |
|
| SQM Vitas Brasil Agroindustria (*) |
|
|
162,026 |
|
|
11,670 |
|
|
602 |
|
|
12,272 |
|
| SQM Vitas Perú S.A.C. (*) |
|
|
61,387 |
|
|
4,586 |
|
|
— |
|
|
4,586 |
|
| Pavoni & C. Spa (*) |
|
|
18,066 |
|
|
939 |
|
|
(344) |
|
|
595 |
|
| Covalent Lithium Pty Ltd. |
|
|
— |
|
|
(2,648) |
|
|
— |
|
|
(2,648) |
|
| Total |
|
|
241,479 |
|
|
14,712 |
|
|
258 |
|
|
14,970 |
|
(*) The financial figures exclude consolidation adjustments (unrealized gains and losses)
8.3 Other joint venture disclosures
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Cash and cash equivalents |
|
Other current financial liabilities |
|
Other non-current financial liabilities |
| Joint Venture |
|
As of
December 31,
2024 |
|
As of
December 31,
2023 |
|
As of
December 31,
2024 |
|
As of
December 31,
2023 |
|
As of
December 31,
2024 |
|
As of
December 31,
2023 |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| SQM Vitas Fzco. |
|
10,807 |
|
|
28,012 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
| SQM Vitas Brasil Agroindustria |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
| SQM Vitas Perú S.A.C. |
|
1,092 |
|
|
2,318 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
| Pavoni & C. Spa |
|
493 |
|
|
838 |
|
|
2,809 |
|
|
2,043 |
|
|
— |
|
|
— |
|
| Covalent Lithium Pty Ltd. |
|
1,403 |
|
|
1,865 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
| Pirra Lithium Pty Ltd. |
|
2,718 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
| Azure Minerals |
|
26,678 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
| Total |
|
43,191 |
|
|
33,033 |
|
|
2,809 |
|
|
2,043 |
|
|
— |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Depreciation and amortization expense
for the year ending |
|
Interest expense
for the year ending |
|
Income tax benefit (expense)
for the year ending |
| Joint Venture |
|
As of
December 31,
2024 |
|
As of
December 31,
2023 |
|
As of
December 31,
2024 |
|
As of
December 31,
2023 |
|
As of
December 31,
2024 |
|
As of
December 31,
2023 |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| SQM Vitas Fzco. |
|
— |
|
|
— |
|
|
(1) |
|
|
(1) |
|
|
— |
|
|
— |
|
| SQM Vitas Brasil Agroindustria |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
| SQM Vitas Perú S.A.C. |
|
(109) |
|
|
(513) |
|
|
(70) |
|
|
(220) |
|
|
(342) |
|
|
2,013 |
|
| Pavoni & C. Spa |
|
(99) |
|
|
(213) |
|
|
(375) |
|
|
(418) |
|
|
(184) |
|
|
(392) |
|
| Covalent Lithium Pty Ltd. |
|
(252) |
|
|
(691) |
|
|
(20) |
|
|
(16) |
|
|
(1,364) |
|
|
(107) |
|
| Pirra Lithium Pty Ltd. |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
| Azure Minerals |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
| Total |
|
(460) |
|
|
(1,417) |
|
|
(466) |
|
|
(655) |
|
|
(1,890) |
|
|
1,514 |
|
8.4 Disclosure of interests in joint ventures
a)Transactions in the year 2024
•)On March 27, 2024, the Company acquired 100% interest ownership in SQM Vitas Perú S.A.C., starting its consolidation in the second quarter of 2024. The purchase price was for ThUS$ 10,116.
•During the first quarter of 2024, the share percentage in Pirra Lithium Pty Ltd increased to 40% for an amount of ThUS$ 3,544.
•On May 9, 2024, the company acquired an additional 30.57% of Azure Minerals for ThUS$356,846 through SH Mining Pty Ltd., bringing total interest to 50%. As of December 31, 2023, the Company held a 19.43% interest, presented in other non-current financial assets. Further details are available in the description in Note 12.1.
b)Transactions in the year 2023
•On December 19, 2023, the joint venture SQM Vitas Fzco sold its 100% interest in SQM Vitas Brasil, generating an effect on the consolidated financial statements of a loss of ThUS$2.6 million. Prior to the sale of Vitas Brasil, Vitas Brasil distributed dividends to SQM Vitas Fzco for ThUS$14,282. Subsequently, in 2024 SQM Vitas Fzco distributed and paid dividends to the Company in the amount of ThUS$12,500.
•During the fourth quarter of 2023, the Company made an investment of ThUS$3,544 in Pirra Lithium Pty Ltd with an equity interest of 37.5%. The Company has the right to nominate a director and anti-dilution rights in terms of its shareholding. In addition, it has the right to nominate a member of the technical committee in charge of exploration plans and budgets.
•On December 19, 2023, the SQM Vitas Fzco joint venture made an agreement with the Company to purchase 50% of the SQM Vitas Peru joint venture, which will be completed during the second quarter of 2024 for approximately US$5 million subject to compliance with certain regulatory requirements.
c) Transactions in the year 2022
•As of December 31, 2022, there are no transactions to disclose.
8.5 Joint Operations
In 2017, together with our subsidiary SQM Australia Pty, we entered into an agreement to acquire 50% of the assets of the Mt Holland lithium project in Western Australia. The Mt Holland lithium project is to designing, constructing and operating a mine, concentrator and refinery to produce lithium hydroxide.
As of December 31, 2024, a total of US$840.9 million has been contributed to Mt. Holland Lithium project.
Note 9 Cash and cash equivalents
9.1 Types of cash and cash equivalents
As of December 31, 2024 and 2023, cash and cash equivalents are detailed as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cash |
|
As of
December 31,
2024 |
|
As of
December 31,
2023 |
|
|
ThUS$ |
|
ThUS$ |
| Cash on hand |
|
663 |
|
|
33 |
|
| Cash in banks |
|
925,380 |
|
|
676,282 |
|
| Other demand deposits |
|
— |
|
|
709 |
|
| Total Cash |
|
926,043 |
|
|
677,024 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cash equivalents |
|
As of
December 31,
2024 |
|
As of
December 31,
2023 |
|
|
ThUS$ |
|
ThUS$ |
| Short-term deposits, classified as cash equivalents |
|
322,500 |
|
|
23,545 |
|
| Short-term investments, classified as cash equivalents |
|
129,308 |
|
|
340,800 |
|
| Total cash equivalents |
|
451,808 |
|
|
364,345 |
|
| Total cash and cash equivalents |
|
1,377,851 |
|
|
1,041,369 |
|
9.2 Short-term investments, classified as cash equivalents
As of December 31, 2024 and 2023, the short-term investments classified as cash equivalents relate to mutual funds (investment liquidity funds) for investments in:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Institution |
|
As of
December 31,
2024 |
|
As of
December 31,
2023 |
|
|
ThUS$ |
|
ThUS$ |
| Legg Mason - Western Asset Institutional Cash Reserves |
|
122,337 |
|
|
312,924 |
|
| JP Morgan US dollar Liquidity Fund Institutional |
|
1,974 |
|
|
22,845 |
|
| Banco Crédito e Inversiones |
|
4,997 |
|
|
5,031 |
|
| Total |
|
129,308 |
|
|
340,800 |
|
Short-term investments are highly liquid mutual funds that are basically invested in short-term fixed rate notes in the U.S. and in Chile market.
9.3 Amount restricted cash balances
The Company has granted a guarantee consisting of financial instruments, specified in deposits, custody and administration to Banco de Chile, for its subsidiary Isapre Norte Grande Ltda., in compliance with the provisions of the Superintendence of Health, which regulates social security health institutions.
According to the regulations of the Superintendence of Health, this guarantee is for the total amount payable to its affiliates and medical providers. Banco de Chile reports the current value of the guarantee to the Superintendence of Health and Isapre Norte Grande Ltda. on a daily basis.
As of December 31, 2024 and 2023, pledged assets are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Restricted cash balances |
|
As of
December 31,
2024 |
|
As of
December 31,
2023 |
|
|
ThUS$ |
|
ThUS$ |
| Isapre Norte Grande Ltda. |
|
942 |
|
|
950 |
|
| Total |
|
942 |
|
|
950 |
|
9.4 Short-term deposits, classified as cash equivalents
The detail at the end of each balance date is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Receiver of the deposit |
|
Type of deposit |
|
Original
Currency |
|
Interest Rate |
|
Placement date |
|
Expiration date |
|
Principal |
|
Interest
accrued to-date |
|
As of
December 31, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Banco de Chile |
|
Fixed term |
|
Dollar |
|
0.43 |
% |
|
12-03-2024 |
|
01-06-2025 |
|
1,000 |
|
|
4 |
|
|
1,004 |
|
| Banco de Chile |
|
Fixed term |
|
Dollar |
|
0.08 |
% |
|
12-27-2024 |
|
01-03-2025 |
|
5,300 |
|
|
3 |
|
|
5,303 |
|
| Banco Estado |
|
Fixed term |
|
Dollar |
|
0.45 |
% |
|
12-10-2024 |
|
01-13-2025 |
|
500 |
|
|
1 |
|
|
501 |
|
| Banco Estado |
|
Fixed term |
|
Dollar |
|
0.40 |
% |
|
12-13-2024 |
|
01-13-2025 |
|
1,000 |
|
|
2 |
|
|
1,002 |
|
| Banco Estado |
|
Fixed term |
|
Dollar |
|
0.36 |
% |
|
12-16-2024 |
|
01-13-2025 |
|
500 |
|
|
1 |
|
|
501 |
|
| Banco Estado |
|
Fixed term |
|
Dollar |
|
0.27 |
% |
|
12-23-2024 |
|
01-13-2025 |
|
2,000 |
|
|
2 |
|
|
2,002 |
|
| Banco Estado |
|
Fixed term |
|
Dollar |
|
0.34 |
% |
|
12-26-2024 |
|
01-21-2025 |
|
50,000 |
|
|
39 |
|
|
50,039 |
|
| Banco Estado |
|
Fixed term |
|
Dollar |
|
0.34 |
% |
|
12-26-2024 |
|
01-21-2025 |
|
50,000 |
|
|
39 |
|
|
50,039 |
|
| Banco Crédito e Inversiones |
|
Fixed term |
|
Dollar |
|
0.46 |
% |
|
12-09-2024 |
|
01-13-2025 |
|
1,000 |
|
|
3 |
|
|
1,003 |
|
| Banco Santander |
|
Fixed term |
|
Dollar |
|
0.25 |
% |
|
12-24-2024 |
|
01-13-2025 |
|
500 |
|
|
— |
|
|
500 |
|
| Banco Santander |
|
Fixed term |
|
Dollar |
|
0.09 |
% |
|
12-27-2024 |
|
01-03-2025 |
|
4,500 |
|
|
2 |
|
|
4,502 |
|
| Banco Santander |
|
Fixed term |
|
Peso |
|
0.44 |
% |
|
12-26-2024 |
|
01-14-2025 |
|
99,452 |
|
|
88 |
|
|
99,540 |
|
| Scotiabank Chile |
|
Fixed term |
|
Dollar |
|
0.32 |
% |
|
12-19-2024 |
|
01-13-2025 |
|
500 |
|
|
1 |
|
|
501 |
|
| Scotiabank Chile |
|
Fixed term |
|
Dollar |
|
0.18 |
% |
|
12-30-2024 |
|
01-13-2025 |
|
800 |
|
|
— |
|
|
800 |
|
| Scotiabank Chile |
|
Fixed term |
|
Peso |
|
0.10 |
% |
|
12-26-2024 |
|
01-02-2025 |
|
2,509 |
|
|
2 |
|
|
2,511 |
|
| Scotiabank Chile |
|
Fixed term |
|
Peso |
|
0.10 |
% |
|
12-27-2024 |
|
01-03-2025 |
|
1,806 |
|
|
1 |
|
|
1,807 |
|
| Scotiabank Chile |
|
Fixed term |
|
Peso |
|
0.10 |
% |
|
12-30-2024 |
|
01-06-2025 |
|
1,505 |
|
|
— |
|
|
1,505 |
|
| Scotiabank Chile |
|
Fixed term |
|
Peso |
|
0.45 |
% |
|
12-26-2024 |
|
01-28-2025 |
|
99,352 |
|
|
88 |
|
|
99,440 |
|
| Total |
|
|
|
|
|
|
|
|
|
|
|
322,224 |
|
|
276 |
|
|
322,500 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Receiver of the deposit |
|
Type of deposit |
|
Original
Currency |
|
Interest Rate |
|
Placement date |
|
Expiration date |
|
Principal |
|
Interest
accrued to-date |
|
As of
December 31,
2023 |
|
|
|
|
|
|
|
|
|
|
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Banco Santander |
|
Fixed term |
|
Dollar |
|
0.39 |
% |
|
12-11-2023 |
|
01-05-2024 |
|
5,000 |
|
|
16 |
|
|
5,016 |
|
| Banco Santander |
|
Fixed term |
|
Dollar |
|
0.28 |
% |
|
12-21-2023 |
|
01-08-2024 |
|
1,300 |
|
|
2 |
|
|
1,302 |
|
| Banco Crédito e Inversiones |
|
Fixed term |
|
Dollar |
|
0.80 |
% |
|
12-28-2023 |
|
02-16-2024 |
|
1,000 |
|
|
— |
|
|
1,000 |
|
| Itaú Corpbanca |
|
Fixed term |
|
Dollar |
|
0.27 |
% |
|
12-18-2023 |
|
01-05-2024 |
|
3,000 |
|
|
6 |
|
|
3,006 |
|
| Itaú Corpbanca |
|
Fixed term |
|
Dollar |
|
0.54 |
% |
|
12-04-2023 |
|
01-08-2024 |
|
2,000 |
|
|
8 |
|
|
2,008 |
|
| Scotiabank Sud Americano |
|
Fixed term |
|
Dollar |
|
0.45 |
% |
|
12-18-2023 |
|
01-16-2024 |
|
2,700 |
|
|
5 |
|
|
2,705 |
|
| Scotiabank Sud Americano |
|
Fixed term |
|
Dollar |
|
0.23 |
% |
|
12-20-2023 |
|
01-04-2024 |
|
2,200 |
|
|
4 |
|
|
2,204 |
|
| Scotiabank Sud Americano |
|
Fixed term |
|
Dollar |
|
0.16 |
% |
|
12-29-2023 |
|
01-05-2024 |
|
1,140 |
|
|
1 |
|
|
1,141 |
|
| Scotiabank Sud Americano |
|
Fixed term |
|
Dollar |
|
0.78 |
% |
|
12-13-2023 |
|
01-31-2024 |
|
700 |
|
|
2 |
|
|
702 |
|
| Banco de Chile |
|
Fixed term |
|
Dollar |
|
0.70 |
% |
|
12-27-2023 |
|
02-09-2024 |
|
1,850 |
|
|
1 |
|
|
1,851 |
|
| Banco de Chile |
|
Fixed term |
|
Dollar |
|
1.02 |
% |
|
12-04-2023 |
|
02-05-2024 |
|
1,300 |
|
|
6 |
|
|
1,306 |
|
| Banco de Chile |
|
Fixed term |
|
Dollar |
|
0.77 |
% |
|
12-14-2023 |
|
01-31-2024 |
|
1,300 |
|
|
4 |
|
|
1,304 |
|
| Total |
|
|
|
|
|
|
|
|
|
|
|
23,490 |
|
|
55 |
|
|
23,545 |
|
Note 10 Inventories
The composition of inventory at each period-end is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Type of inventory |
|
As of
December 31,
2024 |
|
As of
December 31,
2023 |
|
|
ThUS$ |
|
ThUS$ |
| Raw material |
|
58,212 |
|
|
61,098 |
|
| Production supplies |
|
91,914 |
|
|
77,810 |
|
| Products-in-progress |
|
698,134 |
|
|
744,217 |
|
| Finished product |
|
853,925 |
|
|
891,469 |
|
| Total |
|
1,702,185 |
|
|
1,774,594 |
|
As of December 31, 2024 and 2023, the Company held caliche stockpiles, solutions in solar ponds and intermediary salts amounting ThUS$ 462,451 and as of December 31, 2023 was ThUS$ 503,318 (including products in progress). As of December 31, 2024, bulk inventories recognized within work in progress were ThUS$ 249,105, while as of December 31, 2023 this value amounted to ThUS$ 221,559. As of December 31, 2024, bulk inventories recognized within finished goods were ThUS$ 138,625 (as of December 31, 2023, this value amounted to ThUS$ 164,029).
As of December 31, 2024 and 2023, recognized inventory allowances, amounted to ThUS$ 114,632 and ThUS$ 133,768, respectively. For finished and in-process products, recognized allowances include the provision associated with the lower value of stock (considers lower realizable value, uncertain future use, reprocessing costs of off-specification products, etc.), provision for inventory differences and the provision for potential errors in the determination of inventories (e.g., errors in topography, grade, moisture, etc.). (See Note 3.15).
For raw materials, supplies, materials and parts, the lower value provision was associated with the proportion of defective materials and potential differences.
The breakdown of inventory allowances is detailed as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Type of inventory |
|
As of
December 31,
2024 |
|
As of
December 31,
2023 |
|
|
ThUS$ |
|
ThUS$ |
| Raw material and supplies for production |
|
5,082 |
|
|
7,724 |
|
| Products-in-progress |
|
75,100 |
|
|
104,970 |
|
| Finished product |
|
34,450 |
|
|
21,074 |
|
| Total |
|
114,632 |
|
|
133,768 |
|
The Company has not pledged inventory as collateral for the periods indicated above.
As of December 31, 2024, and 2023, movements in provisions are detailed as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Reconciliation |
|
As of
December 31,
2024 |
|
As of
December 31,
2023 |
|
As of
December 31,
2022 |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Beginning balance |
|
133,768 |
|
|
104,057 |
|
|
75,892 |
|
| Decrease (increase) in carrying amount |
|
(14,517) |
|
|
32,926 |
|
|
29,693 |
|
| Additional Provision Differences of Inventory |
|
171 |
|
|
455 |
|
|
(161) |
|
| Increase / Decrease eventual differences and others |
|
— |
|
|
— |
|
|
— |
|
| Provision Used |
|
(4,790) |
|
|
(3,670) |
|
|
(1,367) |
|
| Total changes |
|
(19,136) |
|
|
29,711 |
|
|
28,165 |
|
| Final balance |
|
114,632 |
|
|
133,768 |
|
|
104,057 |
|
For further details, see accounting policy for inventory measurement in Note 3.15
Note 11 Related party disclosures
11.1 Related party disclosures
Balances pending at the period-end are not guaranteed, accrue no interest and are settled in cash, no guarantees have been delivered or received for trade and other receivables due from related parties or trade and other payables due to related parties.
11.2 Relationships between the parent and the entity
Pursuant to Article 99 of Law of the Securities Market Law, the CMF may determine that a company does not have a controlling entity in accordance with the distribution and dispersion of its ownership. On November 30, 2018, the CMF issued the ordinary letter No. 32,131 whereby it determined that Pampa Group, do not exert decisive power over the management of the Company since it does not have a predominance in the ownership that allows it to make management decisions. Therefore, the CMF has determined not to consider Pampa Group as the controlling entity of the Company and that the Company does not have a controlling entity given its current ownership structure.
11.3 Detailed identification of related parties and subsidiaries
As of December 31, 2024 and 2023, the detail of entities that are identified as subsidiaries or related parties of the SQM Group is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Tax ID No |
|
Name |
|
Country of origin |
|
Functional currency |
|
Nature |
| Foreign |
|
Nitratos Naturais Do Chile Ltda. |
|
Brazil |
|
Dollar |
|
Subsidiary |
| Foreign |
|
SQM North America Corp. |
|
United States |
|
Dollar |
|
Subsidiary |
| Foreign |
|
SQM Europe N.V. (3) |
|
Belgium |
|
Dollar |
|
Subsidiary |
| Foreign |
|
Soquimich European Holding B.V. |
|
Netherlands |
|
Dollar |
|
Subsidiary |
| Foreign |
|
SQM Corporation N.V. |
|
Curacao |
|
Dollar |
|
Subsidiary |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Tax ID No |
|
Name |
|
Country of origin |
|
Functional currency |
|
Nature |
| Foreign |
|
SQM Comercial De México S.A. de C.V. |
|
Mexico |
|
Dollar |
|
Subsidiary |
| Foreign |
|
North American Trading Company (4) |
|
United States |
|
Dollar |
|
Subsidiary |
| Foreign |
|
Administración y Servicios Santiago S.A. de C.V. |
|
Mexico |
|
Dollar |
|
Subsidiary |
| Foreign |
|
SQM Ecuador S.A. |
|
Ecuador |
|
Dollar |
|
Subsidiary |
| Foreign |
|
SQM Nitratos Mexico S.A. de C.V. |
|
Mexico |
|
Dollar |
|
Subsidiary |
| Foreign |
|
SQMC Holding Corporation. |
|
United States |
|
Dollar |
|
Subsidiary |
| Foreign |
|
SQM Investment Corporation N.V. |
|
Curacao |
|
Dollar |
|
Subsidiary |
| Foreign |
|
SQM Brasil Limitada |
|
Brazil |
|
Dollar |
|
Subsidiary |
| Foreign |
|
SQM France S.A. |
|
France |
|
Dollar |
|
Subsidiary |
| Foreign |
|
SQM Japan Co. Ltd. |
|
Japan |
|
Dollar |
|
Subsidiary |
| Foreign |
|
Royal Seed Trading Corporation A.V.V. (6) |
|
Aruba |
|
Dollar |
|
Subsidiary |
| Foreign |
|
SQM Oceania Pty Limited |
|
Australia |
|
Dollar |
|
Subsidiary |
| Foreign |
|
Rs Agro-Chemical Trading Corporation A.V.V. (5) |
|
Aruba |
|
Dollar |
|
Subsidiary |
| Foreign |
|
SQM Indonesia S.A. |
|
Indonesia |
|
Dollar |
|
Subsidiary |
| Foreign |
|
SQM Virginia L.L.C. (4) |
|
United States |
|
Dollar |
|
Subsidiary |
| Foreign |
|
Comercial Caimán Internacional S.A. (2) |
|
Panama |
|
Dollar |
|
Subsidiary |
| Foreign |
|
SQM África Pty. Ltd. |
|
South Africa |
|
Dollar |
|
Subsidiary |
| Foreign |
|
SQM Colombia SAS |
|
Colombia |
|
Dollar |
|
Subsidiary |
| Foreign |
|
SQM (Shanghai) Chemicals Co. Ltd. |
|
China |
|
Dollar |
|
Subsidiary |
| Foreign |
|
SQM Lithium Specialties Limited Partnership (4) |
|
United States |
|
Dollar |
|
Subsidiary |
| Foreign |
|
SQM Iberian S.A. |
|
Spain |
|
Dollar |
|
Subsidiary |
| Foreign |
|
SQM Beijing Commercial Co. Ltd. |
|
China |
|
Dollar |
|
Subsidiary |
| Foreign |
|
SQM Thailand Limited (18) |
|
Thailand |
|
Dollar |
|
Subsidiary |
| Foreign |
|
SQM Australia PTY |
|
Australia |
|
Dollar |
|
Subsidiary |
| Foreign |
|
SQM Holland B.V. |
|
Netherlands |
|
Dollar |
|
Subsidiary |
| Foreign |
|
Soquimich LLC |
|
South Korea |
|
Dollar |
|
Subsidiary |
| Foreign |
|
Soquimich Comercial Brasil Ltda |
|
Brazil |
|
Dollar |
|
Subsidiary |
| 96.801.610-5 |
|
Comercial Hydro S.A. |
|
Chile |
|
Dollar |
|
Subsidiary |
| 96.651.060-9 |
|
SQM Potasio S.A. (9) |
|
Chile |
|
Dollar |
|
Subsidiary |
| 96.592.190-7 |
|
SQM Nitratos S.A. |
|
Chile |
|
Dollar |
|
Subsidiary |
| 96.592.180-K |
|
Ajay SQM Chile S.A. |
|
Chile |
|
Dollar |
|
Subsidiary |
| 79.947.100-0 |
|
SQM Industrial S.A. |
|
Chile |
|
Dollar |
|
Subsidiary |
| 79.906.120-1 |
|
Isapre Norte Grande Ltda. |
|
Chile |
|
Peso |
|
Subsidiary |
| 79.876.080-7 |
|
Almacenes y Depósitos Ltda. |
|
Chile |
|
Peso |
|
Subsidiary |
| 79.770.780-5 |
|
Servicios Integrales de Tránsitos y Transferencias S.A. |
|
Chile |
|
Dollar |
|
Subsidiary |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Tax ID No |
|
Name |
|
Country of origin |
|
Functional currency |
|
Nature |
| 79.768.170-9 |
|
Soquimich Comercial S.A. |
|
Chile |
|
Dollar |
|
Subsidiary |
| 79.626.800-K |
|
SQM Salar S.A. (10) |
|
Chile |
|
Dollar |
|
Subsidiary |
| 76.534.490-5 |
|
Sociedad Prestadora de Servicios de Salud Cruz del Norte S.A. |
|
Chile |
|
Peso |
|
Subsidiary |
| 76.425.380-9 |
|
Exploraciones Mineras S.A. |
|
Chile |
|
Dollar |
|
Subsidiary |
| 76.064.419-6 |
|
Comercial Agrorama Ltda. (1) |
|
Chile |
|
Peso |
|
Subsidiary |
| 76.145.229-0 |
|
Agrorama S.A. |
|
Chile |
|
Peso |
|
Subsidiary |
| 76.359.919-1 |
|
Orcoma Estudios SpA |
|
Chile |
|
Dollar |
|
Subsidiary |
| 76.360.575-2 |
|
Orcoma SpA |
|
Chile |
|
Dollar |
|
Subsidiary |
| 76.686.311-9 |
|
SQM MAG SpA |
|
Chile |
|
Dollar |
|
Subsidiary |
| 77.114.779-8 |
|
Sociedad Contractual Minera Bufalo |
|
Chile |
|
Dollar |
|
Subsidiary |
| 76.630.159-2 |
|
SQM Nueva Potasio SpA (11) |
|
Chile |
|
Dollar |
|
Subsidiary |
| 78.009.141-K |
|
SQM Lab SpA (20) |
|
Chile |
|
Dollar |
|
Subsidiary |
| Foreign |
|
Blue Energy Business and Trade (Shanghai) Co., Ltd. (7) |
|
China |
|
Chinese Yuan |
|
Subsidiary |
| Foreign |
|
SQM Comercial Perú S.A.C. (8) |
|
Peru |
|
Dollar |
|
Subsidiary |
| Foreign |
|
SQM India Private Limited (12) |
|
India |
|
Indian Rupee |
|
Subsidiary |
| Foreign |
|
Sichuan Dixin New Energy Co., Ltd. (13) |
|
China |
|
Chinese Yuan |
|
Subsidiary |
| Foreign |
|
SQM (Shanghai) Industrial Co, Ltd. (14) |
|
China |
|
Dollar |
|
Subsidiary |
| Foreign |
|
SQM Lithium Europe NV (15) |
|
Belgium |
|
Dollar |
|
Subsidiary |
| Foreign |
|
SQM Lithium North America Corporation (16) |
|
United States of America |
|
Dollar |
|
Subsidiary |
| Foreign |
|
Sociedad Química y Minera Maroc (17) |
|
Marocco |
|
Moroccan Dirham |
|
Subsidiary |
| Foreign |
|
SQM Japan Lithium Co. Ltd. (19) |
|
Japan |
|
Dollar |
|
Subsidiary |
| Foreign |
|
Harding Battery Minerals (Novo JV) |
|
Australia |
|
Australian Dollar |
|
Subsidiary |
| Foreign |
|
Ajay North America |
|
United States |
|
Dollar |
|
Associate |
| Foreign |
|
Abu Dhabi Fertilizer Industries WWL |
|
United Arab Emirates |
|
Arab Emirates dirham |
|
Associate |
| Foreign |
|
Ajay Europe SARL |
|
France |
|
Euro |
|
Associate |
| Foreign |
|
SAS Adionics |
|
France |
|
Euro |
|
Associate |
| Foreign |
|
Pirra Lithium Pty Ltd. |
|
Australia |
|
Australian Dollar |
|
Joint venture |
| Foreign |
|
SQM Vitas Fzco. |
|
United Arab Emirates |
|
Arab Emirates dirham |
|
Joint venture |
| Foreign |
|
Covalent Lithium Pty Ltd. |
|
Australia |
|
Dollar |
|
Joint venture |
| Foreign |
|
Pavoni & C, SPA |
|
Italy |
|
Euro |
|
Joint venture |
| Foreign |
|
Azure Minerals |
|
Australia |
|
Australian Dollar |
|
Joint venture |
| Foreign |
|
SH Mining Pty Ltd |
|
Australia |
|
Australian Dollar |
|
Joint venture |
| Foreign |
|
SQM Vitas Brasil Agroindustria |
|
Brazil |
|
Brazilian real |
|
Other related parties |
_______________________________________________
(1)SQM has control over the management of Comercial Agrorama Ltda.
(2)Comercial Caimán Internacional S.A. has been liquidated as of September 30, 2023.
(3)On July 1, 2023, SQM Europe N.V. absorbed the subsidiary SQM International N.V.
(4)SQM Virginia LLC, North American Trading Company and SQM Lithium Specialties Limited Partnership have been liquidated as of December 31, 2023.
(5)RS Agro Chemical Trading Corporation A.V.V. was liquidated during the first quarter of 2024.
(6)Royal Seed Trading Corporation A.V.V. was liquidated during the first quarter of 2024.
(7)Blue Energy Business and Trade (Shanghai) Co., Ltd. was incorporated on March 21, 2024.
(8)On March 27, 2024, 100% of SQM Vitas Perú S.A.C. was acquired. In April 2024, SQM Vitas Perú S.A.C. changed its corporate name to SQM Comercial Perú S.A.C.
(9)On May 31, 2024, SQM Potasio S.A. was transformed from SQM Potasio S.A. to SQM Potasio SpA.
(10)On May 31, 2024, SQM Salar S.A. was transformed from SQM Salar S.A. to SQM Salar SpA.
(11)On May 31, 2024, SQM Potasio SpA was divided creating SQM Nueva Potasio SpA.
(12)The subsidiary SQM India Private Limited was incorporated on April 22, 2024.
(13)The subsidiary Sichuan Dixin New Energy Co., Ltd. was acquired on April 30, 2024.
(14)SQM (Shanghai) Industrial Co., Ltd. was incorporated on September 18, 2024.
(15)On September 9, 2024, the subsidiary SQM Lithium Europe NV was incorporated.
(16)On September 17, 2024, the subsidiary SQM Lithium North America Corporation was incorporated.
(17)On July 18, 2024, Sociedad Química y Minera Maroc was incorporated.
(18)In the fourth quarter of 2024, SQM Thailand Limited was liquidated
(19)On October 2024 the subsidiary SQM Japan Lithium Co. Ltd. was incorporated.
(20)On December 16, 2024, the subsidiary SQM Lab SpA was incorporated
The following other related parties correspond to mining contractual corporations.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Tax ID No. |
|
Name |
|
Country of origin |
|
Functional currency |
|
Relationship |
| N/A |
|
Sociedad Contractual Minera Pampa Unión |
|
Chile |
|
Peso |
|
Other related parties |
Below is a list of transactions with clients and suppliers with whom a relationship with key Company personnel was identified:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Tax ID No |
|
Name |
|
Country of origin |
|
Nature |
| 90.193.000-7 |
|
El Mercurio S.A.P. |
|
Chile |
|
Other related parties |
| 92.580.000-7 |
|
Empresa Nacional de Telecomunicaciones S.A. |
|
Chile |
|
Other related parties |
| 96.806.980-2 |
|
Entel PCS Telecomunicaciones S.A. |
|
Chile |
|
Other related parties |
| 97.004.000-5 |
|
Banco de Chile |
|
Chile |
|
Other related parties |
| 99.012.000-5 |
|
Compañía de Seguros de Vida Consorcio Nacional |
|
Chile |
|
Other related parties |
| 65.614.340-1 |
|
Corporación Endeavor Chile |
|
Chile |
|
Other related parties |
| 82.135.600-8 |
|
Instituto Chileno administración empresas |
|
Chile |
|
Other related parties |
| 65.204.189-2 |
|
Fundación para el desarrollo Social |
|
Chile |
|
Other related parties |
| 76.825.265-3 |
|
Link Capital Partners SPA |
|
Chile |
|
Other related parties |
| 76.389.727-3 |
|
Sociedad Periodística El Libero |
|
Chile |
|
Other related parties |
11.4 Detail of related parties and related party transactions
Transactions between the Company and its subsidiaries, associated businesses, joint ventures and other related parties are part of the Company’s common transactions. Their conditions are those customaries for this type of transactions in respect of terms and market prices. Maturity terms for each case vary by virtue of the transaction giving rise to them.
For the year ended December 31, 2024, 2023 and 2022, the detail of significant transactions with related parties is as follows
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Tax ID No |
|
Name |
|
Nature |
|
Country of origin |
|
Transaction |
|
For the year ended
December 31,
2024 |
|
For the year ended
December 31,
2023 |
|
For the year ended
December 31,
2022 |
|
|
|
|
|
|
|
|
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Foreign |
|
Ajay Europe S.A.R.L. |
|
Associate |
|
France |
|
Sale of products |
|
51,838 |
|
|
45,314 |
|
|
45,205 |
|
| Foreign |
|
Ajay Europe S.A.R.L. |
|
Associate |
|
France |
|
Dividends |
|
3,049 |
|
|
4,682 |
|
|
1,778 |
|
| Foreign |
|
Ajay North America LL.C. |
|
Associate |
|
United States |
|
Sale of products |
|
50,593 |
|
|
30,791 |
|
|
41,814 |
|
| Foreign |
|
Ajay North America LL.C. |
|
Associate |
|
United States |
|
Dividends |
|
2,799 |
|
|
4,013 |
|
|
1,576 |
|
| Foreign |
|
Abu Dhabi Fertilizer Industries |
|
Associate |
|
United Arab Emirates |
|
Dividends |
|
— |
|
|
633 |
|
|
3,000 |
|
| Foreign |
|
SQM Vitas Brasil Agroindustria |
|
Other related parties |
|
Brazil |
|
Sale of products |
|
— |
|
|
9,019 |
|
|
51,748 |
|
| Foreign |
|
SQM Vitas Perú S.A.C. |
|
Other related parties |
|
Peru |
|
Sale of products |
|
7,237 |
|
|
17,312 |
|
|
58,077 |
|
| Foreign |
|
Pavoni & CPA |
|
Joint venture |
|
Italy |
|
Sale of products |
|
6,423 |
|
|
5,541 |
|
|
4,138 |
|
| Foreign |
|
Pavoni & CPA |
|
Joint venture |
|
Italy |
|
Dividends |
|
218 |
|
|
— |
|
|
— |
|
| Foreign |
|
SQM Vitas Fzco |
|
Joint venture |
|
United Arab Emirates |
|
Dividends |
|
12,500 |
|
|
— |
|
|
— |
|
| Chile |
|
Banco de Chile |
|
Other related parties |
|
Chile |
|
Service Provider |
|
(68,927) |
|
|
(32,418) |
|
|
(27,918) |
|
| Chile |
|
El Mercurio S.A.P. |
|
Other related parties |
|
Chile |
|
Service Provider |
|
(183) |
|
|
(1,038) |
|
|
(90) |
|
| Chile |
|
Compañía de Seguros de Vida Consorcio Nacional |
|
Other related parties |
|
Chile |
|
Service Provider |
|
(31) |
|
|
(33) |
|
|
(31) |
|
| Chile |
|
Entel PCS Telecomunicaciones S.A. |
|
Other related parties |
|
Chile |
|
Service Provider |
|
(307) |
|
|
(182) |
|
|
(228) |
|
| Chile |
|
Gonzalo Guerrero Yamamoto |
|
Other related parties |
|
Chile |
|
Service Provider |
|
— |
|
|
— |
|
|
(19) |
|
| Chile |
|
Empresa Nacional de Telecomunicaciones |
|
Other related parties |
|
Chile |
|
Service Provider |
|
(793) |
|
|
(3,485) |
|
|
(1,746) |
|
| Chile |
|
Instituto Chileno administración empresas |
|
Other related parties |
|
Chile |
|
Service Provider |
|
(78) |
|
|
(134) |
|
|
(46) |
|
| Chile |
|
Corporación Endeavor Chile |
|
Other related parties |
|
Chile |
|
Service Provider |
|
(143) |
|
|
(101) |
|
|
— |
|
| Chile |
|
Fundación para el desarrollo social |
|
Other related parties |
|
Chile |
|
Service Provider |
|
(3) |
|
|
— |
|
|
(7) |
|
| Chile |
|
Link Capital Partners SPA |
|
Other related parties |
|
Chile |
|
Service Provider |
|
(39) |
|
|
— |
|
|
— |
|
| Chile |
|
Sociedad Periodística El Libero |
|
Other related parties |
|
Chile |
|
Service Provider |
|
— |
|
|
— |
|
|
— |
|
11.5 Trade receivables due from related parties, current:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Tax ID No |
|
Name |
|
Nature |
|
Country of origin |
|
Currency |
|
As of
December 31,
2024 |
|
As of
December 31,
2023 |
|
|
|
|
|
|
|
|
|
|
ThUS$ |
|
ThUS$ |
| Foreign |
|
Ajay Europe S.A.R.L. |
|
Associate |
|
France |
|
Euro |
|
13,213 |
|
|
8,932 |
|
| Foreign |
|
Ajay North America LL.C. |
|
Associate |
|
United States of America |
|
Dollar |
|
7,232 |
|
|
4,393 |
|
| 96.511.530-7 |
|
Soc. de Inversiones Pampa Calichera |
|
Other related parties |
|
Chile |
|
Dollar |
|
4 |
|
|
5 |
|
| Foreign |
|
SQM Vitas Perú S.A.C. |
|
Other related parties |
|
Peru |
|
Dollar |
|
— |
|
|
27,115 |
|
| Foreign |
|
SQM Vitas Fzco. |
|
Joint venture |
|
United Arab Emirates |
|
Arab Emirates dirham |
|
— |
|
|
232 |
|
| Foreign |
|
Pavoni & C. SpA |
|
Joint venture |
|
Italy |
|
Euro |
|
1,511 |
|
|
2,576 |
|
| Foreign |
|
Azure Minerals |
|
Joint venture |
|
Australia |
|
Australian dollar |
|
4,713 |
|
|
— |
|
| Foreign |
|
SH Mining Pty Ltd |
|
Joint venture |
|
Australia |
|
Australian dollar |
|
2,033 |
|
|
— |
|
| Total |
|
|
|
|
|
|
|
|
|
28,706 |
|
|
43,253 |
|
As of December 31, 2024 and 2023, receivables are net of provision for ThUS$ 668 and ThUS$ 800, respectively.
11.6 Current trade payables due to related:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Tax ID No |
|
Name |
|
Nature |
|
Country of origin |
|
Currency |
|
As of
December 31,
2024 |
|
As of
December 31,
2023 |
|
|
|
|
|
|
|
|
|
|
ThUS$ |
|
ThUS$ |
| Foreign |
|
Covalent Lithium Pty Ltd. |
|
Joint venture |
|
Australia |
|
Australian dollar |
|
4,438 |
|
|
2,346 |
|
| Foreign |
|
SQM Vitas Fzco. |
|
Joint venture |
|
United Arab Emirates |
|
Dollar |
|
5,827 |
|
|
— |
|
| Total |
|
|
|
|
|
|
|
|
|
10,265 |
|
|
2,346 |
|
11.7 Other disclosures:
Note 6 describes the remuneration of the board of directors, administration and key management personnel.
Note 12 Financial instruments
12.1 Types of other current and non-current financial assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Description of other financial assets |
|
As of
December 31,
2024 |
|
As of
December 31,
2023 |
|
|
ThUS$ |
|
ThUS$ |
| Financial assets at amortized cost (1) |
|
1,061,262 |
|
|
1,316,797 |
|
| Derivative financial instruments |
|
|
|
|
-For hedging |
|
15,405 |
|
|
8,527 |
|
-Non-hedging (2) |
|
2,928 |
|
|
519 |
|
| Total other current financial assets |
|
1,079,595 |
|
|
1,325,843 |
|
| Financial assets at fair value through other comprehensive income (4) (5) (6) (7) |
|
57,756 |
|
|
232,268 |
|
| Derivative financial instruments |
|
|
|
|
-For hedging |
|
2,930 |
|
|
15,993 |
|
| Other financial assets at amortized cost |
|
20 |
|
|
20 |
|
| Total other non-current financial assets |
|
60,706 |
|
|
248,281 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Institution |
|
As of
December 31,
2024 |
|
As of
December 31,
2023 |
|
|
ThUS$ |
|
ThUS$ |
| Banco de Crédito e Inversiones |
|
174,684 |
|
|
74,459 |
|
| Banco Morgan Stanley (3) |
|
— |
|
|
5,590 |
|
| Banco Santander |
|
415,851 |
|
|
100,083 |
|
| Banco Itaú CorpBanca |
|
66,166 |
|
|
372,061 |
|
| Scotiabank Chile |
|
240,164 |
|
|
319,128 |
|
| Bank of Nova Scotia |
|
51,025 |
|
|
353,592 |
|
| Sumitomo Mitsui Banking |
|
— |
|
|
91,884 |
|
| KBC Bank |
|
22,397 |
|
|
— |
|
| Banco Estado |
|
90,975 |
|
|
— |
|
| Total |
|
1,061,262 |
|
|
1,316,797 |
|
________________________________________________
(1)Corresponds to term deposits whose maturity date is greater than 90 days and less than 360 days from the investment date constituted in the aforementioned financial institutions.
(2)Correspond to forwards and options that were not classified as hedging instruments (See detail in Note 12.3).
(3)As of December 31, 2024, there are no collateral guarantees. As of December 31, 2023, collateral guarantees were recorded for an amount of ThUS$ 5,590.
(4)During the first quarter of 2023, the Company made an investment of ThUS$13,480 to acquire a 19.99% interest in Azure Minerals Limited (a company listed on the Australian Stock Exchange). The Company and Azure have entered into an acquisition agreement
under which the Company has the right to choose a director and acquire 25% of all lithium products in which Azure has an interest on commercially competitive market terms. During the third and fourth quarter of 2023, the Company invested an additional ThUS$12,904 and ThUS$4,317, respectively, to maintain its ownership interest.
On May 9, 2024, the Company acquired an additional share in this entity, reaching a 50% ownership stake (for more details, see Note 9.4, section (a)). Consequently, this investment was reclassified under the joint ventures category. At the time of reclassification, the cumulative valuation recorded in the reserve for gains and losses on financial assets was transferred to retained earnings, totaling MUS$186,809. This amount reflects the total change in the fair value assessment from the initial acquisition of 19.99% to reaching the 50% ownership stake.
(5) In the first quarter of 2024, the Company invested an additional ThUS$4,380 in Altilium Metals Ltd., bringing the total investment to ThUS$ 12,000 and increasing its interest in this entity to 11%. During the third quarter of 2023, the Company invested ThUS$ 7,620 to acquire a 3% interest in Altilium Metals Ltd.
(6) In the first quarter of 2024, the Company contributed ThUS$ 1,285 to acquire a 14.86% interest in Salinity Solutions Ltd. During the third quarter of 2023, the Company contributed ThUS$ 3,000 to acquire a 6.82% interest in Electric Era Technologies Inc.
(7) During the third quarter of 2024 and as a result of the Company's loss of significant influence over this investment (for further details see note 8.3 letter a), the investment in SAS Adionics previously held as investment in associates was reclassified to other non-current financial assets when the Company irrevocably classified it as equity financial assets measured at fair value through other comprehensive income.
Considering that these investments (5) (6) and (7) are recent, their carrying amount is estimated to approximate their fair value.
12.2 Trade and other receivables
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2024 |
|
As of December 31, 2023 |
| Trade and other receivables |
|
Current |
|
Non-current |
|
Total |
|
Current |
|
Non-current |
|
Total |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Trade receivables, current |
|
537,552 |
|
|
— |
|
|
537,552 |
|
|
784,422 |
|
|
— |
|
|
784,422 |
|
| Prepayments, current |
|
33,737 |
|
|
— |
|
|
33,737 |
|
|
74,630 |
|
|
— |
|
|
74,630 |
|
| Other receivables, current |
|
23,063 |
|
|
2,727 |
|
|
25,790 |
|
|
18,163 |
|
|
2,559 |
|
|
20,722 |
|
| Guarantee deposits (1) |
|
11,785 |
|
|
— |
|
|
11,785 |
|
|
29,966 |
|
|
— |
|
|
29,966 |
|
| Total trade and other receivables |
|
606,137 |
|
|
2,727 |
|
|
608,864 |
|
|
907,181 |
|
|
2,559 |
|
|
909,740 |
|
See discussion about credit risk in Note 4.2.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2024 |
|
As of December 31, 2023 |
| Trade and other receivables |
|
Gross
receivables |
|
Impairment
provision for
doubtful receivables |
|
Trade receivables,
net |
|
Gross
receivables |
|
Impairment
provision for
doubtful receivables |
|
Trade receivables,
net |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Trade receivables, current |
|
539,948 |
|
|
(2,396) |
|
|
537,552 |
|
|
787,667 |
|
|
(3,245) |
|
|
784,422 |
|
| Prepayments, current |
|
34,521 |
|
|
(784) |
|
|
33,737 |
|
|
75,414 |
|
|
(784) |
|
|
74,630 |
|
| Other receivables, current |
|
25,712 |
|
|
(2,649) |
|
|
23,063 |
|
|
21,209 |
|
|
(3,046) |
|
|
18,163 |
|
| Guarantee deposits (1) |
|
11,785 |
|
|
— |
|
|
11,785 |
|
|
29,966 |
|
|
— |
|
|
29,966 |
|
| Other receivables, non-current |
|
2,727 |
|
|
— |
|
|
2,727 |
|
|
2,559 |
|
|
— |
|
|
2,559 |
|
| Total trade and other receivables |
|
614,693 |
|
|
(5,829) |
|
|
608,864 |
|
|
916,815 |
|
|
(7,075) |
|
|
909,740 |
|
(1)During the third quarter of 2022, the Company signed an agreement for an option to potentially acquire a battery-grade lithium hydroxide monohydrate plant with a production capacity of approximately 20,000 tons per year from lithium sulfate salts. In addition, the transaction secures rights to adjacent land for future expansion.
The transaction became effective in April 2024, with the acquisition of all the shares of Sichuan Dixin New Energy Co. Ltd. and the recognition of an intangible asset for ThUS$ 10,130 (see note 14, Intangible assets). Regarding the deposit of CNY 204.5 million (ThUS$ 28,152) granted to the seller in the first quarter of 2023, ThUS$ 16,071 has been reimbursed with the remaining amount being used as a guarantee while certain requirements established in the contract are fulfilled.
As of December 31, 2024, and 2023 the renegotiated portfolio represented 0% of total trade receivables.
(a)Impairment provision for doubtful receivables
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| As of December 31, 2024 |
|
|
Trade accounts receivable days past due |
|
|
|
|
| Trade and other receivables |
|
Current |
|
1 to 30 days |
|
31 to 60 days |
|
61 to 90 days |
|
Over 90 days |
|
Trade |
|
Trade receivables
due from related
parties |
|
|
|
|
|
|
|
|
|
|
|
|
ThUS$ |
|
ThUS$ |
| Expected Loss Rate on |
|
0% |
|
1 |
% |
|
2 |
% |
|
5 |
% |
|
27 |
% |
|
— |
|
|
— |
|
| Total Gross Book Value |
|
512,474 |
|
|
16,619 |
|
|
6,294 |
|
|
558 |
|
|
4,003 |
|
|
539,948 |
|
|
29,374 |
|
| Impairment Estimate |
|
989 |
|
|
163 |
|
|
138 |
|
|
26 |
|
|
1,080 |
|
|
2,396 |
|
|
668 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| As of December 31, 2023 |
|
|
Trade accounts receivable days past due |
|
|
|
Trade receivables
due from related
parties |
| Trade and other receivables |
|
Current |
|
1 to 30 days |
|
31 to 60 days |
|
61 to 90 days |
|
Over 90 days |
|
Trade |
|
|
|
|
|
|
|
|
|
|
|
|
|
ThUS$ |
|
ThUS$ |
| Expected Loss Rate on |
|
0% |
|
2 |
% |
|
7 |
% |
|
2 |
% |
|
39 |
% |
|
— |
|
|
— |
|
| Total Gross Book Value |
|
758,781 |
|
|
18,732 |
|
|
2,684 |
|
|
3,509 |
|
|
3,961 |
|
|
787,667 |
|
|
44,053 |
|
| Impairment Estimate |
|
1,007 |
|
|
422 |
|
|
197 |
|
|
67 |
|
|
1,552 |
|
|
3,245 |
|
|
800 |
|
As of December 31, 2024, and 2023, movements in provisions are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Provisions |
|
As of
December 31,
2024 |
|
As of
December 31,
2023 |
As of
December 31,
2022 |
|
|
ThUS$ |
|
ThUS$ |
ThUS$ |
| Impairment provision of Accounts receivable at the beginning of the year |
|
7,875 |
|
|
10,193 |
|
14,716 |
|
| Impairment loss on accounts receivable for the period recognized in results |
|
(639) |
|
|
(202) |
|
(3,369) |
|
| Write-off of receivables |
|
(2,154) |
|
|
(1,351) |
|
— |
|
| Difference in exchange rate |
|
1,415 |
|
|
(765) |
|
(1,154) |
|
| Impairment provision of Accounts Receivable Provision at the end of the year |
|
6,497 |
|
|
7,875 |
|
10,193 |
|
| Trade and other receivables |
|
2,396 |
|
|
3,245 |
|
4,759 |
|
| Current other receivables |
|
3,433 |
|
|
3,830 |
|
4,056 |
|
| Trade receivables with related parties |
|
668 |
|
|
800 |
|
1,378 |
|
| Recovery of Insurrance |
|
— |
|
|
— |
|
— |
|
|
|
|
|
|
|
| Impairment provision of Accounts Receivable |
|
6,497 |
|
|
7,875 |
|
10,193 |
|
12.3 Hedging assets and liabilities
The balance represents derivative financial instruments measured at fair value which have been classified as hedges for exchange and interest rate risks relating to the total obligations with the public associated with bonds in UF and investments in Chilean pesos. (See more detail in Note 4.2 b).
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| As of December 31, 2024 |
|
Assets |
|
Liabilities |
|
Total Realized (*) |
|
Hedging Reserve in
Gross Equity (1) |
| Type of Instrument: Cross currency interest rate swaps and Forwards |
|
|
|
|
|
|
|
|
| Cash flow hedge derivatives |
|
|
|
|
|
|
|
|
| Short term |
|
15,405 |
|
|
7,316 |
|
|
— |
|
|
— |
|
| Long term |
|
2,930 |
|
|
21,440 |
|
|
— |
|
|
— |
|
| Subtotal |
|
18,335 |
|
|
28,756 |
|
|
10,018 |
|
|
(20,439) |
|
| Type of Instrument: Forwards |
|
|
|
|
|
|
|
|
| Non-hedging derivates disbursement SQM Australia Pty |
|
|
|
|
|
|
|
|
| Short term |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
| Long term |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
| Subtotal |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
| Underlying Investments Hedge |
|
18,335 |
|
|
28,756 |
|
|
10,018 |
|
|
(20,439) |
|
| Type of Instrument: Forwards/Options |
|
|
|
|
|
|
|
|
| Non-hedge derivates with effect on income |
|
|
|
|
|
|
|
|
| Short term |
|
2,928 |
|
|
418 |
|
|
— |
|
|
— |
|
| Underlying Investments Hedge |
|
2,928 |
|
|
418 |
|
|
17,131 |
|
|
— |
|
| Total Instruments |
|
21,263 |
|
|
29,174 |
|
|
27,149 |
|
|
(20,439) |
|
The Company recouped the CCS with Santander Bank who had hedged the Series Q bond, by moving the UF/USD exchange rate upwards. This change increased the USD value of the bond by ThUS$16,440 and its interest payable. Santander Bank paid the company ThUS$17,320 on August 18, 2023 in exchange for this amendment.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| As of December 31, 2023 |
|
Assets |
|
Liabilities |
|
Total Realized (*) |
|
Hedging Reserve in
Gross Equity (1) |
| Type of Instrument: Cross currency interest rate swaps and Forwards |
|
|
|
|
|
|
|
|
| Cash flow hedge derivatives |
|
|
|
|
|
|
|
|
| Short term |
|
7,038 |
|
|
30,442 |
|
|
— |
|
|
— |
|
| Long term |
|
15,993 |
|
|
8,368 |
|
|
— |
|
|
— |
|
| Subtotal |
|
23,031 |
|
|
38,810 |
|
|
(13,067) |
|
|
(2,712) |
|
| Type of Instrument: Forwards |
|
|
|
|
|
|
|
|
| Non-hedging derivates disbursement SQM Australia Pty |
|
|
|
|
|
|
|
|
| Short term |
|
1,489 |
|
|
— |
|
|
|
|
|
| Long term |
|
— |
|
|
52 |
|
|
— |
|
|
1,437 |
|
| Subtotal |
|
1,489 |
|
|
52 |
|
|
— |
|
|
1,437 |
|
| Underlying Investments Hedge |
|
24,520 |
|
|
38,862 |
|
|
(13,067) |
|
|
(1,275) |
|
| Type of Instrument: Forwards/Options |
|
|
|
|
|
|
|
|
| Non-hedge derivates with effect on income |
|
|
|
|
|
|
|
|
| Short term |
|
519 |
|
|
14,795 |
|
|
— |
|
|
— |
|
| Underlying Investments Hedge |
|
519 |
|
|
14,795 |
|
|
5,401 |
|
|
— |
|
| Total Instruments |
|
25,039 |
|
|
53,657 |
|
|
(7,666) |
|
|
(1,275) |
|
________________________________________________
(1)See underlying hedges in Note 4.2 letters b) and d) and movement of cash flow hedge reserve in Note 19.4.
(*) The balances in the column “Total Realized” consider the intermediate effects of the contracts that were in place between January 1 and December 31, 2024, and January 1 and December 31, 2023.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of asset and
liability hedging derivatives |
|
As of December
31, 2023 |
|
Cash Flow |
|
Income Statement |
|
Equity and Others |
|
As of December
31, 2024 |
| Hedge-to-debt derivatives |
|
2,520 |
|
|
6,298 |
|
|
(47,238) |
|
|
12,594 |
|
|
(25,826) |
|
| Hedging derivatives to investment |
|
(18,300) |
|
|
(4,368) |
|
|
37,938 |
|
|
135 |
|
|
15,405 |
|
| Hedging derivatives – cash requirements for Australia’s business |
|
1,437 |
|
|
— |
|
|
— |
|
|
(1,437) |
|
|
— |
|
| Non-hedging derivatives |
|
(14,275) |
|
|
(345) |
|
|
17,130 |
|
|
— |
|
|
2,510 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of asset and
liability hedging derivatives |
|
As of December
31, 2022 |
|
Cash Flow |
|
Income Statement |
|
Equity and Others |
|
As of December
31, 2023 |
| Hedge-to-debt derivatives |
|
(10,061) |
|
|
(14,850) |
|
|
6,631 |
|
|
20,800 |
|
|
2,520 |
|
| Hedging derivatives to investment |
|
(29,984) |
|
|
(10,082) |
|
|
18,171 |
|
|
3,595 |
|
|
(18,300) |
|
| Non-hedging derivatives disbursement SQM Australia Pty asset |
|
7,139 |
|
|
1,183 |
|
|
(1,183) |
|
|
(5,702) |
|
|
1,437 |
|
| Non-hedging derivatives |
|
(1,642) |
|
|
(18,034) |
|
|
5,401 |
|
|
— |
|
|
(14,275) |
|
Derivative contract maturities are detailed as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Series |
|
Contract amount |
|
Currency |
|
Maturity date |
|
ThUS$ |
|
|
| H |
|
84,662 |
|
|
UF |
|
01/05/2025 |
| O |
|
58,748 |
|
|
UF |
|
02/01/2030 |
| P |
|
134,228 |
|
|
UF |
|
01/15/2028 |
| Q |
|
123,370 |
|
|
UF |
|
06/01/2030 |
Effectiveness
The Company uses CCS, Forwards and IRS to hedge the potential financial risk associated with exchange rate and interest rate volatility. The objective is to hedge the exchange rate and inflation financial risks associated with bond obligations, exchange rate financial risks associated with investments in Chilean pesos, exchange rate financial risk associated with projects under construction in Australian dollars and interest rate financial risk associated with bank loans. Hedges are documented and qualitatively assessed to demonstrate their effectiveness based on a comparison of their critical terms.
The hedges used by the Company as of the reporting date are highly effective given that the amounts, currencies, exchange dates and rates of the hedged item and the hedge are aligned, maintaining a close economic relationship.
12.4 Financial liabilities
Other current and non-current financial liabilities
As of December 31, 2024, and 2023, the detail is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2024 |
|
As of December 31, 2023 |
Other current and non-current financial
liabilities |
|
Currents |
|
Non-Current |
|
Total |
|
Currents |
|
Non-Current |
|
Total |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Liabilities at amortized cost |
|
|
|
|
|
|
|
|
|
|
|
|
| Bank borrowings |
|
847,963 |
|
|
129,683 |
|
|
977,646 |
|
|
1,164,262 |
|
|
295,518 |
|
|
1,459,780 |
|
| Unsecured obligations |
|
307,771 |
|
|
3,449,459 |
|
|
3,757,230 |
|
|
46,999 |
|
|
2,909,485 |
|
|
2,956,484 |
|
| Derivative financial instruments |
|
|
|
|
|
|
|
|
|
|
|
|
| For hedging |
|
7,316 |
|
|
21,440 |
|
|
28,756 |
|
|
30,443 |
|
|
8,419 |
|
|
38,862 |
|
| Non-Hedging |
|
418 |
|
|
— |
|
|
418 |
|
|
14,795 |
|
|
— |
|
|
14,795 |
|
| Total |
|
1,163,468 |
|
|
3,600,582 |
|
|
4,764,050 |
|
|
1,256,499 |
|
|
3,213,422 |
|
|
4,469,921 |
|
a)Bank borrowings, current:
As of December 31, 2024, the detail of this caption is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Debtor |
|
Creditor |
|
Currency or
adjustment
index |
|
|
|
|
|
|
|
|
|
| Tax ID No |
|
Company |
|
Country |
|
Tax ID No. |
|
Financial institution |
|
Country |
|
|
Repayment |
|
|
maturity |
|
Effective rate |
|
Nominal rate |
| 93.007.000-9 |
|
SQM S.A. |
|
Chile |
|
O-E |
|
Bank of Nova Scotia |
|
United States of America |
|
Dollar |
|
Upon maturity |
|
|
06/20/2025 |
|
5.93 |
% |
|
4.28 |
% |
| 93.007.000-9 |
|
SQM S.A. |
|
Chile |
|
O-E |
|
Banco Santander/Kexim |
|
Spain/South Korea |
|
Dollar |
|
Upon maturity |
|
|
06/23/2025 |
|
4.73 |
% |
|
4.28 |
% |
| 93.007.000-9 |
|
SQM S.A. |
|
Chile |
|
O-E |
|
Banco Santander/Kexim |
|
Spain/South Korea |
|
Dollar |
|
Upon maturity |
|
|
06/23/2025 |
|
4.27 |
% |
|
4.29 |
% |
| 93.007.000-9 |
|
SQM S.A. |
|
Chile |
|
97.018.000-1 |
|
Scotiabank Chile |
|
Chile |
|
Dollar |
|
Upon maturity |
|
|
03/26/2025 |
|
6.10 |
% |
|
6.10 |
% |
| 93.007.000-9 |
|
SQM S.A. |
|
Chile |
|
97.030.000-7 |
|
Banco Estado |
|
Chile |
|
Dollar |
|
Upon maturity |
|
|
02/14/2025 |
|
5.95 |
% |
|
5.95 |
% |
| 93.007.000-9 |
|
SQM S.A. |
|
Chile |
|
97.030.000-7 |
|
Banco Estado |
|
Chile |
|
Dollar |
|
Upon maturity |
|
|
08/21/2025 |
|
5.27 |
% |
|
5.27 |
% |
| 93.007.000-9 |
|
SQM S.A. |
|
Chile |
|
97.030.000-7 |
|
Banco Estado |
|
Chile |
|
Dollar |
|
Upon maturity |
|
|
09/02/2025 |
|
4.95 |
% |
|
4.95 |
% |
| 93.007.000-9 |
|
SQM S.A. |
|
Chile |
|
97.043.000-8 |
|
JPMorgan |
|
Chile |
|
Dollar |
|
Upon maturity |
|
|
07/10/2025 |
|
5.77 |
% |
|
5.77 |
% |
| 79.947.100-0 |
|
SQM Industrial S.A. |
|
Chile |
|
97.023.000-9 |
|
Banco Itau |
|
Chile |
|
Dollar |
|
Upon maturity |
|
|
03/07/2025 |
|
6.11 |
% |
|
6.11 |
% |
| 79.947.100-0 |
|
SQM Industrial S.A. |
|
Chile |
|
97.023.000-9 |
|
Banco Itau |
|
Chile |
|
Dollar |
|
Upon maturity |
|
|
03/07/2025 |
|
6.11 |
% |
|
6.11 |
% |
| 79.947.100-0 |
|
SQM Industrial S.A. |
|
Chile |
|
97.023.000-9 |
|
Banco Itau |
|
Chile |
|
Dollar |
|
Upon maturity |
|
|
02/25/2025 |
|
5.84 |
% |
|
5.84 |
% |
| 79.947.100-0 |
|
SQM Industrial S.A. |
|
Chile |
|
97.023.000-9 |
|
Banco Itau |
|
Chile |
|
Dollar |
|
Upon maturity |
|
|
06/19/2025 |
|
5.89 |
% |
|
5.89 |
% |
| 79.947.100-0 |
|
SQM Industrial S.A. |
|
Chile |
|
97.023.000-9 |
|
Banco Itau |
|
Chile |
|
Dollar |
|
Upon maturity |
|
|
02/07/2025 |
|
5.89 |
% |
|
5.89 |
% |
| 79.947.100-0 |
|
SQM Industrial S.A. |
|
Chile |
|
97.030.000-7 |
|
Banco Estado |
|
Chile |
|
Dollar |
|
Upon maturity |
|
|
07/11/2025 |
|
5.53 |
% |
|
5.53 |
% |
| 79.947.100-0 |
|
SQM Industrial S.A. |
|
Chile |
|
97.030.000-7 |
|
Banco Estado |
|
Chile |
|
Dollar |
|
Upon maturity |
|
|
08/08/2025 |
|
5.22 |
% |
|
5.22 |
% |
| 79.626.800-K |
|
SQM Salar SpA |
|
Chile |
|
97.023.000-9 |
|
Banco Itau |
|
Chile |
|
Dollar |
|
Upon maturity |
|
|
02/17/2025 |
|
5.86 |
% |
|
5.86 |
% |
| 79.626.800-K |
|
SQM Salar SpA |
|
Chile |
|
97.018.000-1 |
|
Scotiabank Chile |
|
Chile |
|
Dollar |
|
Upon maturity |
|
|
05/06/2025 |
|
6.06 |
% |
|
6.06 |
% |
| 79.626.800-K |
|
SQM Salar SpA |
|
Chile |
|
97.018.000-1 |
|
Scotiabank Chile |
|
Chile |
|
Dollar |
|
Upon maturity |
|
|
03/26/2025 |
|
6.10 |
% |
|
6.10 |
% |
| 79.626.800-K |
|
SQM Salar SpA |
|
Chile |
|
97.004.000-5 |
|
Banco de Chile |
|
Chile |
|
Dollar |
|
Upon maturity |
|
|
08/08/2025 |
|
5.34 |
% |
|
5.34 |
% |
| 79.626.800-K |
|
SQM Salar SpA |
|
Chile |
|
97.004.000-5 |
|
Banco de Chile |
|
Chile |
|
Dollar |
|
Upon maturity |
|
|
06/16/2025 |
|
5.90 |
% |
|
5.90 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Debtor |
|
Creditor |
|
Nominal amounts as of December 31, 2024 |
|
Current amounts as of December 31, 2024 |
| Company |
|
Financial institution |
|
Up to 90 days |
|
90 days to 1 year |
|
Total |
|
Up to 90 days |
|
90 days to 1
year |
|
Subtotal |
|
Borrowing
costs |
|
Total |
|
|
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| SQM S.A. |
|
Bank of Nova Scotia |
|
— |
|
|
200,000 |
|
|
200,000 |
|
|
— |
|
|
200,346 |
|
|
200,346 |
|
|
(839) |
|
|
199,507 |
|
| SQM S.A. |
|
Banco Santander/Kexim |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
150 |
|
|
150 |
|
|
— |
|
|
150 |
|
| SQM S.A. |
|
Banco Santander/Kexim |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
23 |
|
|
23 |
|
|
— |
|
|
23 |
|
| SQM S.A. |
|
Scotiabank Chile |
|
— |
|
|
25,000 |
|
|
25,000 |
|
|
25,911 |
|
|
— |
|
|
25,911 |
|
|
— |
|
|
25,911 |
|
| SQM S.A. |
|
Banco Estado |
|
15,000 |
|
|
— |
|
|
15,000 |
|
|
15,781 |
|
|
— |
|
|
15,781 |
|
|
— |
|
|
15,781 |
|
| SQM S.A. |
|
Banco Estado |
|
— |
|
|
30,000 |
|
|
30,000 |
|
|
— |
|
|
30,558 |
|
|
30,558 |
|
|
— |
|
|
30,558 |
|
| SQM S.A. |
|
Banco Estado |
|
— |
|
|
80,000 |
|
|
80,000 |
|
|
— |
|
|
81,287 |
|
|
81,287 |
|
|
— |
|
|
81,287 |
|
| SQM S.A. |
|
JPMorgan |
|
— |
|
|
50,000 |
|
|
50,000 |
|
|
— |
|
|
51,395 |
|
|
51,395 |
|
|
— |
|
|
51,395 |
|
| SQM Industrial S.A. |
|
Banco Itau |
|
20,000 |
|
|
— |
|
|
20,000 |
|
|
20,859 |
|
|
— |
|
|
20,859 |
|
|
— |
|
|
20,859 |
|
| SQM Industrial S.A. |
|
Banco Itau |
|
20,000 |
|
|
— |
|
|
20,000 |
|
|
20,586 |
|
|
— |
|
|
20,586 |
|
|
— |
|
|
20,586 |
|
| SQM Industrial S.A. |
|
Banco Itau |
|
10,000 |
|
|
— |
|
|
10,000 |
|
|
10,429 |
|
|
— |
|
|
10,429 |
|
|
— |
|
|
10,429 |
|
| SQM Industrial S.A. |
|
Banco Itau |
|
40,000 |
|
|
— |
|
|
40,000 |
|
|
41,226 |
|
|
— |
|
|
41,226 |
|
|
— |
|
|
41,226 |
|
| SQM Industrial S.A. |
|
Banco Itau |
|
— |
|
|
30,000 |
|
|
30,000 |
|
|
— |
|
|
30,928 |
|
|
30,928 |
|
|
— |
|
|
30,928 |
|
| SQM Industrial S.A. |
|
Banco Estado |
|
— |
|
|
30,000 |
|
|
30,000 |
|
|
— |
|
|
30,605 |
|
|
30,605 |
|
|
— |
|
|
30,605 |
|
| SQM Industrial S.A. |
|
Banco Estado |
|
— |
|
|
50,000 |
|
|
50,000 |
|
|
— |
|
|
51,275 |
|
|
51,275 |
|
|
— |
|
|
51,275 |
|
| SQM Salar SpA |
|
Banco Itau |
|
20,000 |
|
|
— |
|
|
20,000 |
|
|
20,664 |
|
|
— |
|
|
20,664 |
|
|
— |
|
|
20,664 |
|
| SQM Salar SpA |
|
Scotiabank Chile |
|
— |
|
|
50,000 |
|
|
50,000 |
|
|
— |
|
|
51,918 |
|
|
51,918 |
|
|
— |
|
|
51,918 |
|
| SQM Salar SpA |
|
Scotiabank Chile |
|
50,000 |
|
|
— |
|
|
50,000 |
|
|
51,822 |
|
|
— |
|
|
51,822 |
|
|
— |
|
|
51,822 |
|
| SQM Salar SpA |
|
Banco de Chile |
|
— |
|
|
40,000 |
|
|
40,000 |
|
|
— |
|
|
40,825 |
|
|
40,825 |
|
|
— |
|
|
40,825 |
|
| SQM Salar SpA |
|
Banco de Chile |
|
— |
|
|
70,000 |
|
|
70,000 |
|
|
— |
|
|
72,214 |
|
|
72,214 |
|
|
— |
|
|
72,214 |
|
| Total |
|
|
|
175,000 |
|
|
655,000 |
|
|
830,000 |
|
|
207,278 |
|
|
641,524 |
|
|
848,802 |
|
|
(839) |
|
|
847,963 |
|
As of December 31, 2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Debtor |
|
Creditor |
|
Currency or
adjustment
index |
|
|
|
|
|
|
|
|
|
| Tax ID No |
|
Company |
|
Country |
|
Tax ID No. |
|
Financial institution |
|
Country |
|
|
Repayment |
|
|
maturity |
|
Effective rate |
|
Nominal rate |
| 93.007.000-9 |
|
SQM S.A. |
|
Chile |
|
O-E |
|
Bank of Nova Scotia |
|
United States of America |
|
Dollar |
|
Upon maturity |
|
|
06/21/2024 |
|
5.88 |
% |
|
6.64 |
% |
| 93.007.000-9 |
|
SQM S.A. |
|
Chile |
|
O-E |
|
Banco Santander/Kexim |
|
Spain/South Korea |
|
Dollar |
|
Upon maturity |
|
|
06/21/2024 |
|
4.49 |
% |
|
6.36 |
% |
| 93.007.000-9 |
|
SQM S.A. |
|
Chile |
|
97.043.000-8 |
|
JP Morgan |
|
Chile |
|
Dollar |
|
Upon maturity |
|
|
05/28/2024 |
|
6.69 |
% |
|
6.69 |
% |
| 93.007.000-9 |
|
SQM S.A. |
|
Chile |
|
97.036.000-K |
|
Banco Santander |
|
Chile |
|
Dollar |
|
Upon maturity |
|
|
05/17/2024 |
|
5.95 |
% |
|
5.95 |
% |
| 93.007.000-9 |
|
SQM S.A. |
|
Chile |
|
97.036.000-K |
|
Banco Santander |
|
Chile |
|
Dollar |
|
Upon maturity |
|
|
08/26/2024 |
|
6.88 |
% |
|
6.88 |
% |
| 93.007.000-9 |
|
SQM S.A. |
|
Chile |
|
97.018.000-1 |
|
Scotiabank Chile |
|
Chile |
|
Dollar |
|
Upon maturity |
|
|
05/30/2024 |
|
6.19 |
% |
|
6.19 |
% |
| 93.007.000-9 |
|
SQM S.A. |
|
Chile |
|
97.030.000-7 |
|
Banco Estado |
|
Chile |
|
Dollar |
|
Upon maturity |
|
|
02/20/2024 |
|
6.18 |
% |
|
6.18 |
% |
| 93.007.000-9 |
|
SQM S.A. |
|
Chile |
|
97.030.000-7 |
|
Banco Estado |
|
Chile |
|
Dollar |
|
Upon maturity |
|
|
06/10/2024 |
|
6.19 |
% |
|
6.19 |
% |
| 93.007.000-9 |
|
SQM S.A. |
|
Chile |
|
97.006.000-6 |
|
Banco Crédito e Inversiones |
|
Chile |
|
Dollar |
|
Upon maturity |
|
|
04/18/2024 |
|
6.01 |
% |
|
6.01 |
% |
| 93.007.000-9 |
|
SQM S.A. |
|
Chile |
|
97.006.000-6 |
|
Banco Crédito e Inversiones |
|
Chile |
|
Dollar |
|
Upon maturity |
|
|
10/17/2024 |
|
5.84 |
% |
|
6.46 |
% |
| 93.007.000-9 |
|
SQM S.A. |
|
Chile |
|
97.006.000-6 |
|
Banco Crédito e Inversiones |
|
Chile |
|
Dollar |
|
Upon maturity |
|
|
05/24/2024 |
|
6.17 |
% |
|
6.17 |
% |
| 93.007.000-9 |
|
SQM S.A. |
|
Chile |
|
97.023.000-9 |
|
Banco Itau |
|
Chile |
|
Dollar |
|
Upon maturity |
|
|
07/05/2024 |
|
6.50 |
% |
|
6.50 |
% |
| 79.947.100-0 |
|
SQM Industrial S.A. |
|
Chile |
|
97.004.000-5 |
|
Banco de Chile |
|
Chile |
|
Dollar |
|
Upon maturity |
|
|
05/16/2024 |
|
5.85 |
% |
|
5.85 |
% |
| 79.947.100-0 |
|
SQM Industrial S.A. |
|
Chile |
|
97.023.000-9 |
|
Banco Itau |
|
Chile |
|
Dollar |
|
Upon maturity |
|
|
07/05/2024 |
|
6.50 |
% |
|
6.50 |
% |
| 79.626.800-K |
|
SQM Salar S.A. |
|
Chile |
|
97.023.000-9 |
|
Banco Itau |
|
Chile |
|
Dollar |
|
Upon maturity |
|
|
07/05/2024 |
|
6.50 |
% |
|
6.50 |
% |
| 79.626.800-K |
|
SQM Salar S.A. |
|
Chile |
|
97.023.000-9 |
|
Banco Itau |
|
Chile |
|
Dollar |
|
Upon maturity |
|
|
07/05/2024 |
|
6.50 |
% |
|
6.50 |
% |
| 79.626.800-K |
|
SQM Salar S.A. |
|
Chile |
|
97.018.000-1 |
|
Scotiabank Chile |
|
Chile |
|
Dollar |
|
Upon maturity |
|
|
05/17/2024 |
|
6.07 |
% |
|
6.07 |
% |
| 79.626.800-K |
|
SQM Salar S.A. |
|
Chile |
|
97.018.000-1 |
|
Scotiabank Chile |
|
Chile |
|
Dollar |
|
Upon maturity |
|
|
05/30/2024 |
|
6.19 |
% |
|
6.19 |
% |
| 79.626.800-K |
|
SQM Salar S.A. |
|
Chile |
|
97.030.000-7 |
|
Banco Estado |
|
Chile |
|
Dollar |
|
Upon maturity |
|
|
07/18/2024 |
|
5.92 |
% |
|
6.15 |
% |
| 79.626.800-K |
|
SQM Salar S.A. |
|
Chile |
|
97.030.000-7 |
|
Banco Estado |
|
Chile |
|
Dollar |
|
Upon maturity |
|
|
06/10/2024 |
|
6.19 |
% |
|
6.19 |
% |
| 79.626.800-K |
|
SQM Salar S.A. |
|
Chile |
|
97.004.000-5 |
|
Banco de Chile |
|
Chile |
|
Dollar |
|
Upon maturity |
|
|
05/16/2024 |
|
5.85 |
% |
|
5.85 |
% |
| 79.626.800-K |
|
SQM Salar S.A. |
|
Chile |
|
97.004.000-5 |
|
Banco de Chile |
|
Chile |
|
Dollar |
|
Upon maturity |
|
|
06/21/2024 |
|
6.25 |
% |
|
6.25 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Debtor |
|
Creditor |
|
Nominal amounts as of December 31, 2023 |
|
Current amounts as of December 31, 2023 |
| Company |
|
Financial institution |
|
Up to 90 days |
|
90 days to 1 year |
|
Total |
|
Up to 90 days |
|
90 days to 1
year |
|
Subtotal |
|
Borrowing
costs |
|
Total |
|
|
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| SQM S.A. |
|
Bank of Nova Scotia |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
406 |
|
|
406 |
|
|
— |
|
|
406 |
|
| SQM S.A. |
|
Banco Santander |
|
— |
|
|
120,000 |
|
|
120,000 |
|
|
— |
|
|
124,383 |
|
|
124,383 |
|
|
— |
|
|
124,383 |
|
| SQM S.A. |
|
Banco Santander |
|
— |
|
|
200,000 |
|
|
200,000 |
|
|
— |
|
|
204,625 |
|
|
204,625 |
|
|
— |
|
|
204,625 |
|
| SQM S.A. |
|
Banco JP Morgan |
|
— |
|
|
50,000 |
|
|
50,000 |
|
|
— |
|
|
50,288 |
|
|
50,288 |
|
|
— |
|
|
50,288 |
|
| SQM S.A. |
|
Banco Santander/Kexim |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
177 |
|
|
177 |
|
|
— |
|
|
177 |
|
| SQM S.A. |
|
Scotiabank Chile |
|
— |
|
|
25,000 |
|
|
25,000 |
|
|
— |
|
|
25,898 |
|
|
25,898 |
|
|
— |
|
|
25,898 |
|
| SQM S.A. |
|
Banco Estado |
|
15,000 |
|
|
— |
|
|
15,000 |
|
|
15,569 |
|
|
— |
|
|
15,569 |
|
|
— |
|
|
15,569 |
|
| SQM S.A. |
|
Banco Estado |
|
— |
|
|
20,000 |
|
|
20,000 |
|
|
— |
|
|
20,695 |
|
|
20,695 |
|
|
— |
|
|
20,695 |
|
| SQM S.A. |
|
Banco Crédito e Inversiones |
|
— |
|
|
100,000 |
|
|
100,000 |
|
|
— |
|
|
104,176 |
|
|
104,176 |
|
|
— |
|
|
104,176 |
|
| SQM S.A. |
|
Banco Crédito e Inversiones |
|
— |
|
|
100,000 |
|
|
100,000 |
|
|
— |
|
|
101,238 |
|
|
101,238 |
|
|
— |
|
|
101,238 |
|
| SQM S.A. |
|
Banco Crédito e Inversiones |
|
— |
|
|
50,000 |
|
|
50,000 |
|
|
— |
|
|
51,825 |
|
|
51,825 |
|
|
— |
|
|
51,825 |
|
| SQM S.A. |
|
Banco Itau |
|
— |
|
|
10,000 |
|
|
10,000 |
|
|
— |
|
|
10,309 |
|
|
10,309 |
|
|
— |
|
|
10,309 |
|
| SQM Industrial S.A. |
|
Banco de Chile |
|
— |
|
|
30,000 |
|
|
30,000 |
|
|
— |
|
|
31,077 |
|
|
31,077 |
|
|
— |
|
|
31,077 |
|
| SQM Industrial S.A. |
|
Banco Itau |
|
— |
|
|
20,000 |
|
|
20,000 |
|
|
— |
|
|
20,618 |
|
|
20,618 |
|
|
— |
|
|
20,618 |
|
| SQM Salar S.A. |
|
Banco Itau |
|
— |
|
|
10,000 |
|
|
10,000 |
|
|
— |
|
|
10,311 |
|
|
10,311 |
|
|
— |
|
|
10,311 |
|
| SQM Salar S.A. |
|
Banco Itau |
|
— |
|
|
20,000 |
|
|
20,000 |
|
|
— |
|
|
20,618 |
|
|
20,618 |
|
|
— |
|
|
20,618 |
|
| SQM Salar S.A. |
|
Scotiabank Chile |
|
— |
|
|
50,000 |
|
|
50,000 |
|
|
— |
|
|
51,864 |
|
|
51,864 |
|
|
— |
|
|
51,864 |
|
| SQM Salar S.A. |
|
Scotiabank Chile |
|
— |
|
|
50,000 |
|
|
50,000 |
|
|
— |
|
|
51,797 |
|
|
51,797 |
|
|
— |
|
|
51,797 |
|
| SQM Salar S.A. |
|
Banco Estado |
|
— |
|
|
70,000 |
|
|
70,000 |
|
|
— |
|
|
71,913 |
|
|
71,913 |
|
|
— |
|
|
71,913 |
|
| SQM Salar S.A. |
|
Banco Estado |
|
— |
|
|
80,000 |
|
|
80,000 |
|
|
— |
|
|
82,779 |
|
|
82,779 |
|
|
— |
|
|
82,779 |
|
| SQM Salar S.A. |
|
Banco de Chile |
|
— |
|
|
40,000 |
|
|
40,000 |
|
|
— |
|
|
41,436 |
|
|
41,436 |
|
|
— |
|
|
41,436 |
|
| SQM Salar S.A. |
|
Banco de Chile |
|
— |
|
|
70,000 |
|
|
70,000 |
|
|
— |
|
|
72,260 |
|
|
72,260 |
|
|
— |
|
|
72,260 |
|
| Total |
|
|
|
15,000 |
|
|
1,115,000 |
|
|
1,130,000 |
|
|
15,569 |
|
|
1,148,693 |
|
|
1,164,262 |
|
|
— |
|
|
1,164,262 |
|
b)Unsecured obligations, current:
As of December 31, 2024, the detail of current unsecured interest-bearing obligations is composed of promissory notes and bonds, as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Debtor |
|
|
|
|
|
Number of
registration or ID
of the instrument |
|
|
|
|
|
Currency or
adjustment
index |
|
Periodicity |
|
|
|
|
| Tax ID No. |
|
Company |
|
Country |
|
|
Series |
|
Maturity date |
|
|
Payment of
interest |
|
Repayment |
|
Effective rate |
|
Nominal rate |
| 93.007.000-9 |
|
SQM S.A. |
|
Chile |
|
— |
|
ThUS$250,000 |
|
01/28/2025 |
|
Dollar |
|
Semiannual |
|
Upon maturity |
|
0.39 |
% |
|
4.38 |
% |
| 93.007.000-9 |
|
SQM S.A. |
|
Chile |
|
— |
|
ThUS$450,000 |
|
05/07/2025 |
|
Dollar |
|
Semiannual |
|
Upon maturity |
|
1.98 |
% |
|
4.25 |
% |
| 93.007.000-9 |
|
SQM S.A. |
|
Chile |
|
— |
|
ThUS$400,000 |
|
01/22/2025 |
|
Dollar |
|
Semiannual |
|
Upon maturity |
|
3.43 |
% |
|
4.25 |
% |
| 93.007.000-9 |
|
SQM S.A. |
|
Chile |
|
— |
|
ThUS$700,000 |
|
03/10/2025 |
|
Dollar |
|
Semiannual |
|
Upon maturity |
|
3.14 |
% |
|
3.50 |
% |
| 93.007.000-9 |
|
SQM S.A. |
|
Chile |
|
— |
|
ThUS$750,000 |
|
05/07/2025 |
|
Dollar |
|
Semiannual |
|
Upon maturity |
|
6.02 |
% |
|
6.50 |
% |
| 93.007.000-9 |
|
SQM S.A. |
|
Chile |
|
— |
|
ThUS$850,000 |
|
03/10/2025 |
|
Dollar |
|
Semiannual |
|
Upon maturity |
|
5.86 |
% |
|
5.50 |
% |
| 93.007.000-9 |
|
SQM S.A. |
|
Chile |
|
564 |
|
H |
|
01/05/2024 |
|
UF |
|
Semiannual |
|
Semiannual |
|
1.55 |
% |
|
4.90 |
% |
| 93.007.000-9 |
|
SQM S.A. |
|
Chile |
|
699 |
|
O |
|
02/01/2024 |
|
UF |
|
Semiannual |
|
Upon maturity |
|
1.51 |
% |
|
3.80 |
% |
| 93.007.000-9 |
|
SQM S.A. |
|
Chile |
|
563 |
|
P |
|
01/15/2024 |
|
UF |
|
Semiannual |
|
Upon maturity |
|
1.10 |
% |
|
3.25 |
% |
| 93.007.000-9 |
|
SQM S.A. |
|
Chile |
|
700 |
|
Q |
|
06/01/2024 |
|
UF |
|
Semiannual |
|
Upon maturity |
|
2.23 |
% |
|
3.45 |
% |
Effective rates of bonds in Pesos and UF are expressed and calculated in Dollars based on the flows agreed in Cross Currency Swap Agreements.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nominal amounts as of December 31, 2024 |
|
Carrying amounts of maturities as of December 31, 2024 |
| Company |
|
Country |
|
Series |
|
Up to 90
days |
|
90 days to 1
year |
|
Total |
|
Up to 90 days |
|
90 days to
1 year |
|
Subtotal |
|
Borrowing
costs |
|
Total |
|
|
|
|
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| SQM S.A. |
|
Chile |
|
ThUS$250,000 |
|
254,648 |
|
|
— |
|
|
254,648 |
|
|
254,648 |
|
|
— |
|
|
254,648 |
|
|
(36) |
|
|
254,612 |
|
| SQM S.A. |
|
Chile |
|
ThUS$450,000 |
|
— |
|
|
2,869 |
|
|
2,869 |
|
|
— |
|
|
2,869 |
|
|
2,869 |
|
|
(677) |
|
|
2,192 |
|
| SQM S.A. |
|
Chile |
|
ThUS$400,000 |
|
7,508 |
|
|
— |
|
|
7,508 |
|
|
7,508 |
|
|
— |
|
|
7,508 |
|
|
(235) |
|
|
7,273 |
|
| SQM S.A. |
|
Chile |
|
ThUS$700,000 |
|
7,554 |
|
|
— |
|
|
7,554 |
|
|
7,554 |
|
|
— |
|
|
7,554 |
|
|
(555) |
|
|
6,999 |
|
| SQM S.A. |
|
Chile |
|
ThUS$750,000 |
|
— |
|
|
7,313 |
|
|
7,313 |
|
|
— |
|
|
7,313 |
|
|
7,313 |
|
|
(1,611) |
|
|
5,702 |
|
| SQM S.A. |
|
Chile |
|
ThUS$850,000 |
|
14,415 |
|
|
— |
|
|
14,415 |
|
|
14,415 |
|
|
— |
|
|
14,415 |
|
|
(1,935) |
|
|
12,480 |
|
| SQM S.A. |
|
Chile |
|
H |
|
15,844 |
|
|
— |
|
|
15,844 |
|
|
15,844 |
|
|
— |
|
|
15,844 |
|
|
(172) |
|
|
15,672 |
|
| SQM S.A. |
|
Chile |
|
O |
|
907 |
|
|
— |
|
|
907 |
|
|
907 |
|
|
— |
|
|
907 |
|
|
(81) |
|
|
826 |
|
| SQM S.A. |
|
Chile |
|
P |
|
1,719 |
|
|
— |
|
|
1,719 |
|
|
1,719 |
|
|
— |
|
|
1,719 |
|
|
(12) |
|
|
1,707 |
|
| SQM S.A. |
|
Chile |
|
Q |
|
— |
|
|
330 |
|
|
330 |
|
|
— |
|
|
330 |
|
|
330 |
|
|
(22) |
|
|
308 |
|
| Total |
|
|
|
|
|
302,595 |
|
|
10,512 |
|
|
313,107 |
|
|
302,595 |
|
|
10,512 |
|
|
313,107 |
|
|
(5,336) |
|
|
307,771 |
|
As of December 31, 2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Debtor |
|
|
|
|
|
Number of
registration or ID
of the instrument |
|
|
|
|
|
Currency or
adjustment
index |
|
Periodicity |
|
|
|
|
| Tax I No. |
|
Company |
|
Country |
|
|
Series |
|
Maturity date |
|
|
Payment of
interest |
|
Repayment |
|
Effective rate |
|
Nominal rate |
| 93.007.000-9 |
|
SQM S.A. |
|
Chile |
|
— |
|
ThUS$250,000 |
|
01/28/2024 |
|
Dollar |
|
Semiannual |
|
Upon maturity |
|
0.80 |
% |
|
4.38 |
% |
| 93.007.000-9 |
|
SQM S.A. |
|
Chile |
|
— |
|
ThUS$450,000 |
|
05/07/2024 |
|
Dollar |
|
Semiannual |
|
Upon maturity |
|
2.39 |
% |
|
4.25 |
% |
| 93.007.000-9 |
|
SQM S.A. |
|
Chile |
|
— |
|
ThUS$400,000 |
|
01/22/2024 |
|
Dollar |
|
Semiannual |
|
Upon maturity |
|
3.62 |
% |
|
4.25 |
% |
| 93.007.000-9 |
|
SQM S.A. |
|
Chile |
|
— |
|
ThUS$700,000 |
|
03/10/2024 |
|
Dollar |
|
Semiannual |
|
Upon maturity |
|
3.30 |
% |
|
3.50 |
% |
| 93.007.000-9 |
|
SQM S.A. |
|
Chile |
|
— |
|
ThUS$750,000 |
|
05/07/2024 |
|
Dollar |
|
Semiannual |
|
Upon maturity |
|
6.89 |
% |
|
6.50 |
% |
| 93.007.000-9 |
|
SQM S.A. |
|
Chile |
|
564 |
|
H |
|
01/05/2024 |
|
UF |
|
Semiannual |
|
Semiannual |
|
1.58 |
% |
|
4.90 |
% |
| 93.007.000-9 |
|
SQM S.A. |
|
Chile |
|
699 |
|
O |
|
02/01/2024 |
|
UF |
|
Semiannual |
|
Upon maturity |
|
1.68 |
% |
|
3.80 |
% |
| 93.007.000-9 |
|
SQM S.A. |
|
Chile |
|
563 |
|
P |
|
01/15/2024 |
|
UF |
|
Semiannual |
|
Upon maturity |
|
1.41 |
% |
|
3.25 |
% |
| 93.007.000-9 |
|
SQM S.A. |
|
Chile |
|
700 |
|
Q |
|
06/01/2024 |
|
UF |
|
Semiannual |
|
Upon maturity |
|
2.41 |
% |
|
3.45 |
% |
Effective rates of bonds in Pesos and UF are expressed and calculated in Dollars based on the flows agreed in Cross Currency Swap Agreements.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nominal amounts as of December 31, 2023 |
|
Carrying amounts of maturities as of December 31, 2023 |
| Company |
|
Country |
|
Series |
|
Up to 90
days |
|
90 days to 1
year |
|
Total |
|
Up to 90 days |
|
90 days to
1 year |
|
Subtotal |
|
Borrowing costs |
|
Total |
|
|
|
|
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| SQM S.A. |
|
Chile |
|
ThUS$250,000 |
|
4,648 |
|
|
— |
|
|
4,648 |
|
|
4,648 |
|
|
— |
|
|
4,648 |
|
|
(433) |
|
|
4,215 |
|
| SQM S.A. |
|
Chile |
|
ThUS$450,000 |
|
— |
|
|
2,869 |
|
|
2,869 |
|
|
— |
|
|
2,869 |
|
|
2,869 |
|
|
(677) |
|
|
2,192 |
|
| SQM S.A. |
|
Chile |
|
ThUS$400,000 |
|
7,508 |
|
|
— |
|
|
7,508 |
|
|
7,508 |
|
|
— |
|
|
7,508 |
|
|
(235) |
|
|
7,273 |
|
| SQM S.A. |
|
Chile |
|
ThUS$700,000 |
|
7,554 |
|
|
— |
|
|
7,554 |
|
|
7,554 |
|
|
— |
|
|
7,554 |
|
|
(555) |
|
|
6,999 |
|
| SQM S.A. |
|
Chile |
|
ThUS$750,000 |
|
— |
|
|
7,312 |
|
|
7,312 |
|
|
— |
|
|
7,312 |
|
|
7,312 |
|
|
(1,521) |
|
|
5,791 |
|
| SQM S.A. |
|
Chile |
|
H |
|
17,599 |
|
|
— |
|
|
17,599 |
|
|
17,599 |
|
|
— |
|
|
17,599 |
|
|
(172) |
|
|
17,427 |
|
| SQM S.A. |
|
Chile |
|
O |
|
987 |
|
|
— |
|
|
987 |
|
|
987 |
|
|
— |
|
|
987 |
|
|
(82) |
|
|
905 |
|
| SQM S.A. |
|
Chile |
|
P |
|
1,871 |
|
|
— |
|
|
1,871 |
|
|
1,871 |
|
|
— |
|
|
1,871 |
|
|
(12) |
|
|
1,859 |
|
| SQM S.A. |
|
Chile |
|
Q |
|
— |
|
|
359 |
|
|
359 |
|
|
— |
|
|
359 |
|
|
359 |
|
|
(21) |
|
|
338 |
|
| Total |
|
|
|
|
|
40,167 |
|
|
10,540 |
|
|
50,707 |
|
|
40,167 |
|
|
10,540 |
|
|
50,707 |
|
|
(3,708) |
|
|
46,999 |
|
c)Bank borrowings -non-current
The following table shows the details of bank loans as of December 31, 2024:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Debtor |
|
Creditor |
|
Currency or
adjustment index |
|
Type of
amortization
|
|
Effective rate |
|
Nominal rate |
| Tax ID No. |
|
Company |
|
Country |
|
Tax ID No. |
|
Financial institution |
|
Country |
|
|
|
|
| 93.007.000-9 |
|
SQM S.A. |
|
Chile |
|
O-E |
|
Banco Santander/Kexim |
|
Spain/South Korea |
|
Dollar |
|
Upon Maturity |
|
4.73 |
% |
|
4.28 |
% |
| 93.007.000-9 |
|
SQM S.A. |
|
Chile |
|
O-E |
|
Banco Santander/Kexim |
|
Spain/South Korea |
|
Dollar |
|
Upon Maturity |
|
4.27 |
% |
|
4.29 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Debtor |
|
Creditor |
|
Nominal non-current maturities as of December 31, 2024 |
|
Carrying amounts and maturities as of December 31, 2024 |
| Company |
|
Financial institution |
|
Between 1 and 2 |
|
Between 2
and 3 |
|
Between 3
and 4 |
|
Total |
|
Between 1
and 2 |
|
Between 2
and 3 |
|
Between 3
and 4 |
|
Subtotal |
|
Costs of
obtaining
loans |
|
Total |
|
|
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| SQM S.A. |
|
Banco Santander/Kexim |
|
— |
|
|
— |
|
|
100,000 |
|
|
100,000 |
|
|
— |
|
|
— |
|
|
100,000 |
|
|
100,000 |
|
|
(2,997) |
|
|
97,003 |
|
| SQM S.A. |
|
Banco Santander/Kexim |
|
— |
|
|
— |
|
|
36,000 |
|
|
36,000 |
|
|
— |
|
|
— |
|
|
36,000 |
|
|
36,000 |
|
|
(3,320) |
|
|
32,680 |
|
| Total |
|
|
|
— |
|
|
— |
|
|
136,000 |
|
|
136,000 |
|
|
— |
|
|
— |
|
|
136,000 |
|
|
136,000 |
|
|
(6,317) |
|
|
129,683 |
|
As of December 31, 2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Debtor |
|
Creditor |
|
Currency or
adjustment index |
|
Type of
amortization
|
|
Effective rate |
|
Nominal rate |
| Tax ID No. |
|
Company |
|
Country |
|
Tax ID No. |
|
Financial institution |
|
Country |
|
|
|
|
| 93.007.000-9 |
|
SQM S.A. |
|
Chile |
|
O-E |
|
Bank of Nova Scotia |
|
Canada |
|
Dollar |
|
Upon Maturity |
|
5.88 |
% |
|
6.64 |
% |
| 93.007.000-9 |
|
SQM S.A. |
|
Chile |
|
O-E |
|
Banco Santander/Kexim |
|
Spain/South Korea |
|
Dollar |
|
Upon Maturity |
|
5.49 |
% |
|
6.36 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Debtor |
|
Creditor |
|
Nominal non-current maturities as of December 31, 2023 |
|
Carrying amounts and maturities as of December 31, 2023 |
| Company |
|
Financial institution |
|
Between 1 and 2 |
|
Between 2
and 3 |
|
Between 3
and 4 |
|
Total |
|
Between 1
and 2 |
|
Between 2
and 3 |
|
Between 3
and 4 |
|
Subtotal |
|
Costs of obtaining loans |
|
Total |
|
|
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| SQM S.A. |
|
Bank of Nova Scotia |
|
— |
|
|
200,000 |
|
|
— |
|
|
200,000 |
|
|
— |
|
|
200,000 |
|
|
— |
|
|
200,000 |
|
|
(1,648) |
|
|
198,352 |
|
| SQM S.A. |
|
Banco Santander/Kexim |
|
— |
|
|
— |
|
|
100,000 |
|
|
100,000 |
|
|
— |
|
|
— |
|
|
100,000 |
|
|
100,000 |
|
|
(2,834) |
|
|
97,166 |
|
| Total |
|
|
|
— |
|
|
200,000 |
|
|
100,000 |
|
|
300,000 |
|
|
— |
|
|
200,000 |
|
|
100,000 |
|
|
300,000 |
|
|
(4,482) |
|
|
295,518 |
|
d)Unsecured obligations, non-current
The following table shows the details of “unsecured debentures that accrue non-current interest” as of December 31, 2024:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Debtor |
|
|
|
|
|
Number of
registration or ID
of the instrument |
|
|
|
|
|
Currency or
adjustment index |
|
Periodicity |
|
|
|
|
| Tax ID No. |
|
Company |
|
Country |
|
|
Series |
|
Maturity date |
|
|
Payment of
interest |
|
Repayment |
|
Effective rate |
|
Nominal rate |
| 93.007.000-9 |
|
SQM S.A. |
|
Chile |
|
— |
|
ThUS$450,000 |
|
05/07/2029 |
|
Dollar |
|
Semiannual |
|
Upon maturity |
|
4.14 |
% |
|
4.25 |
% |
| 93.007.000-9 |
|
SQM S.A. |
|
Chile |
|
— |
|
ThUS$400,000 |
|
01/22/2050 |
|
Dollar |
|
Semiannual |
|
Upon maturity |
|
4.23 |
% |
|
4.25 |
% |
| 93.007.000-9 |
|
SQM S.A. |
|
Chile |
|
— |
|
ThUS$700,000 |
|
09/10/2051 |
|
Dollar |
|
Semiannual |
|
Upon maturity |
|
3.45 |
% |
|
3.50 |
% |
| 93.007.000-9 |
|
SQM S.A. |
|
Chile |
|
— |
|
ThUS$750,000 |
|
11/07/2033 |
|
Dollar |
|
Semiannual |
|
Upon maturity |
|
6.89 |
% |
|
6.50 |
% |
| 93.007.000-9 |
|
SQM S.A. |
|
Chile |
|
— |
|
ThUS$850,000 |
|
09/10/2034 |
|
Dollar |
|
Semiannual |
|
Upon maturity |
|
5.86 |
% |
|
5.50 |
% |
| 93.007.000-9 |
|
SQM S.A. |
|
Chile |
|
564 |
|
H |
|
01/05/2030 |
|
UF |
|
Semiannual |
|
Semiannual |
|
4.76 |
% |
|
4.90 |
% |
| 93.007.000-9 |
|
SQM S.A. |
|
Chile |
|
699 |
|
O |
|
02/01/2033 |
|
UF |
|
Semiannual |
|
Upon maturity |
|
3.69 |
% |
|
3.80 |
% |
| 93.007.000-9 |
|
SQM S.A. |
|
Chile |
|
563 |
|
P |
|
01/15/2028 |
|
UF |
|
Semiannual |
|
Upon maturity |
|
3.24 |
% |
|
3.25 |
% |
| 93.007.000-9 |
|
SQM S.A. |
|
Chile |
|
700 |
|
Q |
|
06/01/2038 |
|
UF |
|
Semiannual |
|
Upon maturity |
|
3.54 |
% |
|
3.45 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nominal non-current maturities as of December 31, 2024 |
|
Carrying amounts and maturities as of December 31, 2024 |
| Series |
|
Over 1
year to 2 |
|
Over 2
years to 3 |
|
Over 3
Years to 4 |
|
Over 4
Years to 5 |
|
Over 5
years |
|
Total |
|
Over 1
year to 2 |
|
Over 2
years to 3 |
|
Over 3
Years to 4 |
|
Over 4
Years to 5 |
|
Over 5
years |
|
Subtotal |
|
Bond
issuance
costs |
|
Total |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| ThUS$450 |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
450,000 |
|
|
450,000 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
450,000 |
|
|
450,000 |
|
|
(2,313) |
|
|
447,687 |
|
| ThUS$400 |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
400,000 |
|
|
400,000 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
400,000 |
|
|
400,000 |
|
|
(5,644) |
|
|
394,356 |
|
| ThUS$700 |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
700,000 |
|
|
700,000 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
700,000 |
|
|
700,000 |
|
|
(14,232) |
|
|
685,768 |
|
| ThUS$750 |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
750,000 |
|
|
750,000 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
750,000 |
|
|
750,000 |
|
|
(12,590) |
|
|
737,410 |
|
| ThUS$850 |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
850,000 |
|
|
850,000 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
850,000 |
|
|
850,000 |
|
|
(16,433) |
|
|
833,567 |
|
| H |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
63,087 |
|
|
63,087 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
63,087 |
|
|
63,087 |
|
|
(689) |
|
|
62,398 |
|
| O |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
57,830 |
|
|
57,830 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
57,830 |
|
|
57,830 |
|
|
(578) |
|
|
57,252 |
|
| P |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
115,659 |
|
|
115,659 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
115,659 |
|
|
115,659 |
|
|
(27) |
|
|
115,632 |
|
| Q |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
115,659 |
|
|
115,659 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
115,659 |
|
|
115,659 |
|
|
(270) |
|
|
115,389 |
|
| Total |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
3,502,235 |
|
|
3,502,235 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
3,502,235 |
|
|
3,502,235 |
|
|
(52,776) |
|
|
3,449,459 |
|
As of December 31, 2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Debtor |
|
Number of
registration or ID
of the instrument |
|
|
|
|
|
Currency or
adjustment
index |
|
Periodicity |
|
|
|
|
| Tax ID No. |
|
Company |
|
Country |
|
|
Series |
|
Maturity date |
|
|
Payment of
interest |
|
Repayment |
|
Effective rate |
|
Nominal rate |
| 93.007.000-9 |
|
SQM S.A. |
|
Chile |
|
— |
|
ThUS$250,000 |
|
01/28/2025 |
|
Dollar |
|
Semiannual |
|
Upon maturity |
|
4.24 |
% |
|
4.38 |
% |
| 93.007.000-9 |
|
SQM S.A. |
|
Chile |
|
— |
|
ThUS$450,000 |
|
05/07/2029 |
|
Dollar |
|
Semiannual |
|
Upon maturity |
|
4.14 |
% |
|
4.25 |
% |
| 93.007.000-9 |
|
SQM S.A. |
|
Chile |
|
— |
|
ThUS$400,000 |
|
01/22/2050 |
|
Dollar |
|
Semiannual |
|
Upon maturity |
|
4.23 |
% |
|
4.25 |
% |
| 93.007.000-9 |
|
SQM S.A. |
|
Chile |
|
— |
|
ThUS$700,000 |
|
09/10/2051 |
|
Dollar |
|
Semiannual |
|
Upon maturity |
|
3.45 |
% |
|
3.50 |
% |
| 93.007.000-9 |
|
SQM S.A. |
|
Chile |
|
— |
|
ThUS$750,000 |
|
11/07/2033 |
|
Dollar |
|
Semiannual |
|
Upon maturity |
|
6.89 |
% |
|
6.50 |
% |
| 93.007.000-9 |
|
SQM S.A. |
|
Chile |
|
564 |
|
H |
|
01/05/2030 |
|
UF |
|
Semiannual |
|
Semiannual |
|
4.76 |
% |
|
4.90 |
% |
| 93.007.000-9 |
|
SQM S.A. |
|
Chile |
|
699 |
|
O |
|
02/01/2033 |
|
UF |
|
Semiannual |
|
Upon maturity |
|
3.69 |
% |
|
3.80 |
% |
| 93.007.000-9 |
|
SQM S.A. |
|
Chile |
|
563 |
|
P |
|
01/15/2028 |
|
UF |
|
Semiannual |
|
Upon maturity |
|
3.24 |
% |
|
3.25 |
% |
| 93.007.000-9 |
|
SQM S.A. |
|
Chile |
|
700 |
|
Q |
|
06/01/2038 |
|
UF |
|
Semiannual |
|
Upon maturity |
|
3.54 |
% |
|
3.45 |
% |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Nominal non-current maturities as of December 31, 2023 |
|
Carrying amounts and maturities as of December 31, 2023 |
| Series |
|
Over 1
year to 2 |
|
Over 2
years to 3 |
|
Over 3
Years to 4 |
|
Over 4
Years to 5 |
|
Over 5
years |
|
Total |
|
Over 1
year to 2 |
|
Over 2
years to 3 |
|
Over 3
Years to 4 |
|
Over 4
Years to 5 |
|
Over 5
years |
|
Subtotal |
|
Bond
issuance
costs |
|
Total |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| ThUS$250 |
|
250,000 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
250,000 |
|
|
250,000 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
250,000 |
|
|
(36) |
|
|
249,964 |
|
| ThUS$450 |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
450,000 |
|
|
450,000 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
450,000 |
|
|
450,000 |
|
|
(2,991) |
|
|
447,009 |
|
| ThUS$400 |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
400,000 |
|
|
400,000 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
400,000 |
|
|
400,000 |
|
|
(5,879) |
|
|
394,121 |
|
| ThUS$700 |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
700,000 |
|
|
700,000 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
700,000 |
|
|
700,000 |
|
|
(14,787) |
|
|
685,213 |
|
| ThUS$750 |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
750,000 |
|
|
750,000 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
750,000 |
|
|
750,000 |
|
|
(13,437) |
|
|
736,563 |
|
| H |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
83,887 |
|
|
83,887 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
83,887 |
|
|
83,887 |
|
|
(861) |
|
|
83,026 |
|
| O |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
62,915 |
|
|
62,915 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
62,915 |
|
|
62,915 |
|
|
(659) |
|
|
62,256 |
|
| P |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
125,830 |
|
|
125,830 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
125,830 |
|
|
125,830 |
|
|
(40) |
|
|
125,790 |
|
| Q |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
125,830 |
|
|
125,830 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
125,830 |
|
|
125,830 |
|
|
(287) |
|
|
125,543 |
|
| Total |
|
250,000 |
|
|
— |
|
|
— |
|
|
— |
|
|
2,698,462 |
|
|
2,948,462 |
|
|
250,000 |
|
|
— |
|
|
— |
|
|
— |
|
|
2,698,462 |
|
|
2,948,462 |
|
|
(38,977) |
|
|
2,909,485 |
|
12.5 Trade and other payables
a)Details trade and other payables
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2024 |
|
As of December 31, 2023 |
| Details trade and other payables |
|
Current |
|
Non-current |
|
Total |
|
Current |
|
Non-current |
|
Total |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Accounts payable |
|
448,154 |
|
|
— |
|
|
448,154 |
|
|
441,780 |
|
|
— |
|
|
441,780 |
|
| Other accounts payable |
|
1,007 |
|
|
— |
|
|
1,007 |
|
|
2,163 |
|
|
— |
|
|
2,163 |
|
| Prepayments from customers |
|
22,288 |
|
|
— |
|
|
22,288 |
|
|
5,690 |
|
|
— |
|
|
5,690 |
|
| Total |
|
471,449 |
|
|
— |
|
|
471,449 |
|
|
449,633 |
|
|
— |
|
|
449,633 |
|
As of December 31, 2024, and 2023, the balance of current and past due accounts payable is made up as follows:
Suppliers current on all payments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts according to payment periods as of December 31, 2024 |
| Type of Supplier |
|
Up to 30
Days |
|
31 – 60
days |
|
61 – 90
Days |
|
91 – 120
days |
|
121 – 365
days |
|
366 and
more
days |
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ThUS$ |
| Goods |
|
290,688 |
|
|
5,248 |
|
|
66 |
|
|
25 |
|
|
1 |
|
|
— |
|
|
296,028 |
|
| Services |
|
126,479 |
|
|
6,031 |
|
|
11 |
|
|
7 |
|
|
65 |
|
|
— |
|
|
132,593 |
|
| Others |
|
40,353 |
|
|
159 |
|
|
4 |
|
|
— |
|
|
— |
|
|
— |
|
|
40,516 |
|
| Total |
|
457,520 |
|
|
11,438 |
|
|
81 |
|
|
32 |
|
|
66 |
|
|
— |
|
|
469,137 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts according to payment periods as of December 31, 2023 |
| Type of Supplier |
|
Up to 30
Days |
|
31 – 60
days |
|
61 – 90
Days |
|
91 – 120
days |
|
121 – 365
days |
|
366 and
more
days |
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ThUS$ |
| Goods |
|
246,789 |
|
|
2,654 |
|
|
2 |
|
|
— |
|
|
1,653 |
|
|
— |
|
|
251,098 |
|
| Services |
|
142,625 |
|
|
243 |
|
|
4 |
|
|
— |
|
|
65 |
|
|
— |
|
|
142,937 |
|
| Others |
|
50,335 |
|
|
— |
|
|
— |
|
|
— |
|
|
7 |
|
|
— |
|
|
50,342 |
|
| Total |
|
439,749 |
|
|
2,897 |
|
|
6 |
|
|
— |
|
|
1,725 |
|
|
— |
|
|
444,377 |
|
Suppliers past due on payments
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts according to payment periods as of December 31, 2024 |
| Type of Supplier |
|
Up to 30
Days |
|
31 – 60
days |
|
61 – 90
Days |
|
91 – 120
days |
|
121 – 365
days |
|
366 and
more
days |
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ThUS$ |
| Goods |
|
458 |
|
|
80 |
|
|
121 |
|
|
61 |
|
|
67 |
|
|
— |
|
|
787 |
|
| Services |
|
443 |
|
|
— |
|
|
— |
|
|
9 |
|
|
2 |
|
|
— |
|
|
454 |
|
| Others |
|
32 |
|
|
32 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
64 |
|
| Total |
|
933 |
|
|
112 |
|
|
121 |
|
|
70 |
|
|
69 |
|
|
— |
|
|
1,305 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Amounts according to payment periods as of December 31, 2023 |
| Type of Supplier |
|
Up to 30
Days |
|
31 – 60
days |
|
61 – 90
Days |
|
91 – 120
days |
|
121 – 365
days |
|
366 and
more
days |
|
Total |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
ThUS$ |
| Goods |
|
864 |
|
|
158 |
|
|
77 |
|
|
66 |
|
|
185 |
|
|
— |
|
|
1,350 |
|
| Services |
|
1,557 |
|
|
57 |
|
|
24 |
|
|
8 |
|
|
19 |
|
|
— |
|
|
1,665 |
|
| Others |
|
10 |
|
|
9 |
|
|
— |
|
|
— |
|
|
59 |
|
|
— |
|
|
78 |
|
| Total |
|
2,431 |
|
|
224 |
|
|
101 |
|
|
74 |
|
|
263 |
|
|
— |
|
|
3,093 |
|
Purchase commitments held by the Company are recognized as liabilities when the goods and services are received by the Company. As of December 31, 2024, the Company has purchase orders amounting to ThUS$141,604 and ThUS$224,307 as of December 31, 2023.
12.6 Financial asset and liability categories
a)Financial Assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Description of financial assets |
|
As of December 31, 2024 |
|
As of December 31, 2023 |
|
Current |
|
Non-current |
|
Total |
|
Current |
|
Non-current |
|
Total |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Cash and cash equivalent |
|
1,377,851 |
|
|
— |
|
|
1,377,851 |
|
|
1,041,369 |
|
|
— |
|
|
1,041,369 |
|
| Trade receivables due from related parties at amortized cost |
|
28,706 |
|
|
— |
|
|
28,706 |
|
|
43,253 |
|
|
— |
|
|
43,253 |
|
| Financial assets measured at amortized cost |
|
1,061,262 |
|
|
20 |
|
|
1,061,282 |
|
|
1,316,797 |
|
|
20 |
|
|
1,316,817 |
|
| Trade and other receivables |
|
606,137 |
|
|
2,727 |
|
|
608,864 |
|
|
907,181 |
|
|
2,559 |
|
|
909,740 |
|
| Total financial assets measured at amortized cost |
|
3,073,956 |
|
|
2,747 |
|
|
3,076,703 |
|
|
3,308,600 |
|
|
2,579 |
|
|
3,311,179 |
|
| Financial instruments for hedging purposes |
|
15,405 |
|
|
2,930 |
|
|
18,335 |
|
|
8,527 |
|
|
15,993 |
|
|
24,520 |
|
| Derivative financial instruments with effect in profit or loss (no hedge) |
|
2,928 |
|
|
— |
|
|
2,928 |
|
|
519 |
|
|
— |
|
|
519 |
|
| Financial assets classified as available for sale at fair value through other comprehensive income |
|
— |
|
|
57,756 |
|
|
57,756 |
|
|
— |
|
|
232,268 |
|
|
232,268 |
|
| Total financial assets at fair value |
|
18,333 |
|
|
60,686 |
|
|
79,019 |
|
|
9,046 |
|
|
248,261 |
|
|
257,307 |
|
| Total financial assets |
|
3,092,289 |
|
|
63,433 |
|
|
3,155,722 |
|
|
3,317,646 |
|
|
250,840 |
|
|
3,568,486 |
|
b)Financial Liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Description of financial liabilities |
|
As of December 31, 2024 |
|
As of December 31, 2023 |
|
Current |
|
Non-current |
|
Total |
|
Current |
|
Non-current |
|
Total |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| For hedging purposes through other comprehensive income |
|
7,316 |
|
|
21,440 |
|
|
28,756 |
|
|
30,443 |
|
|
8,419 |
|
|
38,862 |
|
| Derivative financial instruments with effect in profit or loss (non-hedging) |
|
418 |
|
|
— |
|
|
418 |
|
|
14,795 |
|
|
— |
|
|
14,795 |
|
| Financial liabilities at fair value |
|
7,734 |
|
|
21,440 |
|
|
29,174 |
|
|
45,238 |
|
|
8,419 |
|
|
53,657 |
|
| Bank loans |
|
847,963 |
|
|
129,683 |
|
|
977,646 |
|
|
1,164,262 |
|
|
295,518 |
|
|
1,459,780 |
|
| Unsecured obligations |
|
307,771 |
|
|
3,449,459 |
|
|
3,757,230 |
|
|
46,999 |
|
|
2,909,485 |
|
|
2,956,484 |
|
| Lease Liabilities |
|
23,011 |
|
|
60,801 |
|
|
83,812 |
|
|
18,192 |
|
|
56,966 |
|
|
75,158 |
|
| Trade and other payables |
|
471,449 |
|
|
— |
|
|
471,449 |
|
|
449,633 |
|
|
— |
|
|
449,633 |
|
| Total financial liabilities at amortized cost |
|
1,650,194 |
|
|
3,639,943 |
|
|
5,290,137 |
|
|
1,679,086 |
|
|
3,261,969 |
|
|
4,941,055 |
|
| Total financial liabilities |
|
1,657,928 |
|
|
3,661,383 |
|
|
5,319,311 |
|
|
1,724,324 |
|
|
3,270,388 |
|
|
4,994,712 |
|
12.7 Fair value measurement of finance assets and liabilities
The fair value hierarchy is detailed as follows:
(a)Level 1: The fair value of financial instruments traded in active markets (such as publicly traded derivatives, and equity securities) is based on quoted market prices at the end of the reporting period. The quoted market price used for financial assets held by the Company is the current bid price. These instruments are included in level 1.
(b)Level 2: The fair value of financial instruments that are not traded in an active market (for example, over-the-counter derivatives) is determined by using valuation techniques which maximize the use of observable market data and rely as little as possible on entity-specific estimates. If all significant inputs required to fair value an instrument are observable, the instrument is included in level 2.
(c)Level 3: If one or more of the significant inputs is not based on observable market data, the instrument is included in level 3. This is the case for unlisted equity securities.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2024 |
|
Measurement Methodology |
| Fair value measurement of assets and liabilities |
|
Carrying Amount at
Amortized Cost |
|
Fair value
(disclosure
purposes) |
|
Fair amount
registered |
|
Level 1 |
|
Level 2 |
|
Level 3 |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Financial Assets |
|
|
|
|
|
|
|
|
|
|
|
|
| Cash and cash equivalents |
|
1,377,851 |
|
|
1,377,851 |
|
|
— |
|
|
1,377,851 |
|
|
— |
|
|
— |
|
| Other current financial assets |
|
|
|
|
|
|
|
|
|
|
|
|
-Time deposits |
|
1,061,262 |
|
|
1,061,262 |
|
|
— |
|
|
— |
|
|
1,061,262 |
|
|
— |
|
-Derivative financial instruments |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
|
-Forwards |
|
— |
|
|
— |
|
|
2,615 |
|
|
— |
|
|
2,615 |
|
|
— |
|
-Options |
|
— |
|
|
— |
|
|
313 |
|
|
— |
|
|
313 |
|
|
— |
|
-Hedging assets |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
-Swaps |
|
— |
|
|
— |
|
|
15,405 |
|
|
— |
|
|
15,405 |
|
|
— |
|
Non-current accounts receivable |
|
2,727 |
|
|
2,727 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
| Other non-current financial assets: |
|
|
|
|
|
|
|
|
|
|
|
|
-Other |
|
20 |
|
|
20 |
|
|
— |
|
|
— |
|
|
20 |
|
|
— |
|
-Equity instruments |
|
— |
|
|
— |
|
|
57,756 |
|
|
57,756 |
|
|
— |
|
|
— |
|
-Hedging assets – Swaps |
|
— |
|
|
— |
|
|
2,930 |
|
|
2,930 |
|
|
— |
|
|
— |
|
| Other current financial liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
-Bank borrowings |
|
847,963 |
|
|
848,800 |
|
|
— |
|
|
— |
|
|
848,800 |
|
|
— |
|
-Derivative instruments |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
-Forwards |
|
— |
|
|
— |
|
|
182 |
|
|
— |
|
|
182 |
|
|
— |
|
-Options |
|
— |
|
|
— |
|
|
236 |
|
|
— |
|
|
236 |
|
|
— |
|
-Hedging liabilities – Swaps |
|
— |
|
|
— |
|
|
7,316 |
|
|
— |
|
|
7,316 |
|
|
— |
|
-Swaps hedges, investments |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
-Cash flow hedges |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
-Unsecured obligations |
|
307,771 |
|
|
313,107 |
|
|
— |
|
|
— |
|
|
313,107 |
|
|
— |
|
| Other non-current financial liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
-Bank borrowings |
|
129,683 |
|
|
136,000 |
|
|
— |
|
|
— |
|
|
136,000 |
|
|
— |
|
-Unsecured obligations |
|
3,449,459 |
|
|
3,502,236 |
|
|
— |
|
|
— |
|
|
3,502,236 |
|
|
— |
|
-Non-current hedging liabilities |
|
— |
|
|
— |
|
|
21,440 |
|
|
— |
|
|
21,440 |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2023 |
|
Measurement Methodology |
| Fair value measurement of assets and liabilities |
|
Carrying Amount at
Amortized Cost |
|
Fair value
(disclosure
purposes) |
|
Fair amount
registered |
|
Level 1 |
|
Level 2 |
|
Level 3 |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Financial Assets |
|
|
|
|
|
|
|
|
|
|
|
|
| Cash and cash equivalents |
|
1,041,369 |
|
|
1,041,369 |
|
|
— |
|
|
1,041,369 |
|
|
— |
|
|
— |
|
| Other current financial assets |
|
|
|
|
|
|
|
|
|
|
|
|
-Time deposits |
|
1,316,797 |
|
|
1,316,797 |
|
|
— |
|
|
— |
|
|
1,316,797 |
|
|
— |
|
-Derivative financial instruments |
|
|
|
|
|
|
|
|
|
|
|
|
-Forwards |
|
— |
|
|
— |
|
|
324 |
|
|
— |
|
|
324 |
|
|
— |
|
-Options |
|
— |
|
|
— |
|
|
195 |
|
|
— |
|
|
195 |
|
|
— |
|
-Hedging assets |
|
— |
|
|
— |
|
|
8,527 |
|
|
— |
|
|
8,527 |
|
|
— |
|
-Swaps |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
Non-current accounts receivable |
|
2,559 |
|
|
2,559 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
| Other non-current financial assets: |
|
|
|
|
|
|
|
|
|
|
|
|
-Other |
|
20 |
|
|
20 |
|
|
— |
|
|
— |
|
|
20 |
|
|
— |
|
-Equity instruments |
|
— |
|
|
— |
|
|
232,268 |
|
|
232,268 |
|
|
— |
|
|
— |
|
-Hedging assets – Swaps |
|
— |
|
|
— |
|
|
15,993 |
|
|
15,993 |
|
|
— |
|
|
— |
|
| Other current financial liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
-Bank borrowings |
|
1,164,262 |
|
|
1,164,262 |
|
|
— |
|
|
— |
|
|
1,164,262 |
|
|
— |
|
-Derivative instruments |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
-Forwards |
|
— |
|
|
— |
|
|
14,525 |
|
|
— |
|
|
14,525 |
|
|
— |
|
-Options |
|
— |
|
|
— |
|
|
270 |
|
|
— |
|
|
270 |
|
|
— |
|
-Hedging liabilities – Swaps |
|
— |
|
|
— |
|
|
12,143 |
|
|
— |
|
|
12,143 |
|
|
— |
|
-Swaps hedges, investments |
|
— |
|
|
— |
|
|
18,300 |
|
|
— |
|
|
18,300 |
|
|
— |
|
-Cash flow hedges |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
-Unsecured obligations |
|
46,999 |
|
|
46,999 |
|
|
— |
|
|
— |
|
|
46,999 |
|
|
— |
|
| Other non-current financial liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
-Bank borrowings |
|
295,518 |
|
|
295,518 |
|
|
— |
|
|
— |
|
|
295,518 |
|
|
— |
|
-Unsecured obligations |
|
2,909,485 |
|
|
2,909,485 |
|
|
— |
|
|
— |
|
|
2,909,485 |
|
|
— |
|
-Non-current hedging liabilities |
|
— |
|
|
— |
|
|
8,419 |
|
|
— |
|
|
8,419 |
|
|
— |
|
12.8 Reconciliation of net debt and lease liabilities
This section presents an analysis of net debt plus lease liabilities and their movements for each of the reported periods. The definition of the net debt is described in Note 19.1. and includes current and non-current lease liabilities to complete its analysis.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Net debt |
|
As of
December 31,
2024 |
|
As of
December 31,
2023 |
|
|
ThUS$ |
|
ThUS$ |
| Cash and cash equivalents |
|
1,377,851 |
|
|
1,041,369 |
|
| Other current financial assets |
|
1,079,595 |
|
|
1,325,843 |
|
| Other non-current financial hedge assets |
|
2,930 |
|
|
15,993 |
|
| Other current financial liabilities |
|
(1,163,468) |
|
|
(1,256,499) |
|
| Lease liabilities current |
|
(23,011) |
|
|
(18,192) |
|
| Other non-current financial liabilities |
|
(3,600,582) |
|
|
(3,213,422) |
|
| Non-current Lease liabilities |
|
(60,801) |
|
|
(56,966) |
|
| Total |
|
(2,387,486) |
|
|
(2,161,874) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of
December 31,
2023 |
|
From cash flow |
|
Not from cash flow |
|
As of
December 31,
2024 |
| Net debt |
|
|
Amounts from
loans |
|
Amounts from
interests |
|
Other cash
(inflows)/outflows |
|
Income statement |
|
Equity and others |
|
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Obligations with the public and bank loans |
|
(4,416,264) |
|
|
(371,131) |
|
|
233,768 |
|
|
23,091 |
|
|
(204,340) |
|
|
— |
|
|
(4,734,876) |
|
| Financial instruments derived from hedging |
|
(22,000) |
|
|
(759) |
|
|
7,057 |
|
|
— |
|
|
(25,648) |
|
|
12,594 |
|
|
(28,756) |
|
| Derivatives for investment hedges |
|
(18,300) |
|
|
— |
|
|
— |
|
|
(4,368) |
|
|
22,533 |
|
|
135 |
|
|
— |
|
| Non-hedging derivatives in other financial liabilities |
|
(14,795) |
|
|
— |
|
|
— |
|
|
— |
|
|
14,377 |
|
|
— |
|
|
(418) |
|
| Current and non-current lease liabilities |
|
(75,158) |
|
|
22,288 |
|
|
2,820 |
|
|
— |
|
|
(33,762) |
|
|
— |
|
|
(83,812) |
|
| Hedging derivatives – cash requirements for Australia’s business |
|
1,437 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(1,437) |
|
|
— |
|
| Current and non-current financial liabilities |
|
(4,545,080) |
|
|
(349,602) |
|
|
243,645 |
|
|
18,723 |
|
|
(226,840) |
|
|
11,292 |
|
|
(4,847,862) |
|
| Cash and cash equivalents |
|
1,041,369 |
|
|
— |
|
|
(50,529) |
|
|
329,897 |
|
|
57,114 |
|
|
— |
|
|
1,377,851 |
|
| Deposits that do not qualify as cash and cash equivalents |
|
1,316,797 |
|
|
— |
|
|
(46,547) |
|
|
(230,017) |
|
|
21,029 |
|
|
— |
|
|
1,061,262 |
|
| Debt hedging derivative financial instruments |
|
24,520 |
|
|
— |
|
|
— |
|
|
— |
|
|
(21,590) |
|
|
— |
|
|
2,930 |
|
| Derivatives for investment hedges |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
15,405 |
|
|
— |
|
|
15,405 |
|
| Non-hedging derivatives on other financial assets |
|
520 |
|
|
— |
|
|
— |
|
|
(345) |
|
|
2,753 |
|
|
— |
|
|
2,928 |
|
| Current and Non-Current Financial Assets |
|
2,383,206 |
|
|
— |
|
|
(97,076) |
|
|
99,535 |
|
|
74,711 |
|
|
— |
|
|
2,460,376 |
|
| Total |
|
(2,161,874) |
|
|
(349,602) |
|
|
146,569 |
|
|
118,258 |
|
|
(152,129) |
|
|
11,292 |
|
|
(2,387,486) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of
December 31,
2022 |
|
From cash flow |
|
Not from cash flow |
|
As of
December 31,
2023 |
| Net debt |
|
|
Amounts from
loans |
|
Amounts from
interests |
|
Other cash
(inflows)/outflows |
|
Income statement |
|
Equity and others |
|
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Obligations with the public and bank loans |
|
(2,848,875) |
|
|
(1,534,282) |
|
|
117,145 |
|
|
18,346 |
|
|
(168,598) |
|
|
— |
|
|
(4,416,264) |
|
| Financial instruments derived from hedging |
|
(39,681) |
|
|
(18,927) |
|
|
4,077 |
|
|
— |
|
|
11,731 |
|
|
20,800 |
|
|
(22,000) |
|
| Derivatives for investment hedges |
|
(29,984) |
|
|
— |
|
|
— |
|
|
(10,082) |
|
|
18,171 |
|
|
3,595 |
|
|
(18,300) |
|
| Non-hedging Derivatives in Other financial liabilities |
|
(5,816) |
|
|
— |
|
|
— |
|
|
— |
|
|
(8,979) |
|
|
— |
|
|
(14,795) |
|
| Current and non-current lease liabilities |
|
(61,734) |
|
|
15,914 |
|
|
2,038 |
|
|
— |
|
|
(31,376) |
|
|
— |
|
|
(75,158) |
|
| Current and non-current financial liabilities |
|
(2,986,090) |
|
|
(1,537,295) |
|
|
123,260 |
|
|
8,264 |
|
|
(179,051) |
|
|
24,395 |
|
|
(4,546,517) |
|
| Cash and cash equivalents |
|
2,655,236 |
|
|
— |
|
|
(53,539) |
|
|
(1,615,863) |
|
|
55,535 |
|
|
— |
|
|
1,041,369 |
|
| Deposits that do not qualify as cash and cash equivalents |
|
950,167 |
|
|
— |
|
|
(49,226) |
|
|
341,742 |
|
|
74,114 |
|
|
— |
|
|
1,316,797 |
|
| Debt Hedging Derivative Financial Instruments |
|
29,620 |
|
|
— |
|
|
— |
|
|
— |
|
|
(5,100) |
|
|
— |
|
|
24,520 |
|
| Derivatives for investment hedges |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
| Non-hedging derivatives on other financial assets |
|
4,174 |
|
|
— |
|
|
— |
|
|
(18,034) |
|
|
14,380 |
|
|
— |
|
|
520 |
|
| Hedging derivatives – cash requirements for Australia’s business |
|
7,139 |
|
|
— |
|
|
— |
|
|
1,183 |
|
|
(1,183) |
|
|
(5,702) |
|
|
1,437 |
|
| Current and Non-Current Financial Assets |
|
3,646,336 |
|
|
— |
|
|
(102,765) |
|
|
(1,290,972) |
|
|
137,746 |
|
|
(5,702) |
|
|
2,384,643 |
|
| Total |
|
660,246 |
|
|
(1,537,295) |
|
|
20,495 |
|
|
(1,282,708) |
|
|
(41,305) |
|
|
18,693 |
|
|
(2,161,874) |
|
Note 13 Right-of-use assets and Lease liabilities
13.1 Right-of-use assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of changes
in right-of-use assets as of
December 31, 2024, net value |
|
Land |
|
Buildings |
|
Other
property,
plant and
equipment |
|
Transport
equipment |
|
Machinery,
plant and
equipment |
|
Total |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Opening Balance |
|
18,299 |
|
|
25,458 |
|
|
— |
|
|
855 |
|
|
28,581 |
|
|
73,193 |
|
| Additions |
|
110 |
|
|
12,247 |
|
|
— |
|
|
1,245 |
|
|
19,435 |
|
|
33,037 |
|
| Depreciation expenses |
|
(738) |
|
|
(7,150) |
|
|
— |
|
|
(1,129) |
|
|
(13,648) |
|
|
(22,665) |
|
| Transfer to property, plant and equipment |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
| Other increases (decreases) |
|
992 |
|
|
(7) |
|
|
— |
|
|
242 |
|
|
(722) |
|
|
505 |
|
| Total changes |
|
364 |
|
|
5,090 |
|
|
— |
|
|
358 |
|
|
5,065 |
|
|
10,877 |
|
| Closing balance |
|
18,663 |
|
|
30,548 |
|
|
— |
|
|
1,213 |
|
|
33,646 |
|
|
84,070 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of changes
in right-of-use assets as of
December 31, 2023, net value |
|
Land |
|
Buildings |
|
Other
property,
plant and
equipment |
|
Transport
equipment |
|
Machinery,
plant and
equipment |
|
Total |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Opening Balance |
|
18,320 |
|
|
17,839 |
|
|
— |
|
|
1,805 |
|
|
22,903 |
|
|
60,867 |
|
| Additions |
|
894 |
|
|
13,714 |
|
|
— |
|
|
37 |
|
|
18,686 |
|
|
33,331 |
|
| Depreciation expenses |
|
(687) |
|
|
(4,509) |
|
|
— |
|
|
(987) |
|
|
(11,088) |
|
|
(17,271) |
|
| Transfer to property, plant and equipment |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
| Other increases (decreases) |
|
(228) |
|
|
(1,586) |
|
|
— |
|
|
— |
|
|
(1,920) |
|
|
(3,734) |
|
| Total changes |
|
(21) |
|
|
7,619 |
|
|
— |
|
|
(950) |
|
|
5,678 |
|
|
12,326 |
|
| Closing balance |
|
18,299 |
|
|
25,458 |
|
|
— |
|
|
855 |
|
|
28,581 |
|
|
73,193 |
|
The Company’s lease activities included the following aspects:
(a)The nature of the Company’s lease activities is related to contracts focused primarily on business operations, mainly rights-of-use to equipment and real estate,
(b)The Company does not estimate any significant future cash outflows that would potentially expose the Company, and these are likewise not reflected in the measurement of lease liabilities, related to concepts such as: (i) Variable lease payments, (ii) Extension options and termination options, (iii) Guaranteed residual value and (iv) Leases not yet undertaken but committed by the Company.
(c)These are not subject to restrictions or agreements imposed by contracts.
There were no sales transactions with leases later in the period.
13.2 Lease liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Lease liabilities |
|
As of December 31, 2024 |
|
As of December 31, 2023 |
|
Current |
|
Non-Current |
|
Current |
|
Non-Current |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Lease liabilities |
|
23,011 |
|
|
60,801 |
|
|
18,192 |
|
|
56,966 |
|
| Total |
|
23,011 |
|
|
60,801 |
|
|
18,192 |
|
|
56,966 |
|
i) Current and non-current lease liabilities
(a) As of December 31, 2024 and 2023, current lease liabilities are analyzed as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Debtor |
|
Creditor |
|
Contract indexation unit |
|
Effective rate |
|
Nominal amounts as of December 31,2024 |
|
Nominal amounts as of December 31,2024 |
| Tax ID No. |
|
Company |
|
Country |
|
Supplier |
|
|
|
Up to 90 days |
|
90 days to 1 year |
|
Total |
|
Up to 90 days |
|
90 days to 1 year |
|
Total |
|
|
|
|
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| 79.626.800-K |
|
SQM Salar SpA |
|
Chile |
|
Contract supplier |
|
Peso |
|
3.42% |
|
2,813 |
|
|
8,438 |
|
|
11,251 |
|
|
2,482 |
|
|
7,591 |
|
|
10,073 |
|
| 79.626.800-K |
|
SQM Salar SpA |
|
Chile |
|
Contract supplier |
|
UF |
|
2.47% |
|
361 |
|
|
1,065 |
|
|
1,426 |
|
|
339 |
|
|
1,017 |
|
|
1,356 |
|
| 79.947.100-0 |
|
SQM Industrial S.A. |
|
Chile |
|
Contract supplier |
|
Peso |
|
3.52% |
|
65 |
|
|
58 |
|
|
123 |
|
|
64 |
|
|
56 |
|
|
120 |
|
| 79.947.100-0 |
|
SQM Industrial S.A. |
|
Chile |
|
Contract supplier |
|
UF |
|
2.45% |
|
658 |
|
|
1,911 |
|
|
2,569 |
|
|
589 |
|
|
1,724 |
|
|
2,313 |
|
| 79.768.170-9 |
|
Soquimich Comercial S.A. |
|
Chile |
|
Contract supplier |
|
UF |
|
3.75% |
|
336 |
|
|
954 |
|
|
1,290 |
|
|
324 |
|
|
874 |
|
|
1,198 |
|
| 76.359.919-1 |
|
Orcoma SpA |
|
Chile |
|
Contract supplier |
|
Peso |
|
6.80% |
|
2 |
|
|
7 |
|
|
9 |
|
|
2 |
|
|
4 |
|
|
6 |
|
| 76.359.919-1 |
|
Orcoma SpA |
|
Chile |
|
Contract supplier |
|
UF |
|
2.35% |
|
1 |
|
|
1 |
|
|
2 |
|
|
1 |
|
|
1 |
|
|
2 |
|
| Foreign |
|
SQM Australia Pty |
|
Australia |
|
Contract supplier |
|
Australian dollar |
|
5.36% |
|
687 |
|
|
1,999 |
|
|
2,686 |
|
|
683 |
|
|
1,989 |
|
|
2,672 |
|
| Foreign |
|
SQM Comercial de México S.A. de C.V. |
|
Mexico |
|
Contract supplier |
|
Dollar |
|
5.05% |
|
734 |
|
|
1,455 |
|
|
2,189 |
|
|
692 |
|
|
1,370 |
|
|
2,062 |
|
| Foreign |
|
SQM Comercial de México S.A. de C.V. |
|
Mexico |
|
Contract supplier |
|
Mexican Peso |
|
6.37% |
|
317 |
|
|
537 |
|
|
854 |
|
|
290 |
|
|
475 |
|
|
765 |
|
| Foreign |
|
SQM Europe N.V. |
|
Belgium |
|
Contract supplier |
|
Euro |
|
3.07% |
|
121 |
|
|
364 |
|
|
485 |
|
|
97 |
|
|
296 |
|
|
393 |
|
| Foreign |
|
SQM North América Corp. |
|
United States |
|
Contract supplier |
|
Dollar |
|
5.25% |
|
74 |
|
|
221 |
|
|
295 |
|
|
68 |
|
|
204 |
|
|
272 |
|
| Foreign |
|
SQM África Pty |
|
South Africa |
|
Contract supplier |
|
Rand |
|
9.20% |
|
370 |
|
|
929 |
|
|
1,299 |
|
|
316 |
|
|
823 |
|
|
1,139 |
|
| Foreign |
|
SQM Colombia S.A.S. |
|
Colombia |
|
Contract supplier |
|
Colombian Peso |
|
12.86% |
|
66 |
|
|
200 |
|
|
266 |
|
|
66 |
|
|
200 |
|
|
266 |
|
| Foreign |
|
SQM Iberian |
|
Spain |
|
Contract supplier |
|
Euro |
|
3.25% |
|
15 |
|
|
46 |
|
|
61 |
|
|
14 |
|
|
44 |
|
|
58 |
|
| Foreign |
|
SQM Comercial Perú S.A.C. |
|
Peru |
|
Contract supplier |
|
Dollar |
|
6.83% |
|
31 |
|
|
91 |
|
|
122 |
|
|
31 |
|
|
91 |
|
|
122 |
|
| Foreign |
|
SQM India Private Limited |
|
India |
|
Contract supplier |
|
INR |
|
2.84% |
|
9 |
|
|
26 |
|
|
35 |
|
|
9 |
|
|
26 |
|
|
35 |
|
| Foreign |
|
SQM Comercial Brasil |
|
Brazil |
|
Contract supplier |
|
Brazilian real |
|
2.55% |
|
5 |
|
|
13 |
|
|
18 |
|
|
4 |
|
|
13 |
|
|
17 |
|
| Foreign |
|
SQM Japan Co. Ltd. |
|
Japan |
|
Contract supplier |
|
JPY |
|
2.38% |
|
7 |
|
|
21 |
|
|
28 |
|
|
7 |
|
|
21 |
|
|
28 |
|
| Foreign |
|
SQM Shanghái Industrial Co |
|
China |
|
Contract supplier |
|
CNY |
|
2.46% |
|
30 |
|
|
90 |
|
|
120 |
|
|
28 |
|
|
86 |
|
|
114 |
|
| Total |
|
|
|
|
|
|
|
|
|
|
|
6,702 |
|
|
18,426 |
|
|
25,128 |
|
|
6,106 |
|
|
16,905 |
|
|
23,011 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Debtor |
|
Creditor |
|
Contract indexation unit |
|
Effective rate |
|
Nominal amounts as of December 31,2023 |
|
Nominal amounts as of December 31,2023 |
| Tax ID No. |
|
Company |
|
Country |
|
Supplier |
|
|
|
Up to 90 days |
|
90 days to 1 year |
|
Total |
|
Up to 90 days |
|
90 days to 1 year |
|
Total |
|
|
|
|
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| 93.007.000-9 |
|
SQM S.A. |
|
Chile |
|
Contract supplier |
|
UF |
|
3.49% |
|
20 |
|
|
46 |
|
|
66 |
|
|
19 |
|
|
46 |
|
|
65 |
|
| 79.626.800-K |
|
SQM Salar S.A. |
|
Chile |
|
Contract supplier |
|
Peso |
|
3.02% |
|
344 |
|
|
1,034 |
|
|
1,378 |
|
|
321 |
|
|
977 |
|
|
1,298 |
|
| 79.626.800-K |
|
SQM Salar S.A. |
|
Chile |
|
Contract supplier |
|
UF |
|
2.54% |
|
1,492 |
|
|
4,040 |
|
|
5,532 |
|
|
1,400 |
|
|
3,718 |
|
|
5,118 |
|
| 79.947.100-0 |
|
SQM Industrial S.A. |
|
Chile |
|
Contract supplier |
|
UF |
|
2.58% |
|
726 |
|
|
1,863 |
|
|
2,589 |
|
|
645 |
|
|
1,640 |
|
|
2,285 |
|
| 96.592.190-7 |
|
SQM Nitratos S.A. |
|
Chile |
|
Contract supplier |
|
UF |
|
3.49% |
|
18 |
|
|
43 |
|
|
61 |
|
|
18 |
|
|
42 |
|
|
60 |
|
| 79.768.170-9 |
|
Soquimich Comercial S.A. |
|
Chile |
|
Contract supplier |
|
UF |
|
2.97% |
|
374 |
|
|
1,123 |
|
|
1,497 |
|
|
336 |
|
|
956 |
|
|
1,292 |
|
| 76.359.919-1 |
|
Orcoma SpA |
|
Chile |
|
Contract supplier |
|
Peso |
|
6.16% |
|
2 |
|
|
7 |
|
|
9 |
|
|
2 |
|
|
2 |
|
|
4 |
|
| 76.359.919-1 |
|
Orcoma SpA |
|
Chile |
|
Contract supplier |
|
UF |
|
6.80% |
|
1 |
|
|
2 |
|
|
3 |
|
|
1 |
|
|
2 |
|
|
3 |
|
| Foreign |
|
SQM Australia Pty |
|
Australia |
|
Contract supplier |
|
Australian dollar |
|
4.93% |
|
725 |
|
|
1,896 |
|
|
2,621 |
|
|
721 |
|
|
1,884 |
|
|
2,605 |
|
| Foreign |
|
SQM Comercial de México S.A. de C.V. |
|
Mexico |
|
Contract supplier |
|
Dollar |
|
3.74% |
|
711 |
|
|
2,131 |
|
|
2,842 |
|
|
633 |
|
|
1,953 |
|
|
2,586 |
|
| Foreign |
|
SQM Comercial de México S.A. de C.V. |
|
Mexico |
|
Contract supplier |
|
Mexican peso |
|
9.73% |
|
262 |
|
|
789 |
|
|
1,051 |
|
|
240 |
|
|
747 |
|
|
987 |
|
| Foreign |
|
SQM Europe N.V. |
|
Belgium |
|
Contract supplier |
|
Euro |
|
1.30% |
|
121 |
|
|
364 |
|
|
485 |
|
|
94 |
|
|
287 |
|
|
381 |
|
| Foreign |
|
SQM North América Corp. |
|
United States |
|
Contract supplier |
|
Dollar |
|
3.67% |
|
106 |
|
|
267 |
|
|
373 |
|
|
97 |
|
|
244 |
|
|
341 |
|
| Foreign |
|
SQM África Pty |
|
South Africa |
|
Contract supplier |
|
Rand |
|
9.20% |
|
344 |
|
|
1,007 |
|
|
1,351 |
|
|
267 |
|
|
820 |
|
|
1,087 |
|
| Foreign |
|
SQM Colombia S.A.S. |
|
Colombia |
|
Contract supplier |
|
Colombian peso |
|
2.45% |
|
5 |
|
|
17 |
|
|
22 |
|
|
5 |
|
|
17 |
|
|
22 |
|
| Foreign |
|
SQM Iberian |
|
Spain |
|
Contract supplier |
|
Euro |
|
3.25% |
|
15 |
|
|
48 |
|
|
63 |
|
|
14 |
|
|
44 |
|
|
58 |
|
| Total |
|
|
|
|
|
|
|
|
|
|
|
5,266 |
|
|
14,677 |
|
|
19,943 |
|
|
4,813 |
|
|
13,379 |
|
|
18,192 |
|
(b) As of December 31, 2024 and 2023, the non-current lease liabilities are analyzed as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Debtor |
|
Creditor |
|
Contract indexation unit |
|
Effective rate |
|
Nominal amounts as of December 31,2024 |
|
Amounts at amortized cost as of December 31, 2024 |
| Tax ID No. |
|
Company |
|
Country |
|
Supplier |
|
|
|
1-2 Years |
|
2-3 Years |
|
3-4 Years |
|
Total |
|
1-2 Years |
|
2-3 Years |
|
3-4 Years |
|
Total |
|
|
|
|
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| 79.626.800-K |
|
SQM Salar SpA |
|
Chile |
|
Contract supplier |
|
Peso |
|
3.42% |
|
17,661 |
|
|
5,100 |
|
|
— |
|
|
22,761 |
|
|
16,676 |
|
|
4,968 |
|
|
— |
|
|
21,644 |
|
| 79.626.800-K |
|
SQM Salar SpA |
|
Chile |
|
Contract supplier |
|
UF |
|
2.39% |
|
1,565 |
|
|
308 |
|
|
— |
|
|
1,873 |
|
|
1,505 |
|
|
306 |
|
|
— |
|
|
1,811 |
|
| 79.947.100-0 |
|
SQM Industrial S.A. |
|
Chile |
|
Contract supplier |
|
Peso |
|
6.02% |
|
37 |
|
|
— |
|
|
— |
|
|
37 |
|
|
36 |
|
|
— |
|
|
— |
|
|
36 |
|
| 79.947.100-0 |
|
SQM Industrial S.A. |
|
Chile |
|
Contract supplier |
|
UF |
|
3.10% |
|
3,730 |
|
|
4,040 |
|
|
— |
|
|
7,770 |
|
|
3,382 |
|
|
3,905 |
|
|
— |
|
|
7,287 |
|
| 79.768.170-9 |
|
Soquimich Comercial S.A. |
|
Chile |
|
Contract supplier |
|
UF |
|
4.23% |
|
1,650 |
|
|
362 |
|
|
— |
|
|
2,012 |
|
|
1,574 |
|
|
357 |
|
|
— |
|
|
1,931 |
|
| 76.359.919-1 |
|
Orcoma SpA |
|
Chile |
|
Contract supplier |
|
Peso |
|
6.80% |
|
18 |
|
|
26 |
|
|
28 |
|
|
72 |
|
|
11 |
|
|
19 |
|
|
25 |
|
|
55 |
|
| Foreign |
|
SQM North América Corp. |
|
United States |
|
Contract supplier |
|
Dollar |
|
5.52% |
|
562 |
|
|
6 |
|
|
— |
|
|
568 |
|
|
542 |
|
|
6 |
|
|
— |
|
|
548 |
|
| Foreign |
|
SQM Comercial de México S.A. de C.V. |
|
Mexico |
|
Contract supplier |
|
Mexican peso |
|
9.75% |
|
766 |
|
|
574 |
|
|
— |
|
|
1,340 |
|
|
663 |
|
|
549 |
|
|
— |
|
|
1,212 |
|
| Foreign |
|
SQM Comercial de México S.A. de C.V. |
|
Mexico |
|
Contract supplier |
|
Dollar |
|
4.46% |
|
1,521 |
|
|
— |
|
|
— |
|
|
1,521 |
|
|
1,489 |
|
|
— |
|
|
— |
|
|
1,489 |
|
| Foreign |
|
SQM Australia Pty |
|
Australia |
|
Contract supplier |
|
Australian dollar |
|
5.29% |
|
3,253 |
|
|
15,998 |
|
|
— |
|
|
19,251 |
|
|
3,249 |
|
|
15,998 |
|
|
— |
|
|
19,247 |
|
| Foreign |
|
SQM África Pty |
|
South Africa |
|
Contract supplier |
|
Rand |
|
9.43% |
|
1,222 |
|
|
— |
|
|
— |
|
|
1,222 |
|
|
1,105 |
|
|
— |
|
|
— |
|
|
1,105 |
|
| Foreign |
|
SQM Colombia S.A.S. |
|
Colombia |
|
Contract supplier |
|
Colombian peso |
|
14.83% |
|
1,200 |
|
|
— |
|
|
— |
|
|
1,200 |
|
|
1,198 |
|
|
— |
|
|
— |
|
|
1,198 |
|
| Foreign |
|
SQM Europe N.V. |
|
Belgium |
|
Contract supplier |
|
Euro |
|
3.07% |
|
970 |
|
|
1,455 |
|
|
647 |
|
|
3,072 |
|
|
823 |
|
|
1,332 |
|
|
633 |
|
|
2,788 |
|
| Foreign |
|
SQM Iberian |
|
Spain |
|
Contract supplier |
|
Euro |
|
3.25% |
|
76 |
|
|
16 |
|
|
— |
|
|
92 |
|
|
60 |
|
|
16 |
|
|
— |
|
|
76 |
|
| Foreign |
|
SQM Comercial Perú S.A.C. |
|
Peru |
|
Contract supplier |
|
Dollar |
|
8.01% |
|
94 |
|
|
— |
|
|
— |
|
|
94 |
|
|
94 |
|
|
— |
|
|
— |
|
|
94 |
|
| Foreign |
|
SQM Soquimich Brasil |
|
Brazil |
|
Contract supplier |
|
Brazilian real |
|
2.62% |
|
21 |
|
|
— |
|
|
— |
|
|
21 |
|
|
21 |
|
|
— |
|
|
— |
|
|
21 |
|
| Foreign |
|
SQM India Private Limited |
|
India |
|
Contract supplier |
|
INR |
|
2.84% |
|
18 |
|
|
— |
|
|
— |
|
|
18 |
|
|
18 |
|
|
— |
|
|
— |
|
|
18 |
|
| Foreign |
|
SQM Japan Co. Ltd. |
|
Japan |
|
Contract supplier |
|
JPY |
|
2.38% |
|
14 |
|
|
— |
|
|
— |
|
|
14 |
|
|
14 |
|
|
— |
|
|
— |
|
|
14 |
|
| Foreign |
|
SQM Shanghái Industrial Co |
|
China |
|
Contract supplier |
|
CNY |
|
2.46% |
|
231 |
|
|
— |
|
|
— |
|
|
231 |
|
|
227 |
|
|
— |
|
|
— |
|
|
227 |
|
| Total |
|
|
|
|
|
|
|
|
|
|
|
34,609 |
|
|
27,885 |
|
|
675 |
|
|
63,169 |
|
|
32,687 |
|
|
27,456 |
|
|
658 |
|
|
60,801 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Debtor |
|
Creditor |
|
Contract indexation unit |
|
Effective rate |
|
Nominal amounts as of December 31,2023 |
|
Amounts at amortized cost as of December 31, 2023 |
| Tax ID No. |
|
Company |
|
Country |
|
Supplier |
|
|
1-2 Years |
|
2-3 Years |
|
3-4 Years |
|
Total |
|
1-2 Years |
|
2-3 Years |
|
3-4 Years |
|
Total |
|
|
|
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| 79.626.800-K |
|
SQM Salar S.A. |
|
Chile |
|
Contract supplier |
|
Peso |
|
2.61% |
|
1,176 |
|
|
1,079 |
|
|
— |
|
|
2,255 |
|
|
1,133 |
|
|
1,064 |
|
|
— |
|
|
2,197 |
|
| 79.626.800-K |
|
SQM Salar S.A. |
|
Chile |
|
Contract supplier |
|
UF |
|
2.88% |
|
6,185 |
|
|
3,728 |
|
|
— |
|
|
9,913 |
|
|
5,901 |
|
|
3,630 |
|
|
— |
|
|
9,531 |
|
| 79.947.100-0 |
|
SQM Industrial S.A. |
|
Chile |
|
Contract supplier |
|
UF |
|
2.06% |
|
3,799 |
|
|
5,594 |
|
|
311 |
|
|
9,704 |
|
|
3,348 |
|
|
5,312 |
|
|
310 |
|
|
8,970 |
|
| 79.768.170-9 |
|
Soquimich Comercial S.A. |
|
Chile |
|
Contract supplier |
|
UF |
|
2.97% |
|
1,844 |
|
|
969 |
|
|
181 |
|
|
2,994 |
|
|
2,020 |
|
|
938 |
|
|
173 |
|
|
3,131 |
|
| 76.359.919-1 |
|
Orcoma SpA |
|
Chile |
|
Contract supplier |
|
Peso |
|
6.80% |
|
18 |
|
|
26 |
|
|
37 |
|
|
81 |
|
|
8 |
|
|
12 |
|
|
41 |
|
|
61 |
|
| Foreign |
|
SQM North América Corp. |
|
United States |
|
Contract supplier |
|
Dollar |
|
4.99% |
|
524 |
|
|
265 |
|
|
— |
|
|
789 |
|
|
484 |
|
|
260 |
|
|
— |
|
|
744 |
|
| Foreign |
|
SQM Comercial de México S.A. de C.V. |
|
Mexico |
|
Contract supplier |
|
Mexican Peso |
|
6.79% |
|
91 |
|
|
— |
|
|
— |
|
|
91 |
|
|
90 |
|
|
— |
|
|
— |
|
|
90 |
|
| Foreign |
|
SQM Comercial de México S.A. de C.V. |
|
Mexico |
|
Contract supplier |
|
Dollar |
|
5.25% |
|
3,197 |
|
|
1,131 |
|
|
— |
|
|
4,328 |
|
|
3,040 |
|
|
1,105 |
|
|
— |
|
|
4,145 |
|
| Foreign |
|
SQM Australia Pty |
|
Australia |
|
Contract supplier |
|
Australian dollar |
|
4.92% |
|
5,624 |
|
|
18,236 |
|
|
— |
|
|
23,860 |
|
|
5,618 |
|
|
16,916 |
|
|
— |
|
|
22,534 |
|
| Foreign |
|
SQM África Pty |
|
South Africa |
|
Contract supplier |
|
Rand |
|
9.20% |
|
1,276 |
|
|
591 |
|
|
659 |
|
|
2,526 |
|
|
1,182 |
|
|
483 |
|
|
581 |
|
|
2,246 |
|
| Foreign |
|
SQM Colombia S.A.S. |
|
Colombia |
|
Contract supplier |
|
Colombian peso |
|
2.17% |
|
1 |
|
|
— |
|
|
— |
|
|
1 |
|
|
1 |
|
|
— |
|
|
— |
|
|
1 |
|
| Foreign |
|
SQM Europe N.V |
|
Belgium |
|
Contract supplier |
|
Euro |
|
1.30% |
|
485 |
|
|
485 |
|
|
2,586 |
|
|
3,556 |
|
|
393 |
|
|
405 |
|
|
2,383 |
|
|
3,181 |
|
| Foreign |
|
SQM Iberian |
|
Spain |
|
Contract supplier |
|
Euro |
|
3.25% |
|
61 |
|
|
61 |
|
|
16 |
|
|
138 |
|
|
58 |
|
|
60 |
|
|
17 |
|
|
135 |
|
| Total |
|
|
|
|
|
|
|
|
|
|
|
24,281 |
|
|
32,165 |
|
|
3,790 |
|
|
60,236 |
|
|
23,276 |
|
|
30,185 |
|
|
3,505 |
|
|
56,966 |
|
Other lease disclosures
Total lease expenses related to lease payments that did not qualify under the scope of IFRS 16 were ThUS$ 86,872, ThUS$ 88,754 and ThUS$ 78,880 for the periods ended December 31, 2024, 2023 and 2022. See Note 20.8.
Expenses related to variable payments not included in lease liabilities were ThUS$6,138, ThUS$4,700 and ThUS$3,631 for the periods ending December 31, 2024, 2023 and 2022.
Income from subleases on right-of-use assets were ThUS$0, ThUS$5 and ThUS$142 as of December 31, 2024, 2023 and 2022, respectively.
Payments for contractual operating leases are disclosed in Note 4.2 Liquidity Risk.
Note 14 Intangible assets and goodwill
14.1 Reconciliation of changes in intangible assets and goodwill
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| As of December 31, 2024 |
| Intangible assets and goodwill |
|
Useful life |
|
Net Value |
|
|
|
|
ThUS$ |
| IT programs |
|
Finite |
|
8,430 |
|
| Mining rights |
|
Finite |
|
133,119 |
|
| Water rights and rights of way |
|
Indefinite |
|
4,909 |
|
| Water rights |
|
Finite |
|
3,791 |
|
| Intellectual property |
|
Finite |
|
14,761 |
|
| Other intangible assets |
|
Finite |
|
2,958 |
|
| Intangible assets other than goodwill |
|
|
|
167,968 |
|
| Goodwill |
|
Indefinite |
|
948 |
|
| Total Intangible Asset |
|
|
|
168,916 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| As of December 31, 2023 |
| Intangible assets and goodwill |
|
Useful life |
|
Net Value |
|
|
|
|
ThUS$ |
| IT programs |
|
Finite |
|
3,190 |
|
| Mining rights |
|
Finite |
|
134,924 |
|
| Water rights and rights of way |
|
Indefinite |
|
4,909 |
|
| Water rights |
|
Finite |
|
7,580 |
|
| Intellectual property |
|
Finite |
|
5,201 |
|
| Other intangible assets |
|
Finite |
|
70 |
|
| Intangible assets other than goodwill |
|
|
|
155,874 |
|
| Goodwill |
|
Indefinite |
|
958 |
|
| Total Intangible Asset |
|
|
|
156,832 |
|
a) Movements in identifiable intangible assets as of December 31, 2024:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Movements in identifiable intangible assets |
|
IT programs |
|
Mining rights,
Finite |
|
Water rights,
and rights of
way, Indefinite |
|
Water rights
Finite |
|
Intellectual
property |
|
Other intangible
assets |
|
Goodwill |
|
Total |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| At January 1, 2024 |
|
3,190 |
|
|
134,924 |
|
|
4,909 |
|
|
7,580 |
|
|
5,201 |
|
|
70 |
|
|
958 |
|
|
156,832 |
|
| Additions |
|
6,700 |
|
|
— |
|
|
— |
|
|
— |
|
|
10,130 |
|
|
378 |
|
|
— |
|
|
17,208 |
|
| Amortization for the year |
|
(1,430) |
|
|
(1,608) |
|
|
— |
|
|
(3,789) |
|
|
(805) |
|
|
(126) |
|
|
— |
|
|
(7,758) |
|
| Impairment losses recognized in income for the period |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(10) |
|
|
(10) |
|
| Other increases / decreases for foreign currency exchange rates |
|
(41) |
|
|
3,694 |
|
|
— |
|
|
— |
|
|
— |
|
|
(24) |
|
|
— |
|
|
3,629 |
|
| Other increases (decreases) |
|
11 |
|
|
(3,891) |
|
|
— |
|
|
— |
|
|
235 |
|
|
2,660 |
|
|
— |
|
|
(985) |
|
| Subtotal |
|
5,240 |
|
|
(1,805) |
|
|
— |
|
|
(3,789) |
|
|
9,560 |
|
|
2,888 |
|
|
(10) |
|
|
12,084 |
|
| As of December 31, 2024 |
|
8,430 |
|
|
133,119 |
|
|
4,909 |
|
|
3,791 |
|
|
14,761 |
|
|
2,958 |
|
|
948 |
|
|
168,916 |
|
| Historical cost |
|
43,851 |
|
|
162,492 |
|
|
7,420 |
|
|
18,000 |
|
|
17,580 |
|
|
5,314 |
|
|
4,491 |
|
|
259,148 |
|
| Accumulated amortization |
|
(35,421) |
|
|
(29,373) |
|
|
(2,511) |
|
|
(14,209) |
|
|
(2,819) |
|
|
(2,356) |
|
|
(3,543) |
|
|
(90,232) |
|
| At January 1, 2023 |
|
3,249 |
|
|
140,873 |
|
|
4,909 |
|
|
11,369 |
|
|
5,850 |
|
|
86 |
|
|
967 |
|
|
167,303 |
|
| Additions |
|
197 |
|
|
196 |
|
|
— |
|
|
— |
|
|
— |
|
|
15 |
|
|
— |
|
|
408 |
|
| Amortization for the year |
|
(1,451) |
|
|
(4,684) |
|
|
— |
|
|
(3,789) |
|
|
(649) |
|
|
(28) |
|
|
— |
|
|
(10,601) |
|
| Impairment losses recognized in income for the year (1) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(9) |
|
|
(9) |
|
| Other increases / decreases for foreign currency exchange rates |
|
6 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(3) |
|
|
— |
|
|
3 |
|
| Other increases (decreases) |
|
1,189 |
|
|
(1,461) |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(272) |
|
| Subtotal |
|
(59) |
|
|
(5,949) |
|
|
— |
|
|
(3,789) |
|
|
(649) |
|
|
(16) |
|
|
(9) |
|
|
(10,471) |
|
| As of December 31, 2023 |
|
3,190 |
|
|
134,924 |
|
|
4,909 |
|
|
7,580 |
|
|
5,201 |
|
|
70 |
|
|
958 |
|
|
156,832 |
|
| Historical cost |
|
37,849 |
|
|
161,451 |
|
|
7,420 |
|
|
18,000 |
|
|
7,215 |
|
|
2,303 |
|
|
4,492 |
|
|
238,730 |
|
| Accumulated amortization |
|
(34,659) |
|
|
(26,527) |
|
|
(2,511) |
|
|
(10,420) |
|
|
(2,014) |
|
|
(2,233) |
|
|
(3,534) |
|
|
(81,898) |
|
(1)See Note 21.5.
(b) Movements in identifiable goodwill as of December 31, 2024 and 2023:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated impairment
Movements in identifiable
goodwill |
|
Goodwill at the beginning
of period January 1, 2024 |
|
Additional
recognition |
|
Impairment losses recognized in
income for the year (-) |
|
Total increase
(decrease) |
|
Total |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| SQM Iberian S.A. |
|
148 |
|
|
— |
|
|
(10) |
|
|
(10) |
|
|
138 |
|
| SQM Investment Corporation |
|
86 |
|
|
— |
|
|
— |
|
|
— |
|
|
86 |
|
| SQM Potasio SpA |
|
724 |
|
|
— |
|
|
— |
|
|
— |
|
|
724 |
|
| Ending balance |
|
958 |
|
|
— |
|
|
(10) |
|
|
(10) |
|
|
948 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Accumulated impairment
Movements in identifiable
goodwill |
|
Goodwill at the beginning
of period January 1, 2023 |
|
Additional
recognition |
|
Impairment losses recognized in income for the year (-) |
|
Total increase
(decrease) |
|
Total |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| SQM Iberian S.A. |
|
148 |
|
|
— |
|
|
— |
|
|
— |
|
|
148 |
|
| SQM Investment Corporation |
|
86 |
|
|
— |
|
|
— |
|
|
— |
|
|
86 |
|
| Soquimich European Holding B.V. (*) |
|
9 |
|
|
— |
|
|
(9) |
|
|
(9) |
|
|
— |
|
| SQM Potasio S.A. |
|
724 |
|
|
— |
|
|
— |
|
|
— |
|
|
724 |
|
| Ending balance |
|
967 |
|
|
— |
|
|
(9) |
|
|
(9) |
|
|
958 |
|
(*)Based on an impairment analysis conducted by management, this goodwill was adjusted for based on the assessment that its partial or total book value is not recoverable.
Note 15 Property, plant and equipment
As of December 31, 2024, and 2023, the detail of property, plant and equipment is as follows:
15.1 Types of property, plant and equipment
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Description of types of property, plant and equipment |
|
As of
December 31,
2024 |
|
As of
December 31,
2023 |
|
|
ThUS$ |
|
ThUS$ |
| Property, plant and equipment, net |
|
|
|
|
| Land |
|
24,698 |
|
|
23,481 |
|
| Buildings |
|
340,807 |
|
|
285,487 |
|
| Other property, plant and equipment |
|
135,091 |
|
|
62,739 |
|
| Transport equipment |
|
8,125 |
|
|
9,165 |
|
| Supplies and accessories |
|
4,405 |
|
|
4,139 |
|
| Office equipment |
|
1,435 |
|
|
1,158 |
|
| Network and communication equipment |
|
1,518 |
|
|
1,605 |
|
| Mining assets |
|
162,074 |
|
|
154,715 |
|
| IT equipment |
|
5,281 |
|
|
2,092 |
|
| Energy generating assets |
|
2,269 |
|
|
2,893 |
|
| Constructions in progress |
|
1,957,128 |
|
|
1,834,041 |
|
| Machinery, plant and equipment |
|
1,790,814 |
|
|
1,228,422 |
|
| Total |
|
4,433,645 |
|
|
3,609,937 |
|
| Property, plant and equipment, gross |
|
|
|
|
| Land |
|
24,698 |
|
|
23,481 |
|
| Buildings |
|
947,585 |
|
|
851,706 |
|
| Other property, plant and equipment |
|
378,013 |
|
|
291,053 |
|
| Transport equipment |
|
21,737 |
|
|
22,143 |
|
| Supplies and accessories |
|
32,863 |
|
|
31,132 |
|
| Office equipment |
|
13,820 |
|
|
13,346 |
|
| Network and communication equipment |
|
11,411 |
|
|
11,644 |
|
| Mining assets |
|
370,504 |
|
|
341,837 |
|
| IT equipment |
|
33,819 |
|
|
29,384 |
|
| Energy generating assets |
|
38,929 |
|
|
38,929 |
|
| Constructions in progress |
|
1,957,128 |
|
|
1,834,041 |
|
| Machinery, plant and equipment |
|
4,989,892 |
|
|
4,189,794 |
|
| Total |
|
8,820,399 |
|
|
7,678,490 |
|
| Accumulated depreciation and value impairment of property, plant and equipment, total |
|
|
|
|
| Accumulated depreciation and impairment of buildings |
|
(606,778) |
|
|
(566,219) |
|
| Accumulated depreciation and impairment of other property, plant and equipment |
|
(242,922) |
|
|
(228,314) |
|
| Accumulated depreciation and impairment of transport equipment |
|
(13,612) |
|
|
(12,978) |
|
| Accumulated depreciation and impairment of supplies and accessories |
|
(28,458) |
|
|
(26,993) |
|
| Accumulated depreciation and impairment of office equipment |
|
(12,385) |
|
|
(12,188) |
|
| Accumulated depreciation and impairment of network and communication equipment |
|
(9,893) |
|
|
(10,039) |
|
| Accumulated depreciation and impairment of mining assets |
|
(208,430) |
|
|
(187,122) |
|
| Accumulated depreciation and impairment of IT equipment |
|
(28,538) |
|
|
(27,292) |
|
| Accumulated depreciation and impairment of energy generating assets |
|
(36,660) |
|
|
(36,036) |
|
| Accumulated depreciation and impairment of machinery, plant and equipment |
|
(3,199,078) |
|
|
(2,961,372) |
|
| Total |
|
(4,386,754) |
|
|
(4,068,553) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Description of classes of property, plant and equipment |
|
As of
December 31,
2024 |
|
As of
December 31,
2023 |
|
|
ThUS$ |
|
ThUS$ |
| Property, plant and equipment, net |
|
|
|
|
| Pumps |
|
133,863 |
|
|
61,385 |
|
| Conveyor Belt |
|
15,622 |
|
|
16,589 |
|
| Crystallizer |
|
60,888 |
|
|
56,930 |
|
| Plant Equipment |
|
332,127 |
|
|
285,653 |
|
| Tanks |
|
62,657 |
|
|
39,422 |
|
| Filter |
|
79,456 |
|
|
69,246 |
|
| Electrical equipment/facilities |
|
149,728 |
|
|
110,255 |
|
| Other Property, Plant & Equipment |
|
326,923 |
|
|
68,967 |
|
| Site Closure |
|
34,828 |
|
|
40,696 |
|
| Piping |
|
207,595 |
|
|
142,013 |
|
| Well |
|
167,942 |
|
|
156,621 |
|
| Pond |
|
36,627 |
|
|
34,957 |
|
| Spare Parts (1) |
|
182,558 |
|
|
145,688 |
|
| Total |
|
1,790,814 |
|
|
1,228,422 |
|
________________________________________________
(1)The reconciliation of the spare parts provisions as of December 31, 2024 and 2023 is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Reconciliation |
|
As of
December 31,
2024 |
|
As of
December 31,
2023 |
|
|
ThUS$ |
|
ThUS$ |
| Opening balance |
|
58,600 |
|
52,072 |
| Increase in provision |
|
3,913 |
|
6,528 |
| Closing balance |
|
62,513 |
|
58,600 |
15.2 Reconciliation of changes in property, plant and equipment by type:
Reconciliation of changes in property, plant and equipment by class as of December 31, 2024 and 2023:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation of changes in property,
plant and equipment by class as of
|
|
Land |
|
Buildings |
|
Other
property,
plant and
equipment
|
|
Transport
equipment
|
|
Supplies
and
accessories
|
|
Equipment
office
|
|
Network and
communication
equipment
|
|
Mining
assets
|
|
IT
equipment
|
|
Energy
generating
assets
|
|
Assets
under
construction
|
|
Machinery,
plant and
equipment
|
|
Total |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| At January 1, 2024 |
|
23,481 |
|
|
285,487 |
|
|
62,739 |
|
|
9,165 |
|
|
4,139 |
|
|
1,158 |
|
|
1,605 |
|
|
154,715 |
|
|
2,092 |
|
|
2,893 |
|
|
1,834,041 |
|
|
1,228,422 |
|
|
3,609,937 |
|
| Additions |
|
— |
|
|
9,831 |
|
|
21,109 |
|
|
— |
|
|
99 |
|
|
230 |
|
|
3 |
|
|
6,723 |
|
|
2,432 |
|
|
— |
|
|
770,525 |
|
|
174,142 |
|
|
985,094 |
|
| Disposals |
|
— |
|
|
— |
|
|
— |
|
|
(135) |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(135) |
|
| Depreciation for the year |
|
— |
|
|
(40,570) |
|
|
(14,781) |
|
|
(905) |
|
|
(1,510) |
|
|
(291) |
|
|
(582) |
|
|
(21,308) |
|
|
(2,261) |
|
|
(625) |
|
|
|
|
(229,168) |
|
|
(312,001) |
|
| Impairment (2) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(10,759) |
|
|
(10,759) |
|
| Increase (decrease) in foreign currency translation difference |
|
— |
|
|
(180) |
|
|
(1) |
|
|
— |
|
|
(3) |
|
|
— |
|
|
— |
|
|
— |
|
|
(1) |
|
|
— |
|
|
(305) |
|
|
(646) |
|
|
(1,136) |
|
| Reclassifications |
|
(116) |
|
|
58,986 |
|
|
65,361 |
|
|
— |
|
|
1,314 |
|
|
278 |
|
|
489 |
|
|
21,944 |
|
|
3,231 |
|
|
— |
|
|
(662,051) |
|
|
510,564 |
|
|
— |
|
| Other increases (decreases) (1) |
|
1,333 |
|
|
27,253 |
|
|
664 |
|
|
— |
|
|
366 |
|
|
60 |
|
|
3 |
|
|
— |
|
|
(212) |
|
|
1 |
|
|
14,918 |
|
|
118,259 |
|
|
162,645 |
|
| Decreases for classification as held for sale |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
| Subtotal |
|
1,217 |
|
|
55,320 |
|
|
72,352 |
|
|
(1,040) |
|
|
266 |
|
|
277 |
|
|
(87) |
|
|
7,359 |
|
|
3,189 |
|
|
(624) |
|
|
123,087 |
|
|
562,392 |
|
|
823,708 |
|
| As of December 31, 2024 |
|
24,698 |
|
|
340,807 |
|
|
135,091 |
|
|
8,125 |
|
|
4,405 |
|
|
1,435 |
|
|
1,518 |
|
|
162,074 |
|
|
5,281 |
|
|
2,269 |
|
|
1,957,128 |
|
|
1,790,814 |
|
|
4,433,645 |
|
| Historical cost |
|
24,698 |
|
|
947,585 |
|
|
378,013 |
|
|
21,737 |
|
|
32,863 |
|
|
13,820 |
|
|
11,411 |
|
|
370,504 |
|
|
33,819 |
|
|
38,929 |
|
|
1,957,128 |
|
|
4,989,892 |
|
|
8,820,399 |
|
| Accumulated depreciation |
|
— |
|
|
(606,778) |
|
|
(242,922) |
|
|
(13,612) |
|
|
(28,458) |
|
|
(12,385) |
|
|
(9,893) |
|
|
(208,430) |
|
|
(28,538) |
|
|
(36,660) |
|
|
— |
|
|
(3,199,078) |
|
|
(4,386,754) |
|
| At January 1, 2023 |
|
23,482 |
|
|
273,913 |
|
|
34,960 |
|
|
9,487 |
|
|
4,798 |
|
|
1,355 |
|
|
1,872 |
|
|
60,284 |
|
|
3,147 |
|
|
3,253 |
|
|
1,328,508 |
|
|
981,779 |
|
|
2,726,838 |
|
| Additions |
|
— |
|
|
— |
|
|
545 |
|
|
— |
|
|
52 |
|
|
8 |
|
|
208 |
|
|
— |
|
|
207 |
|
|
— |
|
|
1,091,840 |
|
|
2,347 |
|
|
1,095,207 |
|
| Disposals |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(1) |
|
|
— |
|
|
— |
|
|
(17) |
|
|
(18) |
|
| Depreciation for the year |
|
— |
|
|
(37,315) |
|
|
(13,337) |
|
|
(1,155) |
|
|
(1,809) |
|
|
(230) |
|
|
(670) |
|
|
(16,603) |
|
|
(890) |
|
|
(749) |
|
|
— |
|
|
(179,989) |
|
|
(252,747) |
|
| Impairment (2) |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(47,059) |
|
|
(47,059) |
|
| Increase (decrease) in foreign currency translation difference |
|
(6) |
|
|
(7) |
|
|
(35) |
|
|
(1) |
|
|
— |
|
|
(7) |
|
|
— |
|
|
— |
|
|
(3) |
|
|
— |
|
|
— |
|
|
(39) |
|
|
(98) |
|
| Reclassifications |
|
— |
|
|
48,677 |
|
|
40,657 |
|
|
801 |
|
|
1,099 |
|
|
31 |
|
|
195 |
|
|
111,059 |
|
|
(447) |
|
|
389 |
|
|
(588,635) |
|
|
386,174 |
|
|
— |
|
| Other increases (decreases) (1) |
|
5 |
|
|
219 |
|
|
(51) |
|
|
33 |
|
|
(1) |
|
|
1 |
|
|
— |
|
|
(25) |
|
|
79 |
|
|
— |
|
|
2,328 |
|
|
85,226 |
|
|
87,814 |
|
| Decreases for classification as held for sale |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
| Subtotal |
|
(1) |
|
|
11,574 |
|
|
27,779 |
|
|
(322) |
|
|
(659) |
|
|
(197) |
|
|
(267) |
|
|
94,431 |
|
|
(1,055) |
|
|
(360) |
|
|
505,533 |
|
|
246,643 |
|
|
883,099 |
|
| As of December 31, 2023 |
|
23,481 |
|
|
285,487 |
|
|
62,739 |
|
|
9,165 |
|
|
4,139 |
|
|
1,158 |
|
|
1,605 |
|
|
154,715 |
|
|
2,092 |
|
|
2,893 |
|
|
1,834,041 |
|
|
1,228,422 |
|
|
3,609,937 |
|
| Historical cost |
|
23,481 |
|
|
851,706 |
|
|
291,053 |
|
|
22,143 |
|
|
31,132 |
|
|
13,346 |
|
|
11,644 |
|
|
341,837 |
|
|
29,384 |
|
|
38,929 |
|
|
1,834,041 |
|
|
4,189,794 |
|
|
7,678,490 |
|
| Accumulated depreciation |
|
— |
|
|
(566,219) |
|
|
(228,314) |
|
|
(12,978) |
|
|
(26,993) |
|
|
(12,188) |
|
|
(10,039) |
|
|
(187,122) |
|
|
(27,292) |
|
|
(36,036) |
|
|
— |
|
|
(2,961,372) |
|
|
(4,068,553) |
|
(1)The net balance of “Other Increases (Decreases)” corresponds to all those items that are reclassified to or from “Property, Plant and Equipment”, They can have the following origin: (i) work in progress which is expensed to the statement of income, forming part of operating costs or other expenses per function, as appropriate; (ii) the variation representing the purchase and use of materials and spare parts; (iii) projects corresponding mainly to exploration expenditures and ground studies that are reclassified to the item other non-current financial assets; (iv) software that is reclassified to “Intangibles (v) Provisions related to the investment plan and assets related to closing the site.
(2)See note 21.5. This impairment corresponds to identified assets identified that will not be used in the operation due to their specific characteristics relating to the iodine and nitrate segments.
15.3 Detail of property, plant and equipment pledged as guarantee
There are no restrictions in title or guarantees for compliance with obligations that affect property, plant and equipment.
15.4 Cost of capitalized interest, property, plant and equipment
The rates and costs for capitalized interest of property, plant and equipment are detailed as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Costs of capitalized interest |
|
As of
December 31,
2024 |
|
As of
December 31,
2023 |
|
|
ThUS$ |
|
ThUS$ |
| Weighted average capitalization rate of capitalized interest costs |
|
5 |
% |
|
5 |
% |
| Amount of interest cost capitalized |
|
67,126 |
|
|
43,331 |
|
Note 16 Other current and non-current non-financial assets
As of December 31, 2024, and 2023, the detail of “Other Current and Non-current Assets” is as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Other non-financial assets, current |
|
As of
December 31,
2024 |
|
As of
December 31,
2023 |
|
|
ThUS$ |
|
ThUS$ |
| Domestic Value Added Tax |
|
125,963 |
|
|
63,973 |
|
| Foreign Value Added Tax |
|
26,315 |
|
|
24,889 |
|
| Prepaid mining licenses |
|
3,326 |
|
|
1,299 |
|
| Prepaid insurance |
|
12,589 |
|
|
15,022 |
|
| Other prepayments |
|
1,391 |
|
|
3,204 |
|
| Refund of Value Added Tax to exporters |
|
24,601 |
|
|
19,929 |
|
| Other taxes |
|
4,189 |
|
|
6,142 |
|
| Other assets |
|
2,331 |
|
|
2,292 |
|
| Total |
|
200,705 |
|
|
136,750 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Other non-financial assets, non-current |
|
As of
December 31,
2024 |
|
As of
December 31,
2023 |
|
|
ThUS$ |
|
ThUS$ |
| Exploration and evaluation expenses |
|
65,510 |
|
|
57,458 |
|
| Guarantee deposits |
|
942 |
|
|
950 |
|
| Foreign VAT (1) |
|
289,921 |
|
308,084 |
| Other non-current assets |
|
7,793 |
|
|
7,208 |
|
| Total |
|
364,166 |
|
|
373,700 |
|
________________________________________________
(1) Value-added taxes to be recovered from the commercial office of SQM Shanghai Chemicals Co. Ltd., where that recovery is expected to take longer than 12 months.
Movements in assets for the exploration and evaluation of mineral resources as of December 31, 2024, and 2023:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Reconciliation |
|
As of
December 31,
2024 |
|
As of
December 31,
2023 |
|
As of
December 31,
2022 |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Opening balance |
|
57,458 |
|
|
44,023 |
|
|
26,752 |
|
| Changes |
|
|
|
|
|
|
| Additions |
|
10,701 |
|
|
12,002 |
|
|
11,341 |
|
| Reclassifications from/to short-term (inventory) |
|
(197) |
|
|
1,049 |
|
|
(465) |
|
| Amortization of ground studies |
|
(733) |
|
|
(2,131) |
|
|
(2,421) |
|
| Reclassification from construction in progress |
|
(1,719) |
|
|
2,515 |
|
|
8,816 |
|
| Total changes |
|
8,052 |
|
|
13,435 |
|
|
17,271 |
|
| Ending balance (*) |
|
65,510 |
|
|
57,458 |
|
|
44,023 |
|
As of December 31, 2024 and 2023, no reevaluations of assets for exploration and assessment of mineral resources have been conducted.
(*) This corresponds to the sum of expenditures for economically feasible exploration and exploration under operation (long-term).
Mineral resource exploration, evaluation and Exploitation expenditure
Given the nature of operations of the Company and the type of exploration it undertakes, disbursements for exploration can be found in 4 stages: Execution, economically feasible, not economically feasible and in exploitation:
(a)Not economically feasible: Exploration and evaluation disbursements, once finalized and concluded to be not economically feasible, will be charged to income. As of December 31, 2024, and 2023 there were no disbursements for this concept.
(b)Execution: Disbursements for exploration and evaluation under implementation and therefore prior to determination of economic feasibility, are presented as part of property, plant and equipment as constructions in progress. As of December 31, 2024 and 2023, this amounts to ThUS$14,787 and ThUS$9,062.
(c) Economically feasible: Reimbursements for exploration and evaluation whose study concluded that its economic viability is viable are classified in “Other non-financial assets, non-current.”
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Prospecting |
|
Type of Exploration |
|
As of
December 31,
2024 |
|
As of
December 31,
2023 |
|
|
|
|
ThUS$ |
|
ThUS$ |
| Chile (1) |
|
Metallic/Non-Metallic |
|
59,826 |
|
|
50,844 |
|
| Total |
|
|
|
59,826 |
|
|
50,844 |
|
________________________________________________
(1)The value presented for Chile is composed as of December 2024 of ThUS 12,084 corresponding to non-metallic exploration and evaluation and ThUS$ 47,742 associated with metallic exploration. In December 2023, the amounts of non-metallic and metallic exploration were ThUS$ 13,803 and ThUS$ 37,041, respectively.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Prospecting conciliation |
|
As of
December 31,
2024 |
|
As of
December 31,
2023 |
|
|
ThUS$ |
|
ThUS$ |
| Opening balance |
|
50,844 |
|
|
36,327 |
|
| Additions |
|
10,701 |
|
|
12,002 |
|
| Reclassifications from Exploration in execution – Chile |
|
(1,719) |
|
|
2,515 |
|
| Reclassifications to Exploration in Exploitation-Chile |
|
— |
|
|
— |
|
| Total changes |
|
8,982 |
|
|
14,517 |
|
| Total |
|
59,826 |
|
|
50,844 |
|
(d) In Exploitation: Caliche exploration disbursements that are found in this area are amortized based on the material exploited, the portion that is expected to be exploited in the following 12 months is presented as “Current Assets” in the “Inventories in process” and the remaining portion is classified as “Other Non-current Non-Financial Assets”.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Short-Term Exploitation Conciliation |
|
As of
December 31,
2024 |
|
As of
December 31,
2023 |
|
|
ThUS$ |
|
ThUS$ |
| Opening balance |
|
651 |
|
|
1,700 |
|
| Amortization of ground studies |
|
— |
|
|
— |
|
| Reclasifications from/to short term (inventories) |
|
197 |
|
|
(1,049) |
|
| Total changes |
|
197 |
|
|
(1,049) |
|
| Total |
|
848 |
|
|
651 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Long-Term Exploitation Conciliation |
|
As of
December 31,
2024 |
|
As of
December 31,
2023 |
|
|
ThUS$ |
|
ThUS$ |
| Opening balance |
|
6,614 |
|
|
7,696 |
|
| Amortization of ground studies |
|
(733) |
|
|
(2,131) |
|
| Reclasifications from/to short term (inventories) |
|
(197) |
|
|
1,049 |
|
| Total changes |
|
(930) |
|
|
(1,082) |
|
| Total |
|
5,684 |
|
|
6,614 |
|
Note 17 Employee benefits
17.1 Provisions for employee benefits
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Classes of benefits and expenses by employee |
|
As of
December 31,
2024 |
|
As of
December 31,
2023 |
|
|
ThUS$ |
|
ThUS$ |
| Current |
|
|
|
|
| Profit sharing and bonuses |
|
— |
|
|
— |
|
| Performance bonus and operational targets |
|
31,546 |
|
|
23,946 |
|
| Total |
|
31,546 |
|
|
23,946 |
|
| Non-current |
|
|
|
|
| Profit sharing and bonuses |
|
26,970 |
|
|
18,428 |
|
| Severance indemnity payments |
|
38,637 |
|
|
43,578 |
|
| Total |
|
65,607 |
|
|
62,006 |
|
17.2 Policies on defined benefit plan
This policy is applied to all benefits received for services provided by the Company’s employees. This is divided as follows:
a)Short-term benefits for active employees are represented by salaries, social welfare benefits, paid time off, sickness and other types of leave, profit sharing and incentives and non-monetary benefits; e.g., healthcare service, housing, subsidized or free goods or services. These will be paid in a term which does not exceed twelve months. The Company maintains incentive programs for its employees, which are calculated based on the net result at the close of each period by applying a factor obtained from an evaluation based on their personal performance, the Company’s performance and other short-term and long-term indicators.
b)Staff severance indemnities are agreed and payable based on the final salary, calculated in accordance with each year of service to the Company, with certain maximum limits in respect of either the number of years or in monetary terms. In general, this benefit is payable when the employee or worker ceases to provide his/her services to the Company and there are a number of different circumstances through which a person can be eligible for it, as indicated in the respective agreements; e.g. retirement, dismissal, voluntary retirement, incapacity or disability, death, etc. See Note 17.3.
c)Obligations after employee retirement, described in Note 17.4.
d)Retention bonuses for a group of Company executives, described in Note 17.6.
17.3 Other long-term benefits
The actuarial assessment method has been used to calculate the Company’s obligations with respect to staff severance indemnities, which relate to defined benefit plans consisting of days of remuneration per year served at the time of retirement under conditions agreed in the respective agreements established between the Company and its employees.
Under this benefit plan, the Company retains the obligation to pay staff severance indemnities related to retirement, without establishing a separate fund with specific assets, which is referred to as not funded.
Benefit payment conditions
The staff severance indemnity benefit relates to remuneration days for years worked for the Company without a limit being imposed in regard of amount of salary or years of service. It applies when employees cease to work for the Company because they are made redundant or in the event of their death. This benefit is applicable up to a maximum age of 65 for men and 60 for women, which are the usual retirement ages according to the Chilean pensions system as established in Decree Law 3,500 of 1980.
Methodology
The determination of the defined benefit obligation is made under the requirements of IAS 19 “Employee benefits”.
17.4 Post-employment benefit obligations
Our subsidiary SQM NA, together with its employees established a pension plan until 2002 called the “SQM North America Retirement Income Plan”. This obligation is calculated measuring the expected future forecast staff severance indemnity obligation using a net salary gradual rate of restatements for inflation, mortality and turnover assumptions, discounting the resulting amounts at present value using the interest rate defined by the authorities.
For workers under contract, since 2003, SQM NA offers benefits related to pension plans based on the 401-K system to its employees, which does not generate obligations for the Company.
A settlement was reflected in the last quarter of 2022 for the purchase of annuities by the pension plan for all inactive participants.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Reconciliation Changes in the benefit obligation |
|
As of
December 31,
2024 |
|
As of
December 31,
2023 |
|
As of
December 31,
2022 |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Benefit obligation at the beginning of the year |
|
286 |
|
|
279 |
|
|
9,550 |
|
| Current cost of service |
|
— |
|
|
— |
|
|
— |
|
| Interest cost |
|
12 |
|
|
12 |
|
|
255 |
|
| Actuarial loss |
|
54 |
|
|
180 |
|
|
(1,357) |
|
| Settlement |
|
— |
|
|
— |
|
|
(7,739) |
|
| Benefits paid |
|
(81) |
|
|
(185) |
|
|
(430) |
|
| Total |
|
271 |
|
|
286 |
|
|
279 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Reconciliation
Changes in plan assets |
|
As of
December 31,
2024 |
|
As of
December 31,
2023 |
|
As of
December 31,
2022 |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Fair value of plan assets at the start of the year |
|
5,382 |
|
|
4,982 |
|
|
13,497 |
|
| Real return (loss) in the plan assets |
|
236 |
|
|
585 |
|
|
(346) |
|
| Benefits paid |
|
(81) |
|
|
(185) |
|
|
(430) |
|
| Settlement |
|
— |
|
|
— |
|
|
(7,739) |
|
| Fair value of plan assets at the end of the year |
|
5,537 |
|
|
5,382 |
|
|
4,982 |
|
| Non-current-assets |
|
5,266 |
|
|
5,095 |
|
|
4,703 |
|
| Elements not yet recognized as components of the cost of periodic net pensions: |
|
|
|
|
|
|
| Net actuarial income at the beginning of the year |
|
249 |
|
|
59 |
|
|
1,039 |
|
| Settlement |
|
— |
|
|
— |
|
|
(1,627) |
|
| Gain |
|
(49) |
|
|
190 |
|
|
647 |
|
| Adjustment to recognize the minimum pension obligation |
|
200 |
|
|
249 |
|
|
59 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cost of service or benefits received during the year |
|
As of
December 31,
2024 |
|
As of
December 31,
2023 |
|
As of
December 31,
2022 |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Financial cost |
|
12 |
|
|
12 |
|
|
255 |
|
| Real loss in plan assets |
|
(231) |
|
|
(214) |
|
|
(363) |
|
| Settlement |
|
— |
|
|
— |
|
|
(1,627) |
|
| Net periodic pension expenses |
|
(219) |
|
|
(202) |
|
|
(1,735) |
|
17.5 Staff severance indemnities
As of December 31, 2024, and 2023, severance indemnities calculated at the actuarial value are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Staff severance indemnities |
|
As of
December 31,
2024 |
|
As of
December 31,
2023 |
|
As of
December 31,
2022 |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Opening balance |
|
(43,578) |
|
|
(34,899) |
|
|
(27,099) |
|
| Current cost of service |
|
(1,889) |
|
|
(4,624) |
|
|
(4,204) |
|
| Interest cost |
|
(2,549) |
|
|
(2,236) |
|
|
(1,928) |
|
| Actuarial gain loss |
|
3,149 |
|
|
(5,947) |
|
|
(5,305) |
|
| Exchange rate difference |
|
5,039 |
|
|
769 |
|
|
551 |
|
| Benefits paid during the year |
|
1,191 |
|
|
3,359 |
|
|
3,086 |
|
| Total |
|
(38,637) |
|
|
(43,578) |
|
|
(34,899) |
|
(a) Actuarial assumptions
The liability recorded for staff severance indemnity is valued at the actuarial value method, using the following actuarial assumptions:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Actuarial assumptions |
|
As of
December 31,
2024 |
|
As of
December 31,
2023 |
|
As of
December 31,
2022 |
|
Annual/Years |
| Mortality rate |
|
RV - 2020/CB - 2020 |
|
RV - 2020/CB - 2020 |
|
RV - 2014 |
|
|
| Discount interest rate |
|
5.75% |
|
5.32% |
|
5.12% |
|
|
| Inflation rate |
|
3.00% |
|
3.00% |
|
3.41% |
|
|
| Voluntary retirement rate: |
|
|
|
|
|
|
|
|
| Men |
|
3.82 |
% |
|
3.82 |
% |
|
6.49 |
% |
|
Annual |
| Women |
|
3.82 |
% |
|
3.82 |
% |
|
6.49 |
% |
|
Annual |
| Salary increase |
|
4.01 |
% |
|
4.01 |
% |
|
3.00 |
% |
|
Annual |
| Retirement age: |
|
|
|
|
|
|
|
|
| Men |
|
65 |
|
65 |
|
65 |
|
Years |
| Women |
|
60 |
|
60 |
|
60 |
|
Years |
(b) Sensitivity analysis of assumptions
As of December 31, 2024, 2023 and 2022, the Company has conducted a sensitivity analysis of the main assumptions of the actuarial calculation, determining the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Sensitivity analysis as of December 31, 2024 |
|
Effect + 100 basis
points |
|
Effect - 100 basis
points |
|
|
ThUS$ |
|
ThUS$ |
| Discount rate |
|
(2,352) |
|
|
2,647 |
|
| Employee turnover rate |
|
(309) |
|
|
345 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Sensitivity analysis as of December 31, 2023 |
|
Effect + 100 basis
points |
|
Effect - 100 basis
points |
|
|
ThUS$ |
|
ThUS$ |
| Discount rate |
|
(2,575) |
|
|
2,898 |
|
| Employee turnover rate |
|
(338) |
|
|
378 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Sensitivity analysis as of December 31, 2022 |
|
Effect + 100 basis
points |
|
Effect - 100 basis
points |
|
|
ThUS$ |
|
ThUS$ |
| Discount rate |
|
(2,090) |
|
|
2,352 |
|
| Employee turnover rate |
|
(274) |
|
|
307 |
|
Sensitivity relates to an increase/decrease of 100 basis points.
17.6 Executive compensation plan
The Company has compensation plans with the purpose of motivating the Company’s executives and encouraging them to remain within the Company and are described as follows:
I)Compensation plan based on financial metrics
(a) Plan characteristics
This compensation plan is paid in cash.
(b) Plan participants and payment dates
A total of 41 Company executives are entitled to this benefit, provided they remain with the Company until year end of 2025. The payment dates, where relevant, will be during the first quarter of 2026.
This compensation plan was approved by the Board and was first applied on January 1, 2022. Compensation expense for the years ended December 31, 2024, 2023 and 2022 correspond to ThUS$8,193, ThUS$9,933 and ThUS$8,495, respectively. The liability related to this compensation plan amounts to ThUS$26,621 and ThUS$ 18,428 as of December 31, 2024 and 2023, respectively.
II) Share based compensation plan
(a) Plan characteristics
This compensation plan was paid in cash in 2023.
(b) Plan participants and payment dates The share-based compensation plan was approved by the Board and included 188,740 shares. The effects on the statement of income correspond to an expense of ThUS$ 2,251 for the year ended 2022.
Note 18 Provisions and other non-financial liabilities
18.1 Types of provisions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Types of provisions |
|
As of December 31, 2024 |
|
As of December 31, 2023 |
|
Current |
|
Non-current |
|
Total |
|
Current |
|
Non-current |
|
Total |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Provision for legal complaints (1) |
|
8,957 |
|
106 |
|
9,063 |
|
106 |
|
1,195 |
|
1,301 |
| Provision for dismantling, restoration and rehabilitation cost (2) |
|
— |
|
53,011 |
|
53,011 |
|
— |
|
58,459 |
|
58,459 |
| Other provisions (3) |
|
302,240 |
|
200 |
|
302,440 |
|
392,216 |
|
796 |
|
393,012 |
| Total |
|
311,197 |
|
53,317 |
|
364,514 |
|
392,322 |
|
60,450 |
|
452,772 |
________________________________________________
(1)These provisions correspond to legal processes that are pending resolution or that have not yet been disbursed, these provisions are mainly related to litigation involving the subsidiaries located in Chile, Brazil and the United States (see note 20.1).
(2)Sernageomin commitments for the restoration of the location of the production sites have been incorporated, In addition to SQM Australia Pty. This cost value is calculated at discounted present value, using flows associated with plans with an evaluation horizon that fluctuates between 8 and 25 years for potassium-lithium operations and 11 to 22 years for nitrate-iodine operations. The rates used to discount future cash flows are based on market rates for the aforementioned terms.
(3)See Note 18.2.
18.2 Description of other provisions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Current provisions, other short-term provisions |
|
As of
December 31,
2024 |
|
As of
December 31,
2023 |
|
|
ThUS$ |
|
ThUS$ |
| Rent under Lease contract (1) |
|
265,054 |
|
|
354,205 |
|
| Provision for additional tax related to foreign loans |
|
2,602 |
|
|
1,641 |
|
| End of agreement bonus |
|
5,279 |
|
|
6,979 |
|
| Other bonuses to workers |
|
7,701 |
|
6,933 |
| Other bonuses, general staff |
|
2,912 |
|
— |
| Directors’ per diem allowance |
|
5,143 |
|
|
4,676 |
|
| Miscellaneous provisions |
|
13,549 |
|
|
17,782 |
|
| Total |
|
302,240 |
|
|
392,216 |
|
________________________________________________
(1)Payment Obligations for the lease contract with CORFO: These correspond to the obligations assumed in the Lease Agreement. Our subsidiary SQM Salar holds exclusive rights to exploit the mineral resources in an area covering approximately 140,000 hectares of land in the Salar de Atacama in northern Chile, of which SQM Salar is only entitled to exploit the mineral resources in 81,920 hectares. These rights are owned by Corfo and leased to SQM Salar pursuant to the Lease Agreement. Corfo cannot unilaterally amend the Lease Agreement and the Project Agreement, and the rights to exploit the resources cannot be transferred. The Lease Agreement establishes that SQM Salar is responsible for making quarterly lease payments to Corfo according to specified percentages of the value of production of minerals extracted from the Salar de Atacama brines, maintaining Corfo’s rights over the Mining Exploitation Concessions and making annual payments to the Chilean government for such concession rights. The Lease Agreement was entered into in 1993 and expires on December 31, 2030.
On January 17, 2018, SQM and CORFO reached an agreement to end an arbitration process directed by the arbitrator, Mr. Héctor Humeres Noguer, in case 1954-2014 of the Arbitration and Mediation Center of Santiago Chamber of Commerce and other cases related to it.
The agreement signed in January 2018, includes important amendments to the lease agreement and project agreement signed between CORFO and SQM in 1993.
The main modifications became effective on April 10, 2018 and require (i) higher lease payments as a result of increased lease rates associated with the sale of the different products produced in the Salar de Atacama, including lithium carbonate, lithium hydroxide and potassium chloride; (ii) SQM Salar commits to contribute between US$10.8 and US$18.9 million per year to research and development efforts, between US$10 and US$15 million per year to the communities near the Salar de Atacama basin, and to annually contribute 1.7% of SQM Salar’s total annual sales to regional development; (iii) Corfo authorization for CCHEN to establish a total production and sales limit for lithium products produced in the Salar de Atacama of up to 349,553 metric tons of lithium metal equivalent (1,860,671 tons of lithium carbonate equivalent), which is in addition to the approximately 64,816 metric tons of lithium metal equivalent (345,015 tons of lithium carbonate equivalent) remaining from the originally authorized amount; (iv) provisions relating to the return of real estate and movable property leased to Corfo, the transfer of environmental permits to Corfo at no cost and the granting of purchase options to Corfo for production facilities and water rights in the Salar de Atacama upon termination of Corfo agreements; and (v) prohibitions on the sale of lithium brine extracted from leased mining concessions.
The fee structure is as follows:
|
|
|
|
|
|
|
|
|
| Price US$/MT Li2CO3 |
|
Lease payment rate |
$0 - $4,000 |
|
6.8% |
$4,000 - $5,000 |
|
8.0% |
$5,000 - $6,000 |
|
10.0% |
$6,000 - $7,000 |
|
17.0% |
$7,000 - $10,000 |
|
25.0% |
$10,000 |
|
40.0% |
|
|
|
|
|
|
|
|
|
| Price US$/MT LiOH |
|
Lease payment rate |
$0 - $5,000 |
|
6.8% |
Over $5,000 - $6,000 |
|
8.0% |
Over $6,000 - $7,000 |
|
10.0% |
Over $7,000- $10,000 |
|
17.0% |
Over $10,000 - $12,000 |
|
25.0% |
Over $12,000 |
|
40.0% |
|
|
|
|
|
|
|
|
|
|
|
|
| Price US$/MT KCl |
|
Lease payment rate |
$0 - $300 |
|
3.0% |
Over $300 - $400 |
|
7.0% |
Over $400 - $500 |
|
10.0% |
Over $500 - $600 |
|
15.0% |
Over $600 |
|
20.0% |
On May 31, 2024, the Company reported having entered into an association agreement with Codelco to develop extractive and productive activities to produce lithium products, potassium products and other products extracted from Corfo's properties in the Salar de Atacama, through the merger by incorporation of Codelco's subsidiary, Minera Tarar SpA, into the Company's subsidiary, SQM Salar SpA, subject to the terms established in the Association Agreement.
The effectiveness of the association agreement is subject to a series of conditions precedent, as well as the execution of contracts with Corfo to (i) increase the amount of lithium that SQM Salar SpA can exploit from the Salar de Atacama between the years 2025 and 2030 and (ii) establish the right to exploit lithium from the Salar de Atacama between the years 2031 and 2060.
To date there are no impacts to the consolidated financial statements arising from this agreement.
18.3 Changes in provisions
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Description of items that gave rise to variations
as of December 31, 2024 |
|
Legal complaints |
|
Provision for
dismantling,
restoration and
rehabilitation cost |
|
Other provisions |
|
Total |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Total provisions, initial balance |
|
1,301 |
|
|
58,459 |
|
|
393,012 |
|
|
452,772 |
|
| Changes |
|
|
|
|
|
|
|
|
| Additional provisions |
|
17,333 |
|
|
— |
|
|
504,995 |
|
|
522,328 |
|
| Provision used |
|
— |
|
|
— |
|
|
(570,187) |
|
|
(570,187) |
|
| Increase (decrease) in foreign currency exchange |
|
134 |
|
|
— |
|
|
(352) |
|
|
(218) |
|
| Others |
|
(9,705) |
|
|
(5,448) |
|
|
(25,028) |
|
|
(40,181) |
|
| Total Increase (decreases) |
|
7,762 |
|
|
(5,448) |
|
|
(90,572) |
|
|
(88,258) |
|
| Total |
|
9,063 |
|
|
53,011 |
|
|
302,440 |
|
|
364,514 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Description of items that gave rise to variations
as of December 31, 2023 |
|
Legal complaints |
|
Provision for
dismantling,
restoration and
rehabilitation cost |
|
Other provisions |
|
Total |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Total provisions, initial balance |
|
53,709 |
|
|
53,995 |
|
|
1,253,495 |
|
|
1,361,199 |
|
| Changes |
|
|
|
|
|
|
|
|
| Additional provisions |
|
266 |
|
|
12,127 |
|
|
1,922,666 |
|
|
1,935,059 |
|
| Provision used |
|
(52,707) |
|
|
— |
|
|
(2,771,422) |
|
|
(2,824,129) |
|
| Increase (decrease) in foreign currency exchange |
|
33 |
|
|
— |
|
|
(871) |
|
|
(838) |
|
| Others |
|
— |
|
|
(7,663) |
|
|
(10,856) |
|
|
(18,519) |
|
| Total Increase (decreases) |
|
(52,408) |
|
|
4,464 |
|
|
(860,483) |
|
|
(908,427) |
|
| Total |
|
1,301 |
|
|
58,459 |
|
|
393,012 |
|
|
452,772 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Description of items that gave rise to variations
as of December 31, 2022 |
|
Legal complaints |
|
Provision for
dismantling,
restoration and
rehabilitation cost |
|
Other provisions |
|
Total |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Total provisions, initial balance |
|
49,741 |
|
|
58,592 |
|
|
270,371 |
|
|
378,704 |
|
| Changes |
|
|
|
|
|
|
|
|
| Additional provisions |
|
3,981 |
|
|
7,085 |
|
|
3,045,758 |
|
|
3,056,824 |
|
| Provision used |
|
— |
|
|
— |
|
|
(2,060,321) |
|
|
(2,060,321) |
|
| Increase (decrease) in foreign currency exchange |
|
(1) |
|
|
(35) |
|
|
4 |
|
|
(32) |
|
| Others |
|
(12) |
|
|
(11,647) |
|
|
(2,317) |
|
|
(13,976) |
|
| Total Increase (decreases) |
|
3,968 |
|
|
(4,597) |
|
|
983,124 |
|
|
982,495 |
|
| Total |
|
53,709 |
|
|
53,995 |
|
|
1,253,495 |
|
|
1,361,199 |
|
18.4 Other non-financial liabilities, Current
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Description of other liabilities |
|
As of
December 31,
2024 |
|
As of
December 31,
2023 |
|
|
ThUS$ |
|
ThUS$ |
| Tax withholdings |
|
2,995 |
|
|
8,750 |
|
| Other non-income taxes payable |
|
710 |
|
— |
| VAT payable |
|
51,420 |
|
|
33,782 |
|
| Guarantees received |
|
1,021 |
|
|
1,021 |
|
| Accrual for dividend |
|
5,909 |
|
|
67,219 |
|
| Monthly tax provisional payments |
|
17,003 |
|
|
26,160 |
|
| Deferred income |
|
4,657 |
|
|
4,144 |
|
| Withholdings from employees and salaries payable |
|
9,175 |
|
|
9,333 |
|
| Accrued vacations |
|
34,796 |
|
|
35,902 |
|
| Other current liabilities |
|
353 |
|
|
994 |
|
| Total |
|
128,039 |
|
|
187,305 |
|
Note 19 Disclosures on equity
The detail and movements in the funds of equity accounts are shown in the consolidated statement of changes in equity.
19.1 Capital management
The main object of capital management relative to the administration of the Company’s financial debt and equity is to ensure the regular conduct of operations and business continuity in the long term, with the constant intention of maintaining an adequate level of liquidity and in compliance with the financial safeguards established in the debt contracts in force. Within this framework, decisions are made in order to maximize the value of the company.
Capital management must comply with, among others, the limits contemplated in the Financing Policy approved by the Shareholders’ Meeting, which establish a maximum consolidated indebtedness level of 1 times the debt to equity ratio. This limit can be exceeded only if the Company’s management has first obtained express approval at an Extraordinary Shareholders’ Meeting.
The Company’s management controls capital management based on the following ratios:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Capital Management |
|
As of December 31,
2024 |
|
As of December 31,
2023 |
|
Description (1) |
|
Calculation (1) |
| Net Financial Debt (ThUS$) |
|
2,303,673 |
|
|
2,086,717 |
|
|
Financial Debt – Financial Resources |
|
Other current Financial Liabilities + Other Non-Current Financial Liabilities– Cash and Cash Equivalents – Other Current Financial Assets – Hedging Assets, non-current |
| Liquidity |
|
2.51 |
|
|
2.33 |
|
|
Current Assets divided by Current Liabilities |
|
Total Current Assets / Total Current Liabilities |
| ROE |
|
-13.31 % |
|
20.78 % |
|
Net income the year divided by Total Equity |
|
Net income the year / Equity |
| Adjusted EBITDA (ThUS$) |
|
1,483,571 |
|
|
3,180,071 |
|
|
Adjusted EBITDA |
|
EBITDA – Other income – Other gains (losses) - Share of Profit of associates and joint ventures accounted for using the equity method + Other expenses by function + Net impairment gains on reversal (losses) of financial assets – Finance income – Currency differences. |
| EBITDA (ThUS$) |
|
1,514,382 |
|
|
3,226,202 |
|
|
EBITDA |
|
Net income + Depreciation and Amortization Expense adjustments + Finance Costs + Income Tax |
| ROA |
|
13.60 % |
|
35.90 % |
|
Adjusted EBITDA – Depreciation divided by Total Assets net of financial resources less related parties’ investments |
|
(Gross Profit – Administrative Expenses)/ (Total Assets – Cash and Cash Equivalents – Other Current Financial Assets – Other Non-Current Financial Assets – Equity accounted Investments) (LTM) |
| Indebtedness |
|
0.44 |
|
|
0.47 |
|
|
Net Financial Debt on Equity |
|
Net Financial Debt / Total Equity |
The Company’s capital requirements change according to variables such as: working capital needs, new investment financing and dividends, among others. The SQM Group manages its capital structure and makes adjustments bases on the predominant economic conditions so as to mitigate the risks associated with adverse market conditions and take advantage of the opportunities there may be to improve the liquidity position of the SQM Group.
There have been no changes in the capital management objectives or policy within the years reported in this document, no breaches of external requirements of capital imposed have been recorded. There are no contractual capital investment commitments.
19.2 Operational restrictions and financial limits
Bond issuance contracts in the local market require the Company to maintain a Total Borrowing Ratio no higher than 1 for Series H, Series O and Series Q bonds, calculated over the last consecutive 12 months.
Capital management must ensure that the Borrowing Ratio remains below 1.0, with respect to the Series H, Series O and Series Q bonds. As of December 31, 2024 this ratio was 0.44.
The financial restrictions with respect to the bonds issued by the Company for the periods ended December 31, 2024 and 2023 are as follows.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| As of December 31, 2024 |
|
Financial restrictions |
|
Financial
restrictions |
|
Financial
restrictions |
|
Financial
restrictions |
|
Financial
restrictions |
| Instrument with restriction |
|
Bonds |
|
Bonds |
|
Bonds |
|
Bank loans |
| Reporting party or subsidiary restriction |
|
|
|
|
|
|
|
|
| Creditor |
|
Bondholders |
|
Bondholders |
|
Bondholders |
|
Scotiabank |
| Registration number |
|
H |
|
Q |
|
O |
|
PB 70M |
| Name of financial indicator or ratio (See definition in Note 19.1) |
|
NFD/Equity |
|
NFD/Equity |
|
NFD/Equity |
|
NFD/Equity |
| Measurement frequency |
|
Quarterly |
|
Quarterly |
|
Quarterly |
|
Quarterly |
| Restriction (Range, value and unit of measure) |
|
Must be less than |
|
Must be less than |
|
Must be less than |
|
Must be less than |
|
1.00 |
|
1.00 |
|
1.00 |
|
1.00 |
| Indicator or ratio determined by the company |
|
0.44 |
|
0.44 |
|
0.44 |
|
0.44 |
| Fulfilled YES/NO |
|
yes |
|
yes |
|
yes |
|
yes |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| As of December 31, 2023 |
|
Financial restrictions |
|
Financial
restrictions |
|
Financial
restrictions |
|
Financial
restrictions |
|
Financial
restrictions |
| Instrument with restriction |
|
Bonds |
|
Bonds |
|
Bonds |
|
Bank loans |
| Reporting party or subsidiary restriction |
|
|
|
|
|
|
|
|
| Creditor |
|
Bondholders |
|
Bondholders |
|
Bondholders |
|
Scotiabank |
| Registration number |
|
H |
|
Q |
|
O |
|
PB 70M |
| Name of financial indicator or ratio (See definition in Note 19.1) |
|
NFD/Equity |
|
NFD/Equity |
|
NFD/Equity |
|
NFD/Equity |
| Measurement frequency |
|
Quarterly |
|
Quarterly |
|
Quarterly |
|
Quarterly |
| Restriction (Range, value and unit of measure) |
|
Must be less than |
|
Must be less than |
|
Must be less than |
|
Must be less than |
|
1.00 |
|
1.00 |
|
1.00 |
|
1.00 |
| Indicator or ratio determined by the company |
|
0.47 |
|
0.47 |
|
0.47 |
|
0.47 |
| Fulfilled YES/NO |
|
yes |
|
yes |
|
yes |
|
yes |
Bond issuance contracts in foreign markets require that the Company does not merge, or dispose of, or encumber all or a significant portion of its assets, unless all of the following conditions are met: (i) the legal successor is an entity constituted under the laws of Chile or the United States, which assumes all the obligations of the Company in a supplemental indenture, (ii) immediately after the merger or disposal or encumbrance there is no default by the issuer, and (iii) the issuer has provided a legal opinion indicating that the merger or disposal or encumbrance and the supplemental indenture comply with the requirements of the original indenture.The Company is also committed to provide quarterly financial information.
The Company and its subsidiaries are complying with all the aforementioned limitations, restrictions and obligations.
19.3 Disclosures on share capital
Issued share capital is divided into Series A shares and Series B shares. All such shares are nominative, have no par value and are fully issued, subscribed and paid.
Series B shares may not exceed 50% of the total issued, subscribed and paid-in shares of the Company and have a limited voting right, in that all of them can only elect one director of the Company, regardless of their equity interest and preferences:
(a)require the calling of an Ordinary or Extraordinary Shareholders’ Meeting when requested by Series B shareholders representing at least 5% of the issued shares thereof; and
(b)require the calling of an extraordinary meeting of the board of directors, without the president being able to qualify the need for such a request, when so requested by the director who has been elected by the shareholders of said Series B.
The limitation and preferences of Series B shares have a duration of 50 consecutive and continuous years as of June 3, 1993.
The Series A shares have the preference of being able to exclude the director elected by the Series B shareholders in the voting process in which the president of the board of directors and of the Company must be elected and which follows the one in which the tie that allows such exclusion resulted.
The preference of Series A shares will have a term of 50 consecutive and continuous years as of June 3, 1993. The form of the titles of the shares, their issuance, exchange, disablement, loss, replacement, assignment and other circumstances thereof shall be governed by the provisions of Law No, 18,046 and its regulations.
Detail of capital classes in shares:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Type of capital in preferred shares |
|
As of December 31, 2024 |
|
As of December 31, 2023 |
|
As of December 31, 2022 |
|
Series A |
|
Series B |
|
Series A |
|
Series B |
|
Series A |
|
Series B |
| Description of type of capital in shares |
|
|
|
|
|
|
|
|
|
|
|
|
| Number of authorized shares |
|
142,818,904 |
|
142,818,904 |
|
142,819,552 |
|
142,818,904 |
|
142,819,552 |
|
142,818,904 |
| Number of fully subscribed and paid shares |
|
142,818,904 |
|
142,818,904 |
|
142,819,552 |
|
142,818,904 |
|
142,819,552 |
|
142,818,904 |
| Number of subscribed, partially paid shares |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
| Increase (decrease) in the number of current shares |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
| Number of outstanding shares |
|
142,818,904 |
|
142,818,904 |
|
142,818,904 |
|
142,818,904 |
|
142,818,904 |
|
142,818,904 |
| Number of shares owned by the Company or its subsidiaries or associates |
|
— |
|
— |
|
648 |
|
— |
|
648 |
|
— |
| Number of shares whose issuance is reserved due to the existence of options or agreements to dispose shares |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
| Capital amount in shares ThUS$ |
|
134,730 |
|
|
1,442,893 |
|
|
134,750 |
|
|
1,442,893 |
|
|
134,750 |
|
|
1,442,893 |
|
| Total number of subscribed shares |
|
142,818,904 |
|
142,818,904 |
|
142,819,552 |
|
142,818,904 |
|
142,819,552 |
|
142,818,904 |
19.4 Disclosures on reserves in Equity and non-controlling interests
As of December 31, 2024, 2023 and 2022, this caption comprises the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Disclosure of reserves within shareholders' equity |
|
As of
December 31,
2024 |
|
As of
December 31,
2023 |
|
As of
December 31,
2022 |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Reserve for currency exchange conversion (1) |
|
(38,024) |
|
|
(4,921) |
|
|
(8,042) |
|
| Reserve for cash flow hedges (2) |
|
7,314 |
|
|
(930) |
|
|
(14,575) |
|
| Reserve for gains and losses from financial assets measured at fair value through other comprehensive income (3) |
|
(5,702) |
|
|
122,294 |
|
|
(10,973) |
|
| Reserve for actuarial gains or losses in defined benefit plans (4) |
|
(11,179) |
|
|
(13,454) |
|
|
(9,198) |
|
| Other reserves |
|
10,175 |
|
|
11,881 |
|
|
11,663 |
|
| Total |
|
(37,416) |
|
|
114,870 |
|
|
(31,125) |
|
________________________________________________
(1)This balance reflects retained earnings for changes in the exchange rate when converting the financial statements of subsidiaries whose functional currency is different from the US dollar.
(2)The Company maintains, as hedge instruments, financial derivatives related to obligations with the public issued in UF and Chilean pesos, Changes from the fair value of derivatives designated and classified as hedges are recognized under this classification.
(3)Reserve related to the fair value variation of equity financial instruments.
(4)This caption reflects the effects of changes in actuarial assumptions, mainly changes in the discount rate.
Movements in other reserves and changes in interest were as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Movements |
|
Foreign
currency
translation
difference
(1) |
|
Reserve for cash flow
hedges |
|
Reserve for actuarial gains
and losses from defined
benefit plans |
|
Reserve for gains (losses)
from financial assets
measured at fair value
through other
comprehensive income |
|
Other
reserves |
|
Total reserves |
|
Before
taxes |
|
Before
taxes |
|
Deferred
taxes |
|
Before
taxes |
|
Deferred
taxes |
|
Before
Taxes |
|
Deferred
taxes |
|
Before
taxes |
|
Reserves |
|
Deferred
taxes |
|
Total
reserves |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Opening balance as of January 1, 2022 |
|
(7,913) |
|
|
(46,589) |
|
|
12,564 |
|
|
(5,879) |
|
|
1,705 |
|
|
(15,271) |
|
|
4,125 |
|
|
13,103 |
|
|
(62,549) |
|
|
18,394 |
|
|
(44,155) |
|
| Movement of reserves |
|
(129) |
|
|
36,079 |
|
|
— |
|
|
(6,276) |
|
|
— |
|
|
190 |
|
|
— |
|
|
(985) |
|
|
28,879 |
|
|
— |
|
|
28,879 |
|
| Impact to Income statement |
|
— |
|
|
(9,457) |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(455) |
|
|
(9,912) |
|
|
— |
|
|
(9,912) |
|
| Income taxes |
|
— |
|
|
— |
|
|
(7,172) |
|
|
— |
|
|
1,252 |
|
|
— |
|
|
(17) |
|
|
— |
|
|
— |
|
|
(5,937) |
|
|
(5,937) |
|
| Reclassification to retained earnings |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
| Closing balance as of December 31, 2022 |
|
(8,042) |
|
|
(19,967) |
|
|
5,392 |
|
|
(12,155) |
|
|
2,957 |
|
|
(15,081) |
|
|
4,108 |
|
|
11,663 |
|
|
(43,582) |
|
|
12,457 |
|
|
(31,125) |
|
| Movement of reserves |
|
3,121 |
|
|
126 |
|
|
— |
|
|
(5,836) |
|
|
— |
|
|
190,509 |
|
|
— |
|
|
218 |
|
|
188,138 |
|
|
— |
|
|
188,138 |
|
| Impact to Income statement |
|
— |
|
|
18,566 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
18,566 |
|
|
— |
|
|
18,566 |
|
| Income taxes |
|
— |
|
|
— |
|
|
(5,047) |
|
|
— |
|
|
1,580 |
|
|
— |
|
|
(57,242) |
|
|
— |
|
|
— |
|
|
(60,709) |
|
|
(60,709) |
|
| Closing balance as of December 31, 2023 |
|
(4,921) |
|
|
(1,275) |
|
|
345 |
|
|
(17,991) |
|
|
4,537 |
|
|
175,428 |
|
|
(53,134) |
|
|
11,881 |
|
|
163,122 |
|
|
(48,252) |
|
|
114,870 |
|
| Movement of reserves |
|
(33,103) |
|
|
2,520 |
|
|
— |
|
|
3,137 |
|
|
— |
|
|
(183,289) |
|
|
— |
|
|
(1,706) |
|
|
(212,441) |
|
|
— |
|
|
(212,441) |
|
| Impact to Income statement |
|
— |
|
|
8,773 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
8,773 |
|
|
— |
|
|
8,773 |
|
| Income taxes |
|
— |
|
|
— |
|
|
(3,049) |
|
|
— |
|
|
(862) |
|
|
— |
|
|
55,293 |
|
|
— |
|
|
— |
|
|
51,382 |
|
|
51,382 |
|
| Closing balance as of December 31, 2024 |
|
(38,024) |
|
|
10,018 |
|
|
(2,704) |
|
|
(14,854) |
|
|
3,675 |
|
|
(7,861) |
|
|
2,159 |
|
|
10,175 |
|
|
(40,546) |
|
|
3,130 |
|
|
(37,416) |
|
________________________________________________
(1)See details on reserves for foreign currency translation differences on conversion in Note 23, letter a).
Other reserves
This caption corresponds to the legal reserves reported in the stand-alone financial statements of the subsidiaries and associates that are mentioned below and that have been recognized in SQM’s equity through the application of the equity method.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Subsidiary – Associate |
|
As of
December 31,
2024 |
|
As of
December 31,
2023 |
|
As of
December 31,
2022 |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| SQM Iberian S.A. |
|
9,464 |
|
|
9,464 |
|
|
9,464 |
|
| SQM Europe NV |
|
354 |
|
|
1,957 |
|
|
1,957 |
|
| Soquimich European holding B.V. |
|
828 |
|
|
828 |
|
|
828 |
|
| Soquimich Comercial S.A. |
|
(393) |
|
|
(393) |
|
|
(401) |
|
| SQM Australia Pty Ltd |
|
87 |
|
|
94 |
|
|
— |
|
| SQM Iberian S.A. |
|
(1,677) |
|
|
(1,677) |
|
|
(1,677) |
|
| Orcoma Estudios SpA |
|
2,121 |
|
|
2,121 |
|
|
2,121 |
|
| Pavoni & C. SpA |
|
7 |
|
|
7 |
|
|
7 |
|
| SQM Vitas Fzco. |
|
85 |
|
|
85 |
|
|
85 |
|
| SAS Adionics |
|
— |
|
|
116 |
|
|
— |
|
| Others |
|
(701) |
|
|
(721) |
|
|
(721) |
|
| Total Other reserves |
|
10,175 |
|
|
11,881 |
|
|
11,663 |
|
Non-controlling interests
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Subsidiary |
|
% of interests in the
ownership held by non-
controlling interests |
|
Net income attributable to non-controlling interests for the year ended |
|
Equity, non-controlling interests for the year ended |
|
Dividends paid to non-controlling interests for the year ended |
|
|
As of
December 31, 2024 |
|
As of
December 31, 2023 |
|
As of
December 31, 2024 |
|
As of
December 31, 2023 |
|
As of
December 31, 2024 |
|
As of
December 31, 2023 |
|
|
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| SQM Potasio S.A. |
|
0.0000001% |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
| Ajay SQM Chile S.A. |
|
49.00000% |
|
3,261 |
|
|
3,238 |
|
|
10,611 |
|
|
9,795 |
|
|
2,446 |
|
|
2,429 |
|
| Soquimich Comercial S.A. |
|
39.36168% |
|
3,463 |
|
|
3,838 |
|
|
26,637 |
|
|
26,435 |
|
|
3,463 |
|
|
3,837 |
|
| Comercial Agrorama Ltda. |
|
30.00000% |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
| SQM Indonesia S.A. |
|
20.00000% |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
| SQM Thailand Limited |
|
0.00200% |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
| Total |
|
|
|
6,724 |
|
|
7,076 |
|
|
37,248 |
|
|
36,230 |
|
|
5,909 |
|
|
6,266 |
|
19.5 Dividend policies
As required by Article 79 of the Chilean Companies Act, unless otherwise decided by unanimous vote of the holders of issued and subscribed shares, a publicly traded corporation must annually distribute a cash dividend to its shareholders, prorated based on their shares or the proportion established in the company’s bylaws if there are preferred shares, with at least 30% of our consolidated net income for each year.
Dividend policy for commercial year 2024
The Company’s dividend policy for the 2024 business year was agreed upon by the Board of Directors on April 25, 2024 based on the financial statements filed by the Company with the Chilean Financial Market Commission (“Comisión para el Mercado Financiero” or “CMF”). On that occasion, the following was decided:
(a)Distribute and pay a dividend to the respective shareholders as a percentage of the profits representing 30% of profits for 2024.
(b)Notwithstanding the aforementioned, the percentage indicated in (a) above may be increased if the Company’s Board of Directors deems that such increase does not materially and adversely affect the Company’s ability to make its investments and to comply with the estimates on future cash use, also considering the following financial parameters:
(i)100% of the net income for 2024 if all the following financial parameters are met: (a) “all current assets” divided by “all current liabilities” is equal to or greater than 2.5 times, and (b) the sum of “all current liabilities” and “all non-current liabilities”, less “cash equivalents”, less “other current financial assets”, all of the above divided by “total equity” in equal or less than 0.8 times.
(ii)80% of the net income for 2024 if all the following financial parameters are met: (a) “all current assets” divided by “all current liabilities” is equal to or greater than 2.0 times, and (b) the sum of “all current liabilities” and “all non-current liabilities”, less “cash equivalents”, less “other current financial assets”, all of the above divided by “total equity” in equal or less than 0.9 times.
(iii)60% of the net income for 2024 if all the following financial parameters are met: (a) “all current assets” divided by “all current liabilities” is equal to or greater than 1.5 times, and (b) the sum of “all current liabilities” and “all non-current liabilities”, less “cash equivalents”, less “other current financial assets”, all of the above divided by “total equity” in equal or less than 1.0 times.
(c)Distribute and pay in 2024 and the first quarter of 2025, dividends, which will be charged against the aforementioned final dividend.
(d)In the ordinary meeting to be held in 2025, the Company’s Board of Directors will propose a final dividend discounting the amount of dividends previously distributed, considering that it does not materially and negatively affect the Company’s ability to make its investments, meet its obligations and, in general, comply with the investment and financing policy approved by the ordinary shareholders’ meeting.
(e)Any remaining amount from the net income from 2024 can be retained and used to finance the Company’s own operations or one or more of its investment projects, notwithstanding a possible distribution of dividends charged to accumulated earnings that might be approved by the shareholders’ meeting or the possible future capitalization of all or part of it.
(f)The payment of additional dividends is not being considered.
It must be expressly stated that this dividends policy details the intention of the Company’s Board of Directors and its fulfillment depends on the actual net income obtained, as well as on the results indicated by the projections the Company makes from time to time or on the existence of particular conditions, as appropriate. In any case, if the dividend policy set forth by the Board of Directors should undergo any substantial change, the Company must communicate it as a material event.
19.6 Final dividends
On April 25, 2024, the 49th ordinary general shareholders' meeting of the Company was held, at which it was agreed to distribute and pay an amount of US$0.21339 per share, which the Company must payment to complete the amount of US$2.11386 as a final dividend.
Such final dividend already considers the first dividend of US$0.78760 per share, the second dividend of US$0.60940 per share and the third dividend of US$0.50347 per share, which were paid during 2023.
19.7 Potential and provisional dividends
Dividends discounted from equity from January to December 2024 and 2023 were the following:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Dividends |
|
As of
December 31,
2024 |
|
As of
December 31,
2023 |
|
As of
December 31,
2022 |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Interim dividend |
|
— |
|
542,847 |
|
2,204,229 |
| Final dividend |
|
— |
|
920,819 |
|
— |
| Dividend according to policy |
|
— |
|
60,953 |
|
— |
| Owners of the Parent |
|
— |
|
1,524,619 |
|
2,204,229 |
| Dividend eventual |
|
— |
|
— |
|
— |
| Dividends according to policy |
|
5,909 |
|
6,266 |
|
7,369 |
| Non-controlling interests |
|
5,909 |
|
6,266 |
|
7,369 |
| Dividends discounted from equity for the period |
|
5,909 |
|
1,530,885 |
|
2,211,598 |
Note 20 Contingencies and restrictions
In accordance with note 18.1, the Company recognizes a provision for those lawsuits in which there is a probability that the judgments will be unfavorable to the Company. The Company is party to the following lawsuits and other relevant legal actions:
20.1 Lawsuits and other relevant events
(a)In January 2018, the company Transportes Buen Destino S.A. filed an arbitration claim under CAM rules against SQM Salar for controversies resulting from the execution of transport contracts for lithium brine and transport of salts. The amount of the claim is close to US$3 million. On August 6, 2024, SQM Salar was sentenced to pay ThUS$80, plus indexation. On August 13, 2024, SQM Salar and the Company filed a complaint appeal before the Court of Appeals of Santiago, which is pending.
(b)On April 6, 2021, Empresa Eléctrica Cochrane SpA requested the constitution of arbitration to resolve a dispute in relation to electricity supply contracts signed on March 30, 2012, and February 1, 2013. On January 17, 2022, the Company filed a claim for early termination of the electricity supply contracts against Empresa Eléctrica Cochrane SpA. On November 26, 2024, the arbitral tribunal upheld the claim of Empresa Eléctrica Cochrane SpA for the period between 2021 and 2023, with the amount to be determined in the mandatory compliance phase of the ruling. The arbitral tribunal also determined that Empresa Eléctrica Cochrane SpA failed to meet its information delivery obligations under the electricity supply contracts, although it dismissed the Company’s early termination claim.
(c)In October 2021, the Company requested the constitution of an arbitration against Chilena Consolidada Seguros Generales S.A. to resolve differences in relation to the interpretation and execution of the directors' and officers' liability insurance policy. On December 14, 2023, the arbitrator accepted the Company's claim in its entirety and ordered the defendant to pay US$ 32.2 million. The case is currently before the Court of Appeals to hear the appeals and the to hear the cassation and appeal appeals filed by the defendant.
(d)In February 2022, the company Montajes Eléctricos y Construcciones RER Limitada filed a claim for damages before the 21st Civil Court of Santiago against SQM Industrial S.A. for its alleged liability derived from the breach of an electrical installation contract. The case is awaiting a decision verdict from the court. The amount of the lawsuit is approximately ThUS$ 542.
(e)In March 2023, Mr. Josué Merari Trujillo Montejano filed a lawsuit against SQM Comercial de México, S.A. de C.V. for damages for third-party civil liability for the death of his brother Mr. Manuel Agustín Trujillo Montejano, before the First Instance Judge of the Civil Branch of the city of Zapopan, Mexico. The lawsuit is currently under discussion. The amount of the lawsuit is approximately ThUS$ 330.
(f)In May 2023, the heirs of Sami Al Taweel, a shareholder of Abu Dhabi Fertilizer Industries Company LLC ("Adfert"), filed a claim against SQM Corporation NV, other shareholders and former officers and directors of Adfert appointed by SQM Corporation NV, with the Settlement Center of the Abu Dhabi Commercial Court of First Instance, which alleges a debt of AED 73.5 million. The lawsuit is being heard by the Abu Dhabi.
(g)In May 2023, Mr. Luis Guillermo Benítez Peña and 17 other employees filed a lawsuit against a contractor, the Company and six other companies with the Labor Court of San Miguel for indirect dismissal, annulment of dismissal and payment of employment benefits The proceeding is in the ruling stage. On August 28, 2024, a ruling was issued rejecting the claim against the Company. On January 21, 2025, one of the main defendants filed an appeal for unification of jurisprudence, which is currently pending. The amount of the lawsuit is approximately ThUS$358.
(h)In January, Mr. José Luis Carreño Soto filed a lawsuit for protection of fundamental rights against a contractor company and the Company before the Labor Court of Antofagasta. On December 3, 2024, the plaintiff and the main defendant signed an agreement, and the plaintiff completely withdrew the lawsuit, thus ending the trial.
(i)In February 2024, Mr. Emiliano Malebrán Pallauta, Mr. Rubén Valenzuela González and Mr. José Aguilera Flores filed a lawsuit against the Company through the Labor Court of Iquique for protection of fundamental rights and secondarily for wrongful dismissal and collection of unpaid wages and severance pay. On January 13, 2025, the court ruled partially in favor of the claim and ordered the Company to pay the sum of ThUS$263. On January 24, 2025, the Company filed an appeal for annulment, which is still pending.
(j)In February 2024, Mr. Manuel Jesús Lobos Cortés filed a lawsuit against the Company through the Labor Court of Iquique for damages caused by occupational illness. The case is awaiting the issuance of a ruling. The lawsuit totals approximately ThUS$279.
(k)In September 2024, the subsidiary Sichuan Dixin New Energy Co., Ltd. was notified of a civil lawsuit filed by Hebei Leheng Energy Saving Equipment Co., Ltd. in its capacity as joint and several co-debtor for disputes arising from a construction contract between the plaintiff and the defendant Xinyu Xinyihe New Material Technology Co., Ltd. The amount of the claim is approximately MUS$2. The case is being heard in the People's Court of DongpoDistrict, Meishan, Sichuan Province. The second trial hearing is suspended and the date for its resumption has not yet been set.
The Company and its subsidiaries have been involved and will probably continue to be involved either as plaintiffs or defendants in certain judicial proceedings that have been and will be heard by the arbitration or ordinary courts of justice that will make the final decision. Those proceedings that are regulated by the appropriate legal regulations are intended to exercise or oppose certain actions or exceptions related to certain mining claims either granted or to be granted and that do not or will not affect in an essential manner the development of the Company and its subsidiaries.
Soquimich Comercial S.A., a subsidiary, has been involved and will probably continue being involved either as plaintiff or defendant in certain judicial proceedings through which it intends to collect and receive the amounts owed, the total nominal value of which is approximately US$1.05 million.
The Company and its subsidiaries have made efforts and continues making efforts to obtain payment of certain amounts that are still owed to the Company due to its activities. Such amounts will continue to be required using judicial or non-judicial means by the plaintiffs, and the actions and exercise related to these are currently in full force and effect.
20.2 Administrative - Environmental contingencies
(a)In November 2016, the SMA filed charges against SQM Salar for the extraction of brine beyond the authorized amount, progressive damage to the vitality of algarrobo trees, incomplete information delivery, and modification of monitoring plan variables, among others. SQM Salar submitted a compliance program, which was approved by the SMA on August 29, 2022. A claim was filed regarding this program with the Environmental Court of Antofagasta by the Council of Atacameño Peoples. On June 11, 2024, the Environmental Court of Antofagasta agreed to reject the claim in its entirety. SQM Salar is currently implementing the compliance program, which is expected to be completed by mid-2025. The SMA will determine whether the program has been satisfactorily implemented and decide if the administrative sanctioning procedure should be concluded.
(b)Through the resolution of April 14, 2020, the General Water Directorate imposed a fine of 4,180 monthly tax units (UTM) on SQM Salar for alleged violations of article 294 of the Water Code. This resolution was appealed, and the outcome is still pending.
(c)In May 2024, the General Water Directorate of the Antofagasta Region initiated a sanctioning procedure against SQM Salar for alleged violations of article 294 of the Water Code at the solar evaporation ponds of the Atacama Salt Flat operation. SQM presented defenses rejecting the alleged non-compliance, and the resolution from the General Water Directorate is still pending.
(d)On May 30, 2024, Albemarle Limited submitted an exceptional review request to the Environmental Assessment Service of the Antofagasta Region regarding the environmental qualification resolutions regulating its operation and that of SQM Salar, in accordance with article 25 quinquies of Environmental Framework Law No. 19.300. The procedure is in its initial stage, and the Environmental Assessment Service ruling on the admissibility of the request is still pending. As such, it could either proceed or be declared inadmissible and closed.
(e)In July 2024, a criminal complaint was filed for alleged environmental non-compliance in the Atacama Salt Flat, which may be investigated under article 308 of the Criminal Code. The complaint is being handled by the Calama Public Prosecutor’s Office, based on the information presented in the exceptional review request for environmental qualification resolutions filed by Albemarle. The case is still under investigation.
(f)Through the resolution of October 15, 2024, the General Water Directorate imposed a fine of 1,285 monthly tax units (UTM) on SQM Salar for alleged violations of articles 5 and 6 of DGA Resolution No. 1.238 regarding the monitoring and reporting system for effective extractions at the groundwater extraction facilities. This resolution was appealed, and the outcome is still pending.
20.3 Tax Contingencies
Claims for the application of the specific tax on mining activities associated with lithium exploitation.
The Chilean Internal Revenue Service (SII) has sought to extend the specific tax on mining activities to lithium mining, which cannot be concessioned under the legal system. As of December 31, 2023, SQM had paid a total of US$986.3 for specific tax on mining activities applied to lithium related to tax years 2012 to 2023 (financial years 2011 to 2022). SQM Salar has filed seven tax claims against the SII. The amount paid included US$59.5 million in over-assessed amounts, US$818.0 million in disputed taxes (net of the corporate income tax impact), and US$108.8 million in interest and penalties. On April 5, 2024, the Santiago Court of Appeals issued a ruling on one of the tax claims, case No. 312-2022, overturning the ruling previously issued by the Santiago Metropolitan Region Tax and Customs Court, which had upheld SQM Salar’s action for annulment on public law grounds regarding tax assessments for tax years 2017 and 2018. Although this ruling by the Santiago Court of Appeals does not affect the other claims filed by SQM Salar against the SII and is still subject to appeal by SQM Salar, it prompted a review of the accounting treatment of the tax claims by the Company’s Board of Directors. As a result, the Company recognized a tax expense of US$1,106.2 million for the year ended December 31, 2023 (US$926.7 million for financial years 2011 to 2022, US$162.8 million for the financial year 2023, and US$16.7 million for financial year 2024). This expense reflects the potential impact of the Santiago Court of Appeals ruling on the tax claims. As of December 31, 2024 and December 31, 2023, the Company recorded non-current tax receivables of US$59.5 million.
The claims are as follows.
(a)On August 26, 2016, a tax claim was filed before the Third Tax and Customs Court of the Metropolitan Region against IRS assessments 169, 170, 171 and 172, for the tax years 2012 to 2014. The amount in dispute is US$17.8 million, where (i) US$11.5 million is the tax claim, after its effect on corporate income taxes and (ii) US$6.3 million is associated interest and penalties. On October 30, 2024, a ruling was issued rejecting the tax claim and the deadline to file an appeal is pending.
(b)On March 24, 2017, a tax claim was filed before the Third Tax and Customs Court of the Metropolitan Region against resolution 156 issued by the Chilean IRS for the tax year 2015. The amount in dispute is US$3.2 million is the tax claim, after its effect on corporate income taxes. On November 4, 2024, a ruling was issued rejecting the tax claim, and the deadline to file an appeal is pending.
(c)On March 24, 2017, a tax claim was filed before the Third Tax and Customs Court of the Metropolitan Region against liquidation No. 207 issued by the Chilean IRS, relating to the 2016 tax year. The amount involved is ThUS$ 5.5 of which (i) ThUS$ 1.2 relates to amounts paid in excess, (ii) ThUS$ 3.8 relates to the tax claimed (net of the effect on corporate tax), and (iii) ThUS$ 0.5 relates to interest and penalties. On October 30, 2024, a ruling was issued rejecting the tax claim and the deadline to file an appeal is pending.
(d)On July 15, 2021, SQM Salar filed before the First Tax and Customs Court of the Metropolitan Region a tax annulment and claim against assessments 65 and 66 for the tax years 2017 and 2018. The amount in dispute is US$ 63.9 million, where (i) US$ 17.6 million is overpaid taxes, (ii) US$ 30.2 million is tax claimed net of corporate income tax, and (iii) US$ 16.1 million is associated interest and penalties. On November 7, 2022, the First Tax and Customs Court upheld SQM Salar's claim and ordered the annulment of these tax assessments. On April 5, 2024, the Santiago Court of Appeals reversed the first instance ruling insofar as it accepted the annulment suit aimed at challenging the liquidations, accepting the claim only in terms of the miscalculated items recognized by the Chilean IRS.
(e)On June 30, 2023, SQM Salar filed before the First Tax and Customs Court of the Metropolitan Region a tax annulment and claim against assessment 23 for the tax year 2019. The amount in dispute is US$ 36.7 million, where (i) US$ 9.7 million is overpaid taxes, and (ii) US$ 27.0 million is the tax claim, after its effect on corporate income taxes. The trial is currently at the discussion stage.
(f)On January 19, 2024, SQM Salar filed with the Third Tax and Customs Court of the Metropolitan Region, a tax annulment and claim against Resolution No. 56/2023 for the tax years 2020 and 2021. The amount in dispute is US$ 20.7 million, where US$ 5.6 million is overpaid taxes and US$ 15.1 million is the tax claim, after its effect on corporate income taxes. The case is currently at the discussion stage.
(g)On January 19, 2024, SQM Salar filed before the Third Tax and Customs Court of the Metropolitan Region a tax annulment and claim against assessment 1 for the tax year 2022. The amount in dispute is US$ 53.5 million, restated to the date of payment, of which US$ 14.4 million is overpaid taxes, US$ 36.1 million is the tax claim, after its effect on corporate income taxes and US$ 3 million is associated interest and penalties. The trial is currently at the discussion stage.
(h)On August 14, 2024, SQM Salar filed an annulment lawsuit on public law grounds and a tax claim before the Santiago Metropolitan Region Third Tax and Customs Court against Settlement No. 67 for the tax year 2023. The disputed amount totals ThUS$785, updated to the date on which the payment was made, of which MMUS$10.9 correspond to over-assessed amounts, ThUS$691.1 corresponds to the claimed tax, andThUS$83 corresponds to interest and penalties. The case is in the discussion phase.
The details of resolutions and settlements with pending claims are provided below:
The Chilean IRS has not issued a settlement for differences on specific mining tax with respect to the 2024 tax year (2023 business year). If the Chilean IRS uses criteria similar to that used in previous years, then it may issue settlements in the future covering this year. The Company's estimate for the amount that could be settled by the SII, corresponding to the business year 2023 and 2024, amounts to MUS$ 179.4 (net of first category tax), without considering interest and penalties.
Others claims.
(a)Exploraciones Mineras S.A. has filed a tax claim with the First Tax and Customs Court of the Metropolitan Region against Resolution Ex. No. 1130 issued by the Tax Department No. 2 of the Chilean IRS for East Santiago on April 30, 2019, which disallowed the tax loss of US$3.8 million declared in the 2016 tax year. On January 31, 2025, the First Tax and Customs Court partially accepted the claim, and the ruling is expected to be appealed by Exploraciones Mineras S.A. within the coming days.
(b)SQM Salar maintains a tax claim with the Fourth Tax and Customs Court of the Metropolitan Region, due to the rejection of expenses for donations in the amount of ThUS$209.1. The case is awaiting the issuance of the resolution that receives the case as evidence.
(c)SQM Salar has filed a tax claim with the First Tax and Customs Court of the Metropolitan Region against Resolution Ex. DGC 17200 No. 152 of August 30, 2022, which disallowed the donation expense under Article 21 of the Income Tax Law. The case amounts to ThUS$319.4 and is awaiting the issuance of the resolution that receives the case as evidence.
(d)SQM Nitratos has filed a tax claim before the Santiago Metropolitan Region First Tax and Customs Court against Tax Settlement No. 15, dated August 30, 2022, which rejected a donation expense deduction under article 21 of the Income Tax Law. The disputed amount is MUS$319.4, and the case is pending a ruling on the evidence phase.
(e)The Company has also filed a tax claim before the Santiago Metropolitan Region First Tax and Customs Court against Tax Settlement No. 16, dated August 30, 2022, which rejected a donation expense deduction under article 21 of the Income Tax Law. These donations were made to the same recipient institutions as those in the previous tax settlement. The disputed amount is ThUS$511, and the case is pending a ruling on the evidence phase.
(f)On December 19, 2024, the SII issued settlements No. 484280, 484282, 484286, 484288, 484289, 484290, 484291, 484293, and 484294, through which it re-determined the mandatory monthly provisional payments for the specific tax on mining activities on SQM Salar’s lithium extraction revenue for the periods from January to September 2024, for a total amount of ThUS$78.3, include penalties and interest amounting ThUS$25.3. SQM Salar appealed these settlements through a voluntary administrative request for reconsideration, which is still pending resolution.
20.4 Association with Codelco
On July 26, 2024, Inversiones TLC SpA, a subsidiary of Tianqi, filed an appeal of illegality before the Court of Appeals of Santiago against the ordinary ruling No. 74.987 issued on June 18, 2024 by the CMF, which determined that the association between SQM and Codelco, reported as an material event on May 31, 2024, does not require approval by the Company's extraordinary shareholders' meeting. The Company became a party to these proceedings on August 1, 2024. The proceeding is awaiting pleadings before the Court of Appeals of Santiago, a court that on various occasions has decided not to grant Tianqi's requests to suspend the effects of the association. Additionally, there are other legal procedures against entities other than the Company or SQM Salar which, if successful, could delay or nullify SQM and Codelco’s partnership.
20.5 Other matters
The Company is required to be in compliance with all applicable laws and regulations in Chile and internationally with respect to anti-corruption, anti-money laundering and other regulatory matters, including the Foreign Corrupt Practices Act (FCPA). The Company has received a request for information and subpoena from the SEC requesting information related to our business operations, compliance program, and allegations of potential violations of the FCPA and other anti-corruption laws. The SEC has said that the investigation is a non-public, fact-finding inquiry and we are not aware that any conclusion has been reached by the SEC. Management has undertaken an internal review to identify information to respond to the SEC's request thus actively cooperating in the review.
20.6 Indirect guarantees
As of December 31, 2024 and 2023, there are no indirect guarantees.
Note 21 Gains (losses) from operating activities in the statement of income of expenses, included according to their nature.
21.1 Revenue from operating activities customer activities
The Group derives revenues from the sale of goods (which are recognized at one point in time) and from the provision of services (which are recognized over time) and are distributed among the following geographical areas and main product and service lines:
(a)Geographic areas:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| For the year ended December 31, 2024 |
| Geographic areas |
|
Specialty
plant
nutrition |
|
Iodine and
derivatives |
|
Lithium and
derivatives |
|
Potassium |
|
Industrial
chemicals |
|
Other |
|
Total
ThUS$ |
| Chile |
|
110,282 |
|
2,012 |
|
600 |
|
36,506 |
|
1,129 |
|
21,022 |
|
171,551 |
| Latin America and the Caribbean |
|
113,524 |
|
20,933 |
|
4,300 |
|
89,473 |
|
7,749 |
|
4,650 |
|
240,629 |
| Europe |
|
156,500 |
|
368,448 |
|
97,000 |
|
40,270 |
|
18,919 |
|
470 |
|
681,607 |
| North America |
|
367,530 |
|
158,253 |
|
57,900 |
|
61,145 |
|
43,519 |
|
1,447 |
|
689,794 |
| Asia and Others |
|
194,104 |
|
418,666 |
|
2,081,450 |
|
43,389 |
|
6,839 |
|
732 |
|
2,745,180 |
| Total |
|
941,940 |
|
968,312 |
|
2,241,250 |
|
270,783 |
|
78,155 |
|
28,321 |
|
4,528,761 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| For the year ended December 31, 2023 |
| Geographic areas |
|
Specialty
plant
nutrition |
|
Iodine and
derivatives |
|
Lithium and
derivatives |
|
Potassium |
|
Industrial
chemicals |
|
Other |
|
Total
ThUS$ |
| Chile |
|
109,669 |
|
|
1,603 |
|
|
2,327 |
|
|
31,356 |
|
|
1,136 |
|
|
23,590 |
|
|
169,681 |
|
| Latin America and the Caribbean |
|
76,157 |
|
|
21,523 |
|
|
7,289 |
|
|
93,868 |
|
|
10,489 |
|
|
973 |
|
|
210,299 |
|
| Europa |
|
128,370 |
|
|
368,696 |
|
|
278,360 |
|
|
30,357 |
|
|
21,054 |
|
|
1,275 |
|
|
828,112 |
|
| North America |
|
411,586 |
|
|
122,025 |
|
|
134,768 |
|
|
67,232 |
|
|
47,074 |
|
|
926 |
|
|
783,611 |
|
| Asia and Others |
|
188,130 |
|
|
378,304 |
|
|
4,757,370 |
|
|
56,237 |
|
|
95,470 |
|
|
276 |
|
|
5,475,787 |
|
| Total |
|
913,912 |
|
|
892,151 |
|
|
5,180,114 |
|
|
279,050 |
|
|
175,223 |
|
|
27,040 |
|
|
7,467,490 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| For the year ended December 31, 2022 |
| Geographic areas |
|
Specialty
plant
nutrition |
|
Iodine and
derivatives |
|
Lithium and
derivatives |
|
Potassium |
|
Industrial
chemicals |
|
Other |
|
Total
ThUS$ |
| Chile |
|
128,829 |
|
|
1,523 |
|
|
1,854 |
|
|
64,409 |
|
|
1,199 |
|
|
25,334 |
|
|
223,148 |
|
| Latin America and the Caribbean |
|
125,712 |
|
|
16,328 |
|
|
5,275 |
|
|
179,621 |
|
|
11,820 |
|
|
1,185 |
|
|
339,941 |
|
| Europa |
|
196,930 |
|
|
288,854 |
|
|
390,832 |
|
|
27,275 |
|
|
27,725 |
|
|
942 |
|
|
932,558 |
|
| North America |
|
489,327 |
|
|
141,683 |
|
|
151,152 |
|
|
71,711 |
|
|
59,402 |
|
|
912 |
|
|
914,187 |
|
| Asia and Others |
|
231,536 |
|
|
305,951 |
|
|
7,603,826 |
|
|
94,164 |
|
|
65,054 |
|
|
213 |
|
|
8,300,744 |
|
| Total |
|
1,172,334 |
|
|
754,339 |
|
|
8,152,939 |
|
|
437,180 |
|
|
165,200 |
|
|
28,586 |
|
|
10,710,578 |
|
(b)Main product and service lines:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Products and Services |
|
For the period from January to December of the year |
|
2024 |
|
2023 |
|
2022 |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Specialty plant nutrition |
|
941,940 |
|
913,912 |
|
1,172,334 |
-Sodium Nitrates |
|
16,906 |
|
25,056 |
|
21,294 |
-Potassium nitrate and sodium potassium nitrate |
|
531,961 |
|
502,349 |
|
700,081 |
-Specialty Blends |
|
246,219 |
|
235,290 |
|
285,027 |
-Other specialty fertilizers |
|
146,854 |
|
151,217 |
|
165,932 |
| Iodine and derivatives |
|
968,312 |
|
892,151 |
|
754,339 |
| Lithium and derivatives |
|
2,241,250 |
|
5,180,114 |
|
8,152,939 |
| Potassium |
|
270,783 |
|
279,050 |
|
437,180 |
| Industrial chemicals |
|
78,155 |
|
175,223 |
|
165,200 |
| Other |
|
28,321 |
|
27,040 |
|
28,586 |
| Total |
|
4,528,761 |
|
7,467,490 |
|
10,710,578 |
21.2 Cost of sales
Cost of sales broken down by nature of expense:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Nature of expense |
|
For the period from January
to December of the year |
|
2024 |
|
2023 |
|
2022 |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Raw materials and consumables used |
|
(1,187,712) |
|
|
(1,109,139) |
|
|
(1,035,451) |
|
| Classes of employee benefit expenses |
|
(344,078) |
|
|
(308,972) |
|
|
(308,744) |
|
| Depreciation expense |
|
(312,001) |
|
|
(252,746) |
|
|
(218,714) |
|
| Depreciation of Right-of-use Assets (contracts under IFRS 16) |
|
(17,746) |
|
|
(11,719) |
|
|
(6,549) |
|
| Amortization expense |
|
(7,622) |
|
|
(12,415) |
|
|
(16,413) |
|
| Investment plan expenses |
|
(49,499) |
|
|
(25,638) |
|
|
(18,293) |
|
| Provision for materials, spare parts and supplies |
|
(3,292) |
|
|
(10,065) |
|
|
(7,099) |
|
| Contractors |
|
(265,729) |
|
|
(226,180) |
|
|
(194,295) |
|
| Operating leases |
|
(85,117) |
|
|
(84,423) |
|
|
(71,420) |
|
| Mining patents |
|
(17,861) |
|
|
(7,560) |
|
|
(14,585) |
|
| Operational transportation |
|
(94,734) |
|
|
(107,074) |
|
|
(91,130) |
|
| Freight / product transportation costs |
|
(288,135) |
|
|
(263,285) |
|
|
(247,889) |
|
| Insurance |
|
(42,237) |
|
|
(55,204) |
|
|
(43,323) |
|
| Corfo rights and other agreements |
|
(397,473) |
|
|
(1,868,850) |
|
|
(3,272,897) |
|
| Expenses related to variable lease payments (contracts under IFRS 16) |
|
(6,138) |
|
|
(4,700) |
|
|
(3,631) |
|
| Variation in gross inventory |
|
(91,544) |
|
|
20,024 |
|
|
628,671 |
|
| Variation in inventory provision |
|
19,136 |
|
|
(29,711) |
|
|
(27,324) |
|
| Other |
|
(9,872) |
|
|
(34,779) |
|
|
(24,867) |
|
| Total |
|
(3,201,654) |
|
|
(4,392,436) |
|
|
(4,973,953) |
|
21.3 Other income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Other income |
|
For the period from January
to December of the year |
|
2024 |
|
2023 |
|
2022 |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Discounts obtained from suppliers |
|
1,958 |
|
2,002 |
|
1,404 |
| Fines charged to suppliers |
|
46 |
|
4,118 |
|
593 |
| Amounts recovered from insurance |
|
1,240 |
|
1,242 |
|
1,646 |
| Overestimate of provisions for third-party obligations |
|
309 |
|
1,272 |
|
86 |
| Sale of assets classified as property, plant and equipment |
|
43 |
|
11 |
|
365 |
| Sales of materials, spare parts and supplies |
|
842 |
|
147 |
|
246 |
| Reimbursement of mining patents and notary expenses |
|
8,511 |
|
5,205 |
|
2,106 |
| Options on mining properties |
|
2,112 |
|
376 |
|
1,126 |
| Easements, pipelines and roads |
|
414 |
|
— |
|
— |
| Government Grants (1) |
|
13,076 |
|
24,387 |
|
— |
| reimbursements Royalty |
|
2,000 |
|
— |
|
— |
| Others |
|
1,678 |
|
1,797 |
|
2,282 |
| Total |
|
32,229 |
|
40,557 |
|
9,854 |
(1) The Company received an unconditional government grant for US$13,076 in December 2024 and US$ 24,387 in September 2023, respectively, related to the permanence of its commercial office of SQM Shanghai Chemicals Co. Ltd. in the current district, which was recognized as part of this category.
21.4 Administrative expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Administrative expenses |
|
For the period from January
to December of the year |
|
2024 |
|
2023 |
|
2022 |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Employee benefit expenses |
|
(93,824) |
|
|
(75,450) |
|
|
(63,713) |
|
| Marketing costs |
|
(6,433) |
|
|
(6,611) |
|
|
(5,661) |
|
| Amortization expenses |
|
(136) |
|
|
(444) |
|
|
(126) |
|
| Entertainment expenses |
|
(6,384) |
|
|
(6,067) |
|
|
(5,576) |
|
| Advisory services |
|
(29,860) |
|
|
(32,562) |
|
|
(27,235) |
|
| Lease of buildings and facilities |
|
(1,755) |
|
|
(4,331) |
|
|
(3,829) |
|
| Insurance |
|
(6,254) |
|
|
(3,778) |
|
|
(3,011) |
|
| Office expenses |
|
(9,165) |
|
|
(9,230) |
|
|
(8,596) |
|
| Contractors |
|
(8,957) |
|
|
(11,067) |
|
|
(7,283) |
|
| Depreciation of Right-of-use Assets (contracts under IFRS 16) |
|
(4,919) |
|
|
(3,463) |
|
|
(2,656) |
|
| Other expenses |
|
(18,272) |
|
|
(22,762) |
|
|
(14,958) |
|
| Total |
|
(185,959) |
|
|
(175,765) |
|
|
(142,644) |
|
21.5 Other expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Other expenses |
|
For the period from January
to December of the year |
|
2024 |
|
2023 |
|
2022 |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Impairment (losses) /reversals of impairment losses recognized in income for the year |
|
|
|
|
|
|
| Properties, plant and equipment |
|
(10,759) |
|
|
(47,059) |
|
|
(8,084) |
|
| Intangible assets other than goodwill |
|
— |
|
|
— |
|
|
(520) |
|
| Impairment of materials, spare parts, and supplies |
|
3,625 |
|
|
— |
|
|
— |
|
| Goodwill |
|
— |
|
|
(9) |
|
(33,629) |
|
| Subtotal |
|
(7,134) |
|
|
(47,068) |
|
|
(42,233) |
|
| Other expenses, by nature |
|
|
|
|
|
|
| Legal expenses |
|
(47,887) |
|
|
17,127 |
|
|
(6,841) |
|
| VAT and other unrecoverable taxes |
|
(1,779) |
|
|
(2,683) |
|
|
(5,694) |
|
| Fines paid |
|
(326) |
|
|
(542) |
|
|
(617) |
|
| Investment plan expenses |
|
(11,546) |
|
|
(13,255) |
|
(727) |
|
| Exploration expenses |
|
— |
|
— |
|
|
— |
|
| Contributions and donations |
|
(35,250) |
|
|
(38,756) |
|
|
(19,096) |
|
| Other operating expenses |
|
(776) |
|
|
(8,223) |
|
|
(763) |
|
| Subtotal |
|
(97,564) |
|
|
(46,332) |
|
|
(33,738) |
|
| Total |
|
(104,698) |
|
|
(93,400) |
|
|
(75,971) |
|
21.6 Other (losses) gains
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Other (losses) income |
|
For the period from January
to December of the year |
|
2024 |
|
2023 |
|
2022 |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Sale of investments in associates |
|
— |
|
|
— |
|
|
60 |
|
| Adjust previous year application method of participation |
|
209 |
|
|
(378) |
|
|
(1) |
|
| Reversal/Impairment of interests in associates |
|
246 |
|
|
626 |
|
|
1,349 |
|
| Sale of investments in joint ventures |
|
— |
|
|
(2,599) |
|
|
— |
|
| Others |
|
(2,597) |
|
|
97 |
|
|
(1,291) |
|
| Total |
|
(2,142) |
|
|
(2,254) |
|
|
117 |
|
21.7 Impairment losses and reversals for financial assets
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Impairment of financial assets and reversal of impairment losses |
|
For the period from January
to December of the year |
|
2024 |
|
2023 |
|
2022 |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| (Impairment) reversal of value of financial assests (See Note 12.2) |
|
(639) |
|
|
202 |
|
|
3,369 |
|
| Totals |
|
(639) |
|
|
202 |
|
|
3,369 |
|
21.8 Summary of expenses by nature
The following summary considers notes 21.2, 21.4 and 21.5.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
For the period from January
to December of the year |
| Expenses by nature |
|
2024 |
|
2023 |
|
2022 |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Raw materials and consumables |
|
(1,187,712) |
|
|
(1,109,139) |
|
|
(1,035,451) |
|
| Employee benefit expenses |
|
(437,902) |
|
|
(384,422) |
|
|
(372,457) |
|
| Depreciation expense |
|
(312,001) |
|
|
(252,746) |
|
|
(218,714) |
|
| Depreciation of right-of-use assets |
|
(22,665) |
|
|
(15,182) |
|
|
(9,205) |
|
| Impairment of properties, plant and equipment, intangible and Goodwill |
|
(7,134) |
|
|
(47,068) |
|
|
(42,233) |
|
| Amortization expense |
|
(7,758) |
|
|
(12,859) |
|
|
(16,539) |
|
| Legal expenses |
|
(47,887) |
|
|
17,127 |
|
|
(6,841) |
|
| Investment plan expenses |
|
(61,045) |
|
|
(38,893) |
|
|
(19,020) |
|
| Provision for materials, spare parts and supplies |
|
(3,292) |
|
|
(10,065) |
|
|
(7,099) |
|
| Contractors |
|
(274,686) |
|
|
(237,247) |
|
|
(201,578) |
|
| Operational leases |
|
(86,872) |
|
|
(88,754) |
|
|
(75,249) |
|
| Mining patents |
|
(17,861) |
|
|
(7,560) |
|
|
(14,585) |
|
| Operational transportation |
|
(94,734) |
|
|
(107,074) |
|
|
(91,130) |
|
| Freight and product transportation costs |
|
(288,135) |
|
|
(263,285) |
|
|
(247,889) |
|
| Corfo rights and other agreements |
|
(432,723) |
|
|
(1,907,606) |
|
|
(3,272,897) |
|
| Expenses related to variable lease payments (contracts under IFRS 16) |
|
(6,138) |
|
|
(4,700) |
|
|
(3,631) |
|
| Insurance |
|
(48,491) |
|
|
(58,982) |
|
|
(46,334) |
|
| Consultant and advisor services |
|
(29,860) |
|
|
(32,562) |
|
|
(27,235) |
|
| Variation in gross inventory |
|
(91,544) |
|
|
20,024 |
|
|
628,671 |
|
| Variation in inventory provision |
|
19,136 |
|
|
(29,711) |
|
|
(27,324) |
|
| Other expenses |
|
(53,007) |
|
|
(90,897) |
|
|
(85,828) |
|
| Total expenses by nature |
|
(3,492,311) |
|
|
(4,661,601) |
|
|
(5,192,568) |
|
21.9 Finance expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Finance expenses |
|
For the period from January
to December of the year |
|
2024 |
|
2023 |
|
2022 |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Interest expense from bank borrowings and overdrafts |
|
(5,485) |
|
|
(3,890) |
|
|
(3,065) |
|
| Interest expense from bonds |
|
(162,258) |
|
|
(106,871) |
|
|
(108,387) |
|
| Interest expense from loans |
|
(84,821) |
|
|
(55,926) |
|
|
(2,098) |
|
| Reversal of capitalized interest expenses |
|
67,126 |
|
43,331 |
|
24,708 |
| Financial expenses for restoration and rehabilitation provisions |
|
2,103 |
|
2,368 |
|
|
9,357 |
| Interest on lease agreement |
|
(2,820) |
|
|
(2,038) |
|
|
(1,226) |
|
| Loss on debt redemption and extinguishment |
|
(982) |
|
|
— |
|
|
— |
|
| Other finance costs |
|
(10,407) |
|
|
(15,376) |
|
|
(5,940) |
|
| Total |
|
(197,544) |
|
|
(138,402) |
|
|
(86,651) |
|
21.10 Finance income
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Finance income |
|
For the period from January
to December of the year |
|
2024 |
|
2023 |
|
2022 |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Interest from term deposits |
|
67,407 |
|
|
81,981 |
|
|
31,122 |
|
| Interest from marketable securities |
|
11,193 |
|
|
31,920 |
|
|
10,252 |
|
| Interest from maintenance of minimum bank balance in current account |
|
3,246 |
|
|
12 |
|
|
6 |
|
| Other finance income |
|
21,086 |
|
|
4,614 |
|
|
3,318 |
|
| Other finance interests |
|
710 |
|
|
4,199 |
|
|
2,340 |
|
| Total |
|
103,642 |
|
|
122,726 |
|
|
47,038 |
|
Note 22 Reportable segments
22.1 Reportable segments
(a)General information:
The amount of each item presented in each operating segment is equal to that reported to the highest authority that makes decisions regarding the operation, in order to decide on the allocation of resources to the defined segments and to assess its performance.
These operating segments mentioned are consistent with the way the Company is managed and how results will be reported by the Company. These segments reflect separate operating results that are regularly reviewed by the executive responsible for operational decisions in order to make decisions about the resources to be allocated to the segment and assess its performance (See Note 22.2).
The performance of each segment is measured based on net income and revenues. Inter-segment sales are made using terms and conditions at current market rates.
(b)Factors used to identify segments on which a report should be presented:
The segments covered in the report are strategic business units that offer different products and services. These are managed separately because each business requires different technology and marketing strategies.
(c)Description of the types of products and services from which each reportable segment obtains its income from ordinary activities
The operating segments are as follows:
(i)Specialty plant nutrients
(ii)Iodine and its derivatives
(iii)Lithium and its derivatives
(iv)Industrial chemicals
(v)Potassium
(vi)Other products and services
(d)Description of income sources for all the other segments
Information regarding assets, liabilities, gains and expenses that cannot be assigned to the segments indicated above, due to the nature of production processes, is included under the "Unallocated amounts” category of the disclosed information.
(e)Description of the nature of the differences between measurements of results of reportable segments and the result of the entity before the expense or income tax expense of incomes
The information reported in the segments is extracted from the Company’s consolidated financial statements and therefore there is no need to prepare reconciliations between the data mentioned above and those reported in the respective segments, according to what is stated in paragraph 28 of IFRS 8, "Operating Segments".
For the allocation of inventory valuation costs, we identify the direct expenses (can be directly allocated to products) and the common expenses (belong to co-production processes, for example common leaching expenses for production of Iodine and Nitrates), Direct costs are directly allocated to the product and the common costs are distributed according to percentages that consider different variables in their determination, such as margins, rotation of inventories, revenue, production etc.
The allocation of other common costs that are not included in the inventory valuation process, but go straight to the cost of sales, use similar criteria: the costs associated with a product or sales in particular are assigned to that particular product or sales, and the common costs associated with different products or business lines are allocated according to the sales.
(f)Description of the nature of the differences between measurements of assets of reportable segments and the Company´s assets
Assets are not shown classified by segments, as this information is not readily available, some of these assets are not separable by the type of activity by which they are affected since this information is not used by management in decision-making with respect to resources to be allocated to each defined segment. All assets are disclosed in the "unallocated amounts" category.
(g)Description of the nature of the differences between measurements of liabilities of reportable segments and the Company’s liabilities
Liabilities are not shown classified by segments, as this information is not readily available, some of these liabilities are not separable by the type of activity by which they are affected, since this information is not used by management in decision-making regarding resources to be allocated to each defined segment. All liabilities are disclosed in the "unallocated amounts" category.
22.2 Reportable segment disclosures:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating segment items for the year ended December 31, 2024 |
|
Specialty
plant
nutrients |
|
Iodine and its
derivatives |
|
Lithium and
its derivatives |
|
Industrial
chemicals |
|
Potassium |
|
Other
products
and services |
|
Reportable
segments |
|
Operating
segments |
|
Unallocated
amounts |
|
Total as of
December 31,
2024 |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Revenue |
|
941,940 |
|
|
968,312 |
|
|
2,241,250 |
|
|
78,155 |
|
|
270,783 |
|
|
28,321 |
|
|
4,528,761 |
|
|
4,528,761 |
|
|
— |
|
|
4,528,761 |
|
| Revenues from transactions with other operating segments of the same entity |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
| Revenues from external customers and transactions with other operating segments of the same entity |
|
941,940 |
|
|
968,312 |
|
|
2,241,250 |
|
|
78,155 |
|
|
270,783 |
|
|
28,321 |
|
|
4,528,761 |
|
|
4,528,761 |
|
|
— |
|
|
4,528,761 |
|
| Costs of sales |
|
(775,152) |
|
|
(444,904) |
|
|
(1,666,328) |
|
|
(47,453) |
|
|
(236,390) |
|
|
(31,427) |
|
|
(3,201,654) |
|
|
(3,201,654) |
|
|
— |
|
|
(3,201,654) |
|
| Administrative expenses |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(185,959) |
|
|
(185,959) |
|
| Finance expense |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(197,544) |
|
|
(197,544) |
|
| Depreciation and amortization expense |
|
(72,211) |
|
|
(57,038) |
|
|
(187,538) |
|
|
(6,328) |
|
|
(19,275) |
|
|
(34) |
|
|
(342,424) |
|
|
(342,424) |
|
|
— |
|
|
(342,424) |
|
| The entity’s interest in the income of associates and joint ventures accounted for by the equity method |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
11,025 |
|
|
11,025 |
|
| Income before taxes |
|
166,788 |
|
|
523,408 |
|
|
574,922 |
|
|
30,702 |
|
|
34,393 |
|
|
(3,106) |
|
|
1,327,107 |
|
|
1,327,107 |
|
|
(352,693) |
|
|
974,414 |
|
| Income tax expense |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(282,573) |
|
|
(282,573) |
|
| Net income (loss) |
|
166,788 |
|
|
523,408 |
|
|
574,922 |
|
|
30,702 |
|
|
34,393 |
|
|
(3,106) |
|
|
1,327,107 |
|
|
1,327,107 |
|
|
(635,266) |
|
|
691,841 |
|
| Assets |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
11,495,569 |
|
|
11,495,569 |
|
| Equity-accounted investees |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
585,794 |
|
|
585,794 |
|
| Incorporation of non-current assets other than financial instruments, deferred tax assets, net defined benefit assets and rights arising from insurance contracts |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(1,181,113) |
|
|
(1,181,113) |
|
| Liabilities |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
6,297,502 |
|
|
6,297,502 |
|
| Impairment loss of financial assets recognized in income |
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
— |
|
|
(639) |
|
|
(639) |
|
| Impairment loss of non-financial assets recognized in income |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(7,134) |
|
|
(7,134) |
|
| Cash flows |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cash flows from operating activities |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
1,274,678 |
|
|
1,274,678 |
|
| Cash flows used in investing activities |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(1,213,992) |
|
|
(1,213,992) |
|
| Cash flows from financing activities |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
282,383 |
|
|
282,383 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating segment items for the year ended December 31, 2023 |
|
Specialty
plant
nutrients |
|
Iodine and its
derivatives |
|
Lithium and
its derivatives |
|
Industrial
chemicals |
|
Potassium |
|
Other
products
and services |
|
Reportable
segments |
|
Operating
segments |
|
Unallocated
amounts |
|
Total as of
December 31,
2023 |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Revenue |
|
913,912 |
|
|
892,151 |
|
|
5,180,114 |
|
|
175,223 |
|
|
279,050 |
|
|
27,040 |
|
|
7,467,490 |
|
|
7,467,490 |
|
|
— |
|
|
7,467,490 |
|
| Revenues from transactions with other operating segments of the same entity |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
| Revenues from external customers and transactions with other operating segments of the same entity |
|
913,912 |
|
|
892,151 |
|
|
5,180,114 |
|
|
175,223 |
|
|
279,050 |
|
|
27,040 |
|
|
7,467,490 |
|
|
7,467,490 |
|
|
— |
|
|
7,467,490 |
|
| Costs of sales |
|
(691,509) |
|
|
(355,717) |
|
|
(2,955,669) |
|
|
(141,351) |
|
|
(219,597) |
|
|
(28,593) |
|
|
(4,392,436) |
|
|
(4,392,436) |
|
|
— |
|
|
(4,392,436) |
|
| Administrative expenses |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(175,765) |
|
|
(175,765) |
|
| Finance expense |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(138,402) |
|
|
(138,402) |
|
| Depreciation and amortization expense |
|
(70,342) |
|
|
(53,140) |
|
|
(124,010) |
|
|
(15,232) |
|
|
(18,006) |
|
|
(57) |
|
|
(280,787) |
|
|
(280,787) |
|
|
— |
|
|
(280,787) |
|
| The entity’s interest in the income of associates and joint ventures accounted for by the equity method |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
593 |
|
|
593 |
|
| Income before taxes |
|
222,403 |
|
|
536,434 |
|
|
2,224,445 |
|
|
33,872 |
|
|
59,453 |
|
|
(1,553) |
|
|
3,075,054 |
|
|
3,075,054 |
|
|
(268,036) |
|
|
2,807,018 |
|
| Income tax expense |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(1,876,751) |
|
|
(1,876,751) |
|
| Net income (loss) |
|
222,403 |
|
|
536,434 |
|
|
2,224,445 |
|
|
33,872 |
|
|
59,453 |
|
|
(1,553) |
|
|
3,075,054 |
|
|
3,075,054 |
|
|
(2,144,787) |
|
|
930,267 |
|
| Assets |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
10,778,837 |
|
|
10,778,837 |
|
| Equity-accounted investees |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
86,417 |
|
|
86,417 |
|
| Incorporation of non-current assets other than financial instruments, deferred tax assets, net defined benefit assets and rights arising from insurance contracts |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
2,785,385 |
|
|
2,785,385 |
|
| Liabilities |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
6,301,408 |
|
|
6,301,408 |
|
| Impairment loss of financial assets recognized in income |
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
— |
|
|
202 |
|
|
202 |
|
| Impairment loss of non-financial assets recognized in income |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(47,068) |
|
|
(47,068) |
|
| Cash flows |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cash flows from operating activities |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(196,639) |
|
|
(196,639) |
|
| Cash flows used in investing activities |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(1,481,493) |
|
|
(1,481,493) |
|
| Cash flows from financing activities |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
66,261 |
|
|
66,261 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Operating segment items for the year ended December 31, 2022 |
|
Specialty
plant
nutrients |
|
Iodine and its
derivatives |
|
Lithium and
its derivatives |
|
Industrial
chemicals |
|
Potassium |
|
Other
products
and services |
|
Reportable
segments |
|
Operating
segments |
|
Unallocated
amounts |
|
Total as of
December 31,
2022 |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Revenue |
|
1,172,334 |
|
|
754,339 |
|
|
8,152,939 |
|
|
165,200 |
|
|
437,180 |
|
|
28,586 |
|
|
10,710,578 |
|
|
10,710,578 |
|
|
— |
|
|
10,710,578 |
|
| Revenues from transactions with other operating segments of the same entity |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
| Revenues from external customers and transactions with other operating segments of the same entity |
|
1,172,334 |
|
|
754,339 |
|
|
8,152,939 |
|
|
165,200 |
|
|
437,180 |
|
|
28,586 |
|
|
10,710,578 |
|
|
10,710,578 |
|
|
— |
|
|
10,710,578 |
|
| Costs of sales |
|
(722,261) |
|
|
(282,100) |
|
|
(3,636,852) |
|
|
(112,247) |
|
|
(193,581) |
|
|
(26,912) |
|
|
(4,973,953) |
|
|
(4,973,953) |
|
|
— |
|
|
(4,973,953) |
|
| Administrative expenses |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(142,644) |
|
|
(142,644) |
|
| Finance expense |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(86,651) |
|
|
(86,651) |
|
| Depreciation and amortization expense |
|
(63,321) |
|
|
(53,734) |
|
|
(88,510) |
|
|
(14,724) |
|
|
(24,043) |
|
|
(126) |
|
|
(244,458) |
|
|
(244,458) |
|
|
— |
|
|
(244,458) |
|
| The entity’s interest in the income of associates and joint ventures accounted for by the equity method |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
20,159 |
|
|
20,159 |
|
| Income before taxes |
|
450,073 |
|
|
472,239 |
|
|
4,516,087 |
|
|
52,953 |
|
|
243,599 |
|
|
1,674 |
|
|
5,736,625 |
|
|
5,736,625 |
|
|
(250,129) |
|
|
5,486,496 |
|
| Income tax expense |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(1,572,212) |
|
|
(1,572,212) |
|
| Net income (loss) |
|
450,073 |
|
|
472,239 |
|
|
4,516,087 |
|
|
52,953 |
|
|
243,599 |
|
|
1,674 |
|
|
5,736,625 |
|
|
5,736,625 |
|
|
(1,822,341) |
|
|
3,914,284 |
|
| Assets |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
10,819,101 |
|
|
10,819,101 |
|
| Equity-accounted investees |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
54,386 |
|
|
54,386 |
|
| Incorporation of non-current assets other than financial instruments, deferred tax assets, net defined benefit assets and rights arising from insurance contracts |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
1,757,581 |
|
|
1,757,581 |
|
| Other Liabilities |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
5,887,100 |
|
|
5,887,100 |
|
| Impairment loss of financial assets recognized in income |
|
|
|
|
|
|
|
|
|
|
|
|
|
— |
|
|
— |
|
|
3,369 |
|
|
3,369 |
|
| Impairment loss of non-financial assets recognized in income |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(42,233) |
|
|
(42,233) |
|
| Cash flows |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Cash flows from operating activities |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
4,077,595 |
|
|
4,077,595 |
|
| Cash flows used in investing activities |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(909,401) |
|
|
(909,401) |
|
| Cash flows from financing activities |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
(2,002,969) |
|
|
(2,002,969) |
|
22.3 Statement of comprehensive income classified by reportable segments based on groups of products
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Items in the statement of comprehensive income for the year ended December 31,2024 |
|
Specialty plant nutrients |
|
Iodine and its derivatives |
|
Lithium and its derivatives |
|
Industrial chemicals |
|
Potassium |
|
Other products and services |
|
Corporate Unit |
|
Total segments and Corporate unit |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Revenue |
|
941,940 |
|
968,312 |
|
2,241,250 |
|
78,155 |
|
270,783 |
|
28,321 |
|
— |
|
4,528,761 |
| Costs of sales |
|
(775,152) |
|
|
(444,904) |
|
|
(1,666,328) |
|
|
(47,453) |
|
|
(236,390) |
|
|
(31,427) |
|
|
— |
|
(3,201,654) |
|
| Gross profit |
|
166,788 |
|
523,408 |
|
574,922 |
|
30,702 |
|
34,393 |
|
(3,106) |
|
— |
|
1,327,107 |
| Other incomes by function |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
32,229 |
|
32,229 |
| Administrative expenses |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(185,959) |
|
|
(185,959) |
|
| Other expenses by function |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(104,698) |
|
|
(104,698) |
|
| Impairment of gains and review of impairment losses (impairment losses) determined in accordance with IFRS 9 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(639) |
|
(639) |
| Other losses |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(2,142) |
|
(2,142) |
| Financial income |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
103,642 |
|
103,642 |
| Financial costs |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(197,544) |
|
|
(197,544) |
|
| Interest in the income of associates and joint ventures accounted for by the equity method |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
11,025 |
|
11,025 |
| Exchange differences |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(8,607) |
|
|
(8,607) |
|
| Income before taxes |
|
166,788 |
|
523,408 |
|
574,922 |
|
30,702 |
|
34,393 |
|
(3,106) |
|
(352,693) |
|
|
974,414 |
| Income tax expense |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(282,573) |
|
|
(282,573) |
|
| Net income |
|
166,788 |
|
523,408 |
|
574,922 |
|
30,702 |
|
34,393 |
|
(3,106) |
|
(635,266) |
|
|
691,841 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Items in the statement of comprehensive income for the year ended December 31,2023 |
|
Specialty plant nutrients |
|
Iodine and its derivatives |
|
Lithium and its derivatives |
|
Industrial chemicals |
|
Potassium |
|
Other products and services |
|
Corporate Unit |
|
Total segments and Corporate unit |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Revenue |
|
913,912 |
|
892,151 |
|
5,180,114 |
|
175,223 |
|
279,050 |
|
27,040 |
|
— |
|
7,467,490 |
| Costs of sales |
|
(691,509) |
|
|
(355,717) |
|
|
(2,955,669) |
|
|
(141,351) |
|
|
(219,597) |
|
|
(28,593) |
|
|
— |
|
(4,392,436) |
|
| Gross profit |
|
222,403 |
|
536,434 |
|
2,224,445 |
|
33,872 |
|
59,453 |
|
(1,553) |
|
— |
|
3,075,054 |
| Other incomes by function |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
40,557 |
|
40,557 |
| Administrative expenses |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(175,765) |
|
|
(175,765) |
|
| Other expenses by function |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(93,400) |
|
|
(93,400) |
|
| Impairment of gains and review of impairment losses (impairment losses) determined in accordance with IFRS 9 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
202 |
|
|
202 |
|
| Other gains |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(2,254) |
|
|
(2,254) |
|
| Financial income |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
122,726 |
|
122,726 |
| Financial costs |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(138,402) |
|
|
(138,402) |
|
| Interest in the income of associates and joint ventures accounted for by the equity method |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
593 |
|
593 |
| Exchange differences |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(22,293) |
|
|
(22,293) |
|
| Income before taxes |
|
222,403 |
|
536,434 |
|
2,224,445 |
|
33,872 |
|
59,453 |
|
(1,553) |
|
(268,036) |
|
|
2,807,018 |
| Income tax expense |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(1,876,751) |
|
|
(1,876,751) |
|
| Net income |
|
222,403 |
|
536,434 |
|
2,224,445 |
|
33,872 |
|
59,453 |
|
(1,553) |
|
(2,144,787) |
|
|
930,267 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Items in the statement of comprehensive income for the year ended December 31,2022 |
|
Specialty plant nutrients |
|
Iodine and its derivatives |
|
Lithium and its derivatives |
|
Industrial chemicals |
|
Potassium |
|
Other products and services |
|
Corporate Unit |
|
Total segments and Corporate unit |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Revenue |
|
1,172,334 |
|
754,339 |
|
8,152,939 |
|
165,200 |
|
437,180 |
|
28,586 |
|
— |
|
10,710,578 |
| Cost of sales |
|
(722,261) |
|
|
(282,100) |
|
|
(3,636,852) |
|
|
(112,247) |
|
|
(193,581) |
|
|
(26,912) |
|
|
— |
|
(4,973,953) |
|
| Gross profit |
|
450,073 |
|
472,239 |
|
4,516,087 |
|
52,953 |
|
243,599 |
|
1,674 |
|
— |
|
5,736,625 |
| Other incomes by function |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
9,854 |
|
9,854 |
| Administrative expenses |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(142,644) |
|
|
(142,644) |
|
| Other expenses by function |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(75,971) |
|
|
(75,971) |
|
| Impairment of gains and review of impairment losses (impairment losses) determined in accordance with IFRS 9 |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
3,369 |
|
3,369 |
| Other losses |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
117 |
|
|
117 |
|
| Financial income |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
47,038 |
|
47,038 |
| Financial costs |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(86,651) |
|
|
(86,651) |
|
| Interest in the income of associates and joint ventures accounted for by the equity method |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
20,159 |
|
20,159 |
| Exchange differences |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(25,400) |
|
|
(25,400) |
|
| Income before taxes |
|
450,073 |
|
472,239 |
|
4,516,087 |
|
52,953 |
|
243,599 |
|
1,674 |
|
(250,129) |
|
|
5,486,496 |
| Income tax expense |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
|
(1,572,212) |
|
|
(1,572,212) |
|
| Net income from continuing operations |
|
450,073 |
|
472,239 |
|
4,516,087 |
|
52,953 |
|
243,599 |
|
1,674 |
|
(1,822,341) |
|
|
3,914,284 |
22.4 Disclosures on geographical areas
As indicated in paragraph 33 of IFRS 8, the entity discloses geographical information on its revenue from operating activities with external customers and from non-current assets that are not financial instruments, deferred income tax assets, assets related to post-employment benefits or rights derived from insurance contracts.
22.5 Disclosures on main customers
With respect to the degree of dependency of the Company on its customers, in accordance with paragraph 34 of IFRS 8, the Company has no external customers who individually represent 10% or more of its revenue.
22.6 Segments by geographical areas
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Segments by geographical areas |
|
Chile |
|
Latin America and the
Caribbean |
|
Europe |
|
North America |
|
Asia and others |
|
Total |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Revenue at December 31, 2024 |
|
171,551 |
|
|
240,629 |
|
|
681,607 |
|
|
689,794 |
|
|
2,745,180 |
|
|
4,528,761 |
|
| Non-current assets at December 31, 2024 |
|
|
|
|
|
|
|
|
|
|
|
|
| Investment accounted for under the equity method |
|
— |
|
|
— |
|
|
13,912 |
|
|
17,470 |
|
|
554,412 |
|
|
585,794 |
|
| Intangible assets other than goodwill |
|
73,762 |
|
|
450 |
|
|
6,466 |
|
|
547 |
|
|
86,743 |
|
|
167,968 |
|
| Goodwill |
|
— |
|
|
86 |
|
|
138 |
|
|
724 |
|
|
— |
|
|
948 |
|
| Property, plant and equipment, net |
|
3,465,971 |
|
|
6,651 |
|
|
10,598 |
|
|
8,277 |
|
|
942,148 |
|
|
4,433,645 |
|
| Right-of-use assets |
|
46,122 |
|
|
1,806 |
|
|
3,234 |
|
|
6,112 |
|
|
26,796 |
|
|
84,070 |
|
| Other non-current assets |
|
68,777 |
|
|
29 |
|
|
— |
|
|
5,413 |
|
|
289,947 |
|
|
364,166 |
|
| Non-current assets |
|
3,654,632 |
|
|
9,022 |
|
|
34,348 |
|
|
38,543 |
|
|
1,900,046 |
|
|
5,636,591 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Segments by geographical areas |
|
Chile |
|
Latin America and the
Caribbean |
|
Europe |
|
North America |
|
Asia and others |
|
Total |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Revenue for the year ended December 31, 2023 |
|
169,681 |
|
210,299 |
|
828,112 |
|
783,611 |
|
5,475,787 |
|
7,467,490 |
| Non-current assets at December 31, 2023 |
|
|
|
|
|
|
|
|
|
|
|
|
| Investment accounted for under the equity method |
|
— |
|
22,490 |
|
42,726 |
|
17,657 |
|
3,544 |
|
86,417 |
| Intangible assets other than goodwill |
|
67,671 |
|
360 |
|
6,440 |
|
876 |
|
80,527 |
|
155,874 |
| Goodwill |
|
— |
|
86 |
|
148 |
|
724 |
|
— |
|
958 |
| Property, plant and equipment, net |
|
2,888,778 |
|
776 |
|
14,485 |
|
6,322 |
|
699,576 |
|
3,609,937 |
| Right-of-use assets |
|
32,359 |
|
19 |
|
3,716 |
|
8,619 |
|
28,480 |
|
73,193 |
| Other non-current assets |
|
60,363 |
|
18 |
|
— |
|
5,099 |
|
308,220 |
|
373,700 |
| Non-current assets |
|
3,049,171 |
|
23,749 |
|
67,515 |
|
39,297 |
|
1,120,347 |
|
4,300,079 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Segments by geographical areas |
|
Chile |
|
Latin America and the
Caribbean |
|
Europe |
|
North America |
|
Asia and others |
|
Total |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Revenue for the year ended December 31, 2022 |
|
223,148 |
|
339,940 |
|
932,558 |
|
914,187 |
|
8,300,745 |
|
10,710,578 |
| Non-current assets at December 31, 2022 |
|
|
|
|
|
|
|
|
|
|
|
|
| Investment accounted for under the equity method |
|
— |
|
20,792 |
|
15,939 |
|
17,655 |
|
— |
|
54,386 |
| Intangible assets other than goodwill |
|
75,666 |
|
428 |
|
6,497 |
|
1,345 |
|
82,400 |
|
166,336 |
| Goodwill |
|
— |
|
86 |
|
158 |
|
723 |
|
— |
|
967 |
| Property, plant and equipment, net |
|
2,269,923 |
|
743 |
|
14,978 |
|
4,506 |
|
436,688 |
|
2,726,838 |
| Right-of-use assets |
|
32,312 |
|
47 |
|
1,651 |
|
2,739 |
|
24,118 |
|
60,867 |
| Other non-current assets |
|
46,640 |
|
17 |
|
6 |
|
4,706 |
|
1,027 |
|
52,396 |
| Non-current assets |
|
2,424,541 |
|
22,113 |
|
39,229 |
|
31,674 |
|
544,233 |
|
3,061,790 |
Note 23 Effect of fluctuations in foreign currency exchange rates
(a)Reserves for foreign currency exchange differences:
As of December 31, 2024, and 2023, are detailed as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Details |
|
As of
December 31,
2024 |
|
As of
December 31,
2023 |
|
As of
December 31,
2022 |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Comercial Hydro S.A. |
|
1,004 |
|
1,004 |
|
1,004 |
| SQMC Internacional Ltda. |
|
— |
|
|
(9) |
|
|
(9) |
|
| Proinsa Ltda. |
|
— |
|
|
(10) |
|
|
(10) |
|
| Comercial Agrorama Ltda. |
|
192 |
|
188 |
|
175 |
|
| Isapre Norte Grande Ltda. |
|
(239) |
|
|
(147) |
|
|
(130) |
|
| Almacenes y Depósitos Ltda. |
|
— |
|
662 |
|
568 |
| Sacal S.A. |
|
— |
|
|
(3) |
|
|
(3) |
|
| Sociedad Prestadora de Servicios de Salud Cruz del Norte S.A. |
|
— |
|
|
(41) |
|
|
(38) |
|
| Agrorama S.A. |
|
814 |
|
730 |
|
666 |
| SQM Vitas Fzco |
|
(1,714) |
|
|
(1,164) |
|
|
(3,614) |
|
| Ajay Europe |
|
(2,152) |
|
|
(1,529) |
|
|
(1,911) |
|
| SQM Oceanía Pty Ltd. |
|
(579) |
|
|
(579) |
|
|
(579) |
|
| SQM Indonesia S.A. |
|
(124) |
|
|
(124) |
|
|
(124) |
|
| Azure Minerals |
|
(33,080) |
|
— |
|
— |
| SQM Holland B.V. |
|
— |
|
99 |
|
99 |
| SQM Thailand Limited |
|
— |
|
|
(68) |
|
|
(68) |
|
| SQM Europe |
|
— |
|
|
(1,983) |
|
|
(1,983) |
|
| SQM Australia Pty Ltd. |
|
(1,265) |
|
|
(1,643) |
|
|
(1,642) |
|
| Pavoni & C. Spa |
|
— |
|
|
(224) |
|
|
(363) |
| Pirra Lithium Pty Ltd. |
|
(135) |
|
|
— |
|
|
— |
|
| Sichuan Dixin New Energy Co. Ltd |
|
(714) |
|
|
— |
|
|
— |
|
| SQM Colombia S.A.S. |
|
— |
|
|
(80) |
|
|
(80) |
|
| Others |
|
(32) |
|
|
— |
|
|
— |
|
| Total |
|
(38,024) |
|
|
(4,921) |
|
|
(8,042) |
|
(b)Functional and presentation currency
The functional currency of these companies corresponds to the currency of the country of origin of each entity, and its presentation currency is the dollar.
(c)Reasons to use one presentation currency and a different functional currency
–A relevant portion of the revenues of these subsidiaries are associated with the local currency.
–The cost structure of these companies is affected by the local currency.
Note 24 Disclosures on the effects of fluctuations in foreign currency exchange rates
a)Assets held in foreign currency subject to fluctuations in exchange rates are detailed as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Class of Asset |
|
Currency |
|
As of
December 31,
2024 |
|
As of
December 31,
2023 |
|
|
|
|
ThUS$ |
|
ThUS$ |
| Cash and cash equivalents |
|
USD |
|
1,020,101 |
|
|
855,001 |
|
| Cash and cash equivalents |
|
CLP |
|
214,361 |
|
|
3,425 |
|
| Cash and cash equivalents |
|
CNY |
|
76,807 |
|
|
31,362 |
|
| Cash and cash equivalents |
|
EUR |
|
6,716 |
|
|
11,183 |
|
| Cash and cash equivalents |
|
GBP |
|
2 |
|
|
26 |
|
| Cash and cash equivalents |
|
AUD |
|
40,954 |
|
|
108,883 |
|
| Cash and cash equivalents |
|
MXN |
|
2,038 |
|
|
649 |
|
| Cash and cash equivalents |
|
AED |
|
1 |
|
|
6 |
|
| Cash and cash equivalents |
|
JPY |
|
910 |
|
|
899 |
|
| Cash and cash equivalents |
|
NOK |
|
1 |
|
|
8 |
|
| Cash and cash equivalents |
|
ZAR |
|
10,978 |
|
|
10,559 |
|
| Cash and cash equivalents |
|
KRW |
|
4,979 |
|
|
19,364 |
|
| Cash and cash equivalents |
|
IDR |
|
3 |
|
|
3 |
|
| Cash and cash equivalents |
|
PLN |
|
— |
|
|
1 |
|
| Subtotal cash and cash equivalents |
|
|
|
1,377,851 |
|
|
1,041,369 |
|
| Other current financial assets |
|
USD |
|
1,079,559 |
|
|
879,612 |
|
| Other current financial assets |
|
BRL |
|
36 |
|
|
10 |
|
| Other current financial assets |
|
CLP |
|
— |
|
|
446,221 |
|
| Subtotal other current financial assets |
|
|
|
1,079,595 |
|
|
1,325,843 |
|
| Other current non-financial assets |
|
USD |
|
20,185 |
|
|
22,092 |
|
| Other current non-financial assets |
|
AUD |
|
2,476 |
|
|
4,870 |
|
| Other current non-financial assets |
|
CLF |
|
153 |
|
|
227 |
|
| Other current non-financial assets |
|
CLP |
|
151,604 |
|
|
85,079 |
|
| Other current non-financial assets |
|
CNY |
|
20,557 |
|
|
529 |
|
| Other current non-financial assets |
|
EUR |
|
482 |
|
|
1,304 |
|
| Other current non-financial assets |
|
COP |
|
313 |
|
|
294 |
|
| Other current non-financial assets |
|
MXN |
|
2,267 |
|
|
2,014 |
|
| Other current non-financial assets |
|
THB |
|
— |
|
|
2 |
|
| Other current non-financial assets |
|
JPY |
|
89 |
|
|
2,267 |
|
| Other current non-financial assets |
|
ZAR |
|
44 |
|
|
41 |
|
| Other current non-financial assets |
|
KRW |
|
2,535 |
|
|
18,031 |
|
| Subtotal other non-financial current assets |
|
|
|
200,705 |
|
|
136,750 |
|
| Trade and other receivables |
|
USD |
|
407,361 |
|
|
516,261 |
|
| Trade and other receivables |
|
BRL |
|
77 |
|
|
8 |
|
| Trade and other receivables |
|
CLF |
|
1,171 |
|
|
1,330 |
|
| Trade and other receivables |
|
CLP |
|
58,117 |
|
|
61,146 |
|
| Trade and other receivables |
|
CNY |
|
82,539 |
|
|
282,117 |
|
| Trade and other receivables |
|
EUR |
|
25,815 |
|
|
25,542 |
|
| Trade and other receivables |
|
GBP |
|
284 |
|
|
147 |
|
| Trade and other receivables |
|
MXN |
|
1,214 |
|
|
670 |
|
| Trade and other receivables |
|
AED |
|
763 |
|
|
1,467 |
|
| Trade and other receivables |
|
JPY |
|
488 |
|
|
382 |
|
| Trade and other receivables |
|
AUD |
|
9,893 |
|
|
2,598 |
|
| Trade and other receivables |
|
ZAR |
|
14,600 |
|
|
12,295 |
|
| Trade and other receivables |
|
COP |
|
3,812 |
|
|
3,210 |
|
| Trade and other receivables |
|
KRW |
|
— |
|
|
8 |
|
| Trade and other receivables |
|
PEN |
|
3 |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Class of Asset |
|
Currency |
|
As of
December 31,
2024 |
|
As of
December 31,
2023 |
|
|
|
|
ThUS$ |
|
ThUS$ |
| Subtotal trade and other receivables |
|
|
|
606,137 |
|
|
907,181 |
|
| Receivables from related parties |
|
USD |
|
20,061 |
|
|
40,236 |
|
| Receivables from related parties |
|
EUR |
|
1,899 |
|
|
3,017 |
|
| Receivables from related parties |
|
AUD |
|
6,746 |
|
|
— |
|
| Subtotal receivables from related parties |
|
|
|
28,706 |
|
|
43,253 |
|
| Current inventories |
|
USD |
|
1,702,185 |
|
1,774,594 |
| Subtotal Current Inventories |
|
|
|
1,702,185 |
|
1,774,594 |
| Current tax assets |
|
USD |
|
571,818 |
|
611,841 |
| Current tax assets |
|
BRL |
|
4 |
|
|
2 |
|
| Current tax assets |
|
CLP |
|
2,040 |
|
|
3,637 |
|
| Current tax assets |
|
CNY |
|
348 |
|
|
— |
|
| Current tax assets |
|
EUR |
|
281 |
|
|
13,556 |
|
| Current tax assets |
|
MXN |
|
4,115 |
|
|
5,216 |
|
| Current tax assets |
|
JPY |
|
— |
|
|
11 |
|
| Current tax assets |
|
PEN |
|
1,804 |
|
|
— |
|
| Current tax assets |
|
ZAR |
|
28 |
|
|
29 |
|
| Current tax assets |
|
COP |
|
2,614 |
|
|
2,741 |
|
| Current tax assets |
|
KRW |
|
2 |
|
|
— |
|
| Current tax assets |
|
AUD |
|
89 |
|
|
— |
|
| Subtotal current tax assets |
|
|
|
583,143 |
|
|
637,033 |
|
| Non-current assets or groups of assets classified as held for sale |
|
USD |
|
118 |
|
|
118 |
|
| Subtotal Non-current assets or groups of assets classified as held for sale |
|
|
|
118 |
|
|
118 |
|
| Total current assets |
|
|
|
5,578,440 |
|
|
5,866,141 |
|
| Other non-current financial assets |
|
USD |
|
60,706 |
|
|
248,281 |
|
| Subtotal Other non-current financial assets |
|
|
|
60,706 |
|
|
248,281 |
|
| Other non-current non-financial assets |
|
USD |
|
74,245 |
|
|
65,616 |
|
| Other non-current non-financial assets |
|
CNY |
|
289,921 |
|
|
308,084 |
|
| Subtotal Other non-current non-financial assets |
|
|
|
364,166 |
|
|
373,700 |
|
| Other receivables, non-current |
|
USD |
|
1,785 |
|
|
705 |
|
| Other receivables, non-current |
|
CLF |
|
63 |
|
|
9 |
|
| Other receivables, non-current |
|
MXN |
|
220 |
|
|
179 |
|
| Other receivables, non-current |
|
KRW |
|
240 |
|
|
667 |
|
| Other receivables, non-current |
|
CLP |
|
419 |
|
|
999 |
|
| Subtotal Other receivables, non-current |
|
|
|
2,727 |
|
|
2,559 |
|
| Investments classified using the equity method of accounting |
|
USD |
|
29,869 |
|
|
76,532 |
|
| Investments classified using the equity method of accounting |
|
AED |
|
324 |
|
|
2,778 |
|
| Investments classified using the equity method of accounting |
|
EUR |
|
9,610 |
|
|
7,107 |
|
| Investments classified using the equity method of accounting |
|
AUD |
|
545,991 |
|
|
— |
|
| Subtotal Investments classified using the equity method of accounting |
|
|
|
585,794 |
|
|
86,417 |
|
| Intangible assets other than goodwill |
|
USD |
|
167,968 |
|
|
155,874 |
|
| Subtotal intangible assets other than goodwill |
|
|
|
167,968 |
|
|
155,874 |
|
| Purchases goodwill, gross |
|
USD |
|
948 |
|
|
958 |
|
| Subtotal Purchases goodwill, gross |
|
|
|
948 |
|
|
958 |
|
| Property, plant and equipment |
|
USD |
|
4,433,645 |
|
|
3,609,937 |
|
| Subtotal property, plant and equipment |
|
|
|
4,433,645 |
|
|
3,609,937 |
|
| Right-of-use assets |
|
USD |
|
84,070 |
|
|
73,193 |
|
| Subtotal Right-of-use assets |
|
|
|
84,070 |
|
|
73,193 |
|
| Non-current tax assets |
|
USD |
|
59,541 |
|
|
59,541 |
|
| Subtotal non-current tax assets |
|
|
|
59,541 |
|
|
59,541 |
|
| Deferred tax assets |
|
USD |
|
157,564 |
|
|
302,236 |
|
| Subtotal Deferred tax assets |
|
|
|
157,564 |
|
|
302,236 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Class of Asset |
|
Currency |
|
As of
December 31,
2024 |
|
As of
December 31,
2023 |
|
|
|
|
ThUS$ |
|
ThUS$ |
| Total non-current assets |
|
|
|
5,917,129 |
|
|
4,912,696 |
|
| Total assets |
|
|
|
11,495,569 |
|
|
10,778,837 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2024 |
|
As of December 31, 2023 |
| Class of liability |
|
Currency |
|
Up to 90 days |
|
More than 90
days to 1 year |
|
Total |
|
Up to 90 days |
|
More than 90
days to 1 year |
|
Total |
|
|
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Current liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Other current financial liabilities |
|
USD |
|
349,671 |
|
|
795,283 |
|
|
1,144,954 |
|
|
773,314 |
|
|
462,656 |
|
|
1,235,970 |
|
| Other current financial liabilities |
|
CLF |
|
18,206 |
|
|
308 |
|
|
18,514 |
|
|
20,191 |
|
|
338 |
|
|
20,529 |
|
| Subtotal other current financial liabilities |
|
|
|
367,877 |
|
|
795,591 |
|
|
1,163,468 |
|
|
793,505 |
|
|
462,994 |
|
|
1,256,499 |
|
| Lease liabilities, current |
|
USD |
|
— |
|
|
14,311 |
|
|
14,311 |
|
|
— |
|
|
9,293 |
|
|
9,293 |
|
| Lease liabilities, current |
|
CLF |
|
— |
|
|
2,433 |
|
|
2,433 |
|
|
— |
|
|
2,284 |
|
|
2,284 |
|
| Lease liabilities, current |
|
MXN |
|
— |
|
|
2,828 |
|
|
2,828 |
|
|
— |
|
|
3,573 |
|
|
3,573 |
|
| Lease liabilities, current |
|
EUR |
|
— |
|
|
451 |
|
|
451 |
|
|
— |
|
|
438 |
|
|
438 |
|
| Lease liabilities, current |
|
AUD |
|
— |
|
|
2,671 |
|
|
2,671 |
|
|
— |
|
|
2,604 |
|
|
2,604 |
|
| Lease liabilities, current |
|
INR |
|
— |
|
|
35 |
|
|
35 |
|
|
— |
|
|
— |
|
|
— |
|
| Lease liabilities, current |
|
BRL |
|
— |
|
|
16 |
|
|
16 |
|
|
— |
|
|
— |
|
|
— |
|
| Lease liabilities, current |
|
COP |
|
— |
|
|
266 |
|
|
266 |
|
|
— |
|
|
— |
|
|
— |
|
| Subtotal Lease liabilities, current |
|
|
|
— |
|
23,011 |
|
23,011 |
|
— |
|
18,192 |
|
18,192 |
| Trade and other payables |
|
USD |
|
102,724 |
|
|
14,579 |
|
|
117,303 |
|
|
87,043 |
|
|
7,310 |
|
|
94,353 |
|
| Trade and other payables |
|
CLF |
|
5,020 |
|
|
— |
|
|
5,020 |
|
|
3,614 |
|
|
— |
|
|
3,614 |
|
| Trade and other payables |
|
BRL |
|
6 |
|
|
— |
|
|
6 |
|
|
12 |
|
|
— |
|
|
12 |
|
| Trade and other payables |
|
THB |
|
— |
|
|
— |
|
|
— |
|
|
4 |
|
|
— |
|
|
4 |
|
| Trade and other payables |
|
CLP |
|
176,474 |
|
|
3 |
|
|
176,477 |
|
|
227,990 |
|
|
52 |
|
|
228,042 |
|
| Trade and other payables |
|
CNY |
|
33,052 |
|
|
— |
|
|
33,052 |
|
|
28,562 |
|
|
— |
|
|
28,562 |
|
| Trade and other payables |
|
EUR |
|
99,605 |
|
|
— |
|
|
99,605 |
|
|
52,883 |
|
|
6,399 |
|
|
59,282 |
|
| Trade and other payables |
|
GBP |
|
18 |
|
|
— |
|
|
18 |
|
|
18 |
|
|
— |
|
|
18 |
|
| Trade and other payables |
|
MXN |
|
— |
|
|
1,484 |
|
|
1,484 |
|
|
1,499 |
|
|
— |
|
|
1,499 |
|
| Trade and other payables |
|
AUD |
|
36,431 |
|
|
— |
|
|
36,431 |
|
|
32,439 |
|
|
7 |
|
|
32,446 |
|
| Trade and other payables |
|
ZAR |
|
— |
|
|
1,562 |
|
|
1,562 |
|
|
984 |
|
|
— |
|
|
984 |
|
| Trade and other payables |
|
AED |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
| Trade and other payables |
|
JPY |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
| Trade and other payables |
|
CHF |
|
21 |
|
|
— |
|
|
21 |
|
|
21 |
|
|
— |
|
|
21 |
|
| Trade and other payables |
|
COP |
|
— |
|
|
325 |
|
|
325 |
|
|
302 |
|
|
— |
|
|
302 |
|
| Trade and other payables |
|
CAD |
|
9 |
|
|
— |
|
9 |
|
2 |
|
|
— |
|
|
2 |
|
| Trade and other payables |
|
KRW |
|
107 |
|
|
— |
|
|
107 |
|
|
492 |
|
|
— |
|
|
492 |
|
| Trade and other payables |
|
INR |
|
29 |
|
|
— |
|
|
29 |
|
|
— |
|
|
— |
|
|
— |
|
| Subtotal trade and other payables |
|
|
|
453,496 |
|
|
17,953 |
|
|
471,449 |
|
|
435,865 |
|
|
13,768 |
|
|
449,633 |
|
| Trade payables due to related parties |
|
USD |
|
— |
|
|
5,827 |
|
|
5,827 |
|
|
— |
|
|
— |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2024 |
|
As of December 31, 2023 |
| Class of liability |
|
Currency |
|
Up to 90 days |
|
More than 90
days to 1 year |
|
Total |
|
Up to 90 days |
|
More than 90
days to 1 year |
|
Total |
|
|
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Trade payables due to related parties |
|
AUD |
|
4,438 |
|
|
— |
|
|
4,438 |
|
|
2,346 |
|
|
— |
|
|
2,346 |
|
| Subtotal Trade payables due to related parties |
|
|
|
4,438 |
|
5,827 |
|
10,265 |
|
2,346 |
|
— |
|
2,346 |
| Other current provisions |
|
USD |
|
28,064 |
|
|
270,161 |
|
|
298,225 |
|
|
384,972 |
|
|
6,793 |
|
|
391,765 |
|
| Other current provisions |
|
CLP |
|
480 |
|
|
— |
|
|
480 |
|
|
332 |
|
|
— |
|
|
332 |
|
| Other current provisions |
|
JPY |
|
12,492 |
|
|
— |
|
|
12,492 |
|
|
225 |
|
|
— |
|
|
225 |
|
| Subtotal other current provisions |
|
|
|
41,036 |
|
|
270,161 |
|
|
311,197 |
|
|
385,529 |
|
|
6,793 |
|
|
392,322 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Current tax liabilities |
|
USD |
|
— |
|
68,300 |
|
68,300 |
|
162,743 |
|
9,805 |
|
172,548 |
| Current tax liabilities |
|
CLP |
|
— |
|
290 |
|
290 |
|
— |
|
513 |
|
513 |
| Current tax liabilities |
|
EUR |
|
— |
|
1,139 |
|
1,139 |
|
— |
|
4,850 |
|
4,850 |
| Current tax liabilities |
|
CNY |
|
— |
|
8,644 |
|
8,644 |
|
— |
|
356 |
|
356 |
| Current tax liabilities |
|
JPY |
|
— |
|
143 |
|
143 |
|
— |
|
— |
|
— |
| Current tax liabilities |
|
AUD |
|
— |
|
388 |
|
388 |
|
— |
|
169 |
|
169 |
| Current tax liabilities |
|
ZAR |
|
— |
|
33 |
|
33 |
|
— |
|
— |
|
— |
| Current tax liabilities |
|
KRW |
|
— |
|
381 |
|
381 |
|
— |
|
5,197 |
|
5,197 |
| Current tax liabilities |
|
PEN |
|
— |
|
433 |
|
433 |
|
— |
|
— |
|
— |
| Current tax liabilities |
|
COP |
|
— |
|
90 |
|
90 |
|
— |
|
— |
|
— |
| Subtotal current tax liabilities |
|
|
|
— |
|
|
79,841 |
|
|
79,841 |
|
|
162,743 |
|
|
20,890 |
|
|
183,633 |
|
| Provisions for employee benefits, current |
|
USD |
|
29,265 |
|
|
— |
|
|
29,265 |
|
|
21,575 |
|
|
— |
|
|
21,575 |
|
| Provisions for employee benefits, current |
|
AUD |
|
939 |
|
|
— |
|
|
939 |
|
|
492 |
|
|
— |
|
|
492 |
|
| Provisions for employee benefits, current |
|
EUR |
|
— |
|
|
— |
|
|
— |
|
|
560 |
|
|
— |
|
|
560 |
|
| Provisions for employee benefits, current |
|
CLP |
|
930 |
|
|
— |
|
|
930 |
|
|
1,117 |
|
|
— |
|
|
1,117 |
|
| Provisions for employee benefits, current |
|
PEN |
|
141 |
|
|
— |
|
|
141 |
|
|
— |
|
|
— |
|
|
— |
|
| Provisions for employee benefits, current |
|
MXN |
|
271 |
|
|
— |
|
|
271 |
|
|
202 |
|
|
— |
|
|
202 |
|
| Subtotal Provisions for employee benefits, current |
|
|
|
31,546 |
|
|
— |
|
|
31,546 |
|
|
23,946 |
|
|
— |
|
|
23,946 |
|
| Other current non-financial liabilities |
|
USD |
|
38,607 |
|
|
220 |
|
|
38,827 |
|
|
57,114 |
|
|
61,037 |
|
|
118,151 |
|
| Other current non-financial liabilities |
|
BRL |
|
18 |
|
|
— |
|
|
18 |
|
|
17 |
|
|
— |
|
|
17 |
|
| Other current non-financial liabilities |
|
CLP |
|
32,749 |
|
|
34,577 |
|
|
67,326 |
|
|
32,780 |
|
|
24,787 |
|
|
57,567 |
|
| Other current non-financial liabilities |
|
CNY |
|
12,287 |
|
|
— |
|
|
12,287 |
|
|
134 |
|
|
— |
|
|
134 |
|
| Other current non-financial liabilities |
|
EUR |
|
4,050 |
|
|
— |
|
|
4,050 |
|
|
669 |
|
|
969 |
|
|
1,638 |
|
| Other current non-financial liabilities |
|
MXN |
|
890 |
|
|
— |
|
|
890 |
|
|
966 |
|
|
16 |
|
|
982 |
|
| Other current non-financial liabilities |
|
JPY |
|
93 |
|
|
— |
|
|
93 |
|
|
49 |
|
|
— |
|
|
49 |
|
| Other current non-financial liabilities |
|
PEN |
|
96 |
|
|
— |
|
|
96 |
|
|
— |
|
|
— |
|
|
— |
|
| Other current non-financial liabilities |
|
COP |
|
233 |
|
|
— |
|
|
233 |
|
|
202 |
|
|
— |
|
|
202 |
|
| Other current non-financial liabilities |
|
ARS |
|
1,454 |
|
|
— |
|
|
1,454 |
|
|
— |
|
|
— |
|
|
— |
|
| Other current non-financial liabilities |
|
ZAR |
|
756 |
|
|
31 |
|
|
787 |
|
|
550 |
|
|
— |
|
|
550 |
|
| Other current non-financial liabilities |
|
KRW |
|
1,978 |
|
|
— |
|
|
1,978 |
|
|
8,015 |
|
|
— |
|
|
8,015 |
|
| Subtotal other current non-financial liabilities |
|
|
|
93,211 |
|
|
34,828 |
|
|
128,039 |
|
|
100,496 |
|
|
86,809 |
|
|
187,305 |
|
| Total current liabilities |
|
|
|
991,604 |
|
|
1,227,212 |
|
|
2,218,816 |
|
|
1,904,430 |
|
|
609,446 |
|
|
2,513,876 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2024 |
| Class of liability |
|
Currency |
|
Over 1 year to 2
years |
|
Over 2 years to 3
years |
|
Over 3 years to 4
years |
|
Over 4 years to 5
years |
|
Over 5 years |
|
Total |
|
|
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Non-current liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Other non-current financial liabilities |
|
USD |
|
— |
|
— |
|
129,683 |
|
— |
|
3,120,228 |
|
3,249,911 |
| Other non-current financial liabilities |
|
CLF |
|
— |
|
— |
|
— |
|
— |
|
350,671 |
|
350,671 |
| Subtotal Other non-current financial liabilities |
|
|
|
— |
|
— |
|
129,683 |
|
— |
|
3,470,899 |
|
3,600,582 |
| Non-current lease liabilities |
|
USD |
|
— |
|
23,456 |
|
— |
|
10,721 |
|
— |
|
34,177 |
| Non-current lease liabilities |
|
CLP |
|
— |
|
36 |
|
— |
|
56 |
|
— |
|
92 |
| Non-current lease liabilities |
|
CLF |
|
— |
|
7,287 |
|
— |
|
— |
|
— |
|
7,287 |
| Non-current lease liabilities |
|
MXN |
|
— |
|
— |
|
— |
|
19,245 |
|
— |
|
19,245 |
| Subtotal non-current lease liabilities |
|
|
|
— |
|
30,779 |
|
— |
|
30,022 |
|
— |
|
60,801 |
| Non-current Trade and other payables |
|
USD |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
| Subtotal Non-current Trade and other payables |
|
|
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
| Other non-current provisions |
|
USD |
|
— |
|
33,651 |
|
— |
|
— |
|
19,666 |
|
53,317 |
| Subtotal Other non-current provisions |
|
|
|
— |
|
33,651 |
|
— |
|
— |
|
19,666 |
|
53,317 |
| Deferred tax liabilities |
|
USD |
|
— |
|
298,379 |
|
— |
|
— |
|
— |
|
298,379 |
| Subtotal Deferred tax liabilities |
|
|
|
— |
|
298,379 |
|
— |
|
— |
|
— |
|
298,379 |
| Provisions for employee benefits, non-current |
|
USD |
|
1,529 |
|
12,383 |
|
— |
|
— |
|
13,343 |
|
27,255 |
| Provisions for employee benefits, non-current |
|
CLP |
|
37,791 |
|
— |
|
— |
|
— |
|
— |
|
37,791 |
| Provisions for employee benefits, non-current |
|
MXN |
|
294 |
|
— |
|
— |
|
— |
|
— |
|
294 |
| Provisions for employee benefits, non-current |
|
AUD |
|
180 |
|
— |
|
— |
|
— |
|
— |
|
180 |
| Provisions for employee benefits, non-current |
|
JPY |
|
— |
|
— |
|
— |
|
— |
|
— |
|
— |
| Provisions for employee benefits, non-current |
|
EUR |
|
87 |
|
— |
|
— |
|
— |
|
— |
|
87 |
| Subtotal Provisions for employee benefits, non-current |
|
|
|
39,881 |
|
12,383 |
|
— |
|
— |
|
13,343 |
|
65,607 |
| Total non-current liabilities |
|
|
|
39,881 |
|
375,192 |
|
129,683 |
|
30,022 |
|
3,503,908 |
|
4,078,686 |
| Total liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
6,297,502 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
As of December 31, 2023 |
| Class of liability |
|
Currency |
|
Over 1 year to 2
years |
|
Over 2 years to 3
years |
|
Over 3 years to 4
years |
|
Over 4 years to 5
years |
|
Over 5 years |
|
Total |
|
|
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Non-current liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Other non-current financial liabilities |
|
USD |
|
249,963 |
|
|
195,833 |
|
|
99,685 |
|
|
— |
|
|
2,271,326 |
|
|
2,816,807 |
|
| Other non-current financial liabilities |
|
CLF |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
396,615 |
|
|
396,615 |
|
| Subtotal Other non-current financial liabilities |
|
|
|
249,963 |
|
|
195,833 |
|
|
99,685 |
|
|
— |
|
|
2,667,941 |
|
|
3,213,422 |
|
| Non-current lease liabilities |
|
USD |
|
— |
|
|
13,059 |
|
|
— |
|
|
4,843 |
|
|
— |
|
|
17,902 |
|
| Non-current lease liabilities |
|
CLP |
|
— |
|
|
— |
|
|
— |
|
|
21 |
|
|
— |
|
|
21 |
|
| Non-current lease liabilities |
|
CLF |
|
— |
|
|
8,971 |
|
|
— |
|
|
— |
|
|
— |
|
|
8,971 |
|
| Non-current lease liabilities |
|
MXN |
|
— |
|
|
— |
|
|
— |
|
|
4,235 |
|
|
— |
|
|
4,235 |
|
| Non-current lease liabilities |
|
EUR |
|
— |
|
|
— |
|
|
— |
|
|
3,315 |
|
|
— |
|
|
3,315 |
|
| Non-current lease liabilities |
|
AUD |
|
— |
|
|
— |
|
|
— |
|
|
22,522 |
|
|
— |
|
|
22,522 |
|
| Subtotal non-current lease liabilities |
|
|
|
— |
|
|
22,030 |
|
|
— |
|
|
34,936 |
|
|
— |
|
|
56,966 |
|
| Non-current Trade and other payables |
|
USD |
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
| Subtotal Non-current Trade and other payables |
|
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
| Other non-current provisions |
|
USD |
|
— |
|
|
27,599 |
|
|
— |
|
|
— |
|
|
32,851 |
|
|
60,450 |
|
| Subtotal Other non-current provisions |
|
|
|
— |
|
|
27,599 |
|
|
— |
|
|
— |
|
|
32,851 |
|
|
60,450 |
|
| Deferred tax liabilities |
|
USD |
|
— |
|
|
394,688 |
|
|
— |
|
|
— |
|
|
— |
|
|
394,688 |
|
| Subtotal Deferred tax liabilities |
|
|
|
— |
|
|
394,688 |
|
|
— |
|
|
— |
|
|
— |
|
|
394,688 |
|
| Provisions for employee benefits, non-current |
|
USD |
|
10,008 |
|
|
8,066 |
|
|
— |
|
|
— |
|
|
440 |
|
|
18,514 |
|
| Provisions for employee benefits, non-current |
|
CLP |
|
42,813 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
42,813 |
|
| Provisions for employee benefits, non-current |
|
MXN |
|
314 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
314 |
|
| Provisions for employee benefits, non-current |
|
AUD |
|
— |
|
— |
|
— |
|
— |
|
91 |
|
91 |
|
| Provisions for employee benefits, non-current |
|
JPY |
|
218 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
218 |
|
| Provisions for employee benefits, non-current |
|
EUR |
|
56 |
|
|
— |
|
|
— |
|
|
— |
|
|
— |
|
|
56 |
|
| Subtotal Provisions for employee benefits, non-current |
|
|
|
53,409 |
|
8,066 |
|
— |
|
— |
|
531 |
|
62,006 |
| Total non-current liabilities |
|
|
|
303,372 |
|
648,216 |
|
99,685 |
|
34,936 |
|
2,701,323 |
|
3,787,532 |
| Total liabilities |
|
|
|
|
|
|
|
|
|
|
|
|
|
6,301,408 |
Effects of changes in foreign currency exchange rates on the statement of net income and other comprehensive income.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Foreign currency exchange rate changes |
|
For the period from January to December of the year |
|
2024 |
|
2023 |
|
2022 |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Foreign currency translation loss |
|
(8,607) |
|
(22,293) |
|
(25,400) |
| Foreign currency translation reserve |
|
(34,516) |
|
3,177 |
|
(255) |
| Total |
|
(43,123) |
|
(19,116) |
|
(25,655) |
The average and closing exchange rate for foreign currency is disclosed in Note 3.3
Note 25 Income tax and deferred taxes
Tax receivables as of December 31, 2024 and 2023, are as follows:
25.1 Current and non-current tax assets
(a)Current
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Current tax assets |
|
As of
December 31,
2024 |
|
As of
December 31,
2023 |
|
|
ThUS$ |
|
ThUS$ |
| Monthly provisional income tax payments, Chilean companies (1) |
|
133,898 |
|
584,382 |
| Monthly provisional income tax payments, foreign companies |
|
12,859 |
|
26,741 |
| Corporate tax credits (2) |
|
4,603 |
|
1,918 |
| 1st category tax absorbed by tax losses (3) |
|
— |
|
1,872 |
| Taxes in recovery process (1) |
|
431,783 |
|
22,120 |
| Total |
|
583,143 |
|
637,033 |
(b)Non-current
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Non-current tax assets |
|
As of
December 31,
2024 |
|
As of
December 31,
2023 |
|
|
ThUS$ |
|
ThUS$ |
| Non current tax receivable (see note 20.3) |
|
59,541 |
|
59,541 |
| Total |
|
59,541 |
|
59,541 |
(1)The PPM of Chilean companies and taxes in the process of recovery are presented net of the liability for specific tax on lithium mining activity for an amount of USD$179.5 million. See note 20.3 Tax contingencies. The taxes in recovery process represent PPM of the previous periods that are yet to be reimbursed from the tax authority.
(2)These credits are available for companies and are related to corporate tax payments in April of the following year. These credits include, among others, credits for training expenses (SENCE), credits for acquisition of fixed assets, donations and credits in Chile for taxes paid abroad.
(3)This concept corresponds to the tax loss absorptions determined by the company at the end of the year, which must be attributed to the dividends received during the year.
25.2 Current tax liabilities
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Current tax liabilities |
|
As of
December 31,
2024 |
|
As of
December 31,
2023 |
|
|
ThUS$ |
|
ThUS$ |
| Chilean income tax (1) |
|
24,687 |
|
636 |
| Specific mining tax to lithium mining (see note 20.3) |
|
— |
|
162,743 |
| Foreign company income tax (2) |
|
55,154 |
|
20,254 |
| Total |
|
79,841 |
|
183,633 |
(1)Income tax in Chile is presented net of provisional monthly payments by Chilean companies for an amount of US$90.9 million.
(2)The income tax of foreign subsidiaries is presented net of provisional monthly payments by companies for an amount of US$66.9 million.
Income tax is calculated based on the income statements or loss for tax purposes that is applied to the effective tax rate applicable in Chile. As established by Law No. 21,713 is 27%.
The royalty is determined by applying the taxable rate to the net operating income obtained, according to the chart in force. The Company currently provisioned 5.00% for mining royalties that involve operations in the Salar de Atacama and 5.44% for caliche extraction operations.
The income tax rate for the main countries where the Company operates is presented below:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Country |
|
Income tax
2024 |
|
Income tax
2023 |
|
|
| Spain |
|
25 % |
|
25 % |
|
|
| Belgium |
|
25 % |
|
25 % |
|
|
| Mexico |
|
30 % |
|
30 % |
|
|
| United States |
|
21% + 2.5% |
|
21% + 3% |
|
|
| South Africa |
|
27 % |
|
27 % |
|
|
| South Korea |
|
24% (2) |
|
24% (2) |
|
|
| China |
|
25%+12% (1) |
|
25%+12% (1) |
|
|
| Australia |
|
30 |
% |
|
30 |
% |
|
|
(1)Additional tax of 12% on VAT payable and the corporate rate in Sichuan is 15%.
(2)Sliding scale from 9% to 24% of taxable income.
25.3 Income tax and deferred taxes
(a)Deferred tax assets and liabilities as of December 31, 2024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Description of deferred tax assets and liabilities as of December 31, 2024 |
|
Net liability position |
|
Assets |
|
Liabilities |
|
|
ThUS$ |
|
ThUS$ |
| Unrealized profit |
|
157,503 |
|
— |
| Property, plant and equipment and capitalized interest (1) |
|
— |
|
(314,309) |
|
| Restoration and rehabilitation provision |
|
5,220 |
|
— |
| Manufacturing expenses |
|
— |
|
(154,906) |
|
| Employee benefits and unemployment insurance |
|
— |
|
(8,736) |
|
| Vacation accrual |
|
9,001 |
|
— |
| Inventory provision |
|
16,353 |
|
— |
| Materials provision |
|
20,293 |
|
— |
| Others employee benefits |
|
10,291 |
|
— |
| Research and development expenses |
|
— |
|
(17,239) |
|
| Bad debt provision |
|
— |
|
(203) |
| Provision for legal complaints and expenses |
|
2,788 |
|
— |
| Loan acquisition expenses |
|
— |
|
(17,604) |
|
| Financial instruments recorded at market value |
|
3,277 |
|
— |
| Specific tax on mining activity |
|
— |
|
(1,398) |
|
| Specific tax on lithium mining activity |
|
4,049 |
|
— |
| Tax loss benefit |
|
129,123 |
|
— |
| Other |
|
15,422 |
|
— |
| Foreign items (other) |
|
260 |
|
— |
| Balances to date |
|
373,580 |
|
|
(514,395) |
|
| Net balance |
|
|
|
(140,815) |
(1)This includes right-of-use assets.
(b)Deferred tax assets and liabilities as of December 31, 2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net liability position |
| Description of deferred tax assets and liabilities as of December 31, 2023 |
|
Assets |
|
Liabilities |
|
|
ThUS$ |
|
ThUS$ |
| Unrealized loss |
|
321,340 |
|
|
— |
|
| Property, plant and equipment and capitalized interest (1) |
|
— |
|
|
(240,056) |
|
| Restoration and rehabilitation provision |
|
6,336 |
|
|
— |
|
| Manufacturing expenses |
|
— |
|
|
(159,879) |
|
| Employee benefits and unemployment insurance |
|
— |
|
|
(9,438) |
|
| Vacation accrual |
|
9,373 |
|
|
— |
|
| Inventory provision |
|
34,718 |
|
|
— |
|
| Materials provision |
|
14,405 |
|
|
— |
|
| Others employee benefits |
|
6,561 |
|
|
— |
|
| Research and development expenses |
|
— |
|
|
(16,046) |
|
| Bad debt provision |
|
3,060 |
|
|
— |
|
| Provision for legal complaints and expenses |
|
2,932 |
|
|
— |
|
| Loan acquisition expenses |
|
— |
|
|
(12,735) |
|
| Financial instruments recorded at market value |
|
— |
|
|
(52,016) |
|
| Specific tax on mining activity |
|
— |
|
|
(3,303) |
|
| Tax loss benefit |
|
23,340 |
|
|
— |
|
| Other |
|
— |
|
|
(21,119) |
|
| Foreign items (other) |
|
75 |
|
|
— |
|
| Balances to date |
|
422,140 |
|
|
(514,592) |
|
| Net balance |
|
|
|
(92,452) |
|
(1)This item includes right-of-use assets.
Deferred tax assets and liabilities in the consolidated statement of financial position as of December 31, 2024 and 2023, are as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Movements of deferred tax assets and liabilities |
|
As of
December 31,
2024 |
|
As of
December 31,
2023 |
|
|
ThUS$ |
|
ThUS$ |
| Deferred tax assets |
|
157,564 |
|
302,236 |
| Deferred tax liabilities |
|
(298,379) |
|
|
(394,688) |
|
| Total |
|
(140,815) |
|
(92,452) |
|
(c)Reconciliation of changes in deferred tax (liabilities) assets as of December 31, 2024
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Reconciliation of changes in deferred tax assets (liabilities) in deferred tax as of December 31, 2024 |
|
Deferred tax
(liability) asset
at beginning of
period |
|
Deferred tax
(expense)
benefit
recognized in
income for
the year |
|
Deferred taxes
related to items
(credited)
charged
directly to
equity |
|
Total change in deferred taxes |
|
Deferred tax
(liability) asset
at end of
period |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Unrealized loss |
|
321,340 |
|
|
(163,837) |
|
|
— |
|
|
(163,837) |
|
|
157,503 |
|
| Property, plant and equipment and capitalized interest |
|
(288,116) |
|
|
(26,193) |
|
|
— |
|
|
(26,193) |
|
|
(314,309) |
|
| Restoration and rehabilitation provision |
|
6,336 |
|
|
(1,116) |
|
|
— |
|
|
(1,116) |
|
|
5,220 |
|
| Manufacturing expenses |
|
(159,879) |
|
|
4,973 |
|
|
— |
|
|
4,973 |
|
|
(154,906) |
|
| Employee benefits and unemployment insurance |
|
(9,438) |
|
|
1,567 |
|
|
(865) |
|
|
702 |
|
|
(8,736) |
|
| Vacation accrual |
|
9,373 |
|
|
(372) |
|
|
— |
|
|
(372) |
|
|
9,001 |
|
| Inventory provision |
|
34,718 |
|
|
(18,365) |
|
|
— |
|
|
(18,365) |
|
|
16,353 |
|
| Materials provision |
|
14,405 |
|
|
5,888 |
|
|
— |
|
|
5,888 |
|
|
20,293 |
|
| Derivative financial instruments |
|
— |
|
|
3,049 |
|
|
(3,049) |
|
|
— |
|
|
— |
|
| Others employee benefits |
|
6,561 |
|
|
3,730 |
|
|
— |
|
|
3,730 |
|
|
10,291 |
|
| Research and development expenses |
|
(16,046) |
|
|
(1,193) |
|
|
— |
|
|
(1,193) |
|
|
(17,239) |
|
| Bad debt provision |
|
1,957 |
|
|
(2,160) |
|
|
— |
|
|
(2,160) |
|
|
(203) |
|
| Provision for legal complaints and expenses |
|
2,932 |
|
|
(144) |
|
|
— |
|
|
(144) |
|
|
2,788 |
|
| Loan approval expenses |
|
(12,735) |
|
|
(4,869) |
|
|
— |
|
|
(4,869) |
|
|
(17,604) |
|
| Financial instruments recorded at market value |
|
(52,016) |
|
|
— |
|
|
55,293 |
|
|
55,293 |
|
|
3,277 |
|
| Specific tax on mining activity |
|
(3,303) |
|
|
1,900 |
|
|
5 |
|
|
1,905 |
|
|
(1,398) |
|
| Specific tax on lithium mining activity |
|
— |
|
|
4,049 |
|
|
— |
|
|
4,049 |
|
|
4,049 |
|
| Tax loss benefit |
|
74,347 |
|
|
54,776 |
|
|
— |
|
|
54,776 |
|
|
129,123 |
|
| Others |
|
(22,963) |
|
|
38,385 |
|
|
— |
|
|
38,385 |
|
|
15,422 |
|
| Foreign items (other) |
|
75 |
|
|
(1,682) |
|
|
1,867 |
|
|
185 |
|
|
260 |
|
| Total temporary differences, unused losses and unused tax credits |
|
(92,452) |
|
|
(101,614) |
|
|
53,251 |
|
|
(48,363) |
|
|
(140,815) |
|
(d)Reconciliation of changes in deferred tax (liabilities) assets as of December 31, 2023
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Reconciliation of changes in deferred tax assets (liabilities) in deferred tax as of December 31, 2023 |
|
Deferred tax
(liability) asset
at beginning of
period |
|
Deferred tax
(expense)
benefit
recognized in
income for
the year |
|
Deferred taxes
related to items
(credited)
charged
directly to
equity |
|
Total change in deferred taxes |
|
Deferred tax
(liability) asset
at end of
period |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Unrealized loss |
|
655,695 |
|
|
(334,355) |
|
|
— |
|
|
(334,355) |
|
|
321,340 |
|
| Property, plant and equipment and capitalized interest |
|
(244,560) |
|
|
(43,556) |
|
|
— |
|
|
(43,556) |
|
|
(288,116) |
|
| Restoration and rehabilitation provision |
|
4,685 |
|
|
1,651 |
|
|
— |
|
|
1,651 |
|
|
6,336 |
|
| Manufacturing expenses |
|
(139,383) |
|
|
(20,496) |
|
|
— |
|
|
(20,496) |
|
|
(159,879) |
|
| Employee benefits and unemployment insurance |
|
(8,995) |
|
|
(2,020) |
|
|
1,577 |
|
|
(443) |
|
|
(9,438) |
|
| Vacation accrual |
|
7,650 |
|
|
1,723 |
|
|
— |
|
|
1,723 |
|
|
9,373 |
|
| Inventory provision |
|
27,512 |
|
|
7,206 |
|
|
— |
|
|
7,206 |
|
|
34,718 |
|
| Materials provision |
|
11,915 |
|
|
2,490 |
|
|
— |
|
|
2,490 |
|
|
14,405 |
|
| Derivative financial instruments |
|
— |
|
|
5,047 |
|
|
(5,047) |
|
|
— |
|
|
— |
|
| Others employee benefits |
|
1,177 |
|
|
5,384 |
|
|
— |
|
|
5,384 |
|
|
6,561 |
|
| Research and development expenses |
|
(12,294) |
|
|
(3,752) |
|
|
— |
|
|
(3,752) |
|
|
(16,046) |
|
| Bad debt provision |
|
715 |
|
|
1,242 |
|
|
— |
|
|
1,242 |
|
|
1,957 |
|
| Provision for legal complaints and expenses |
|
6,827 |
|
|
(3,895) |
|
|
— |
|
|
(3,895) |
|
|
2,932 |
|
| Loan approval expenses |
|
(8,793) |
|
|
(3,942) |
|
|
— |
|
|
(3,942) |
|
|
(12,735) |
|
| Financial instruments recorded at market value |
|
5,226 |
|
|
— |
|
|
(57,242) |
|
|
(57,242) |
|
|
(52,016) |
|
| Specific tax on mining activity |
|
(5,799) |
|
|
2,491 |
|
|
5 |
|
|
2,496 |
|
|
(3,303) |
|
| Tax loss benefit |
|
10,059 |
|
|
64,288 |
|
|
— |
|
|
64,288 |
|
|
74,347 |
|
| Others |
|
2,913 |
|
|
(25,876) |
|
|
— |
|
|
(25,876) |
|
|
(22,963) |
|
| Foreign items (other) |
|
96 |
|
|
(21) |
|
|
— |
|
|
(21) |
|
|
75 |
|
| Total temporary differences, unused losses and unused tax credits |
|
314,646 |
|
|
(346,391) |
|
|
(60,707) |
|
|
(407,098) |
|
|
(92,452) |
|
(e)Deferred taxes related to benefits for tax losses
The Company’s tax loss carryforwards were mainly generated by losses in Chile, which in accordance with current Chilean tax regulations have no expiration date.
As of December 31, 2024, and 2023, tax loss carryforwards are detailed as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Deferred taxes related to benefits for tax losses |
|
As of
December 31,
2024 |
|
As of
December 31,
2023 |
|
|
ThUS$ |
|
ThUS$ |
| Chile |
|
44,525 |
|
16,087 |
| Foreign |
|
84,598 |
|
7,253 |
| Total |
|
129,123 |
|
23,340 |
The tax losses as of December 31, 2024, which are the basis for these deferred taxes correspond mainly to SQM Salar SpA., SQM Potasio SpA., Orcoma SpA., SCM Búfalo, SQM North América Corp., Sichuan Dixin New Energy Co. Ltd., SQM Comercial Perú S.A.C. and SQM Australia Pty Ltd.
(f)Movements in deferred tax assets and liabilities
Movements in deferred tax assets and liabilities as of December 31, 2024 and 2023 are detailed as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Movements in deferred tax assets and liabilities |
|
Assets (liabilities) |
|
As of
December 31,
2024 |
|
As of
December 31,
2023 |
|
|
ThUS$ |
|
ThUS$ |
| Deferred tax assets and liabilities, net opening balance |
|
(92,452) |
|
|
314,646 |
|
| Increase (decrease) in deferred taxes in income |
|
(101,614) |
|
(346,391) |
| Increase (decrease) deferred taxes in equity |
|
53,251 |
|
|
(60,707) |
| Total |
|
(140,815) |
|
(92,452) |
|
(g)Disclosures on income tax (expenses) benefits
Current and deferred tax (expenses) benefits are detailed as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Disclosures on income tax (expense) benefit |
|
(Expense) Income |
|
As of
December 31,
2024 |
|
As of
December 31,
2023 |
|
As of
December 31,
2022 |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Current income tax (expense) benefit |
|
|
|
|
|
|
| Current tax expense (1) |
|
(206,051) |
|
|
(1,533,809) |
|
|
(2,002,564) |
|
| Adjustments to prior year current income tax benefit (expense) |
|
25,092 |
|
|
3,449 |
|
|
(626) |
|
| Current income tax expense, net total |
|
(180,959) |
|
|
(1,530,360) |
|
|
(2,003,190) |
|
| Deferred tax (expense) benefit |
|
|
|
|
|
|
| Deferred tax benefits relating to the creation and reversal of temporary differences |
|
(77,113) |
|
|
(342,363) |
|
|
427,680 |
|
| Tax adjustments related to the creation and reversal of temporary differences from the previous year |
|
(24,501) |
|
(4,028) |
|
3,298 |
| Total deferred tax benefits, net |
|
(101,614) |
|
|
(346,391) |
|
|
430,978 |
|
| Income tax expense |
|
(282,573) |
|
|
(1,876,751) |
|
|
(1,572,212) |
|
(1) Includes a tax expense adjustment amounting US$1,089.5 million for the year ended December 31, 2023 relating to the specific mining tax to lithium mining claims (see note 20.3).
Income tax (expenses) benefit for foreign and domestic parties are detailed as follows:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income tax (expense) benefit |
|
(Expense) Income |
|
As of
December 31,
2024 |
|
As of
December 31,
2023 |
|
As of
December 31,
2022 |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Current income tax benefit (expense) by foreign and domestic parties, net |
|
|
|
|
|
|
| Current income tax (expenses), foreign parties, net |
|
(71,477) |
|
|
(120,893) |
|
|
(213,060) |
|
| Current income tax (expenses), domestic, net (1) |
|
(109,482) |
|
|
(1,409,467) |
|
|
(1,790,130) |
|
| Current income tax expense, net, total |
|
(180,959) |
|
|
(1,530,360) |
|
|
(2,003,190) |
|
| Deferred tax benefit (expense) by foreign and domestic parties, net |
|
|
|
|
|
|
| Current income tax (expense) benefit, foreign parties, net |
|
73,935 |
|
|
(34,014) |
|
|
(21,338) |
|
| Current income tax (expense) benefits, domestic, net |
|
(175,549) |
|
|
(312,377) |
|
|
452,316 |
|
| Deferred tax expense, net, total |
|
(101,614) |
|
|
(346,391) |
|
|
430,978 |
|
| Income tax expense |
|
(282,573) |
|
|
(1,876,751) |
|
|
(1,572,212) |
|
(1) Includes a tax expense adjustment amounting US$1,089.5 million for the year ended December 31, 2023 relating to the specific mining tax to lithium mining claims (see note 20.3).
________________________________________________
(h)Disclosures on the tax effects of other comprehensive income components:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income tax related to other income and expense components with a charge or credit to net equity |
|
As of December 31, 2024 |
|
Amount before taxes
(expense) gain |
|
(Expense) income for
income taxes |
|
Amount after taxes |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Income (losses) from defined benefit plans |
|
3,148 |
|
|
(860) |
|
2,288 |
|
| Cash flow hedges |
|
11,293 |
|
(3,049) |
|
|
8,244 |
| Reserve for (losses) income from financial assets measured at fair value through other comprehensive income |
|
3,520 |
|
(2,723) |
|
|
797 |
| Total |
|
17,961 |
|
(6,632) |
|
|
11,329 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income tax related to other income and expense components with a charge or credit to net equity |
|
As of December 31, 2023 |
|
Amount before taxes
(expense) gain |
|
(Expense) income for
income taxes |
|
Amount after taxes |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| (Losses) income from defined benefit plans |
|
(5,843) |
|
|
1,582 |
|
|
(4,261) |
|
| Cash flow hedges |
|
18,692 |
|
|
(5,047) |
|
|
13,645 |
|
| Reserve for (losses) income from financial assets measured at fair value through other comprehensive income |
|
190,509 |
|
|
(57,242) |
|
|
133,267 |
|
| Total |
|
203,358 |
|
|
(60,707) |
|
|
142,651 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income tax related to other income and expense components with a charge or credit to net equity |
|
As of December 31, 2022 |
|
Amount before taxes
(expense) gain |
|
(Expense) income for
income taxes |
|
Amount after taxes |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Income (losses) from defined benefit plans |
|
(6,350) |
|
1,273 |
|
|
(5,077) |
| Cash flow hedges |
|
26,622 |
|
|
(7,172) |
|
19,450 |
|
| Reserve for income (losses) from financial assets measured at fair value through other comprehensive income |
|
190 |
|
(17) |
|
|
173 |
| Total |
|
20,462 |
|
(5,916) |
|
|
14,546 |
________________________________________________
(i)Explanation of the relationship between (expense) benefit for tax purposes and accounting income.
Based on IAS 12, paragraph 81, letter “c”, the company has estimated that the method that discloses the most significant information for users of the financial statements is the numeric conciliation between the tax benefit (expense) and the result of multiplying the accounting profit by the current rate in Chile. The aforementioned choice is based on the fact that the Company and subsidiaries established in Chile generate a large part of the Company’s tax benefit (expense).
Reconciliation between the tax expense and the tax calculated by multiplying income before taxes by the Chilean corporate income tax rate.
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
| Income Tax (Expense) Benefit |
|
(Expense) Benefit |
|
As of
December 31,
2024 |
|
As of
December 31,
2023 |
|
As of
December 31,
2022 |
|
|
ThUS$ |
|
ThUS$ |
|
ThUS$ |
| Consolidated income before taxes |
|
974,414 |
|
2,807,018 |
|
5,486,496 |
| Statutory income tax rate in Chile |
|
27 % |
|
27 % |
|
27 % |
| Tax expense using the statutory tax rate |
|
(263,092) |
|
|
(757,895) |
|
|
(1,481,354) |
|
| Net effect of royalty tax payments |
|
(4,453) |
|
|
(6,889) |
|
|
(57,500) |
|
| Specific mining tax to lithium mining claims (see note 20.3) (1) |
|
(12,635) |
|
(1,089,476) |
|
— |
|
| Net effect of other additional taxes (3) |
|
(25,377) |
|
— |
|
— |
|
| Tax effect of income from regular activities exempt from taxation and dividends from abroad |
|
1,030 |
|
(1,457) |
|
|
3,490 |
| Tax rate effect of non-tax-deductible expenses for determining taxable profit (loss) |
|
(5,013) |
|
|
3,509 |
|
|
(11,058) |
|
| Effect due to the difference in tax rates related to abroad subsidiaries |
|
7,682 |
|
|
(24,748) |
|
|
(25,053) |
|
| Effect of tax loss recognition |
|
14,750 |
|
— |
|
— |
|
| Other tax effects of reconciliation of accounting income to tax expense |
|
4,535 |
|
|
205 |
|
|
(737) |
|
| Tax expense using the effective tax rate |
|
(282,573) |
|
|
(1,876,751) |
|
|
(1,572,212) |
|
(1)The net effects of the payment of the specific tax on the mining activity applied to lithium are presented with the deferred tax on the mining activity applied to lithium in the amount of ThUS$4,049 for the year ended December 31, 2024.
(2)The other tax effects from the reconciliation between accounting income and tax expenses include deferred taxes from the initiation of operations in Australia.
(3)Mainly related to dividends from abroad subsidiaries and capital gains tax related to common control transactions.
Pillar Two legislation, promoted by the OECD in its BEPS program, has been enacted in some jurisdictions where the Company operates. The Company is evaluating and documenting its potential exposure to income taxes under this new legislation. However, the Company does not anticipate significant exposure to Pillar Two supplementary taxes.
(j)Tax periods potentially subject to verification:
The Group’s Companies are potentially subject to income tax audits by tax authorities in each country These audits are limited to a number of interim tax periods, which, in general, when they elapse, give rise to the expiration of these inspections.
Tax audits, due to their nature, are often complex and may require several years. Below, we provide a summary of tax periods that are potentially subject to verification, in accordance with the tax regulations in force in the country of origin:
(i)Chile
According to article 200 of Decree Law No 830, the taxes will be reviewed for any deficiencies in terms of payment and to generate any taxes that might arise. There is a 3-year prescriptive period for such review, dating from the expiration of the legal deadline when payment should have been made. This prescriptive period can be extended to 6 years for the revision of taxes subject to declaration, when such declaration has not been filed or has been presented with maliciously false information.
(ii)United States
In the United States, the tax authority may review tax returns for up to 3 years from the expiration date of the tax return. In the event that an omission or error is detected in the tax return of sales or cost of sales, the review can be extended for a period of up to 6 years.
(iii)Mexico:
In Mexico, the tax authority can review tax returns up to 5 years from the expiration date of the tax return.
(iv)Spain:
In Spain, the tax authority can review tax returns up to 4 years from the expiration date of the tax return.
(v)Belgium:
In Belgium, the tax authority may review tax returns for up to 3 years from the expiration date of the tax return if no tax losses exist. In the event of detecting an omission or error in the tax return, the review can be extended for a period of up to 5 years.
(vi)South Africa:
In South Africa, the tax authority may review tax returns for up to 3 years from the expiration date of the tax return. In the event that an omission or error in the tax return is detected, the review can be extended for a period of up to 5 years.
(vii)China:
Tax returns up to 3 years old from the due date of the return can be reviewed, in special circumstances this can be extended to 5 years. When tax evasion or fraud is involved, the tax authorities will pursue the collection of tax and there is no time limit.
(viii)South Korea:
Tax returns up to 5 years old from the due date of the return can be reviewed, but this can be extended to 7 years for cross-border transactions. Failure to file the tax return on the legal due date will result in this deadline being extended by up to 5 years and 10 years for cross-border transactions. When tax evasion or fraud is involved, it will be extended by up to 10 years and 15 years for cross-border transactions.
(ix) Australia:
Tax returns may be audited in accordance with the Australian Taxation Office (ATO) up to 4 years from their filing date or due date, whichever is earlier.
Note 26 Events occurred after the reporting date
26.1 Authorization of the financial statements
The consolidated financial statements of the Company and its subsidiaries as of December 31 2024 and 2023, and for the three years ended December 31, 2024, prepared in accordance with IFRS as issued by the IASB , were approved and authorized for issuance by the Company´s Board of Directors on April 23, 2025.
26.2 Disclosures on events occurring after the reporting date
(a) On January 14, 2025, SQM Australia Pty Ltd acquired an additional 30,000,000 ordinary shares in Pirra Resources Limited for a total price of AUD 4,200,000 (ThUS$2,613). As a result of this transaction, the Company’s stake in Pirra Resources Limited increased to 80%.
(b) On February 25, 2025, the Company announced that the Board of Directors has agreed to call an annual general meeting at 10:00 on Thursday, April 24, 2025. The Board of Directors also agreed that the voting instruction card for holders of ADRs of SQM Series B shares, regarding the matters to be discussed at the meeting, will be provided to the Bank of New York Mellon, as depositary bank, at 16:00 on Wednesday, March 26, 2025.
Management is not aware of any other significant events that occurred between December 31, 2024, and the date of issuance of these consolidated financial statements that may significantly affect them.
EX-2.1
2
exhibit21-descriptionofsec.htm
EX-2.1
Document
Exhibit 2.1
DESCRIPTION OF SECURITIES REGISTERED
UNDER SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934
Description of Share Capital
Sociedad Química y Minera de Chile S.A. (the “Company”) is an open stock corporation organized under the laws of the Republic of Chile.
Shares
Under the Company’s By-laws, the Company’s share capital is divided into shares of Series A common stock (“Series A Shares”) and shares of Series B common stock (“Series B Shares”). Series A Shares and Series B Shares have the same economic rights (i.e., both series are entitled to share equally in any dividends declared on the outstanding stock) and voting rights at any shareholders meeting, whether ordinary or extraordinary, with the exception of the election of the Board, in which the Series A Shareholders elect seven directors and the Series B Shareholders elect one director. However, the director elected by the Series B Shareholders cannot vote in the election of the Chairman of the Board if a tie has occurred in the first voting process. As of April 23, 2025, there were 142,818,904 Series A Shares and 142,818,904 Series B Shares outstanding.
Dividends are distributed annually to the Series A and Series B Shareholders of record on the fifth business day prior to the date for payment of the dividends. The By-laws do not specify a time limit after which dividend entitlement elapses but Chilean regulations establish that after five years, unclaimed dividends are to be donated to the fire department.
Article 5 of the Company’s By-laws establishes that Series B Shares may in no case exceed 50% of SQM’s issued, outstanding and paid stock. Series B Shares have a restricted right to vote as they can only elect one director of the Company, regardless of their capital stock’s share. Series B Shares have the right to call for an Ordinary or Extraordinary Shareholders’ Meeting when the shareholders of at least 5% of the Series B Shares issued request so and for an Extraordinary Board of Directors Meeting without the Chairman’s authorization when it is requested by the director elected by the shareholders of the Series B Shares. Series A Shares have the option to exclude the director elected by Series B Shareholders from the voting process in which the Chairman of the Board is to be elected, if there is a tie in the first voting process. However, subject to the second transitory article described below, articles 31 and 31 bis of the Company’s By-laws establish that in General Shareholders’ Meetings each shareholder will have a right to one vote for each share he owns or represents and (a) that no shareholder will have the right to vote for himself or on behalf of other shareholders of the same Series A or Series B Shares representing more than 37.5% of the total outstanding shares with right to vote of each Series and (b) that no shareholder will have the right to vote for himself or on behalf of other shareholders representing more than 32% of the total outstanding shares with a right to vote, with any excess being deducted from the number of shares such shareholder may vote. In calculating a single shareholder’s ownership of Series A or B shares, the shareholder’s stock and those pertaining to third parties related to them are to be added.
The second transitory article provides as follows:
“Throughout the period running from the date of the extraordinary shareholders’ meeting at which this transitory article is incorporated, and December 31, 2030, the restriction against voting on behalf of more than 37.5% of any series of shares in the Company, established in article 31 hereof, shall be subject to the following exception, applicable only to the election of board members by means of Series A shares in the Company: If two or more persons, regardless of whether or not they are related parties to each other (the incoming shareholders), act prior to December 31, 2030 such as to acquire a sufficient number of Series A shares to allow them to hold voting powers for the selection of directors of the Company amounting to more than 37.5% of that series, then any registered shareholder or group of shareholders holding more than 37.5% of all Series A shares in the Company shall be entitled to vote for the selection of directors of the Company amounting to whichever is less, between a number of the Series A shares that are held (i) by existing shareholders as of that date, and (ii) by the incoming shareholders with voting rights. Similarly, if for any reason a registered shareholder in the Company as of the date hereof who holds more than 37.5% of Series A shares in the company between the date hereof and December 31, 2030, comes to hold more voting shares for the selection of directors of the Company than the votes allocated for holding 37.5% of said Series A shares, either through a joint action agreement with other shareholders, including existing shareholders, or by any other means, then any other shareholder or group of shareholders in the Company that is not a related party to the same and holds more than 37.5% of all voting Series A shares in the Company, including both existing and incoming shareholders, shall be entitled to vote for the selection of directors of the Company in accordance with whichever number of Series A shares in the Company is the lesser, between (i) the number held by this shareholder or group of shareholders, and (ii) the existing shareholder may have the capacity to vote in excess of the restriction amounting to 37.5% of said shares.”
Article 5 bis of the Company’s By-laws establishes that no person may directly or by means of related third persons concentrate more than 32% of the Company’s total shares with right to vote.
Each Series A Share and Series B Share is entitled to share equally in the Company’s profits, i.e., they have the same rights on any dividends declared on the outstanding shares of the Company.
The Company By-laws do not contain any provision relating to (a) redemption provisions (b) sinking funds or (c) liability to capital calls by the Company.
As established in article 103 of Law No. 18,046, a company subject to the supervision of the CMF may be liquidated in the following cases:
(1)Expiration of the duration term, if any, as established in its By-laws;
(2)All the shares end up in the possession of one individual for more than ten continuous days;
(3)By agreement of an Extraordinary Shareholders Meeting;
(4)By abolition, pursuant to applicable laws, of the decree that authorized its existence;
(5)Any other reason contemplated in its By-laws.
Article 40 of the Company’s By-laws states that in the event of liquidation, the shareholders’ meeting will appoint a three-member receiver committee that will have the authority to carry out the liquidation process. Any surplus will be distributed equally among the shareholders.
The only way to change the rights of the holders of the Company’s shares is by modifying its By-laws, which can only be carried out by an Extraordinary Shareholders’ Meeting, as established in article 28 of the Company’s By-laws.
Shareholders’ Meetings
Article 29 of the Company’s By-laws states that the call to a shareholders’ meeting, either Ordinary or Extraordinary, will be by means of a highlighted public notice that will be published at least three times, and on different days, in the newspaper of the legal address determined by the shareholders’ meeting, and in the way and under the conditions indicated by the regulations. Additionally, a notice will be sent by mail to each shareholder at least fifteen days prior to the date of the Meeting, which shall include a reference of the matters to be addressed at the meeting.
However, those meetings with the full attendance of the shares with right to vote may be legally held, even if the foregoing formal notice requirements are not met. Notice of any shareholders’ meeting shall be delivered to the CMF at least fifteen days in advance of such meeting.
Any holder of Series A and/or Series B Shares registered in the Company’s shareholder registry on the fifth business day prior to the date of the meeting will have a right to participate at that meeting
Article 67 of Law No. 18,046 provides that decisions made at Extraordinary Shareholders’ Meeting on the following matters require the approval of 2/3 of the outstanding shares with voting rights: (1) transformation or division of the Company and its merger with another company; (2) modification of the Company’s term of duration, if any; (3) early dissolution of the Company; (4) change of the corporate domicile; (5) capital decrease; (6) approval of contributions and estimation of non-cash assets; (7) modification of powers reserved for Shareholders Meetings or limitations on powers of the Board of Directors; (8) reduction in the number of members of the Board of Directors; (9) disposal of 50% or more of the Company’s assets; formulation or modification of any business plan exceeding the above percentage; disposal of 50% or more of an asset belonging to a subsidiary that represents at least 20% of the Company’s assets and disposal of shares of the referred subsidiary such that the parent company would lose its position as controller of the same; (10) method in which profits are distributed; (11) granting of real or personal guarantees as sureties for third-party obligations that exceed 50% of the Company assets, except for subsidiaries, in which case approval of the Board of Directors shall suffice; (12) acquisition of own shares as set forth in articles 27A and 27B of the said law; (13) other matters indicated in the By-laws; (14) amendment of the Company By-laws as a result of errors in the constitution process and amendments in the By-laws involving one or more of the matters stated in the preceding numbers; (15) forced sale of shares carried out by the controller who would acquire more than 95% of the Company’s shares in a tender offer, and (16) approval or ratification of proceedings or contracts with related parties in accordance with the provisions of articles 44 and 147 of Law No. 18,046.
Amendments to the By-laws that are intended to create, modify, defer or suspend preferential rights shall be approved by 2/3 of the shares of the affected series.
The transformation of the Company, the merger of the same, the disposal of assets referred to in number (9) above, the constitution of guarantees set forth in number (11) above, the constitution of preferences or the increase, postponement or decrease of the existing preferences, the reparation of formal nullities incurred in the By-laws and the possession of more than 95% of the Company’s shares and other matters contemplated in the Law or in the By-laws, confer “withdrawal rights.”
Shareholder Restrictions
There are no restrictions on ownership or share concentration, or limiting the exercise of the related right to vote, by local or foreign shareholders other than as described above under “— Shares”.
Change in Control
The Company By-laws provide that no shareholder may hold more than 32% of the Company’s shares, unless the By-laws are modified at an Extraordinary Shareholders’ Meeting. Moreover, on December 12, 2000, the Chilean Government published the Public Tender Offer Law (Ley de Oferta Pública de Acciones or “OPA law”) that seeks to protect the interests of minority shareholders of open stock corporations in transactions involving a change in control, by requiring that the potential new controller purchase the shares owned by the remaining shareholders either in total or pro rata. The law applies to those transactions in which the controlling party would receive a material premium price compared with the price that would be received by the minority shareholders.
There are three conditions that would make it mandatory to initiate a public tender offer under the OPA law:
1)When an investor wants to take control of a company’s stock.
2)When a controlling shareholder holds two-thirds of the company’s stock. If such shareholder buys one more share, it will be mandatory to offer to acquire the rest of the outstanding stock within 30 days of surpassing that threshold.
3)When an investor wants to take control of a corporation, which, in turn, controls an open stock corporation that represents 75% or more of the consolidated assets of the former corporation.
Parties interested in taking control of a company must (i) notify the company of such intention in writing, and notify its controllers, the companies controlled by it, the CMF and the markets where its stocks are traded and (ii) publish a highlighted public notice in two newspapers of national circulation at least 10 business days prior to the date of commencement of the public tender offer.
Directors
As stated in article 9 of the Company’s By-laws, the Company has eight Directors. One of the directors must be “independent” as such term is defined in article 50 bis of Law No. 18,046. Moreover, the possession of shares is not a condition necessary to become a director of the Company.
As stated in article 10 of the Company’s By-laws, the term of the directors is of three years and they can be reelected indefinitely; thus, there is no age limit for their retirement.
The Company’s By-laws, in articles 16 and 16 bis, essentially establish that the transactions in which a director has a material interest must comply with the provisions set forth in articles 136 and 146 to 149 of Law No. 18,046 and the applicable regulations of such Law.
The Board of Directors duties are remunerated, as stated in article 17 of the Company’s By-laws, and the amount of that compensation is fixed yearly by the Ordinary Shareholders’ Meeting. Therefore, directors can neither determine nor modify their compensation.
Directors cannot authorize Company loans on their behalf.
The Board of Directors must provide shareholders and the public with sufficient, reliable and timely information pertaining to the Company’s legal, economic and financial situation, as required by the Law or the CMF. The Board of Directors must adopt the appropriate measures in order to avoid the disclosure of such information to persons other than those persons who should possess such information as a result of their title, position or activity within the Company before such information is disclosed to shareholders and the public. The Board of Directors must treat business dealings and other information about the Company as confidential until such information is officially disclosed. No Director may take advantage of the knowledge about commercial opportunities that he has obtained through his position as Director.
Independent Directors and Directors Committee
According to Chilean Law, the Company must appoint at least one Independent Director and a Directors’ Committee, due to the fact that (a) the Company has a market capitalization greater than or equal to UF 1,500,000 and (b) at least 12.5% of the Company’s shares with voting rights are held by shareholders who, on an individual basis, control or possess less than 10% of such shares.
Persons who have not been involved in any of the circumstances described in the Law at any time during the preceding 18 months are considered independent. Candidates for the position of Independent Director must be proposed by shareholders representing 1% or more of the Company’s shares, at least 10 days prior to the date of the shareholders’ meeting that has been called in order to elect the Directors. No less than two days prior to the respective shareholders’ meeting, the candidate must provide the Chief Executive Officer with a sworn statement indicating that he:
(1)accepts his candidacy for the position of Independent Director;
(2)does not meet any of the conditions that would prevent him from being the Independent Director;
(3)is not related to the Company, the other companies of the group to which the Company belongs, the controller of the Company, or any of the Company’s officers in such a way that would deprive a sensible person of a reasonable degree of autonomy, interfere with his ability to perform his duties objectively and effectively, generate a potential conflict of interest, or interfere with his independent judgment; and
(4)assumes the commitment to remain independent as long as he holds the position of Director.
The Directors’ Committee shall have the following powers and duties:
(1)to examine the reports of the external auditors, the balance sheet and other financial statements presented by the Company’s managers or liquidators to its shareholders and issue an opinion about the same prior to their submission for the approval of the shareholders;
(2)to propose to the Board of Directors the external auditors and risk rating agencies to be proposed to the shareholders at the respective shareholders’ meeting. In the event that an agreement cannot be reached, the Board of Directors shall formulate its own suggestion, and both options shall be submitted for shareholder consideration at such shareholders’ meeting;
(3)to examine the information relating to operations referred to in articles 146 to 149 of Law No. 18,046 and to prepare a report about such operations. A copy of such report shall be sent to the Board of Directors, and such report must be read at the Board Meeting called for the purpose of approving or rejecting the respective operation or operations;
(4)to examine the remuneration system and compensation plans for the Company’s management, officers and employees;
(5)to prepare an annual report on its activities, including its main recommendations to the shareholders;
(6)to inform the Board of Directors about whether or not it is advisable to hire the external audit firm to provide non-audit services where the audit firm is not prohibited from providing such services because the nature of the same could pose a threat to the audit firm’s independence; and
(7)any other issues indicated in the Company’s By-laws or authorized by a shareholders’ meeting or the Board of Directors.
The Directors’ Committee shall be comprised of three members, with at least one independent member. In the event that more than three Directors have the right to form part of the Committee, these same Directors shall unanimously determine who shall make up the Committee. In the event that an agreement cannot be reached, the Directors who were elected with a greater percentage of votes by shareholders controlling or possessing less than 10% of the Company’s shares shall be given priority. If there is only one Independent Director, this Director shall name the other members of the Committee among the other Directors who are not independent. Such other members of the Committee shall have all of the rights associated with such position. The members of the Committee shall be compensated for their role. The amount of their remuneration shall be set annually at the General Shareholders’ Meeting, and it may not be less than the remuneration set for the Company Directors, plus an additional 1/3 of that amount.
The General Shareholders’ Meeting shall determine a budget for the expenses of the Committee and its advisors. Such budget may not be less than the sum of the annual remunerations of the Committee members. The Committee may need to hire professional advisory services in order to carry out its duties in accordance with the abovementioned budget. The proposals made by the Committee to the Board of Directors that are not accepted by the latter must be reported to the shareholders’ meeting prior to the vote by shareholders on the corresponding matter or matters. In addition to the responsibilities that are associated with the position of Director, the members of the Committee are jointly and severally liable for any damages they cause in performing their duties as such to the shareholders and to the Company.
Description of American Depositary Receipts
The following is a summary of the material terms of the Amended and Restated Deposit Agreement dated as of April 15, 2013 (the “Deposit Agreement”) among the Company, The Bank of New York Mellon, as depositary (the “Depositary”), and the owners and holders from time to time of American Depositary Shares (“ADSs”). This summary does not purport to be complete and is qualified in its entirety by reference to the Deposit Agreement and the form of American Depositary Receipt (“ADR”), copies of which have been filed as an exhibit to the Registration Statement on Form F-6 (Registration Statement No. 333-187744).
An owner of ADSs becomes a party to the Deposit Agreement and therefore will be bound to its terms and to the terms of the ADR that represents the ADSs. The Deposit Agreement and the ADR specify the Company’s rights and obligations, as well as the ADR holder’s rights and obligations as owner of ADSs and those of the Depositary. As an ADR holder you appoint the Depositary to act on your behalf in certain circumstances. The Deposit Agreement and the ADRs are governed by New York law. However, the Company’s obligations to the holders of shares of the Company’s Series B common stock (the “Series B Shares”) will continue to be governed by the laws of Chile, which are different from New York law.
American Depositary Receipts
ADRs evidencing ADSs are issuable by the Depositary pursuant to the Deposit Agreement. Each ADS represents, as of the date hereof, one Series B Share deposited with Banco Itau Chile, as custodian (the “Custodian”), as agent of the Depositary. An ADR may evidence any number of ADSs.
Deposit and Withdrawal of Deposited Securities
The Depositary will, upon deposit with the Custodian of the requisite number of Series B Shares and receipt of evidence satisfactory to it that the conditions to deposit described below have been met, and subject to the terms of the Deposit Agreement, the Depositary will execute and deliver at its Corporate Trust Office (which is presently located at 101 Barclay Street, New York, New York 10286) to or upon the order of the person or persons specified by the Depositary, upon payment of the fees, charges and taxes provided in the Deposit Agreement, an ADR or ADRs registered in the name of such person or persons for the number of ADSs issuable in respect of such deposit.
The Depositary will not be required to accept for deposit any Series B Shares unless it receives evidence satisfactory to the Depositary that the deposit has been authorized by the Central Bank of Chile and that the conditions for such authorization set forth in the Foreign Investment Contract (as defined below under “Foreign Currency Conversion — The Foreign Investment Contract”) among the Depositary, the Company and the Central Bank of Chile has been satisfied.
Every person depositing Series B Shares under the Deposit Agreement will be deemed to represent and warrant that the Series B Shares are validly issued, fully paid, non-assessable and free of any preemptive rights, that the certificates for the Series B Shares have been validly authorized and issued and that the deposit of the Series B Shares and the issuance of ADRs evidencing ADSs are not restricted under the U.S. Securities Act of 1933, as amended (the “Securities Act”).
Holders of ADRs are entitled to withdraw the deposited Series B Shares at any time, subject only to (i) temporary delays caused by dosing transfer books of the Depositary or the Company or the deposit of Series B Shares in connection with voting at a shareholders’ meeting or the payment of dividends, (ii) the payment of fees, taxes and similar charges and (iii) compliance with any U.S. or foreign laws or governmental regulations relating to the ADSs or to the withdrawal of the deposited Series B Shares. Upon surrender of ADRs at the Corporate Trust Office of the Depositary and upon payment of the taxes, fees and charges provided in the Deposit Agreement and subject to the terms thereof, ADR holders are entitled to delivery, at the office of the Custodian in Santiago, Chile, of the deposited Series B Shares, any other property or documents of title at the time represented by the surrendered ADRs and a certificate of the Custodian stating that the deposited Series B Shares, are being delivered to such ADR holder in exchange for the surrendered ADRs and that the Depositary waives in favor of the ADR holder the right of access to the Formal Exchange Market relating to such withdrawn Series B Shares. In the event the Depositary determines that there is a reasonable possibility that a fee, tax or other charge will become payable by or be assessed against the Depositary or the Custodian following the delivery, transfer or surrender of ADRs or withdrawal of Series B Shares, the Depositary may, in its discretion, as a condition to consummation of such transaction, require that the ADR holder provide the Depositary with an indemnity bond in such form and amount and with such surety as it may accept as reasonably sufficient to indemnify it against such potential liabilities.
The Depositary is not authorized, in its capacity as Depositary, to deliver Series B Shares by physical delivery, book entry or otherwise, or permit Series B Shares to be withdrawn from the deposit facility except upon the receipt and cancellation of ADRs.
Dividends and Other Distributions
(1)Cash Dividends and Distributions
The Depositary will, as promptly as practicable, convert all cash dividends and other cash distributions received by the Depositary or the Custodian in respect of the deposited Series B Shares into U.S. dollars and, as promptly as practicable, distribute the amount thus received (net of any fees of the Depositary provided in the Deposit Agreement) to the holders of ADRs in proportion to the number of ADSs representing such Series B Shares held by each of them. The amount distributed also will be reduced by any amounts required to be withheld by the Company, the Depositary or the Custodian on account of taxes and the Depositary’s foreign currency conversion expenses. Conversion of such cash amounts from Chilean pesos to U.S. dollars is subject to the terms and conditions of the Deposit Agreement, Chilean law and the Foreign Investment Contract described below under “Foreign Currency Conversion — Foreign Investment Contract”.
(2)Distributions of Series B Shares
If a distribution by the Company consists of a dividend in, or the free distribution of, Series B Shares, the Depositary may after consultation with the Company (or if the Company so requests will) distribute to the holders of outstanding ADRs, in proportion to the number of ADSs representing such Series B Shares held by each of them, additional ADRs for an aggregate number of ADSs representing the number of Series B Shares received as such dividend or free distribution. The Depositary may withhold delivery of ADSs if it has not received satisfactory assurances from the Company that such distribution does not require registration under the Securities Act. If in the opinion of the Depositary any distribution of Series B Shares cannot be made proportionately among the holders of ADRs entitled thereto, or if for any other reason, the Depositary deems such distribution not to be feasible, it may adopt such method as it deems equitable and practicable for the purpose of effecting such distribution, including the public or private sale of all or any portion of the Series B Shares received, and the distribution of the net proceeds of such sale (net of any fees of the Depositary provided in the Deposit Agreement) to the holders of ADRs entitled thereto as in the case of a distribution received in cash.
If additional ADRs or such proceeds are not so distributed, each ADS will thereafter also represent the additional Series B Shares distributed in respect of the Series B Shares represented by such ADS prior to such dividend or free distribution or the net cash proceeds of any such sale.
(3)Distributions of Rights
If the Company offers or causes to be offered to holders of Series B Shares any rights to subscribe for additional Series B Shares or any rights of any other nature, the Depositary will, after consultation with the Company, have discretion as to the procedure to be followed in making such rights available to holders of ADRs or in disposing of such rights on behalf of the holders of ADRs and making the net proceeds available to the holders of ADRs, or if by the terms of such rights offering or for any other reason, the Depositary may not either make such rights available to the holders of ADRs or dispose of such rights and make the net proceeds available to such holders of ADRs, then the Depositary will allow the rights to lapse.
If the Depositary determines in its discretion that it is lawful and feasible to make such rights available to all or certain holders of ADRs but not to other holders of ADRs, the Depositary may, after consultation with the Company, distribute to any holder of ADRs to whom it determines the distribution to be lawful or feasible, in proportion to the number of ADSs held by such holder of ADRs, warrants or other instruments therefor in such other forms as it deems appropriate.
If the Depositary determines in its discretion that it is not lawful or feasible to make such rights available to all or certain holders of ADRs, it may after consultation with the Company, sell the rights, warrants or other instruments in proportion to the number of ADSs held by ADR holders to whom it has determined it may not lawfully or feasibly make such rights available and allocate the net proceeds of such sales (net of fees of the Depositary provided in the Deposit Agreement and all taxes and other governmental charges payable) for the account of the holders of ADRs otherwise entitled to such rights, warrants or other instruments, upon an averaged or other practicable basis without regard to any distinctions among such holders of ADRs because of exchange restrictions, or the date of delivery of any ADR or ADRs, or otherwise.
The Depositary will not offer any right to subscribe for or to purchase any securities, to holders of ADRs unless both the rights and the securities to which such rights relate are either exempt from registration under the Securities Act with respect to a distribution to all holders of ADRs or are registered under the Securities Act. If a holder of ADRs requests the distribution of warrants or other instruments notwithstanding that there has been no such registration under the Securities Act, the Depositary will not effect such distribution unless it has received an opinion from counsel in the United States for the Company satisfactory to the Depositary that such distribution does not require registration under the Securities Act. In no event will the Company have any obligation to register such rights or any securities under the Securities Act, secure an exemption for such rights or any securities under the Securities Act or furnish the opinion described above.
(4)Distributions Other than Cash, Series B Shares or Rights
If the Depositary receives any distribution other than a distribution of cash, Series B Shares or rights, the Depositary will after consultation with the Company distribute to the holders of outstanding ADRs, in proportion to the number of ADSs representing such Series B Shares held by them, the securities or other property received in any manner as the Depositary deems equitable and practicable for accomplishing such distribution. If in the opinion of the Depositary such distribution cannot be made proportionately among the holders of ADRs entitled thereto, or if for any other reason, the Depositary deems such distribution not to be feasible, it may adopt such method as it deems equitable and practicable for the purpose of effecting such distribution, including the public or private sale of all or any portion of the securities or other property received, and the net proceeds of such sale (net of any fees of the Depositary provided in the Deposit Agreement) will be distributed to the holders of ADRs entitled thereto as in the case of a distribution received in cash.
Record Dates
Whenever any cash dividend or other cash distribution becomes payable or any distribution other than cash is made, or whenever rights are issued with respect to Series B Shares or whenever the Depositary receives notice of any meeting of holders of Series B Shares or shareholders generally, the Depository will fix a record date, which will be the same record date as the record date for the Series B Shares, or as near thereto as practicable, for the determination of the holders of ADRs who are entitled to receive such dividend, distribution or rights, or net proceeds of the sale thereof, or to give instructions for the exercise of voting rights at any such meeting, subject to the provisions of the Deposit Agreement.
Voting of the Deposited Securities
As soon as practicable after receipt of notice of any meeting or solicitation of consents or proxies of holders of Series B Shares and any other securities or property represented by the ADSs evidenced by such holders’ ADRs (“Deposited Securities”), the Depository will mail to holders of ADRs a notice in English containing (a) such information as is contained in such notice of meeting or solicitation, (b) a statement that each holder of ADRs at the close of business on a specified record date will be entitled, subject to Chilean law and the provisions of the Company’s By-laws, to instruct the Depositary as to the exercise of the voting rights, if any, pertaining to the Deposited Securities, (c) a statement as to the Deposited Securities represented by such ADR holder’s ADSs and (d) a statement as to the manner in which such instructions may be given, including an express indication that instructions may be given to the Depositary to give a discretionary proxy to a person or persons designated by the Company. Upon the written request of an ADR holder on such record date, received on or before the date established by the Depositary for such purpose, the Depositary will endeavor insofar as practicable and permitted under Chilean law and the provisions of or governing the Deposited Securities to vote or cause to be voted (or to grant a discretionary proxy to a person or persons designated by the Company to vote) the Deposited Securities represented by such ADR holder’s ADSs in accordance with any instruction set forth in such request. If no instructions are received by the Depositary from an ADR holder with respect to any of the Deposited Securities represented by such ADR holder’s ADSs on or before the date established by the Depositary for such purpose, the Depositary will deem such holder to have instructed the Depositary to give a discretionary proxy to a person designated by the Company to vote such Deposited Securities represented by such ADR holder’s ADSs. The Depositary will not provide such discretionary proxy to vote on any matter as to which the Company informs the Depositary that (a) the Company does not wish such proxy to be given or (b) such matter materially and adversely affects the rights of holders of the Series B Shares. If any requirement of Chilean law, the Company’s By-laws or any securities exchange on which the Series B Shares, other Deposited Securities, ADRs or the ADSs evidenced thereby are listed, does not permit the Depositary to vote in accordance with the instructions received from the ADR holders or in accordance with a deemed discretionary proxy, the Depositary will not vote the Series B Shares or other Deposited Securities.
Changes Affecting Deposited Securities
Upon any change in nominal or par value, split-up, consolidation or other reclassification of Deposited Securities or upon a recapitalization, reorganization, merger, consolidation or sale of assets resulting in securities being received by the Depositary or the Custodian in exchange for, in conversion of or in respect of the Deposited Securities, the ADSs will thereafter represent any new securities received in exchange or conversion, unless new ADRs are issued. The Depositary may, after consultation with the Company, and will, at the Company’s request, in such circumstances deliver additional ADRs to ADS holders as in the case of a dividend in shares or call for the exchange of existing ADRs for new ADRs specifically describing the new Deposited Securities.
Inspection of Transfer Books
The Depositary will maintain at its transfer office in the Borough of Manhattan, the City of New York, facilities for the execution and delivery, registration of transfer, combination or split-up of ADRs and a register for the registration of ADRs and the registration of the transfer of ADRs that at reasonable times, will be open for inspection by the holders of ADRs and the Company, provided that such inspection will not be for the purpose of communication with holders of ADRs in the interest of a business or object other than the business of the Company or a matter related to the Deposit Agreement or the ADRs.
Reports and Notices
The Company is subject to the periodic reporting requirements of the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”), and accordingly, files certain reports with the U.S. Securities and Exchange Commission (the “Commission”). These reports and other information are available on the Commission’s website (www.sec.gov).
The Depositary will make available for inspection by ADR holders at the Corporate Trust Office of the Depositary any reports and communications, including any proxy soliciting material, received from the Company that are both (a) received by the Depositary, the Custodian or the nominee of either of them as the holder of Series B Shares and (b) made generally available to the holders of Series B Shares by the Company. The Depositary will also send to ADR holders copies of such reports when furnished by the Company as provided in the Deposit Agreement. Any such reports and communications, including any such proxy soliciting materials, furnished to the Depositary by the Company will be furnished in English to the extent such materials are required to be translated into English pursuant to the regulations of the Commission.
Amendment and Termination of the Deposit Agreement
The form of the ADRs and the Deposit Agreement may at any time be amended by agreement between the Company and the Depositary. Any amendment that imposes or increases any fees or charges (other than fees of the Depositary for the execution and delivery of ADRs and taxes and other governmental charges), or that otherwise prejudices any substantial existing right of ADR owners, will, not take effect as to outstanding ADRs until the expiration of three months after notice of such amendment has been given to the record holders of outstanding ADRs. Every holder of ADRs at the time such amendment so becomes effective, if such holder has been given such notice, will be deemed by continuing to hold such ADR to consent and agree to such amendment and to be bound by the Deposit Agreement or the ADR as amended thereby. In no event may any amendment impair the right of any ADR holder to surrender its ADR and receive therefor the Series B Shares and other property represented thereby, except in order to comply with mandatory provisions of applicable law.
Whenever so directed by the Company, the Depositary will terminate the Deposit Agreement by giving notice of such termination to the holders of ADRs at least 90 days prior to the date fixed in such notice for such termination. The Depositary may terminate the Deposit Agreement at any time 90 days after the Depositary has delivered to the Company and the holders of ADRs its written resignation provided that a successor depositary has not been appointed and accepted its appointment before the end of such 90-day period. If any ADRs remain outstanding after the date of termination, the Depositary thereafter will discontinue the registration of transfers of ADRs, will suspend the distribution of dividends to the holders thereof and will not give any further notices or perform any further acts under the Deposit Agreement, except that the Depositary will continue the collection of dividends and other distributions pertaining to the Series B Shares and any other property represented by such ADRs, the sale of rights as provided in the Deposit Agreement and the delivery of Series B Shares, together with any dividends or other distributions received with respect thereto and the net proceeds of the sale of any rights or other property, in exchange, for surrendered ADRs. At any time after the expiration of four months from the date of termination, the Depositary may sell the Series B Shares and any other property represented by such ADRs and hold uninvested, the net proceeds, together with any other cash then held, unsegregated and without liability for interest, for the pro rata benefit of the holders of ADRs that have not theretofore been surrendered.
Charges of Depositary
The Depositary will charge the party to whom ADRs are issued (including issuance pursuant to a stock dividend or stock split declared by the Company or an exchange of stock regarding ADRs or Deposited Securities or a distribution of ADRs pursuant to the Deposit Agreement) and the party surrendering ADRs for delivery of deposited Series B Shares or other Deposited Securities, property and cash, a fee of up to US$5.00 for each 100 ADSs (or portion thereof) evidenced by the ADRs so issued or surrendered. The Depositary will also charge holders of ADRs a fee for, and will deduct such fee from, the distribution of proceeds from the sale of securities or rights pursuant to the Deposit Agreement in an amount equal to the fee that would have been charged as a result of the deposit by holders of securities or Series B Shares received in exercise of rights distributed to them had such rights nor been sold by the Depositary and the net proceeds therefrom distributed. The Company will pay all other charges of the Depositary and those of the registrar, if any, under the Deposit Agreement, as agreed from time to time between the Company and the Depositary, except for taxes and other government charges, any applicable share transfer and registration fees on deposits or withdrawals of Series B Shares, certain cable, telex and facsimile transmission charges and such expenses as are incurred by the Depositary in the conversion of foreign currency into U.S. dollars, which will be for the account of the holders of ADRs.
Foreign Currency Conversion
If the Depositary or the Custodian receives Chilean pesos or other foreign currency by way of dividends or other distributions or the net proceeds from the sale of securities, property or rights distributed and in the judgment of the Depositary the foreign currency may be converted on a reasonable basis to U.S. dollars and transferred to the United States, the Depositary will, subject to the Foreign Investment Contract and Chilean law, as promptly as practicable, convert such foreign currency into U.S. dollars and distribute the converted amounts, as promptly as practicable, to the holders of ADRs entitled thereto or, if the Depositary has distributed any warrants and/or instruments which entitle the holders thereof to such U.S. dollar amounts, to the holders of such warrants and/or instruments upon surrender thereof for cancellation. Such distribution may be made upon an averaged or other practicable basis without regard to any distinctions among such holders of ADRs because of exchange restrictions, or the date of delivery of any ADR or ADRs, or otherwise and will be net of any expenses of the Depositary for the conversion of the foreign currency into U.S. dollars.
If the Depositary determines that in its judgment any foreign currency received by it cannot be converted into U.S. dollars on a reasonable basis and transferred to the United States, or if the Foreign Investment Contract ceases to be in effect or the rights of the Depositary thereunder are restricted or suspended, or any other approval or license of any government or agency required for such conversion is denied or in the Depositary’s opinion, not obtainable, or any such approval or license is not obtained within a reasonable period as determined by the Depositary, the Depositary will (i) convert the foreign currency into U.S. dollars, to the extent permitted, and transfer such U.S. dollars to the United States for distribution to ADR holders for whom the conversion and distribution is practicable, (ii) if requested in writing by an ADR holder, distribute such foreign currency to ADR holders for whom distribution is lawful or practicable, or (iii) hold such foreign currency uninvested and without liability for interest thereon, for the respective accounts of the ADR holders entitled to receive the same.
Foreign Investment Contract
The Company entered into a foreign investment contract (Convención Capítulo XXVI del Título I del Compendio de Normas de Cambios Internacionales or the “Foreign Investment Contract”) with the Central Bank of Chile and the Depositary, pursuant to Article 47 of the Central Bank Act and Chapter XXVI of the Compendium of Foreign Exchange Regulations of the Central Bank of Chile (the “Compendium”).
Chapter XXVI of the Compendium governs the issuances of ADSs by a Chilean company. Pursuant to the Foreign Investment Contract, the foreign exchange for payments and distributions with respect to ADSs could be purchased in either the Formal Exchange Market or the Informal Exchange Market, but such payments needed to be remitted through the Formal Exchange Market. Foreign investors who have purchased Series B Shares and deposited them in the ADR program under the Foreign Investment Contract have access to the Formal Exchange Market for the purpose of converting from Chilean pesos into U.S. dollars and repatriating the U.S. dollars from Chile, any amounts received with respect to deposited Series B Shares or Series B Shares withdrawn from deposit on surrender of the ADSs (including amounts received as cash dividends and proceeds from the sale in Chile of the underlying Series B Shares and any rights with respect thereto). As of April 19, 2001, Chapter XXVI of the Compendium was eliminated and new investments in ADSs are now governed by Chapter XIV of the Compendium. However, because the Foreign Investment Contract was entered into pursuant to Chapter XXVI of the Compendium before its elimination, the terms of the Foreign Investment Contract continue to apply to foreign investors in the Company’s ADSs.
Pre-Release of ADRs
Subject to the terms and conditions of the Deposit Agreement and any limitations established by the Depositary, the Depositary may, however, execute and deliver ADRs prior to the receipt of Series B Shares (“Pre-Release”). The Depositary may, pursuant to the Deposit Agreement, deliver Series B Shares upon the receipt and cancellation of an ADR or ADRs which have been Pre-Released, whether or not such cancellation is prior to the termination of such Pre-Release or the Depositary knows that such ADR or ADRs have been Pre-Released. The Depositary may receive ADRs in lieu of Series B Shares in satisfaction of a Pre-Release. Each Pre-Release will be (a) preceded or accompanied by a written representation from the person to whom ADRs are to be delivered that such person, or its customer, (i) owns the deposited Series B Shares or ADRs to be remitted and (ii) assigns all beneficial right, title and interest in such Series B Shares or ADRs to the Depositary for the benefit of the holders of ADRs, (b) at all times fully collateralized with cash or U.S. government securities, (c) terminable by the Depositary on not more than five business days’ notice and (d) subject to such further indemnities and credit regulations as the Depositary deems appropriate. The number of ADRs which are outstanding at any time as a result of Pre-Releases will not normally exceed 30% of the Series B Shares deposited under the Deposit Agreement; provided, however, that the Depositary reserves the right to change or disregard such limit from time to time as it reasonably deems appropriate. The Depositary will also set U.S. dollar limits with respect to the number of ADRs issued by Pre-Release in connection with transactions done in accordance with the terms of this paragraph with any one person on a case by case basis as it deems appropriate. The collateral referred to in clause (b) above will be held by the Depositary for the benefit of the holders of ADRs as security for the performance of the obligations to deliver Series B Shares set forth in clause (a) above. The Depositary may retain for its own account any compensation received by it in connection with Pre-Releases. Neither the Company nor the Custodian will incur any liability to ADR holders as a result of any such transaction.
Limitations on Obligations and Liabilities
Neither the Depositary nor the Company nor any of their respective directors, employees, agents or affiliates will incur any liability to any ADR holder (i) if by reason of (A) any present or future law or regulation of the United States, Chile or any other country or of any stock exchange or governmental or regulatory authority (including the breach by the Central Bank of Chile of the Foreign Investment Contract), (B) any provision of the Foreign Investment Contract, or, in the case of the Depositary or its agents, any provision of the Company’s By-laws, (C) any provision of any securities issued or distributed by the Company or of the deposited Series B Shares, or any offering or distribution thereof, or (D) any act of God, war, terrorism, or any other circumstance beyond its control, the Depositary, the Company or any of their agents is prevented, delayed or forbidden from, or is subject to any civil or criminal penalty on account of, performing their obligations under the Deposit Agreement, the Foreign Investment Contract, the Company’s By-laws, or the deposited Series B Shares, (ii) for any non-performance or delay, caused as described above, in the performance of its obligations under the Deposit Agreement, (iii) for any exercise of or failure to exercise any discretion provided for under the Deposit Agreement, (iv) for the inability of any holder of ADRs to benefit from any distribution, offering, right or other benefit which is made available to the holders of Series B Shares, but is not, under the terms of the Deposit Agreement made available to the holders of ADRs or (v) for any special, consequential or punitive damages for any breach of the terms of the Deposit Agreement.
The obligations and liabilities of the Company and the Depositary and its agents under the Deposit Agreement are expressly limited to performing without negligence or bad faith their respective obligations specified therein.
Transfer, Combination or Split-Up of ADRs
The Depositary will act as ADR registrar or appoint a registrar or one or more co-registrars for registration of the ADRs evidencing ADSs in accordance with any requirements of the New York Stock Exchange or of any other stock exchange on which the ADSs may be listed or quoted.
The transfer of the ADRs is registrable on the books of the Depositary, provided, however, that the Depositary may close the transfer books at any time or from time to time when deemed expedient by it in connection with the performance of its duties. As a condition precedent to the execution and delivery, registration, registration of transfer, split-up or combination of any ADR or ADRs or the delivery of any distribution thereon or the withdrawal of any Series B Shares or any property represented by the ADRs, the Depositary or the Custodian may, and upon the instruction of the Company will, require from the holder or the presenter of the ADR or the depositor of the shares (a) payment of a sum sufficient to pay or reimburse the Depositary, the Custodian or the Company for any tax or other government charge and any stock transfer or registration fee or any charge of the Depositary upon delivery of the ADR or upon surrender of the ADR, as set forth in the Deposit Agreement, and (b) the production of proof satisfactory to the Depositary or Custodian of identity or genuineness of any signature and proof of citizenship, residence, exchange control approval, legal or beneficial ownership, compliance with all applicable laws and regulations, compliance with applicable conditions of the Foreign Investment Contract, compliance with all other applicable provisions of or governing the Series B Shares or any other Deposited Securities and the terms of the Deposit Agreement or other information as the Depositary may deem necessary or proper as the Company may require by written request to the Depositary or the Custodian. The delivery, registration, registration of transfer, split-up or combination of ADRs, or the deposit or withdrawal of shares or other property represented by ADRs, in particular instances or generally, may be suspended during any period when the transfer books of the Depositary are closed, or if any such action is deemed necessary or advisable by the Depositary or the Company at any time or from time to time.
Reporting Obligations of ADR Holders
Holders of ADRs are subject to certain provisions of the rules and regulations promulgated under the Exchange Act relating to the disclosure of interests in the Series B Shares. Any holder of ADRs who is or becomes directly or indirectly interested in 5% or such other percentage as may be prescribed by law or regulation) or more of the outstanding Series B Shares must within 10 days after becoming so interested and thereafter upon certain changes in such interests notify the Company and the SEC as required by such rules and regulations. In addition, holders of ADRs are subject to the reporting requirements contained in Articles 12 and 54 and Title XV of the Securities Market Law, which provision may apply when a holder beneficially owns an amount of ADRs that represents 10% or more of the total share capital of the Company or has the intention of taking control of the Company. See “Description of Share Capital” above.
Valuation of Underlying Shares for Chilean Law Purposes
For all purposes of valuation under Chilean law, the Deposit Agreement provides that the acquisition value of the Series B Shares delivered to any holder upon surrender of ADRs will be the highest reported sales price of the Series B Shares on the Santiago Stock Exchange for the day on which the transfer of the Series B Shares is recorded under the name of such holder.
In the event that the Series B Shares are not traded on the Santiago Stock Exchange, the value will be deemed to be the highest reported sales price of the Series B Shares on the principal stock exchange or other organized securities market in Chile on which the Series B Shares are then traded. In the event that no sales price is reported on the day on which the transfer of the Series B Shares is recorded, the value will be deemed to be the highest reported sales price of the Series B Shares on the last day on which such sales price was reported. However, if 30 or more days have lapsed since the last sales price was reported, the sales price will be increased by the percentage increase over the corresponding period in the Chilean Consumer Price Index.
EX-4.1
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exhibit41redactedjointve.htm
EX-4.1
exhibit41redactedjointve
Execution Version Exhibit 4.1 Certain confidential portions of this exhibit have been redacted and marked with “[***]”. The omitted information is (i) not material and (ii) the type of information that Sociedad Química y Minera de Chile S.A. treats as private or confidential. THIS IS A FREE TRANSLATION IN ENGLISH OF THE ORIGINAL SPANISH VERSION OF THE JOINT VENTURE AGREEMENT. IN THE EVENT OF ANY CONFLICT BETWEEN THE ORIGINAL SPANISH VERSION OF THE JOINT VENTURE AGREEMENT AND THE ENGLISH TRANSLATION, THE SPANISH VERSION OF THE JOINT VENTURE AGREEMENT SHALL PREVAIL. JOINT VENTURE AGREEMENT FOR THE MINING, PRODUCTIVE, COMMERCIAL, COMMUNITY AND ENVIRONMENTAL DEVELOPMENT OF THE ATACAMA SALT FLATS BETWEEN CORPORACIÓN NACIONAL DEL COBRE DE CHILE et al, AND SOCIEDAD QUÍMICA Y MINERA DE CHILE S.A. et al. May 31, 2024 Execution Version i TABLE OF CONTENTS RECITALS ........................................................................................................ 1 SECTION 1– DEFINITIONS AND INTERPRETATION .......................................... 4 1.1 DEFINITIONS .......................................................................................... 4 1.2 ANNEXES TO JOINT VENTURE AGREEMENT BETWEEN CODELCO AND SQM ... 21 1.3 INTERPRETATION .................................................................................. 22 SECTION 2 - JOINT VENTURE......................................................................... 24 2.1 SQM SALAR .......................................................................................... 24 2.2 TARAR ................................................................................................. 24 2.3 OPERATING COMPANY ........................................................................... 24 2.4 STEPS AND STAGES OF THE JOINT VENTURE ............................................ 26 2.5 REORGANIZATION OF SQM ..................................................................... 26 2.6 FUTURE SALAR PROJECT 29 2.7 ORDINARY COURSE OF SQM SALAR AND BUSINESS SUBSIDIARIES ............ 30 2.8 ORDINARY COURSE OF TARAR ................................................................ 33 2.9 DUE DILIGENCE. INFORMATION ACCESS.................................................. 33 2.10 CORFO-TARAR AGREEMENTS ............................................................... 34 2.11 AMENDMENT TO CORFO- SQM CONTRACTS ........................................... 34 2.12 CCHEN .............................................................................................. 34 2.13 SII Ruling ........................................................................................ 34 2.14 COMMERCIALIZATION ......................................................................... 34 2.15 POTASSIUM OFFTAKE AGREEMENT ....................................................... 35 2.16 COMMON POLICY ENDORSEMENTS ....................................................... 35 2.17 ENERGY CONTRACTS PROTOCOL .......................................................... 35 SECTION 3 - MERGER BETWEEN SQM SALAR AND TARAR .............................. 36 3.1 MERGER PREPARATION .......................................................................... 36 3.2 SHAREHOLDERS’ APPROVAL OF THE MERGER ........................................... 37 SECTION 4 - CORPORATE GOVERNANCE OF THE OPERATING COMPANY ........ 37 4.1 SHAREHOLDERS’ AGREEMENT ................................................................. 37 4.2 CORPORATE GOVERNANCE ..................................................................... 38 SECTION 5 –COMMUNITY RELATIONS ........................................................... 38 5.1 COMPANY-COMMUNITY PARTICIPATION ................................................... 38 5.2 INDIGENOUS CONSULTATION ................................................................. 38 SECTION 6 – FREE COMPETITION, CONSENTS AND AUTHORIZATIONS .......... 39 6.1 PROTOCOL FOR HANDLING RESTRICTED INFORMATION ............................ 39 6.2 MERGER CONTROL APPROVAL OPERATION IN CHILE ................................. 39 6.3 MERGER CONTROL APPROVAL IN OTHER JURISDICTIONS .......................... 40 6.4 CONSENTS AND AUTHORIZATIONS ......................................................... 42 SECTION 7 – CONDITIONS PRECEDENT ......................................................... 42 7.1 CONDITIONS PRECEDENT APPLICABLE TO ALL PARTIES ............................. 43 7.2 CONDITIONS PRECEDENT APPLICABLE TO CODELCO ................................. 43 7.3 CONDITIONS PRECEDENT APPLICABLE TO SQM ....................................... 44 7.4 EFFECT OF WAIVER OF A CONDITION PRECEDENT .................................... 45 Execution Version ii SECTION 8 - CLOSING .................................................................................... 45 8.1 CLOSING ............................................................................................... 45 8.2 ACTS AND DELIVERABLES OF THE PARTIES ............................................... 45 8.3 ACTS AND DELIVERABLES OF SQM ........................................................... 46 8.4 ACTS AND DELIVERABLES OF CODELCO .................................................... 46 8.5 CLOSING PROCEDURES ........................................................................... 47 SECTION 9 - WORKING CAPITAL AND DIVIDENDS ......................................... 47 9.1 WORKING CAPITAL ADJUSTMENT ............................................................. 47 9.2 ADJUSTMENT ACCOUNT .......................................................................... 51 9.3 ACCOUNTS WITH ENTITIES RELATED TO SQM .......................................... 52 9.4 DIVIDENDS BETWEEN THE REFERENCE DATE AND THE EFFECTIVE DATE OF THE JOINT VENTURE ..................................................................................... 53 9.5 PAYMENTS RECEIVED FOR IEAM ACCOUNTS .............................................. 53 SECTION 10 – SALAR DE MARICUNGA ASSETS, INTELLECTUAL PROPERTY LICENSES AND SICHUAN PLANT ..................................................................... 55 10.1 TRANSFER OF MARICUNGA SALT FLAT ASSETS ...................................... 55 10.2 INTELLECTUAL PROPERTY LICENSES ..................................................... 55 10.3 SICHUAN PLANT .................................................................................. 57 SECTION 11 - REPRESENTATIONS AND WARRANTIES OF SQM ....................... 59 11.1 GOOD STANDING OF SQM AND SQMK .................................................... 59 11.2 SUBSCRIPTION, EXECUTION AND ENFORCEABILITY ................................ 59 11.3 ABSENCE OF CONFLICT ........................................................................ 59 11.4 EXISTENCE OF SQM SALAR AND BUSINESS SUBSIDIARIES ...................... 60 11.5 OWNERSHIP OF SHARES IN SQM SALAR; SUBSIDIARIES ......................... 60 11.6 CONSENTS ......................................................................................... 61 11.7 FINANCIAL INFORMATION .................................................................... 61 11.8 ABSENCE OF UNDISCLOSED LIABILITIES ............................................... 63 11.9 ABSENCE OF CHANGES ........................................................................ 63 11.10 MINING RIGHTS AND ACCESSORY RIGHTS ............................................. 63 11.11 WATER RIGHTS ................................................................................... 65 11.12 PERMITS ............................................................................................ 67 11.13 PERSONAL AND REAL PROPERTY ........................................................... 67 11.14 RELEVANT CONTRACTSCOMMERCIALIZATION ......................................... 68 11.15 RELATED PARTIES’ TRANSACTIONS ....................................................... 69 11.16 ENVIRONMENTAL MATTERS .................................................................. 69 11.17 CONDITION AND SUFFICIENCY OF ASSETS AND PROPERTIES ................... 69 11.18 INSURANCE ........................................................................................ 69 11.19 LITIGATION ........................................................................................ 70 11.20 ANTITRUST / FREE COMPETITION .......................................................... 70 11.21 TAXATION .......................................................................................... 71 11.22 LABOR MATTERS ................................................................................. 72 11.23 COLLECTIVE BARGAINING AGREEMENTS ................................................ 74 11.24 INTELLECTUAL PROPERTY ..................................................................... 74 11.25 INFORMATION TECHNOLOGY ................................................................ 75 11.26 ANTI-CORRUPTION .............................................................................. 76 11.27 BROKER’S FEES ................................................................................... 77 11.28 DISSOLUTION, LIQUIDATION OR INSOLVENCY ....................................... 77 11.29 COMPLIANCE WITH APPLICABLE LAWS ................................................... 78 Execution Version iii 11.30 KNOWLEDGE OF SQM ......................................................................... 78 11.31 EXCLUSIVITY OF REPRESENTATIONS AND WARRANTIES ........................ 78 SECTION 12 - REPRESENTATIONS AND WARRANTIES OF CODELCO .............. 78 12.1 GOOD STANDING OF CODELCO ............................................................ 79 12.2 SUBSCRIPTION, EXECUTION AND ENFORCEABILITY ............................... 79 12.3 ABSENCE OF CONFLICT ....................................................................... 79 12.4 GOOD STANGING OF SDC AND TARAR .................................................. 79 12.5 OWNERSHIP OF SHARES IN TARAR ....................................................... 79 12.6 CONSENTS ........................................................................................ 80 12.7 FINANCIAL INFORMATION ................................................................... 80 12.8 ABSENCE OF UNDISCLOSED LIABILITIES .............................................. 81 12.9 ABSENCE OF ACTIVITY ........................................................................ 81 12.10 CORFO-TARAR AGREEMENTS ............................................................... 82 12.11 TAXATION ......................................................................................... 82 12.12 SUBSIDIARIES OF CODELCO ................................................................ 83 12.13 ANTI-CORRUPTION ............................................................................. 83 12.14 BROKER’S FEES .................................................................................. 84 12.15 DISSOLUTION, LIQUIDATION OR INSOLVENCY ...................................... 84 12.16 KNOWLEDGE OF CODELCO .................................................................. 85 12.17 EXCLUSIVITY OF REPRESENTATIONS AND WARRANTIES ........................ 85 SECTION 13 - ADDITIONAL OBLIGATIONS OF THE PARTIES ......................... 85 13.1 COMMUNICATIONS WITH GOVERNMENTAL AUTHORITIES AND THIRD PARTIES ........................................................................................... 85 13.2 CONFIDENTIALITY .............................................................................. 86 13.3 OTHER ACTIVITIES OF THE PARTIES. NON-SOLICITATION ...................... 88 13.4 PUBLIC ANNOUNCEMENTS ................................................................... 88 13.5 GOOD FAITH COOPERATION ............................................................... 89 13.6 NOTICES UNTIL THE EFFECTIVE DATE OF THE JOINT VENTURE ................ 89 13.7 EXCLUSIVITY ..................................................................................... 90 13.8 ESTACAMENTO SALITRAL .................................................................... 91 SECTION 14 – IMPLEMENTATION AND TRANSITIONAL SERVICES ................ 91 14.1 COORDINATION OF IMPLEMENTATION .................................................. 91 14.2 TRANSITIONAL SERVICES AND SUPPLY CONTRACTS .............................. 91 SECTION 15 - TERMINATION ......................................................................... 91 15.1 TERMINATION .................................................................................... 91 15.2 TERMINATION EFFECT ......................................................................... 92 SECTION 16 - INDEMNITY ............................................................................. 92 16.1 SQM’S INDEMNITY OBLIGATION ........................................................... 92 16.2 CODELCO’S INDEMNITY OBLIGATION .................................................... 93 16.3 THIRD PARTIES’ CLAIMS ..................................................................... 93 16.4 DIRECT CLAIMS .................................................................................. 94 16.5 LIMITACIONES A LA OBLIGACIÓN DE INDEMNIZAR ................................ 95 16.6 SQM’S SPECIAL INDEMNITY ................................................................. 97 16.7 CODELCO’S SPECIAL INDEMNITY .......................................................... 98 16.8 INDEMNITY PAYMENT MECHANISMS ..................................................... 98 16.9 EXCLUSIVE REMEDY .......................................................................... 99 16.10 INSURANCE AND OTHERS .................................................................... 99
Execution Version iv 16.11 EXCLUSION OF MATERIALITY QUALIFICATIONS ................................... 100 SECTION 17 – GOVERNING LAW AND DISPUTE SETTLEMENT ..................... 100 17.1 GOVERNING LAW ............................................................................. 100 17.2 DISPUTE SETTLEMENT ...................................................................... 100 SECTION 18 - COMMUNICATIONS ................................................................ 102 18.1 COMMUNICATIONS AND NOTICES ...................................................... 102 18.2 CONTACT INFORMATION ................................................................... 102 SECTION 19 - MISCELLANEOUS ................................................................... 103 19.1 OTHER WARRANTIES ........................................................................ 103 19.2 SUCCESSORS AND ASSIGNS.............................................................. 103 19.3 JOINT AND SEVERAL LIABILITY .......................................................... 103 19.4 ATTORNEYS' AND ADVISORS' FEES AND EXPENSES ............................ 104 19.5 ENTIRE AGREEMENT AND AMENDMENTS ............................................. 104 19.6 CUMULATIVE REMEDIES .................................................................... 104 19.7 WAIVER ........................................................................................... 105 19.8 SEVERABILITY .................................................................................. 105 SECTION 20 - LEGAL CAPACITY AND COUNTERPARTS ................................. 105 20.1 LEGAL CAPACITIES ........................................................................... 105 20.2 COUNTERPARTS AND ELECTRONIC SIGNATURE .................................... 105 Execution Version 1 JOINT VENTURE AGREEMENT In the city of Santiago, Chile, on May 31, 2024, this joint venture agreement for the mining, productive, community and environmental development of the Salar de Atacama (the “Agreement”) is entered into among: CORPORACIÓN NACIONAL DEL COBRE DE CHILE, Tax ID No. 61.704.000-K, a state-owned, mining, commercial and industrial enterprise, organized and existing under the laws of the Republic of Chile (“CODELCO”), SALARES DE CHILE SpA, Tax ID No.77. 780.914-8 (“SDC”), and MINERA TARAR SpA, Tax ID No. 7.780.919-9, all of whom are domiciled at Huérfanos N°1270, in the borough and city of Santiago (“Tarar” and jointly with CODELCO and SDC as the “CODELCO Party”), on the one hand, as parties of the first part; and SOCIEDAD QUÍMICA Y MINERA DE CHILE S.A., Tax ID No. 93.007.000-9 (“SQM”), SQM POTASIO S.A., Tax ID No. 96.651.060-9 (“SQMK”), and SQM SALAR S.A., Tax ID No. 79.626.800-K, all of whom are domiciled at El Trovador No. 4285, 6th floor, Las Condes, Santiago (“SQM Salar” and jointly with SQM and SQMK, the “SQM Party”), as parties of the second part. Each of the parties identified above may hereinafter be referred to as the “Party” and both collectively as the “Parties”. WHEREAS A. CODELCO and SQM subscribed a memorandum of understanding on December 27, 2023, as amended on March 20, 2024 (the “Memorandum”) for the implementation of a public-private joint venture to jointly develop mining, productive and commercial activities derived from the exploration and exploitation of certain mining properties located in the Salar de Atacama, in the Antofagasta Region, as of January 1, 2025, or the later date on which all the Conditions Precedent have been fulfilled and to jointly develop the Salar Futuro Project, ensuring the operational continuity of the economic activity in the Salar de Atacama for the next decades (the “Joint Venture”). B. WHEREAS, CORFO owns mining properties called “OMA” which are currently leased to SQM Salar under the CORFO-SQM Contracts. CORFO has rights over other mining properties called “Rigo”, “Sal” and “Salar”, which, together with the OMA Mining Properties, it has committed to lease to Tarar as from 2031 until 2060, by virtue of the CORFO-Tarar Contracts. C. WHEREAS, CODELCO, as a State-owned company empowered by its organic law to explore, exploit and commercialize all types of non-ferrous minerals, including lithium, has a robust business organization, solid reputation and mining track record, experience in structuring public-private associations, as well as legal, business and professional teams with recognized experience in the matter, so that it has sufficient capabilities and experience to enter into the Agreement and implement the Joint Venture. D. WHEREAS, SQM Salar, the current lessee and operator of the exploration and exploitation of the OMA Mining Properties, is a Chilean company, owner of world- class infrastructure for the exploitation of lithium and other mineral substances, and has extensive operational and commercial experience and a recognized track record in the lithium and related industries. Moreover, SQM Salar relies upon the technology for the extraction of lithium and other mineral substances, as well as vast commercial networks Execution Version 2 for their commercialization, so it has sufficient capabilities and experience to enter into the Agreement and implement the Joint Venture. E. WHEREAS the exclusive use of evaporation in large pits as part of the traditional brine lithium concentration method, considers a limited reinjection of brines after obtaining the minerals, therefore, it is the intention of the Parties to implement technological changes in the exploitation of lithium that allow returning to the salar, if possible, the brines without lithium and move towards a water balance in the Salar de Atacama basin through the development of the “Salar Futuro Project”. In this regard, the Parties estimate that the known reserves of lithium in the OMA Mining Properties are sufficient to develop the Business and the Salar Futuro Project and that, at the end of the year 2060, a sufficient volume of Brines would remain in the Salar de Atacama to allow the future commercial exploitation of the lithium contained therein. F. WHEREAS, the Joint Venture involves, in addition to the commercial and contractual matters inherent to the relationship between the Parties, a multiplicity of environmental, community, technical, legal, engineering and technological aspects that the Parties have identified and foreseen, that involve authorities and third parties, and that demand careful planning, coordination, compliance with procedures, approvals and authorizations necessary to carry out the Joint Venture and the Salar Futuro Project. G. WHEREAS the Parties are aware of the responsibility that corresponds to the companies in the promotion and protection of human rights and the creation of shared value with the communities of the ancestral territory where they develop their activities, and therefore, they are committed to implementing the best standards in their relationship with the Atacameño Communities, with a focus on capacity building, the promotion of transparency and the promotion of the human rights of these communities. These communities are: Atacameño Community of Toconao, Atacameño Community of San Pedro de Atacama, Atacameño Community of Peine, Atacameño Community of Socaire, Atacameño Community of Coyo, Atacameño Community of Río Grande, Atacameña Community of Quitor, Atacameña Community of Machuca, Atacameña Community of Camar, Atacameña Indigenous Community of Catarpe, Atacameña Community of Larache, Atacameña Community of Solor, Atacameña Indigenous Community of Guatín, Indigenous Community of Ayllu de Cúcuter, Atacameña Community of Talabre, Atacameño Community of Solcor, Atacameño Community of Sequitor and Checar, Atacameño Community of Yaye, all of them members of the Consejo de Pueblos Atacameños (Council of Atacameño Peoples), an indigenous association that gathers 18 communities of the Atacama La Grande Indigenous Development Area, which in September of this year celebrates 30 uninterrupted years of operation in the Lickanantay territory. In this regard, the Parties declare, recognize and accept: (i) The connection that the communities have with the territory they ancestrally inhabit, its lands and waters, as well as the relationship between them and their ways of life and culture, along with their historical, cultural and archaeological heritage; (ii) The ecosystemic value of the Salar de Atacama, in which the lands and waters of ancestral use of the Lickanantay people and their Atacameño Communities, ancestral owners of their lands and territories, inhabitants for eleven thousand years located in the Atacama La Grande Indigenous Development Area are inserted as part of the territory; Execution Version 3 (iii) The right of the communities to live in a healthy and pollution-free environment and the need for mining projects carried out in their territories to be sustainable; (iv) The duty of the Parties and the right of the communities to ensure and contribute to the protection of the environment and the safeguarding of the ecosystemic value of the Salar de Atacama and its historical, cultural and archaeological heritage, and of the ancestral territory of the Salar de Atacama; (v) The right of the communities to decide for themselves their economic, social and cultural development priorities; (vi) Consideration of the diversity of the communities, within the unity of the Atacameño or Lickanantay people, taking into account their cultural and territorial particularities, their interests and priorities, and the impacts they may have in accordance with current legislation; (vii) The location of the activities associated with the Business and the other rights currently held by the Parties, including production facilities, camps and water extraction wells, as well as the development of monitoring and environmental characterization activities, all within the territories of ancestral use of the communities, determine the responsibility of the Parties in safeguarding that part of the territory; (viii) The duty to report and keep the communities permanently informed regarding the activities that the Parties carry out concerning the Business, within the territory of ancestral occupation of the communities; (ix) The commitment to make all reasonable efforts to achieve free, prior and informed consent for the development of new activities in the territory of the communities, and the mutual benefit of developing a relationship based on permanent dialogue and communication, trust, collaboration, mutual respect and good faith; and (x) The commitment of the Parties to ensure that the agreements to be entered into with the communities implement the objectives of “protection, respect and remedy” enshrined in the United Nations Guiding Principles on Business and Human Rights, identifying priorities based on the context of the territories and communities where their Business is carried out and in full accordance with the catalogue of Human Rights incorporated in the Universal Declaration of Human Rights, Convention 169 on Indigenous and Tribal Peoples of the International Organization of Indigenous and Tribal Peoples of the International Labor Organization (“ILO”), the Pacto Internacional sobre Derechos Económicos, Sociales y Culturales, (International Covenant on Economic, Social and Cultural Rights), and the Pacto Internacional sobre Derechos Civiles y Políticos (International Covenant on Civil and Political Rights), as well as the rights recognized and established by Law No. 19.253, Indigenous Law, and the provisions of Supreme Decree No. 66 of the Ministry of Social Development, Regulations governing Indigenous Consultation. The participation and agreement processes also consider the United Nations Sustainable Development Goals and Targets (SDGs) and the International Finance Corporation (IFC) Performance Standard N°7. H. WHEREAS, in consideration of the foregoing, the CODELCO Party, the SQM Party and the Atacameño Communities of the Atacama La Grande Indigenous Development Area have made good faith efforts to develop a process of participation
Execution Version 4 and dialogue with a view to reaching binding agreements, through consensus, on matters of common interest. It is the will of the companies to maintain this process and establish a permanent mechanism for participation and dialogue. I. WHEREAS, this Agreement intends to establish the steps, stages, rights, obligations, terms and conditions for the preparation of the Joint Venture to be carried out by CODELCO and SQM between this date and the Effective Date of the Joint Venture, in order to implement the Joint Venture to develop the Business as from the Effective Date of the Joint Venture. These steps and stages include the Parties' own corporate actions, actions before authorities and third parties and actions related to the Joint Venture. As set forth in this Agreement, the corporate governance of the Joint Venture will be regulated in the Shareholders' Agreement to be entered into between CODELCO and SQM and the relationship with the Communities of the Salar will be regulated in instruments subscribed with them by the Joint Venture and its shareholders. NOW THEREFORE, the Parties agree as follows: SECTION 1- Definitions and Interpretation 1.1 Definitions Capitalized terms used but not otherwise defined in this Agreement shall have the meanings set forth below: “Business Assets” means (i) the infrastructure (including ports, roads, aqueducts, power lines, transmission lines), chemical or production plants (including the Carmen Plant), laboratories, warehouses, commercial offices, in Chile and abroad, Intellectual Property (excluding the SQM Intellectual Property of the Business) and any other assets and rights used for the Business; (ii) the Business Products Inventories; (iii) the Brines, raw materials, inputs, machinery, plant equipment, electrical equipment, wells, spare parts and other materials, assets or inventories existing and used for the Business; (iv) the Mining Rights (excluding the Maricunga Concessions), the Ancillary Rights and the Water Rights owned by SQM and its Related Persons and (v) the CORFO-SQM Contracts. The provisions set forth in paragraphs (i) and (iv) shall be understood to the extent that as of the Agreement Date its owner, holder or user is SQM or any of its Subsidiaries. “Operating Assets”, as of a certain date, means the sum of the balances of the accounts classified as “AO” in Exhibit 9 in the Reference Balance Sheet, or as the case may be, the consolidated financial statements of SQM Salar used for the respective calculation. “Agreement” means this agreement, its Annexes and the Side Letter. “Confidentiality Agreement" means the confidentiality agreement entered into by CODELCO and SQM dated May 31, 2023. "Consolidation Adjustments" means the adjustments that the SQM Party historically makes to the financial statements of the Business Subsidiaries for purposes of translating them into U.S. dollars and adjusting them to Chilean GAAP as detailed in Exhibit E, and that once recorded in the financial statements of either of the Business Subsidiaries, SQM Salar or another SQM Party Entity, allow SQM to consolidate the results of SQM. "Working Capital Adjustment", as of a certain date, means the result of the following calculation, considering the balances of the respective accounts in SQM Salar's consolidated financial statements as of that date: Execution Version 5 (+) Operating Assets (-) Operating Liabilities (+) Cash (-) Debt (-) Deferred Tax Adjustment (+) CAPEX Adjustment (=) Working Capital Adjustment Exhibit 9 contains, for illustration purposes, the calculation of the Working Capital Adjustment as of the date of the Latest Audited Financial Statements. "Deferred Tax Adjustment", as of a given date, means the adjustment made in accordance with Exhibit 9. "Foreign Investment Approvals" means the approval, authorization or equivalent act prior or subsequent to the Closing of the foreign investment that will signify CODELCO's or SDC's participation in the Joint Venture by foreign Governmental Authorities including those listed in Chapter I of Schedule 6.4. “Chilean Merger Control Approval" means the approval of the Joint Venture prior to the Closing in accordance with the Chilean Antitrust Law, pursuant to the procedure for the control of concentration operations regulated in Title IV of Decree Law No. 211 that "Sets Rules for the Defense of Free Competition” and in the “Regulation on the Notification of a Concentration Operation” dated November 2, 2021. "Foreign Merger Control Approvals" means the pre- or post-Closing approval, authorization or equivalent act by foreign Governmental Authorities, including those listed on Exhibit 6.3, which under applicable foreign Antitrust Laws are legally required to be obtained or processed in connection with the Joint Venture; including also those approvals, authorizations or equivalent acts which, despite not being legally required, are advisable to be obtained or processed in connection with the Joint Venture on the basis of the analysis of the Parties' independent legal counsels in those jurisdictions where the merger control regime is voluntary in nature. "Governmental Authority" means any (i) state, national, regional, municipal, local or any other agency, division, department, court, commission, board, superintendency, bureau, office, agency or instrumentality, governmental or public; (ii) subdivision or authority of any of the foregoing; (iii) securities regulatory authority or stock exchange; and (iv) quasi-governmental organization, self-regulatory or private body exercising any regulatory, condemning or taxing authority under or on behalf of any of the foregoing; in each case, having jurisdiction in the relevant circumstances. All of the foregoing refers both to authorities in Chile and authorities abroad that have jurisdiction over any of the Parties, the Business Subsidiaries or the Business Assets. "Reference Balance Sheet" means the consolidated statement of financial position of SQM Salar as of the Reference Date, prepared in accordance with Exhibit 9. "Cash", as of a given date, means the sum of the balances appearing in the accounts classified as "Cash" in Exhibit 9 in the Reference Balance Sheet or, as the case may be, the consolidated financial statements of SQM Salar used for the respective calculation. "Side Letter" means the letter that the SQM Party delivers to the CODELCO Party on the date hereof, with supplementary information to the representations and warranties of the SQM Party contained in Section 11. The information disclosed in a specific paragraph of the Side Letter shall be deemed to be disclosed in the other Execution Version 6 paragraphs of the Side Letter with respect to which such information may reasonably be considered to be relevant. "CCHEN" means the Chilean Nuclear Energy Commission or the Entity that replaces it. "Chile" means the Republic of Chile. "Atacameño Communities" means the communities and social organizations of the Salar de Atacama basin, which include those indicated in Recital G. "Conditions Precedent" means the conditions precedent upon the fulfillment of which the obligations of the Parties to consummate the Closing in accordance with Article 7 depend. "Consents and Authorizations" means the permits, authorizations, registrations, privileges, approvals, consents, licenses and similar rights listed in Exhibit 6.4 that are required to be obtained, from Governmental Authorities or any other Person, for the execution of the transactions contemplated by the Transaction Documents, and, in general, for the implementation of the Joint Venture. “Comptroller" means the Contraloría General (Comptroller General) of the Republic of Chile. "SQM Lease Agreement" means the Amendment and Restatement of the Updated and Restated Text of the OMA Mining Property Lease Agreement among SQM, SQM Salar, SQMK and CORFO dated January 17, 2018, as amended as of this date. "Tarar Lease Agreement" means the mining property lease agreement for the years 2031 to 2060 to be entered into by CORFO and Tarar based on the text approved by the CORFO Board at the meeting held on October 5, 2023, subject to various processes and prior authorizations, and modifications proposed by SQM and acceptable to CORFO and CODELCO, including any potential adjustments to the approved text that may be required pursuant to such processes and authorizations. "SQM Project Contract" means the Amendment and Restatement of the Updated and Restated Text of the Agreement for the Salar de Atacama Project entered into among SQM, SQM Salar, SQMK and CORFO dated January 17, 2018, as amended as of this date. “Tarar Project Contract" means the contract for the Salar de Atacama project for the exploitation by Tarar of the Salar de Atacama between the years 2031 and 2060, both inclusive, to be entered into by CORFO, Tarar and CODELCO on the basis of the text approved by the CORFO Board at the meeting held on October 5, 2023, subject to various processes and prior authorizations, such as the completion of an indigenous consultation process with respect to those administrative measures likely to directly affect indigenous peoples, and the modifications proposed by SQM, including any potential adjustments to the approved text that may be required by virtue of such processes and authorizations. “CORFO-SQM Contracts" means the SQM Lease Agreement and the SQM Project Contract, which grant SQM Salar the right to exploit part of the OMA Mining Properties until December 31, 2030 Execution Version 7 “CORFO-Tarar Contracts" means the Tarar Lease Agreement and the Tarar Project Contract, which will grant Tarar the right to exploit part of the OMA Mining Properties between January 1, 2031 and December 31, 2060. "Control" means, either directly or through another Person or jointly with other Persons with whom it has a joint venture agreement: (i) owning more than fifty percent (50%) of the total votes corresponding to all the shares, corporate rights or quotas of an Entity; or (ii) having the right (by legal, judicial or contractual provision) to appoint or elect the majority of the members of the board of directors or administrators of an Entity; or (iii) in the case of an individual or natural person, having the right (by legal, judicial or contractual provision) to fully manage the assets of such individual or natural person. It is hereby noted that any references to "Control", “Controls”, "Controller”, “Controlling" or "Controlled" shall be construed in accordance with the definition of "Control" herein. “CORFO” means Corporación de Fomento de la Producción, and other Entity that succeeds or replaces it. "Retained Receivables" as of a given date, means the sum of the balances of the accounts receivable classified as "Retained Receivables" in Exhibit 9 in the Reference Balance Sheet, or as the case may be, the consolidated financial statements of SQM Salar used for the respective calculation. "Tax Returns" means any returns, including monthly and annual tax returns, affidavits, reports, applications for refunds, information returns, forms and other documents of a similar nature relating to Taxes required to be filed under Chilean Law, including any schedules or amendments thereto, such as tax returns required to be filed under Foreign Law. “Material Representations and Warranties" means, with respect to the SQM Party, the representations and warranties contained in Sections 11.1 (Existence of SQM and SQMK), 11.2 (Subscription, execution and enforceability), 11.4 (Existence of SQM Salar and Business Subsidiaries), 11.5 (Ownership of SQM Salar Shares; Subsidiaries), and 11.26 (Anti-Corruption), and with respect to the CODELCO Party, the representations and warranties contained in Sections 12.1 (Existence of CODELCO), 12.2 (Subscription, execution and enforceability), 12.4 (Existence of SDC and Tarar), 12.5 (Ownership of Tarar Shares) and 12.13 (Anti-Corruption). "Debt", as of a given date, means the sum of the balances of the accounts classified as "Debt" in Exhibit 9 in the Reference Balance Sheet, or if applicable, the consolidated financial statements of SQM Salar used for the respective calculation. "Business Day" means any day of the week, excluding Saturday, Sunday and days on which commercial banks in Santiago are required or authorized to close and not serve the public. "Official Gazette" means the Official Gazette of the Republic of Chile. “Board of Directors" means the board of directors of SQM Salar and then of the Operating Company. "Know-How Documentation" means any manual, protocol, instruction, list of specifications, procedure, report, database, report, and in general, any document in any type of support or format, whether in magnetic form, paper or any other medium, in which the Know-How is recorded and exists as of the Effective Date of the Joint Venture.
Execution Version 8 "Transaction Documents" means the Agreement and its Annexes, the Side Letter, the Operating Company’s bylaws, the Shareholders' Agreement, the Maricunga Asset Purchase and Sale, IP License for the Operating Company, the IP License for CODELCO, the IP License for SQM, the Maquila Contract, and the Potassium Offtake Contract and each act, contract, agreement or document delivered or executed pursuant to or in accordance with this Agreement. "Material Adverse Effect" means, with respect to SQM Salar and the Business Subsidiaries, on the one hand, or Tarar, on the other hand, any fact, circumstance, change, effect, event or occurrence that, individually or jointly with other facts, circumstances, changes, effects, occurrences or events, is material and adverse to the business, operations, results of operations, properties, assets, liabilities (whether absolute, accrued, contingent or otherwise) or financial condition of SQM Salar and the Business Subsidiaries, as a whole, on the one hand, or Tarar, on the other hand; excluding any fact, circumstance, change, effect, occurrence or event to the extent resulting from or arising in connection with: (a) Any adoption, proposal, implementation or change in the Law or any interpretation of the Law by any Governmental Authority; (b) Any change in Chilean GAAP (or authorized interpretation thereof); (c) Any change, development or condition in or relating to global, national, provincial or regional political conditions (including strikes, riots, the outbreak or escalation of war or acts of terrorism or declarations of a state of emergency) or in general economic, business, banking, regulatory conditions, rules, regarding foreign exchange, interest rate, interest rate inflation or market rates or in national or global financial or capital markets, including credit markets or securities markets (it being understood that the underlying events giving rise to or contributing to such change may, if not otherwise excluded from this definition of Material Adverse Effect, be considered, alone or in combination, to constitute a Material Adverse Effect, or be taken into account in determining whether one has occurred); (d) Any change, event or condition generally affecting the lithium or lithium products extractive and marketing industries, changes in the price of lithium or lithium products; (e) National weather or other events or conditions (including any earthquake or other natural catastrophe or weather condition); (f) Pandemics (including any earthquake or other natural catastrophe or weather condition); (f) Pandemics (including COVID-19 and any variant/mutation thereof), epidemics or similar events, or the worsening of any of the foregoing or the implementation of any action by a Governmental Authority in connection with COVID-19; (g) The execution, notification or performance of this Agreement and the other Transaction Documents or the implementation of the Joint Venture; or (h) Any action taken (or omitted) at the written request, or with the prior written consent, of the CODELCO Party or the SQM Party, as the case may be, or as required by Law or this Agreement. “Entity” means an association, of any type and nature, regardless of whether or not it has legal personality, a trust, partnership, corporation, joint venture, investment fund, legal entity or Governmental Authority, in all of the foregoing cases, whether local, national or foreign. "Agreement Date" means the date indicated on the first page of this Agreement. "Reference Date" means December 31, 2024. “Effective Date of the Joint Venture” means the date on which the Closing takes place. Execution Version 9 "Subsidiary" means with respect to one Entity, another Entity in which the first Entity, either directly or through another Entity, has Control. For the avoidance of doubt, it is understood that the Operating Company will be a Subsidiary of SQM during the First Period and a Subsidiary of CODELCO during the Second Period. “Business Subsidiaries" means the Entities identified in Chapter I of Exhibit A and the Entities that are transferees, assignees or successors to the Business Assets pursuant to the SQM Reorganization and that will become Subsidiaries of the Operating Company to develop the Business. “FNE” [Spanish acronym of] means the Fiscalía Nacional Económica of Chile. “Public Official" means any public official or employee, or of any government department (whether executive, legislative, judicial or administrative), agency or office of the government or a public international organization; or any natural person or individual acting for or on behalf of such government, or any candidate for a public office or representative of a political party, or any state-owned enterprise, but excluding CODELCO and its Subsidiaries. "Liens" means any mortgage, pledge, encumbrance, charge, charge, usufruct, security interest, attachment, provisional remedy, injunction, prohibition, lease, promise, option, trust, preemptive right in favor of third parties, right of first refusal, privilege, preference, covenant of repurchase or repurchase, express resolutory condition, reservation of title, easement, right of use or any matter capable of being registered against title or any other right or claim of any kind or nature affecting the ownership or possession of, or title to, any interest in, or right to use or occupy, property or assets, or any other lien or preferential right of third parties having a similar effect to any of the foregoing, other than Permitted Liens. "Permitted Liens" means, the Liens (a) in effect as of the Agreement Date and declared by SQM in the Side Letter; (b) created to finance, refinance, pay or amortize the price or cost of the purchase, construction, development or improvement of assets of the incorporator or its Subsidiaries, provided that the respective security interest is levied on the same asset acquired, constructed, developed or improved, is created contemporaneously with the acquisition, construction, development or improvement, or within one year after the occurrence of any of these events and provided always that the secured obligation does not exceed the price or cost of the acquisition, construction, development or improvement; (c) granted by the incorporator in favor of its Subsidiaries or by such Subsidiaries to the incorporator, in order to guarantee obligations contracted between them; (d) granted by an Entity which, after the date of creation of the Lien, merges or becomes a Subsidiary of a Person; (e) encumber assets acquired by a Person and which are constituted prior to its acquisition; (f) created by operation of law or by legal rule; (g) created on deposits to secure bids, tenders, offers, contracts (other than contracts for the payment of money), derivative contracts, leases, legal obligations, surety bonds, consignment notes and other obligations of a similar nature assumed in the Ordinary Course; (h) securing repayment obligations under letters of credit, surety bonds and other forms of credit enhancement granted in connection with the purchase of goods and equipment in the Ordinary Course, limited to such goods and equipment; (i) securing reimbursement obligations under performance bonds posted in connection with the filing of appeals pending in any judicial proceeding, to the extent that the enforcement of such Liens is effectively stayed and the claims secured thereby have been answered or opposed in good faith and, if applicable, through appropriate legal proceedings; (j) substituting, or replacing any of the guaranties or security interests mentioned above; (k) that consist of negative easements, rights of way, use restrictions Execution Version 10 derived from urban development plans or statutory plans, Liens that appear in certificates requested from Real Estate Registrars, Judicial Registrars or similar, or defects in property titles. Permitted Liens exclude all those Liens that involve a violation of the prohibitions to encumber established in the CORFO-SQM Contracts and CORFO- Tarar Contracts. “Taxes" means any national, regional, local, municipal, foreign or any other type of tax, including, without limitation, taxes on income, gross income, capital gains, surcharges or additions, second category tax, tax on the sale of goods and/or rendering of services, stamp taxes and stamps, specific taxes, territorial taxes, social development contributions, taxes on ordinary or extraordinary benefits, indemnities, licenses, inventory, imports, exports, rejected expenses subject to article 21 of the Chilean Income Tax Law, taxes or levies on transfer price adjustments, those applied by virtue of franchises, withholding taxes, royalties, special or specific taxes on mining activity, or any other tax, as well as customs duties, tariffs, patents, duties, fees or other levies or charges of any kind, including penalties, fines, interest, surcharges, additions or charges of any kind, including penalties, fines, interest, surcharges, additions or charges of any kind, including penalties, fines, interest, surcharges, additions or charges of any kind, interest, surcharges, additions or adjustments for inflation or restatement, payable to or levied by any Governmental Authority in connection with the Taxes, whether or not the subject of litigation, and whether applicable directly or as a legal successor to the liability of another Person under applicable law. "Confidential Information" means all information, documentation and background information provided, or made available to the Receiving Party after May 31, 2023, by the Disclosing Party, in any form (including, but not limited to, written, electronic or oral). It is expressly stated that the Confidential Information includes, among other matters, information concerning the Disclosing Party, its operations and activities, including documents, records, financial background, accounting information, contracts, reports, trade secrets, names and experience of employees and consultants, know-how, formulas, processes, ideas, inventions (whether patentable or not), and any other technical, business, corporate and product or service development information and data. However, it shall not be deemed to be Confidential Information the information that: (i) as of the date it is provided has become public knowledge, or at any time after the date of access becomes public knowledge for reasons unrelated to its disclosure by any of the Parties or their Representatives; (ii) was available to the Parties, on a non- confidential basis, prior to May 31, 2023 and there is written proof thereof; (iii) was lawfully provided, on a non-confidential basis, by a third party alien to the Parties or their Representatives, unless the third party knows or should know that the information was obtained in breach of a confidentiality agreement; and (iv) is developed by the Receiving Party or its Representatives independently, without the use of Confidential Information. "Restricted Information" means Confidential Information of a Party that, if known to a competitor, would influence its market behavior decisions. "Business Products Inventories" means the balances of inventories of Business Products, whether as finished goods or work-in-process, held at the SQM Party or its Subsidiaries as of a given date. "SQM Salar Merger Meeting" means the extraordinary meeting of SQM Salar shareholders convened or self-convened to submit for approval of its shareholders the merger by incorporation with Tarar and the other matters indicated in Section 3.2 or the resolution without holding a meeting of SQM Salar, in the case of a sociedad por acciones (stock company), adopted by the unanimous vote of SQM Salar shareholders for the Execution Version 11 same purpose through the execution of a public deed or a private instrument to be notarized in the records of a notary public. "Tarar Merger Meeting" means the extraordinary meeting of shareholders of Tarar convened or self-convened to submit for approval of its shareholders the merger by incorporation with SQM Salar and the other matters indicated in Section 3.2, or the resolution without holding a meeting of Tarar, adopted by the unanimous vote of the shareholders of Tarar for the same purpose through the execution of a public deed or a private instrument to be notarized in the records of a notary public. "Merger Meetings" means jointly the SQM Salar Merger Meeting and the Tarar Merger Meeting. "Know-How" means the body of knowledge of a different nature that is necessary for the extraction and production of the Business Products that SQM or any of its Subsidiaries has developed over the years and that is in the possession of the Business Personnel as of the Effective Date of the Joint Venture or that is included in the Know-How Documentation, but it excludes the contributions made by third parties that hold intellectual or industrial property rights over such contributions. Without the following list being restrictive, the Know-How includes, among others, technical or technological knowledge, formulas, processes, procedures, ideas, discoveries, data (technical, scientific or other), protocols, systems, databases, any other type of knowledge necessary for the extraction and production of Business Products . For the avoidance of doubt, Trade Secrets are not part of Know-How. "Law" means jointly Chilean Law and Foreign Law. "Chilean Law" means any law, code, decree, directive, ordinance, circular, office, instruction or regulation issued, promulgated or sanctioned by the President of the Republic, the National Congress of Chile or a Governmental Authority in Chile within its jurisdiction. “Antitrust Law" means (a) Decree Law No. 211, as amended, coordinated and systematized by Decree with Force of Law (DFL) No. 1 of 2005, of the Ministry of Economy, Development and Reconstruction of Chile, and (b) the applicable legislation under which, prior to Closing, Foreign OC Approvals are required for the implementation of the Joint Venture or which are required subsequent to the implementation of the Joint Venture. "Securities Market Law" or "LMV" means Chilean Securities Market Law No. 18.045, as amended from time to time. “Foreign Law" means any law, code, decree, guideline, ordinance, circular, circular, official letter, instruction or regulation issued, promulgated, enacted or sanctioned by a foreign Governmental Authority within its jurisdiction, applicable to the Joint Venture, the Business, the Business Subsidiaries or the Business Assets. "Environmental Law" means any Law (i) for the protection of health, safety, including occupational health and safety, the indoor or outdoor environment (including air, water, soil, natural resources and biota), and individuals or human groups belonging to indigenous peoples, or (ii) regulating the manufacture, use, treatment, storage, disposal and release of Hazardous Materials. "Ley sobre Sociedades Anónimas” or “LSA” means Chilean Stock Companies Law No. 18,046, as amended from time to time.
Execution Version 12 "Hazardous Materials" means any (i) toxic or hazardous material or substance; (ii) hazardous solid waste, including asbestos, polychlorinated biphenyls, mercury and flammable or explosive materials; (iii) radioactive materials; (iv) petroleum or petroleum products (including crude oil); and (v) any other chemical, contaminant, substance or waste that is regulated as "hazardous" by any Governmental Authority under any Law, Order or Permit. "Best Efforts" means acting in good faith and with diligence and care in attempting to obtain a particular result or achieve a specific purpose, which includes taking actions that are reasonably necessary or leading to such result or purpose (to the extent such actions are legally permissible), for example, (a) exercise voting rights or consent in respect of shares or interests owned by it; (b) cause members of the board of directors or similar body of a company controlled by such party (to the extent that such directors or officers have been nominated or appointed by such party) to act in a particular manner; (c) performing acts or entering into agreements that a Person would consider reasonable and prudent under the circumstances; and (d) making, or causing to be made, to Governmental Authorities or other Persons, filings or applications for approvals, registrations or other similar actions that are required in anticipation of a result or objective. For the avoidance of doubt, making Best Efforts shall in no event be construed as an obligation to achieve a particular result or purpose, nor a higher standard of care than that which Persons ordinarily use in their own business, in terms of Article 44 of the Civil Code. "Business" means, the extractive, productive and commercial activities related to the Business Products, derived from the exploration and exploitation of the Properties, including the marketing of the Business Products, directly or through Subsidiaries or representative offices in China, Japan, Korea, the United States of America and Belgium. "Anti-Corruption Regulations" means Articles 233, 234, 235, 236, 237, 239, 240 N°1, 241, 241bis, 242, 243, 244, 246, 247, 247bis (first paragraph) 248, 248 bis, 249, 250, 251bis and 251ter of the Chilean Criminal Code, Article 27 of Law No. 19.913 on the Prevention and Punishment of Money Laundering, and Article 8 of Law No. 18.314 on Terrorist Conduct and Activities, all in connection with Law No. 20,393 on Criminal Liability of Legal Entities, and any law, national or international, on the prevention and punishment of money laundering or the financing of terrorist activities, and that is applicable to the Operating Company or to a Party, as the case may be. "Order" means any order, ruling, decision, judicial request, injunction, decree, mandate, judgment, sentence, ruling, award, settlement or stipulation issued, promulgated or entered into by or with a Governmental Authority or by an arbitral tribunal within its jurisdiction. "Other Products of the Mining Properties" means lithium metal, lithium bromide, butyl lithium, lithium nitrate, other lithium organics, other lithium inorganics and other metallic and non-metallic minerals extracted from the Brine other than Lithium Product, Other Lithium Product or Non-Lithium Product. “Other Lithium Products" means lithium sulfate, lithium chloride and lithium carnallite as intermediate products in the production chain of Lithium Products, extracted from the Mining Properties. "Shareholders' Agreement" means the shareholders' agreement of the Operating Company, to be executed on the Effective Date of the Joint Venture. "Prohibited Payment" means making, or ordering to be made, any offer, gift, payment, promise of payment, of any sum of money, thing of value, economic benefit or of any other nature to a Public Official, directly or through another Person, by reason Execution Version 13 of his or her position for the purpose of (i) influencing any act or decision of the Public Official in his or her capacity as a Public Official; (ii) induce the Public Official to do or omit to do any act, in contravention of his or her legal duty; (iii) secure any improper advantage; (iv) induce the Public Official to use his or her influence with a Governmental Authority to affect or influence any act or decision of such Governmental Authority, in order to procure or retain business or to redirect business to any Party; or (v) contravene in any way the Anti-Corruption Regulations. "Disclosing Party" means the Party that delivers or makes available Confidential Information or Restricted Information to the other Party, as well as its directors, officers, employees, dependents, contractors and consultants who deliver or make available Confidential Information or Restricted Information under the Confidentiality Agreement, the Protocol or this Agreement. "Receiving Party" means the Party receiving or accessing Confidential Information from the other Party, as well as its directors, officers, employees, dependents, contractors and consultants who become aware of the information under the Confidentiality Agreement, the Protocol or this Agreement. "Related Parties" or "Related Persons" means (i) with respect to an Entity, the Persons indicated in Article 100 of the LMV, and (ii) with respect to a natural person or individual, its spouse, civil partner, cohabitant and relative up to the second degree of consanguinity or affinity and the Entities it controls, either alone or jointly with other Persons with whom it has a joint action agreement, any of the aforementioned individuals. "Operating Liabilities", as of a given date, means the sum of the balances of the accounts classified as “PO” [Spanish acronym of “Pasivos Operacionales] in Exhibit 9 in the Reference Balance Sheet, or if applicable, the consolidated financial statements of SQM Salar used for the respective calculation. "Chilean GAAP" means accounting principles generally accepted in Chile, including International Financial Reporting Standards as adopted by the International Financial Reporting Standards Board (IFRS). “Subsidiaries’ GAAP" means the accounting principles that the Business Subsidiaries have historically applied in the preparation of their financial statements for the purposes of their Tax Returns in the respective countries in which they operate, on the basis of which Consolidation Adjustments are applied centrally in Chile, in order to convert them to U.S. Dollars and consistent with Chilean GAAP for consolidation purposes. “Loss" means: (i) actual consequential damages suffered, which, in the case of a Third Party Claim shall include any payment actually paid to a third party, including a Governmental Authority, notwithstanding that the basis of the Third Party Claim would have included any of the items not covered by this definition; (ii) in the case of Section 16.3, costs and expenses (including independent professional fees and expenses such as arbitrators’ and reasonable attorneys', auditors', consultants' and other advisors' fees) actually paid in connection with the investigation, preparation and defense of a Claim; and (iii) reasonable investments, costs and expenses actually incurred to redress, avoid or mitigate the effects of a Loss. The following are expressly excluded from the definition of Losses: loss of profits, moral or reputational damage, indirect damages, consequential damages, unforeseeable damages and speculative damages, being understood as such those consisting of a decrease in value or damage estimated by capitalizing future profits or applying multiples of any kind (including tons, income, results, cash flow or similar). If as a result of a stoppage of the Operating Company’s operations in Chile arising from any of the grounds set forth in Sections 16.1, 16.2 or Execution Version 14 16.6(d), the Operating Company sells in a given annual period less than one hundred seventy thousand (170,000) LCE tons and the sales margin per ton of LCE of such fiscal year was lower than that of the fiscal year immediately preceding the commencement of the stoppage, the "Loss" suffered by the CODELCO Party shall also mean the lower dividend received by the CODELCO Party in respect of such fiscal year, compared to the dividend that the CODELCO Party would have received had the stoppage not existed, in both cases calculated in accordance with the provisions of Section 5 of the Shareholders' Agreement. For purposes of determining the dividend that the CODELCO Party would have received in the absence of the stoppage, if the sales margin per ton of LCE for that fiscal year was lower than that of the fiscal year immediately prior to the commencement of the stoppage, the cost per ton of LCE for the affected fiscal year will be deemed to be equal to the cost per ton of LCE for the fiscal year immediately prior to the commencement of the stoppage, duly adjusted for inflation (excluding from the adjustment those costs per ton of LCE that were not affected by the stoppage, such as, for example, the lease of the CORFO-SQM Contracts and CORFO-Tarar Contracts). "Permits" means the permits, licenses, consents, authorizations, approvals required by SQM Salar, the Business Subsidiaries or the Business Assets of a Governmental Authority to develop the Business in compliance with the Laws, according to the practices of the industry in which they participate. "Person" means an individual or a natural person, an Entity or a Governmental Authority. "Mining Properties" means the OMA Mining Properties, the Rigo Mining Properties, and the Sal and Salar Mining Properties, all located in the Salar de Atacama, commune of San Pedro de Atacama, Antofagasta Region, and which are singled out in Chapter IV of Appendix B. "OMA Mining Properties" means twenty-eight thousand and fifty-four (28,054) mining properties called "OMA" owned by CORFO located in the Salar de Atacama, commune of San Pedro de Atacama, Antofagasta Region, which cover the exploitation of lithium and other mineral substances listed in Chapter I of Appendix B. "Rigo Mining Properties" means three thousand six hundred and sixty (3,660) mining properties called "Rigo" owned by SQM Salar (under the resolutory condition of being returned to CORFO), located in the Salar de Atacama, commune of San Pedro de Atacama, Region of Antofagasta, which are identified in Chapter II of Annex B. "Mining Properties Sal y Salar" means two hundred and twenty-five (225) mining properties called "Sal" or "Salar" owned by CORFO located in the Salar de Atacama, commune of San Pedro de Atacama, Region of Antofagasta, which are identified in Chapter III of Annex B. "Pesos" or "$" means the currency of legal tender in Chile. “Benefit Plan" means any and all bonuses, profit sharing, compensation, deferred compensation, incentive, stock-based benefits (including stock ownership plans, restricted stock plans, phantom plans and stock option plans), benefits in kind, vacation, hospitalization benefits, social assistance, retirement payments, length of service awards, seniority recognition, retention plan, termination benefits, severance payments, health or medical insurance, life and disability insurance or any other plan, contract, agreement or protocol for employees in excess of that provided by law, which is funded or maintained by the Company or its subsidiaries, or which is funded or Execution Version 15 maintained by the Company or its subsidiaries, compensation for change of Control, health or medical insurance, life and disability insurance or any other employee benefit plan, contract, agreement or protocol in excess of that established by Law, which is financed, sponsored or maintained by SQM Salar or the Business Subsidiaries for, among others, its employees (or with respect to which SQM Salar or the Business Subsidiaries have any type of liability), but only to the extent that such employees participate in and benefit from them. For the avoidance of doubt, Benefit Plan does not include social security, pension or other benefit plans that are legally mandatory under Chilean Law. "Carmen Plant" means the lithium carbonate and lithium hydroxide plants owned by SQM Salar, and its annexed facilities, located on the east side of Route 5 North, km 1,373 and approximately 25 km east of the city of Antofagasta, Antofagasta Region, on a site of approximately 74 hectares, and which includes administration and service buildings, warehouses, workshops, Brine storage ponds and disposal ponds for solids and liquids. "Sichuan Plant" means the refinery plant located in Sichuan Province, People's Republic of China, for the production of lithium hydroxide from lithium sulfate from the Mining Properties (with a production capacity of approximately twenty thousand (20,000) metric tons of lithium hydroxide). "Reference Accounting Policies" means Chilean GAAP and GAAP Subsidiaries, as applicable, considering the principles, policies, criteria and estimation methodologies used in the preparation of, in the case of SQM Salar, the Latest Audited Financial Statements; and, in the case of the Business Subsidiaries, the Latest Business Subsidiary Financial Statements. "Regulatory Filings" means the notification required to obtain the Chilean OC Approval, the notifications, filings or applications required to obtain the Foreign OC Approvals and the Foreign Investment Approvals and any other filings or applications with Governmental Authorities in connection with obtaining the Consents and Authorizations. "First Period" means the period from the Effective Date of the Joint Venture through December 31, 2030, inclusive. "Lithium Products" means lithium carbonate in its technical and battery grade and lithium hydroxide in its technical and battery grade, in both cases in their different specifications, which come from ore extracted from Brine. "Potassium Products" means potassium, potassium chloride, potassium carnallite and any by-products, derivatives or compounds thereof, extracted from the Brine. "Business Products" means collectively the Lithium Products, the Other Lithium Products and the Non-Lithium Products. "Non-Lithium Products" means, collectively, Potassium Products, magnesium chloride (bischofite) and sodium chloride (halite) composed of minerals extracted from Brine, in the form currently produced by SQM Salar. "Intellectual Property" means copyrights, databases, and in general, trade names or trademarks, trademark registrations and applications, copyrights, copyright registrations and applications, patents registered and applied for, industrial designs registered and applied for, industrial drawings registered and applied for, utility models registered and applied for and know-how developed or acquired by a Person and rights to any other kind of intangible assets, whether registered or not, whether disclosed or
Execution Version 16 undisclosed. For the avoidance of doubt, Trade Secrets are not included in the concept of Intellectual Property. "Protocol" means the Restricted Information management protocol between CODELCO and SQM dated February 1, 2024. "Power Contracts Protocol" means the binding protocol to be entered into between SQM and the Operating Company to govern the terms of the joint administration of certain power supply contracts pursuant to Section 2.17. "Salar Futuro Project" means the large-scale project to evaluate and eventually implement technological changes in the exploitation of lithium and other mineral resources to return to the Salar de Atacama, if possible, part of the brines with minimal lithium content initially extracted from the Mining Properties and move towards a water balance in the Salar de Atacama basin. It is understood that all the stages of design, feasibility assessment, environmental impact study, and obtaining the respective permits are part of the Salar Futuro Project. "Representatives", with respect to an Entity, means its Subsidiaries and the directors, executive officers and employees of that Entity and that Entity's Subsidiaries. "Claim" means any action, assessment, reassessment, complaint, lawsuit, counterclaim, appeal, claim, demand, injunction, administrative proceeding, dispute, arbitration, judicial proceeding, official letter, guideline, investigation or audit brought, promoted, initiated or to which a Governmental Authority, Person or group thereof is a party, which is brought in or before any ordinary, special court or arbitral tribunal or mediation authority, to the fullest extent thereof, which generates or may generate Losses. "Brine" means extracted crude brine, concentrated or refined brines in any degree of concentration coming from the Mining Properties. "Trade Secrets" means any undisclosed information owned by SQM or any of its Subsidiaries that may be used in any production, R&D or industrial activity related to the Business, provided that such information meets all of the following requirements: (a) it is secret in the sense of not being, as a whole or in the precise configuration and gathering of its components, generally known or readily accessible to persons within the circles in which that type of information is normally used; (b) it has a commercial value because it is secret; and (c) it has been the subject of reasonable measures taken by its legitimate holder to keep it secret. "Second Period" means the period from January 1, 2031 through December 31, 2060, inclusive. "Operating Company" means the company with autonomous and independent operation of its shareholders, whose purpose is to carry out directly or through its own Subsidiaries, the exploration, exploitation and operation of the Properties and the commercialization of the Business Products, with rights, directly or through its Subsidiaries, to all the Assets of the Business, relying upon, directly or through its Subsidiaries, the Business Personnel. "Dixin Company" means Sichuan Dixin New Energy Co., Ltd. "Consent Applications" means the filings or requests made to third parties, other than a Governmental Authority, relating to obtaining Consents and Authorizations. Execution Version 17 “Exchange Rate" means the Dollar/Peso average exchange rate on any date of determination in the Chilean exchange market and published by the Central Bank of Chilean pesos on a daily basis in the Official Gazette as “observed dollar” and available at http://www.bcentral.cl/index.asp, or other publications that may replace such publication for purposes of showing such reference rate on such dates. “Prohibited Transaction” means : (i) receiving, transferring, transporting, retaining, using, structuring, circumventing or concealing the proceeds obtained from any criminal activity, including drug trafficking, fraud and bribery of a Public Official; (ii) knowingly urging or engaging in, financing, or financially supporting or otherwise sponsoring, facilitating or providing assistance to any terrorist Person, activity or organization; or (iii) engage in any transaction or engage in business with a “designated person”, namely, a Person listed on any List published by the United States of America or the United Nations, with respect to money laundering, terrorist financing, drug trafficking or economic or arms embargo. “UF” or “Unidades de Fomento” means the value determined by the Central Bank of Chile pursuant to Article 35(9) of paragraph 4O of Title III of Article 1 of Law 18,840, published in the Official Gazette in accordance with Chapter II.B.3 of the Compendium of Financial Regulations of the Central Bank of Chile, in effect for the day on which payment of the respective obligation is due or in effect for the day on which the value of any agreed obligation or deliverable is to be determined. If the UF is replaced or substituted, all references to it in this Agreement shall be understood to be made to the new unit that replaces it, provided that it is determined in terms equivalent to those used in the calculation of the UF. “Latest Audited Financial Statements” means the audited financial statements of SQM Salar as of December 31, 2023, attached hereto as Exhibit C. “Latest Business Subsidiary Financial Statements” means the financial statements, audited or unaudited (as the case may be), of the Business Subsidiaries as of December 31, 2023 attached hereto as Exhibit D. “USD” or “Dollars” means the lawful currency of the United States of America. The following terms have the meanings set forth in the part, article or sections below: Definition Location: Series E Share Section 10.3(c) SQM Salar Shares Section 2.1 Tarar Shares Section 2.2. Maricunga Assets Section 10.1(a) Agreements between the Parties Section 17.2(d) Adionics Section 10.2(c) Dixin Adjustment Section 10.3(e) CAPEX Adjustment Section 2.7(a)(iii) Joint Venture Recital A Auditor Section 9.1(j) Notice of Third Party Claim Section 16.3(a) Dixin Balance Sheet Section 10.3(e) Execution Version 18 De Minimis Amount Section 16.5(a) Grounds for Objection Section 9.1(c) Closing Section 8.1(a) CMF Section 2.3 CODELCO Recitals Maricunga Asset Purchase and Sale Section 10.1 Sichuan Purchase and Sale Section 10.3(a) Dixin Company Purchase and Sale Section 10.3(c) Community Commitments Section 5.1 Deadlock Communication Section 9.1(e) Alternative Proposal Deadlock Communication Section 9.1(h) Maricunga Concessions Section 10.1(a) Maquila Contract Section 10.3 Potassium Offtake Contract Section 2.15 Marketing Contracts Section 11.4 Transitory Services and Supply Contracts Section 14.2 Related Contracts Section 2.5(c) Relevant Contracts Section 2.5 Adjustment Account Section 9.2(a)(iii) IEAM Accounts Section 9.5(a) Account Payable to SQM Section 9.2(b)(ii) Ordinary Course Section 1.3(d) Auditor's Decision Section 9.1(l)(viii) Deductible Section 16.5 Ancillary Rights Section 11.10(e) Water Rights Section 11.11(a) IEAM Collection Rights Section 9.5(a) Mining Rights Section 11.10(a) Pre-Closing SQM Distributions Section 9.4(c) Adjustment Dividend Section 9.2(b)(i) Working Capital Adjustment Determination Date Section 9.1(n) Preference Termination Date Section 2.3(d) Merger Section 2.3 (d) Inside Information Section 13.2(g) IP License for the Operating Company Section 2.5(f) IP License for CODELCO Section 10.2(a) IP License for SQM Section 10.2(c) Matter of Deadlock Section 9.1(h) Memorandum Recital A Tripartite Table Recital G Maximum Indemnity Amount Section 16.5(c) Korea Business Section 2.5(g) Purpose of the Joint Venture Section 13.7 SII Ruling Section 2.13 Party and Parties Recitals Execution Version 19 CODELCO Party Recitals Indemnified Party Sections 16.3(a) and 16.4(a) Indemnifying Party Sections 16.3(a) and 16.4(a) SQM Party Recitals CODELCO Linked Parties Section 12.13(a) SQM Linked Parties Section 11.26(a) Business Personnel Section 2.5(d) Review Period Section 9.1 (b) Deadlock Review Period Section 9.1(g) Common Policies Section 2.16(a) Existing Insurance Policies Section 11.18(a) Dixin Company Price Section 10.3(c) SQM Intellectual Property of the Business Section 2.5(e) Operating Company Intellectual Property Section 10.2(e) Capital Adjustment Proposal Work Section 9.1(a)(ii) Alternative Working Capital Adjustment Proposal Section 9.1(e) PWC Section 9.1(j) Third Party Claim Section 16.3(a) Direct Claim Section 16.4(a) SQM Reorganization Section 2.5(a) Joinder Resolution Section 17.2(d)(i) SDC Recitals IT Systems Section 11.25(a) Request for Determination Section 9.1(j) SQM Recitals SQM Industrial Section 10.3(a) SQM Salar Recitals SQMK Recitals OIT Recital G Tarar Recitals Arbitral Tribunal Section 17.2(a) 1.2 Annexes Joint Venture Agreement between CODELCO and SQM The following Annexes are made an integral part of the Agreement for all legal purposes. ANNEX A- Business Subsidiaries ANNEX B- Mining Properties ANNEX C - Latest Audited Financial Statements ANNEX D - Latest Business Subsidiary Financial Statements ANNEX E - Consolidation Adjustments ANNEX 1.3(j) - Knowledge of the SQM Party ANNEX 2.3(c) - Operating Company Bylaws for the First Period ANNEX 2.5(a) - SQM Reorganization
Execution Version 20 ANNEX 2.5(b) - Relevant Contracts ANNEX 2.5(c) - Related Contracts ANNEX 2.5(d) - Business Personnel ANNEX 2.5(e) - SQM Intellectual Property of the Business ANNEX 2.5(f) - IP License for the Operating Company ANNEX 2.6 - Salar Futuro Project Matrix Ideas ANNEX 2.7 - Fixed Assets Investments ANNEX 2.8 - SQM Intellectual Property Rights ANNEX 2.8 - SQM Intellectual Property Rights ANNEX 2.9 - SQM Intellectual Property Rights ANNEX 2.10 - SQM Intellectual Property Rights ANNEX 2.15 - Basic Principles of Offtake Potassium Contract ANNEX 2.16 - Common Policies ANNEX 2.17 - Power Contracts Protocol ANNEX 4.1 - Form of Operating Company Shareholders' Agreement ANNEX 4.2(c) - Operating Company Power Structure ANNEX 6.3 - Foreign Merger Control Approvals ANNEX 6.4 - Consents and Authorizations ANNEX 9 - Working Capital and Dividends ANNEX 10.1(a) - Salar de Maricunga Assets ANNEX 10.1(b) - Maricunga Asset Purchase and Sale ANNEX 10.2(a) - IP License for CODELCO ANNEX 10.2(c) - IP License for SQM ANNEX 12.7 - Tarar Financial Statements ANNEX 13.8 - Estacamento Salitral ANNEX 14.2 - Transitory Services and Supply Contracts ANNEX 16.8 - Examples of application of the payment mechanism for the payment of indemnities 1.3 Interpretation (a) The division of this Agreement into Articles and Sections and the insertion of a table of contents and headings are for reference purposes only and do not affect the interpretation of this Agreement. Unless something in the subject matter or context is inconsistent therewith, references herein to Articles, Sections and Annexes are to the Articles, Sections and Annexes of this Agreement. (b) In this Agreement, words in the singular include the plural and vice versa, and words in any gender include all genders. The term "including" means "including without limiting the generality of the foregoing". When a word or phrase is defined, its other grammatical forms have a consistent and corresponding meaning. The words "herein," "hereof" and "hereunder" and similar phrases refer to this Agreement as a whole and not to any particular Section or other subdivision. The words "writing" or "in writing" include printing, typing or any electronic means of communication that can be visibly reproduced at the point of receipt, including electronic mail. (c) In this Agreement, unless anything in the subject matter or context is inconsistent herewith or unless otherwise provided herein, (i) any reference to any regulation is to that regulation as now enacted or as the same may be amended or replaced from time to time, and includes any regulation made thereunder, (ii) any reference to "governing / applicable law", is to any law, code, decree, order, guideline, ordinance, circular, office, instruction or regulation issued, promulgated, enacted or sanctioned by a Governmental Authority within its regulatory jurisdiction applicable, Execution Version 21 according to the same legislation, to the matters, Persons, activities, goods or facts mentioned in such reference, and (iii) any reference to a specific agreement or document is to that agreement or document in its present form or as the same may be amended, renewed, supplemented or modified from time to time or replaced in accordance with the provisions set forth in this Agreement. (d) An action by a Person shall be deemed to have been taken in the "Ordinary Course" only if: (i) Such action is consistent with such Person's past practices and is taken in the ordinary course of such Person's day-to-day operations; or (ii) Such action is similar in nature and magnitude to actions customarily taken by most Persons in the same industry or line of business as such Person, in the ordinary course of normal day-to-day operations: (e) In this Agreement, unless something in the subject matter or context is inconsistent herewith, a "day" shall mean a calendar day and in computing all time periods, excluding the first day of a period and including the last day thereof.. Further, in the event that any date on which any action is required to be taken hereunder is not a Business Day, such action shall be taken on the next day that is a Business Day. (f) Any references to books, records or other information mean books, records or other information in any form, including paper, electronically stored data, magnetic media, film and microfilm. (g) With respect to a Party, its Related Persons and Representatives are not "third parties" for purposes of the Agreement, nor are any of the other Parties to the Agreement or their Related Persons and Representatives. (h) For all purposes of the Agreement, unless otherwise provided or anything in the subject matter or context is inconsistent therewith, it is to be understood that, as of the Effective Date of the Joint Venture, any references to the SQM Party do not include SQM Salar or the Operating Company, unless they refer to facts, acts or contracts performed or committed by the SQM Party prior to the Effective Date of the Joint Venture. (i) Accounting terms not otherwise defined in this Agreement shall have the meanings given to them under Chilean GAAP. To the extent that the definition of an accounting term defined in this Agreement is inconsistent with the meaning of such term under Chilean GAAP, the definition set forth in this Agreement shall prevail. (j) The term "knowledge" or similar expressions refers, when used with respect to the SQM Party, to the actual knowledge of the Persons listed in Annex 1.3(j). For these purposes, actual knowledge shall not be deemed to be knowledge that such Persons could have had if they had exercised due diligence or made appropriate inquiries or reviewed historical information. (k) An obligation or undertaking of a Party to this Agreement to cause another Person to do or refrain from doing anything shall mean the obligation of that Party to take all actions reasonably available to it that are necessary to achieve such effect or result (to the extent such actions are legally permissible). For the avoidance of doubt, the obligation to cause a Person to do or refrain from doing something, implies more than a commitment of Best Efforts, but does not imply an obligation to achieve a specific result, but will have the consequences typical of the vicarious promise in the terms of article 1450 of the Chilean Civil Code. Execution Version 22 SECTION 2 - Joint Venture 2.1 SQM Salar SQM Salar is a sociedad anónima cerrada (closely held corporation) with a capital stock amounting to thirty-eight million dollars (USD 38,000,000), divided into three hundred eighty million (380,000,000) common shares, all of the same series and without par value, fully subscribed and paid-in (the "SQM Salar Shares"). As of the date hereof, the only shareholders of SQM Salar are SQM, with sixty-nine million eighty-four thousand (69,084,000) SQM Salar Shares, and SQMK, with three hundred and ten million nine hundred and sixteen thousand (310,916,000) SQM Salar Shares. 2.2 Tarar Tarar is a sociedad por acciones (joint stock company), with a capital stock amounting to one hundred thousand dollars (USD 100,000), divided into one hundred thousand (100,000) common shares, all of the same series and without par value, fully subscribed and paid-in (the "Tarar Shares"). As of the date hereof, the sole shareholder of Tarar is SDC, holder of all Tarar Shares. 2.3 Operating Company (a) The Parties agree that SQM Salar, subject to the fulfillment of the Conditions Precedent and after the SQM Reorganization and the Merger, will become the Operating Company for purposes of the Joint Venture. (b) The Operating Company will be a sociedad por acciones (joint stock company) and will be the result of the merger by incorporation of Tarar into SQM Salar, as established in Articles 99 and 100 of the Chilean Ley sobre Sociedades Anónimas (the "Merger"), so that, as of the Effective Date of the Joint Venture, SQM Salar, under its new name, will fulfill the role of Operating Company in charge of the Business, as the legal successor of SQM Salar and Tarar. (c) For this purpose, prior to the Salar Merger Meeting, the SQM Party shall transform SQM Salar into a sociedad por acciones (joint stock company), whose bylaws shall substantially be consistent with the text included as Annex 2.3(c). Prior to the Merger Meetings, the capital of SQM Salar shall be divided into forty-nine million nine hundred ninety-nine thousand nine hundred ninety-nine (49,999,999) common shares of a single series and without par value. (d) From the Effective Date of the Joint Venture and until the date on which the distribution of the full amount of dividends to Series A and Series B is made as of 2031 pursuant to the Shareholders' Agreement (such date, the "Preference Termination Date"), the capital stock of the Operating Company will be divided into one hundred million four (100,000,004) shares, distributed in five series of shares: (i) Fifty million one (50,000,001) Series A Shares; (ii) Forty-nine million nine hundred ninety-nine thousand nine hundred ninety-nine (49,999,999) Series B Shares, (iii) Two (2) Series C Shares, (iv) One (1) Series D Share and (v) One (1) Series E Share. Execution Version 23 Each series of shares will enjoy the preferences that will be set forth in the Shareholders' Agreement and in the bylaws of the Operating Company for the terms and conditions established therein. CODELCO, through SDC, will own all of the fifty million one (50,000,001) Series A Shares and two (2) Series C Shares. SQM, either directly or through a Subsidiary, will own all of the forty-nine million nine hundred ninety-nine thousand nine hundred ninety-nine (49,999,999) Series B Shares, one (1) Series D Share and one (1) Series E Share. Upon the occurrence of the Preference Termination Date, the preferences and limitations of the Series A Shares and Series B Shares shall terminate and the shares of such series shall become common shares, with equal rights and obligations or, alternatively, all of the Series A Shares existing as of such date shall be exchanged for fifty million one (50,000.001) common shares, while all of the Series B Shares existing as of that date will be exchanged for forty-nine million nine hundred ninety-nine thousand nine hundred ninety-nine (49,999,999) common shares, in both cases, the holders of the common shares will have the voting and economic rights corresponding to such participations in the respective proportion. The Series C Shares, the Series D Share and the Series E Share, if existing as of the Preference Termination Date, will subsist until their termination in accordance with the rules set forth in the Shareholders' Agreement and in the bylaws of the Operating Company. (e) The Parties will agree on a new name for the Operating Company prior to the Reference Date and agree that, as of the Effective Date of the Joint Venture, the exclusive trademark used by the Operating Company to identify its operations, products and services will be the trademark corresponding to such name, subject to a transition period from the trademarks "SQM", "SOQUIMICH" and "SQM Salar" to the new trademark, of six (6) months from the Effective Date of the Joint Venture, during which period the Operating Company may continue to use the trademarks SQM and SQM Salar free of charge in the same manner in which it has used them to date. (f) The Operating Company shall remain organized as a sociedad por acciones (stock company) during the entire term of the Joint Venture, unless, once the preferences and rights of each of the series into which the capital stock is divided are totally extinguished, any of the Parties requests the other Party to transform the Operating Company into a sociedad anónima (stock company), in which case it shall be transformed into a sociedad anónima (stock company), which, without being a sociedad anónima abierta (publicly traded company) incorporates in its bylaws rules equivalent to those of an sociedad anónima abierta (publicly traded company) and those of the Shareholders' Agreement insofar as they are consistent with them, and provides its shareholders with information equivalent to that which sociedades anónimas abiertas (publicly traded companies) are required to provide to their shareholders, the Comisión para el Mercado Financiero ("CMF") (Chilean Financial Market Commission) and the general public from time to time. 2.4 Steps and Stages of the Joint Venture Subject to the terms and conditions of this Agreement, the Parties agree to implement the Joint Venture, pursuant to the steps and stages described in this Agreement from the Agreement Date until the Effective Date of the Joint Venture (including the steps, instances and corporate acts necessary to consummate the Merger). 2.5 SQM Reorganization (a) The Parties agree that in order to achieve the purpose of the Joint Venture and for SQM Salar to be, as of the Effective Date of the Joint Venture, the Operating
Execution Version 24 Company that develops the Business in the same manner as it is currently conducted, it is required to reorganize SQM Salar and other Subsidiaries of SQM, so as to concentrate in SQM Salar all the Business Assets, Business Subsidiaries, employees (including Business Personnel) and Permits, which are used for the development of the Business, being the holder of the CORFO-SQM Contracts and becoming the holder of the CORFO- Tarar Contracts (the "SQM Reorganization"). The SQM Reorganization includes, among others, the inclusion in SQM Salar or in any of the Business Subsidiaries of the Business Assets that are not owned by SQM Salar or the Business Subsidiaries of the Agreement Date, the exclusion of assets of SQM Salar and the Business Subsidiaries that are not Business Assets, as well as the inclusion or exclusion of contracts and the restructuring of the Business Subsidiaries that will become Subsidiaries of the Operating Company. It is expressly placed on record that the SQM Reorganization excludes the Merger. Annex 2.5(a) describes the outcome that SQM contemplates for the SQM Reorganization as of this date. (b) The SQM Party has identified the relevant contracts with suppliers, customers, SQM or its Subsidiaries and third parties, in effect as of this date, that are necessary in connection with the Business and that should be in effect as of January 1, 2025, which are listed in Annex 2.5(b), including the CORFO-SQM Contracts (the "Relevant Contracts"). Annex 2.5(b) identifies the subject matter of the contract (or the goods and services involved), the parties to the contract, its execution date and its termination date. The Relevant Contracts in which the contracting party is SQM Salar or any of the Business Subsidiaries are grouped in Chapter I of Annex 2.5(b) The Relevant Contracts in which SQM Salar or any of the Business Subsidiaries is not the contracting party, but rather SQM or another SQM Subsidiary are grouped in Chapter II of Annex 2.5(b). (c) The SQM Party has also identified the contracts and commercial relationships (whether documented or not) in force as of this date and that should be in force as of January 1, 2025, between SQM Salar or the Business Subsidiaries on the one hand, and SQM or its Related Persons on the other hand, and that are not part of the Relevant Contracts, which are listed in Annex 2.5(c) (the "Related Contracts"). Annex 2.5(c) identifies the subject matter of the contract (or the goods and services involved), the parties to the contract, its execution date and its termination date. (d) In order to continue the normal development of the Business as of the Effective Date of the Joint Venture, the Operating Company and the Business Subsidiaries shall have the executives and employees listed in Annex 2.5(d) (the "Business Personnel"), which identifies (i) those executives and employees currently employed by SQM Salar or the Business Subsidiaries; and (ii) those other executives and employees of SQM or its Subsidiaries in the first or second line in the organization chart and an approximate number of executives and employees in other levels of the organization chart without individualization, who play an important role in the regular development of the Business, with respect to whom the SQM Party will use its Best Efforts to be rehired by or transferred to SQM Salar or the Business Subsidiaries during the SQM Reorganization process. Annex 2.5(d) also identifies (1) those executives and employees at the first or second line of the organizational chart and an approximate number of executives and employees at other levels of the organizational chart that have not been identified, who are currently employed by SQM Salar or the Business Subsidiaries and who will be transferred to SQM Subsidiaries other than SQM Salar and the Business Subsidiaries during the SQM Reorganization process, and (2) some relevant executives and employees who, although they do not belong to SQM Salar or the Business Subsidiaries, Execution Version 25 are listed for the record that they will remain in other SQM Party companies. For the avoidance of doubt, the persons listed in (1) and (2) above are included in Annex 2.5(d) for the sole purpose of placing on record that they are not intended to be part of the Operating Company, without prejudice to the fact that the employment relationship with any employee may be terminated in accordance with Section 2.5(g)(vi). (e) In order to implement the Joint Venture and for SQM Salar to be the Operating Company that fully develops the Business as of the Effective Date of the Joint Venture, SQM and its Subsidiaries shall grant to SQM Salar the non-exclusive, non- transferable, perpetual and irrevocable right to use free of charge the Intellectual Property owned by SQM or its Subsidiaries that: (i) is solely and strictly related to the extraction and production of the Business Products ; and (ii) exists as of the Agreement Date, which is singled out in Annex 2.5(e) ("SQM Intellectual Property of the Business"). (f) Prior to or contemporaneously with the Effective Date of the Joint Venture, SQM shall grant, or cause its Subsidiaries to grant, as applicable, the right referred to in (e) above through a license of the SQM Intellectual Property of the Business, to be executed between SQM or its respective Subsidiary, and SQM Salar, on terms substantially similar to those of the form incorporated as Annex 2.5(f) (the "IP License for the Operating Company ). (g) In order to achieve the SQM Reorganization, the SQM Party shall perform and cause the remaining Business Subsidiaries to perform all acts and enter into all agreements and contracts necessary so that, as of the Reference Date: (i) SQM Salar has in its shareholders’ equity, directly or through the Business Subsidiaries, only the Business Assets and those other assets and liabilities that correspond in accordance with Article 9; (ii) SQM Salar or the Business Subsidiaries are party to the Relevant Contracts, except for those that have been early terminated in accordance with its terms and conditions and the applicable Law (provided that such termination has been without breach by SQM Salar or the Business Subsidiaries); (iii) The Related Contracts have been terminated or have ceased to be effective at least with respect to SQM Salar and the Business Subsidiaries, without prejudice to the IP License for the Operating Company, the IP License for SQM, the Transitory Services and Supply Contracts, the Potassium Offtake Contract, the provisions of Section 14.2 and the provisions of Article 9; (iv) The Business Subsidiaries are Subsidiaries of the Operating Company; (v) The Operating Company has the non-exclusive, non-transferable, royalty-free right to use the SQM Intellectual Property of the Business by subscribing to the IP License for the Operating Company; (vi) The Operating Company relies upon the Business Personnel, except for executives and employees whose employment relationship with SQM and its Related Persons has been terminated for any reason, including dismissal. However, the Parties agree that it shall not be necessary in order to achieve the SQM Reorganization that SQM Salar or the Business Subsidiaries comprise as of the Reference Date the operations that the SQM Party, through its Subsidiaries, currently carries out in Korea in relation to the Lithium and Other Lithium Products, nor the Execution Version 26 Business Assets that relate to such operation (the "Korea Business"). However, upon the occurrence of the Reference Date, the SQM Party shall, as soon as practicable, transfer the Korea Business to the Operating Company on the same terms and conditions on which it transferred the remainder of the Business to SQM Salar and the Business Subsidiaries pursuant to this section. (h) The CODELCO Party shall have the opportunity to make observations regarding the relevant documentation to be executed to give effect to the SQM Reorganization (provided that such observations do not relate to commercial matters and/or aspects that alter the Ordinary Course of SQM Salar or the Business Subsidiaries), which shall be considered by the SQM Party. (i) SQM and SQMK shall be responsible for paying (or reimbursing or indemnifying the Operating Company) all costs, disbursements, expenses, obligations, liabilities (including severance payments in respect of employees transferred to SQM Salar or its Subsidiaries), Taxes (pursuant to Section 16.6) and charges of any kind or nature incurred in connection with the SQM Reorganization, including those affecting the Operating Company due to, or originating from, events that took place prior to the Effective Date of the Joint Venture, to the extent they are not captured in balance sheet accounts used to determine the amount of the Adjustment Account; provided always that such costs, disbursements, expenses, obligations, liabilities, Taxes or charges of any kind do not arise out of or as a consequence of the Closing or the execution of the Transaction Documents (including, for the avoidance of doubt, the Merger), in which case they shall be borne by both Parties on a 50/50 basis. (j) With respect to assets whose transfer is made by registration (e.g., mining concessions, real estate, water use rights, etc.) and which, by virtue of the SQM Reorganization, must be registered in SQM Salar or one of the Business' Subsidiaries), SQM must deliver at the Closing complete certificates (current title to property, mortgages and liens, prohibitions and interdictions and litigation) stating that such assets are in the name of SQM Salar or the Business Subsidiaries, free of Liens (other than Permitted Liens). (k) If after the Effective Date of the Joint Venture, either Party becomes aware of any Business Asset, Material Contract or Business Personnel, SQM Intellectual Property of the Business, owned or held by the SQM Party or its Related Persons in, or in connection with, the Business, that has not been contributed, assigned, licensed, transferred or else a valid title for its use without consideration has not been constituted in favor of SQM Salar or the Business Subsidiaries in accordance with this Section 2.5 or the SQM Reorganization, the SQM Party shall, as soon as possible, procure the contribution, assignment, license or transfer thereof to the Operating Company, without any additional consideration and taking charge of any applicable Taxes, on terms similar to those set forth in this Agreement. On the other hand, if after the Effective Date of the Joint Venture, any of the Parties becomes aware of the existence of assets, contracts, or Intellectual Property that do not correspond to Business Assets, Relevant Contracts, or SQM Intellectual Property of the Business and that, should have been excluded from the SQM Reorganization continue to be owned or held by the Operating Company or any of the Business Subsidiaries, the Operating Company or the corresponding Subsidiary of the Business shall, as soon as possible, procure the contribution, assignment, license or transfer of the same to SQM or one of its Subsidiaries, without any additional consideration. If the knowledge of the Parties of any of the circumstances referred to above occurs after the Reference Date but prior to the Effective Date of the Joint Venture, such situation shall not alter the Reference Balance Sheet or prevent the Closing from being Execution Version 27 carried out on the basis of such Reference Balance Sheet. In any case, the Party having such knowledge shall inform the other Party of such circumstance as soon as possible, and the Parties in good faith shall agree on the necessary adjustments so that, after the Closing, the necessary contributions, assignments, licenses, transfers or any other transaction may be made, and the corresponding considerations so that the situation of both Parties is the one they would have had if such Business Assets, Relevant Contracts or SQM Intellectual Property of the Business had been included or excluded from the Reference Balance Sheet as of the date on which the Closing occurred. 2.6 Salar Futuro Project (a) The SQM Party is currently developing the Salar Futuro Project whose main ideas are included as Annex 2.6. (b) The Parties have agreed to establish a technical body composed of Representatives appointed by SQM and Representatives appointed by CODELCO to discuss, prior to Closing, the aspects related to the Salar Futuro Project (c) In such instance, to the extent permitted by applicable Laws, in particular the Antitrust Law, the applicable regulatory restrictions and the provisions of the Protocol, the CODELCO Party shall have the opportunity to make consultations and observations on the progress of the Salar Futuro Project, which shall not be binding. In that regard, the interactions in such instance will be reduced to those strictly necessary. (d) The main ideas of the Salar Futuro Project that could have a direct impact on the Atacameño Communities shall also be reviewed during the work of the Tripartite Table, under the terms of Article 5 below; without prejudice to the indigenous consultation within the framework of the Environmental Impact Assessment System with respect to the Environmental Qualification Resolution corresponding to the Salar Futuro Project. (e) As of the Effective Date of the Joint Venture, the development and implementation of the Salar Futuro Project will be subject to the provisions set forth in the Shareholders' Agreement and the Community Commitments. 2.7 Ordinary Course of SQM Salar and Business Subsidiaries (a) As of the Agreement Date and until the earlier of the Effective Date of the Joint Venture or termination of this Agreement, the SQM Party: (i) instruct or cause SQM Salar and the Business Subsidiaries to operate according to their Ordinary Course in the terms of paragraph (b) below, provided always that this is possible in the context of the SQM Reorganization, (ii) shall endeavor to maintain and preserve SQM Salar, the Business Subsidiaries and the Business Assets in a manner consistent with the Ordinary Course of each of them, endeavoring to develop the Business in the form in which it is currently developed, and shall use its Best Efforts to maintain the Relevant Contracts and the Business Personnel that, pursuant to Section 2.5(d), must be employed by SQM Salar or the Business Subsidiaries as of the Reference Date; and (iii) will instruct or cause SQM Salar and the Business Subsidiaries to make CAPEX investments in accordance with the investment budget for the years 2024 and 2025 shown in Annex 2.7. If the total amount invested during the year
Execution Version 28 2024 is less than [***] Dollars (USD [***]) the Working Capital Adjustment will be reduced by the amount of difference between (i) [***] Dollars (USD [***]) and (ii) the actually invested amount. On the other hand, if during the year 2024 investments in fixed assets (CAPEX) are made related to improvements, initiatives and/or projects that were not included in the 2024 investment budget, the Working Capital Adjustment will be increased by the amount effectively invested in such projects, provided always that such investments have been authorized by CODELCO, and such authorization may not be denied or delayed without just cause. The net result of any reductions (with a negative sign) or increases (with a positive sign) to the Working Capital Adjustment in this section will be referred to as the "CAPEX Adjustment". For the avoidance of doubt, CODELCO's authorization referred to in this paragraph (iii) to make an investment is a requirement only for the inclusion of the investment in the CAPEX Adjustment, and not to make the investment, notwithstanding the provisions of Section 2.7(b)(vii) below. (b) Unless (A) previously authorized in writing by CODELCO, authorization that may not be unreasonably withheld or delayed; (B) in the Ordinary Course of SQM Salar and the Business Subsidiaries; (C) permitted under the Transaction Documents, or necessary for the SQM Reorganization, the Merger or for the implementation of the Joint Venture; or (D) is required by a Governmental Authority under applicable Laws, the SQM Party shall ensure and cause SQM Salar and the Business Subsidiaries, as applicable, not to engage in any of the following transactions between the Agreement Date and the Effective Date of the Joint Venture: (i) Incorporation of Subsidiaries, dissolution of Subsidiaries and disposal of shares of SQM Salar's Subsidiaries, unless it is necessary to consummate the SQM Reorganization; (ii) Relevant associations (joint ventures with or without legal personality) with third parties; (iii) Development of business lines not included in the definition of Business (whether or not they are included in the corporate purpose); (iv) The cessation of the production of the Business Products; (v) The granting of security interests or surety bonds to secure obligations (a) of third parties, or (b) of SQM Salar or Business Subsidiaries; (vi) Performance of acts or execution of contracts for no valuable consideration; (vii) Acquisition of goods included in fixed assets with an aggregate value of more than [***] Dollars (USD [***]) in one calendar year, unless considered in the 2024 and 2025 investment budget shown in Annex 2.7; (viii) Disposal of property, plant and equipment with an aggregate value in excess of [***] Dollars (USD [***]) in one calendar year unless such sales of assets are considered in the 2024 and 2025 investment budget shown in Annex 2.7, or non-operating income projected and previously approved by the Board of Directors; (ix) Performance of acts or execution, modification or early termination of contracts beyond the Ordinary Course of Business involving payments to or by SQM Salar or any of the Business Subsidiaries (considering that all contracts Execution Version 29 related to the sale of Business Products to third parties under market conditions are within the Ordinary Course of Business), for amounts greater than [***] Dollars (USD [***]) annually or than [***] Dollars (USD [***]) during the effective term of the contract, or contracts with a term exceeding three (3) years and that cannot be early terminated by SQM Salar or by any of the Business Subsidiaries without penalty with an advance notice of no more than three (3) months; (x) Approval of the request for liquidation or reorganization of SQM Salar or any of its Subsidiaries in accordance with Law 20.720 or the applicable Foreign Law; (xi) The issuance of shares and the approval of the minimum placement price of the shares representing a capital increase of SQM Salar or the Business Subsidiaries, including for workers' compensation plans; (xii) The filing of claims against third parties or the acceptance of claims filed against SQM Salar or any of its Subsidiaries, as well as transactions in respect of disputes, either judicial or extrajudicial, in each case when the dispute is for undetermined amounts or equal to or greater than [***] Dollars (USD [***]); (xiii) Modify the accounting or tax reporting methods, principles, practices or policies used by SQM Salar and Business Subsidiaries in a manner that materially affects their assets or liabilities, unless required by applicable Laws or a change in Chilean GAAP, or permitted under the Transaction Documents; (xiv) Any action that has the effect or purpose of obtaining, modifying or terminating the authorizations granted by CCHEN to SQM Salar; (xv) The execution, modification or early termination of the CORFO- SQM Contracts, as well as the waiver of any right or the exercise of any option established therein; (xvi) Amendments to the bylaws of SQM Salar or the Business Subsidiaries, except for those established in the Transaction Documents and those necessary to carry out the SQM Reorganization; (xvii) Issuance of new shares (cash or bonus shares) and securities convertible into shares of SQM Salar or of the Business Subsidiaries; and (xviii) The granting of powers of attorney to perform any of the acts or enter into contracts listed above, as well as to enter into promises or commitments to perform any of the acts or execute the contracts listed above. In any case, the SQM Party shall not have to request prior written authorization from CODELCO to carry out operations or perform acts that are required to respond to an emergency that poses a serious risk to the health of workers, infrastructure or operations of SQM Salar or to the Atacameño Communities or the environment and the request for prior authorization would prevent a timely and effective response to the emergency. Notwithstanding the above, the SQM Party must inform CODELCO within twenty-four (24) hours after having initiated some of the operations restricted under this section in response to an emergency. Execution Version 30 2.8 Tarar Ordinary Course Unless (A) previously authorized in writing by SQM, which authorization may not be unreasonably withheld or delayed; (B) permitted under the Transaction Documents, or necessary for the Merger or for the implementation of the Joint Venture (including, but not limited to, the execution of the CORFO-Tarar Contracts, and the performance of any administrative actions required under such contracts, such as filings with CORFO and CCHEN); or (C) is required by a Governmental Authority under applicable Laws, the CODELCO Party shall ensure and cause Tarar not to enter into any transaction, perform any act or execute any contract. 2.9 Due diligence. Access to information (a) Subsequent to the execution of the Confidentiality Agreement and especially after the subscription of the Memorandum, the CODELCO Party has conducted a review of financial, technical and legal aspects of SQM Salar, the Business Subsidiaries, and the Business Assets, among other matters. (b) Until the earlier of the Effective Date of the Joint Venture or termination of the Agreement, and subject to applicable Laws and the Protocol, the SQM Party shall permit, or instruct its applicable Subsidiaries to permit, the CODELCO Party and its Representatives and advisors to have reasonable access, during regular business hours and upon receipt of reasonable advance notice, for purposes associated with this Agreement, to the documentation, property, facilities, books, accounts, Tax Returns and records of SQM Salar, the Business Subsidiaries and other Business Assets, including computer files and magnetic strips and other data stored in a similar form, but only to the extent that such access does not unduly interfere with the business of SQM and its Subsidiaries and is necessary to perform or complete pending due diligence or the transactions contemplated by the Transaction Documents. In the case of Restricted Information, the Protocol must be strictly complied with in accordance with Section 6.1. (c) The CODELCO Party acknowledges and agrees that any contact by the CODELCO Party or its Representatives and advisors with directors, officers or employees of SQM and its Subsidiaries shall be arranged and supervised by SQM, unless they expressly and previously authorize a specific contact. The foregoing (A) shall not oblige SQM or its Subsidiaries to permit an inspection or to disclose information that could constitute a disclosure of the trade secrets of third parties or the trade secrets of SQM or its Subsidiaries, or otherwise violate SQM's or its Subsidiaries' confidentiality obligations to third parties, or (B) shall not oblige SQM or its Subsidiaries to disclose any information that could reasonably be expected, in the opinion of legal counsel, to result in a waiver of attorney-client privilege as a consequence of such disclosure. (d) The CODELCO Party hereby undertakes to always enforce its rights under this Section 2.9, in compliance with the antitrust rules and provisions contained in Article 6 below and the rules, provisions and agreements relating to the investigation referred to in Section 7.2(d). Execution Version 31 2.10 CORFO-Tarar Contracts (a) Prior to the Effective Date of the Joint Venture, the CODELCO Party shall proceed to the execution of the CORFO-Tarar Contracts with CORFO, which must contain the same terms and conditions as the drafts sent by CORFO to the Parties for purposes of this Agreement. Any modification to such drafts shall be agreed upon by both Parties and CORFO. (b) After the execution of the CORFO-Tarar Contracts, the CORFO resolution that approves them shall comply with the process of prior control of legality of the Comptroller's Office, according to the provisions set forth in Article 14, No. 14.3, of Resolution No. 7, of 2019, of that control body, or the rule that replaces or modifies it. 2.11 Amendment to CORFO-SQM Contracts (a) Prior to the Effective Date of the Joint Venture, the SQM Party (and other relevant SQM Subsidiaries) shall proceed to the execution of the CORFO-SQM Contracts with CORFO, which must contain the same terms and conditions as the drafts sent by CORFO to the Parties for purposes of this Agreement. Any modification to such drafts shall be agreed upon by both Parties and CORFO. (b) After the execution of the CORFO-SQM Contracts, the CORFO resolution that approves them shall comply with the process of prior control of legality of the Comptroller's Office, according to the provisions set forth in Article 14, No. 14.3, of Resolution No. 7, of 2019, of that control body, or the rule that replaces or modifies it. 2.12 CCHEN The SQM Party, with respect to the amendments to the CORFO-SQM Contracts, and the CODELCO Party, with respect to the CORFO-Tarar Contracts, shall request CCHEN's approvals, in accordance with the provisions set forth in Law 16.319. Moreover, the Operating Company shall other obligations imposed by the Law, the regulations and the agreements of CCHEN within its jurisdiction. 2.13 SII Ruling After the Agreement Date and before the Effective Date of the Joint Venture CODELCO Party shall obtain a pronouncement of the Servicio de Impuestos Internes de Chile, under Article 6(A) N°2 of the Tax Code, to confirm that (i) the taxpayer of the State Specific Tax established in Article 2° of the Decree Law N°2,398 of 1978 is CODELCO and, (ii) that the companies Tarar, SDC and the Operating Company, in which CODELCO has or will have an equity interest, either directly or indirectly are not taxable persons of the referred tax. (the “SII Ruling”). 2.14 Commercialization The commercialization of the Business Products the until the Effective Date of the Joint Venture will continue in the Ordinary Course of SQM Salar and the Business Subsidiaries, and as from that date, it will be governed by the terms agreed upon by the Parties in the Shareholders' Agreement and its annexes. 2.15 Potassium Offtake Contract (a) The extraction, production and commercialization of the Potassium Products is part of the Operating Company Business, the result of which will be
Execution Version 32 distributed among the Parties pro rata to their shareholding, except during the First Period, which will be subject to the rules indicated in the Shareholders' Agreement. (b) On the Effective Date of the Joint Venture, the SQM Party (or a Subsidiary of the SQM Party) and the Operating Company shall enter into an offtake agreement whereby the SQM Party may purchase one hundred percent (100%) of the Potassium Products produced by the Operating Company, on such other terms and conditions as the Parties may agree pursuant to the basic principles set forth in Annex 2.15 (the "Potassium Offtake Contract"). 2.16 Common Policies Endorsement (a) After the Agreement Date, the SQM Party shall use its Best Efforts to cause the insurers of the policies set forth in paragraph (i) of Annex 2.16 (the "Common Policies") subscribe an endorsement on substantially similar terms to those annexed to paragraph (ii) of Annex 2.16. (b) In the event that one or more of the insurance companies of the Common Policies do not subscribe the endorsements referred to in paragraph (a) above, the SQM Party shall make its Best Efforts so that in any case such insurance companies include in the respective Common Policies a clause whereby the parties to such Common Policy undertake not to modify or cancel the Common Policy without the prior written consent of SQM Salar. (c) If one or more insurance companies under the Common Policies do not agree to subscribe the endorsement under the terms of paragraph (a) above, nor to modify the respective Common Policy under the terms of paragraph (b) above, the SQM Party hereby undertakes in any case: (i) not to cancel or modify any of the Common Policies without the prior written consent of SQM Salar, (ii) to diligently process any claim that SQM Salar or the Business Subsidiaries make under a Common Policy, and (iii) to transfer to SQM Salar, within thirty (30) days of receipt, the proportion corresponding to such entity of any amount that the SQM Party receives from an insurance company under the Common Policies for claims affecting SQM Salar or any of the Business Subsidiaries. (d) For the avoidance of doubt, the SQM Party's Best Efforts will in no event consider the payment of any sum to the insurance companies under the Common Policies. 2.17 Power Contracts Protocol Prior to the Effective Date of the Joint Venture, SQM and SQM Salar shall execute the Power Contracts Protocol, in terms substantially similar to those included in the term sheet attached as Annex 2.17. SECTION 3 - Merger between SQM Salar and Tarar 3.1 Merger Preparation (a) The Parties shall take, and shall cause to be taken, all necessary steps, instances and corporate acts, of themselves or their Subsidiaries, to consummate the Merger, including the holding of board meetings of CODELCO and SQM, and the Merger Meetings, in accordance with Section 3.2. Execution Version 33 (b) The agreements for the Merger to be adopted at the Merger Meetings will establish that in the Merger, SQM Salar will absorb Tarar, the former acquiring all the assets and liabilities of the latter, which will be dissolved. SQM Salar shall maintain the taxable value of Tarar's assets and liabilities, in accordance with the reorganization rules set forth in section 64, subsection four of the Chilean Tax Code, complying with all the requirements established by Chilean Law. (c) SQM Salar shall cause the SQM Salar Merger Meeting to be held on the day of the Closing in order to obtain the approval of the SQM Salar shareholders for the Merger. SDC shall cause the Tarar Merger Meeting to be held on the same date as the SQM Salar Merger Meeting in order to obtain the approval of the Tarar shareholders. (d) The agreements for the Merger shall also establish an exchange ratio to achieve the following shareholdings in the Operating Company, which after the Merger shall have a capital divided into one hundred million four (100,000,004) shares: (i) CODELCO, through SDC, will own fifty million and one (50,000,001) Series A Shares and two (2) Series C Shares, which will correspond to the shares received in exchange as a result of the Merger. (ii) SQM directly or through a Subsidiary will own forty-nine million nine hundred ninety-nine thousand nine hundred ninety-nine (49,999,999) Series B Shares, which will correspond to the same common shares issued by SQM Salar prior to the Merger, one (1) Series D Share and one (1) Series E Share. (e) The agreements for the Merger shall provide that the Merger shall take effect and materialize on the same day of the Merger Meetings, for which purpose the Parties undertake, respectively and, if applicable, to notarize in a public deed the minutes of the respective Merger Meeting on the same day it takes place and to proceed diligently to register and publish an extract thereof in accordance with Chilean Law. 3.2 Approval of the Merger by shareholders (a) The SQM Salar Merger Meeting will be held on the day of the Closing. Except with the prior written approval of CODELCO, no matters other than the resolutions relating to the Merger, which shall include the matters referred to in Section 4.2. below, shall be submitted to the SQM Salar Merger Meeting for approval by the SQM Salar shareholders. The SQM Party agrees to vote in favor of the approval of the Merger provided always that it is on the terms agreed upon in this Agreement. (b) The Tarar Merger Meeting will be held on the same day as the SQM Salar Merger Meeting. Unless previously approved in writing by SQM, no matters other than resolutions related to the Merger and approval of the bylaws of the Operating Company will be submitted to the Tarar shareholders for approval at the Tarar Merger Meeting. CODELCO and SDC agree to vote in favor of the approval of the Merger, provided always that it is consistent with the terms agreed in this Agreement. (c) From and including the Agreement Date until the Closing, the SQM Party may not sell, transfer, promise to sell, levy a Lien on, or otherwise dispose of, or perform any act or execute any contract with respect to its SQM Salar Shares or its shares in SQMK (or the SQM Subsidiary that succeeds it in the ownership of the SQM Salar Shares), as applicable, that would result in the SQM Party not having the full and exclusive ability to vote its SQM Salar Shares approving the Merger or the loss of the quorum necessary to approve the Merger at the SQM Salar Merger Meeting. Moreover, from and including the Agreement Date through and including the Closing, the CODELCO Execution Version 34 Party may not sell, transfer, promise to sell, levy a Lien on, or otherwise dispose of, or perform any act or execute any contract with respect to its Tarar Shares or its shares in SDC, as applicable, that would result in SDC not having the full and exclusive ability to vote its Tarar Shares approving the Merger or the loss of the quorum necessary to approve the Merger at the Tarar Merger Meeting. (d) The restriction contained herein shall not apply in the case of direct or indirect transfers of shares in the Operating Company to another SQM Subsidiary or CODELCO Subsidiary, as applicable, and only to the extent that such transfer does not imply: (x) a change in the legal regime applicable to the Operating Company, its shareholders, directors or officers; or (y) an increase in the Taxes to which the Operating Company or the Party not effecting the transfer may be subject, unless: (i) such increase in the Tax burden is borne entirely by the acquirer of the shares, and the acquirer shall be obliged to hold the Operating Company and the non-transferring Party harmless and indemnified; and (ii) the transferring Party is jointly and severally liable for the performance of such obligation. Article 4 - Operating Company Corporate Governance 4.1 Shareholders' Agreement: At the Closing, SDC and SQM (or its designee), as shareholders of the Operating Company in connection with the Merger, shall execute the Shareholders' Agreement in accordance with the same terms as the format attached hereto as Annex 4.1. 4.2 Corporate Governance (a) During the First Period, the Board of Directors of the Operating Company shall be composed of six (6) members, and each Party shall appoint three (3) members. The Chairman of the Board of Directors will be a director appointed by CODELCO. The vice-chairman of the Board of Directors will be a director appointed by SQM. None of them will have a casting vote. (b) In order to implement the management structure of the Operating Company as set forth in paragraph (a) above, the SQM Salar Merger Meeting shall also agree on the renewal of the Board of Directors of the Operating Company. The CODELCO Party shall inform the SQM Party prior to the Merger Meetings of the persons it will appoint as directors of the Operating Company and the person it proposes as chairman of the Board of Directors. (c) Immediately after the Merger Meetings, the Board of Directors shall meet to: (i) appoint the Chairman of the Board of Directors proposed by CODELCO; (ii) appoint the Vice Chairman of the Board of Directors proposed by SQM; (iii) appoint or ratify the General Manager and the Finance Manager of the Operating Company; and (iv) establish the Operating Company's power structure for the First Period, pursuant to Annex 4.2(c). SECTION 5 - Community Relations 5.1 Participation between Companies and Communities (a) The dialogue process has as one of its main purposes to co-construct a governance for the permanent relationship with the Atacameño Communities of the Atacama La Grande Indigenous Development Area, which allows participation in all Execution Version 35 matters of common interest related to the productive activities of the Operating Company. The agreements reached through consensus will be reflected in an operating regulation, which will be incorporated into the Agreement through the legal instruments to be agreed upon. (b) As of the Agreement Date, the Parties and the Atacameño Communities continue their work of dialogue with a view to agree, within the framework of governance to be defined, one or more binding agreements for the CODELCO Party, the SQM Party and the Atacameño communities of the Atacama La Grande Indigenous Development Area that subscribe to it, hereinafter the "Community Commitments". (c) The Community Commitments reached in this process will be incorporated into the Agreement through the legal instruments agreed upon, and must be fulfilled by the Operating Company as of the Effective Date of the Joint Venture, as well as the existing agreements and programs, until the effective date agreed therein. 5.2 Indigenous Consultation (a) Prior to the Effective Date of the Joint Venture CORFO must have concluded an indigenous consultation process regarding the administrative measures that CORFO must order in relation to the activities of the CODELCO Party and the SQM Party in the Salar de Atacama that are likely to directly affect the indigenous peoples, in accordance with the applicable legislation in force and the principles of ILO Convention No. 169. (b) After the Effective Date of the Joint Venture, once the Salar Futuro Project is defined with a level of detail sufficient for its entry into the Environmental Impact Assessment System, a process of indigenous consultation will be designed and developed on the matters that could directly affect them. SECTION 6 – Free Competition, Consent and Authorizations 6.1 Restricted Information Management Protocol (a) Pursuant to the Protocol, the Parties organized a "Clean Team" to carry out the CODELCO Party's due diligence process on SQM Salar, the Business Subsidiaries and the Business Assets and to evaluate the matrix ideas, technological changes and Permits required for the Salar Futuro Project. The Protocol supplemented the regulation of the exchange of Confidential Information and Restricted Information between the Parties already contained in the Confidentiality Agreement, including regulation on the operation of the Clean Team, access to information and meetings between Representatives and advisors of the Parties. (b) The Parties agree that the rules set forth in the Protocol, in all that is not contrary to the provisions of this Agreement, shall continue to govern the handling of Restricted Information between the Parties until the Effective Date of the Joint Venture. References in the Protocol to the "Agreement" (which in the protocol refers to the Confidentiality Agreement), shall be understood to mean this Joint Venture Agreement, in particular Section 13.2 which deals with confidentiality obligations, and which substantially replicate the content of the Confidentiality Agreement and supersede it as of this date. (c) Exchanges of information between the Parties in the context of the preparation of the notifications, submissions and applications required to obtain Chilean
Execution Version 36 MCA Approval and Foreign MCA Approvals referred to in Sections 6.2 and 6.3 and, in general, on the occasion of the procedures necessary to obtain such approvals, authorizations or equivalent acts by the competent Governmental Authorities, shall be carried out in compliance with the applicable Antitrust Law, as applicable, and any other applicable legislation, in strict compliance with the Confidentiality Agreement, the Protocol and Section 13.2. 6.2 Merger Control Approval (MCA) in Chile (a) Within forty (40) Business Days following the Agreement Date, the Parties shall file with the FNE a merger notification regarding the Joint Venture, and other appropriate documentation to obtain Chilean MCA Approval. (b) Each Party shall use its Best Efforts to take all actions necessary to make such filing promptly and in accordance with the Antitrust Law, in order to enable the implementation of the Joint Venture. In connection with such Best Efforts, each Party shall, to the extent permitted by applicable Chilean Law: (i) cooperate in good faith in all respects with the other Party and with independent counsel selected by each Party to obtain Chilean OC Approval; (ii) keep the other Party informed of any notice received by such Party, or sent by such Party, to the FNE, the Tribunal for the Defense of Free Competition or the Supreme Court of Chile, as applicable. No Party may independently participate in any formal meeting or substantive discussions with the FNE, the Tribunal for the Defense of Free Competition or the Supreme Court of Chile in connection with the acts required to obtain Chilean MCA Approval without giving reasonable advance notice to the other Party of such meeting or discussion; (iii) allow the other Party to review and comment, on terms reasonable to the other Party, on any communication, submission or documentation provided to the FNE, the Tribunal for the Defense of Free Competition or the Supreme Court of Chile, and to discuss between the Parties prior to any meeting, whether in person or virtually, with the FNE, the Tribunal for the Defense of Free Competition or the Supreme Court of Chile, and, to the extent possible under the applicable Chilean Law, give the other Party the opportunity to attend and participate in such meetings, whether face-to-face or virtual, in accordance with the Chilean Antitrust Law and any other applicable Chilean Law; (iv) negotiate in good faith with the other Party behavioral or purely informational measures that may be offered for obtaining Chilean MCA Approval; and (v) negotiate in good faith with the other Party the acceptance of conditions or restrictions of a behavioral or mere information nature that the respective Governmental Authority may require for the granting of the Chilean MCA Approval. 6.3 Merger Control Approval in Other Jurisdictions (a) The Parties shall submit to the foreign Governmental Authorities listed in Annex 6.3 under the heading "Competent Governmental Authorities", the notifications, submissions or applications to obtain the Foreign MCA Approvals. Such notifications, submissions or applications, or in the case of a draft notification, submission or application if applicable in any jurisdiction in accordance with the respective Antitrust Execution Version 37 Law, shall be submitted by the dates specified in Annex 6.3 under the heading "Estimated Filing Date". (b) It is hereby placed on record that the list of jurisdictions, the foreign Governmental Authorities and Regulatory Governmental Authorities and Regulatory Filings specified in Annex 6.3 corresponds to the best understanding of the Parties, based on the analysis of the Parties' independent counsel, of those Foreign MCA Approvals that would be mandatory or recommended in those jurisdictions where the merger control regime is voluntary in accordance with the Antitrust Law of each jurisdiction. If, prior to Closing, the Parties determine that it is necessary or advisable in those jurisdictions where the regime is voluntary, based on the analysis of the Parties' independent counsel, to obtain an approval, authorization or equivalent act from a relevant foreign Governmental Authority other than those listed on Annex 6.3, the Parties shall jointly determine how best to proceed so as to comply with the applicable Antitrust Law and make Best Efforts not to delay the implementation of the Joint Venture. (c) Each Party shall use its Best Efforts to take all measures necessary to make such notices, filings and requests promptly and in accordance with applicable Antitrust Laws to enable implementation of the Joint Venture. In connection with such Best Efforts, each Party shall, to the extent permitted by applicable Foreign Law: (i) cooperate in good faith in all respects with the other Party and with the outside counsel selected by each Party to obtain each Foreign MCA Approval; (ii) keep the other Party informed of any notice received by such Party, or sent by such Party, to the competent Governmental Authorities. Neither Party may independently participate in any formal meeting, or discussions of a substantive nature, with the competent Governmental Authorities in connection with the acts required for obtaining the Foreign MCA Approvals, without giving reasonable advance notice to the other Party of such meeting or discussion; (iii) permit the other Party to review and comment, on terms reasonable to the other Party, on any communication, submission or documentation provided to the competent Governmental Authorities, and discuss between the Parties prior to any meeting, whether in person or virtually, with the competent Governmental Authorities and, to the extent possible under applicable Foreign Law, give the other Party the opportunity to attend and participate in such meetings, whether in person or virtually, in accordance with applicable Competition Laws and any other applicable Foreign Law; (iv) negotiate in good faith with the other Party behavioral or mere information measures that may be offered for obtaining a Foreign OC Approval; and (v) negotiate in good faith with the other Party the acceptance of conditions or restrictions of a behavioral or mere information nature that the respective Governmental Authority may require for the granting of the Foreign MCA in Chile. 6.4 Consents and Authorizations (a) As from the Agreement Date, the Parties shall cooperate, and use their Best Efforts, to make the Regulatory Filings (including Foreign Investment Approvals) and Consent Applications and to obtain all Consents and Authorizations listed on Annex 6.4. If, prior to Closing, the Parties determine that it is necessary, based on review by independent counsel for the Parties, to make Regulatory Filings (including Foreign Execution Version 38 Investment Approvals) and/or Consent Solicitations other than those listed in such annex, the Parties shall jointly determine how best to proceed so as to comply with applicable and unanticipated Foreign Laws and to use Best Efforts not to delay the implementation of the Joint Venture. The Parties shall cooperate with each other and use their Best Efforts to prepare or produce as soon as possible all documentation necessary to make Regulatory Filings, Consent Solicitations and obtain Consents and Authorizations. It is placed on record that the provisions set forth in this section exclude those relating to Chilean MCA and Foreign MCA which are governed by Sections 6.2 and 6.3 respectively. (b) Subject to the terms and conditions of this Agreement, each Party shall use its Best Efforts to take, and cause to be taken, in good faith, all actions, and to perform, all acts necessary or advisable under applicable Laws, to lift or terminate any Order or Lien that adversely affects its ability to carry out the implementation of the Joint Venture; the execution of the transactions contemplated by the Transaction Documents; or to achieve compliance with the Conditions Precedent pursuant to Article 7. (c) Each Party shall reasonably cooperate with the other for such purpose and shall provide information and assistance to the other Party as may be reasonably necessary in connection with any submission, notice or request made by or on behalf of the other Party to any Person, including a Governmental Authority (d) The Parties shall ensure that all of their Regulatory Filings and Consent Solicitations materially comply as of the date of their submission with the requirements of the Antitrust Law and other applicable Laws. Each Party shall make available to the other all information reasonably required by the other Party to make Regulatory Filings and Consent Solicitations for which it is responsible in accordance with Annex 6.4, and further agrees to make available to the other Party in the future all necessary information required to respond to requests for additional information from any Governmental Authority. (e) The exchange of information between the Parties on the occasion of submissions and requests relating to Consents and Authorizations under this Section shall be subject to the provisions of Section 6.1. SECTION 7 - Conditions Precedent 7.1 Conditions Precedent applicable to all the Parties The respective obligations of the Parties to consummate the Closing shall be subject to the satisfaction or waiver by both Parties, at or prior to the Closing, of the following Conditions Precedent: (a) CORFO-SQM Contracts and CORFO-Tarar Contracts. CORFO and the respective parties to the amendment of the CORFO-SQM Contracts and the execution of the CORFO-Tarar Contracts must have subscribed such instruments, in the terms indicated in Sections 2.10 and 2.11, which must be acceptable to each of the Parties, and must have completed their full processing before the Comptroller's Office, and CCHEN must have granted its authorization thereof in terms acceptable to each of the Parties; (b) Consents and Authorizations. The Chilean MCA Approval, the Foreign MCA Approvals and the Foreign Investment Approvals must have been obtained without Execution Version 39 any conditions other than those agreed to pursuant to Sections 6.2(b)(iv) and 6.2(b)(v), and Sections 6.3(c)(iv) and 6.3(b)(v), by the respective Governmental Authorities, and all Consents and Authorizations required for the implementation of the Joint Venture contained in Annex 6.4 shall have been granted by the relevant Person; (c) Absence of Order; Illegality. The request dated May 21, 2024 filed by Inversiones TLC SpA before the CMF has not been accepted and no Governmental Authority of competent jurisdiction has issued an Order that is in force and that prohibits or makes illegal the execution of the transactions contemplated in the Transaction Documents or the implementation of the Joint Venture; (d) Absence of Material Adverse Effect. Between the Agreement Date and the Effective Date of the Joint Venture, no Material Adverse Effect must have occurred with respect to SQM Salar and the Business Subsidiaries, or with respect to Tarar; and (e) Acts and Deliverables of the Parties. All acts and deliverables of the Parties, pursuant to Section 8.2, to be performed or delivered at or prior to the Closing, including the Maricunga Asset Purchase and Sale and the Potassium Offtake Contract. 7.2 Conditions Precedent applicable to CODELCO Party The obligation of the CODELCO Party to consummate the Closing shall be subject to the satisfaction or waiver by the CODELCO Party, at or prior to the Closing, of the following conditions precedent: (a) Representations and Warranties of the SQM Party, the Representations and Warranties made by the SQM Party in Article 11 shall be true and correct in their material respects as of the Agreement Date and the Reference Date as if made on each such date (except for those representations and warranties that relate to a specific date and are required to be true and correct only as of such specific date); (b) Compliance with SQM's obligations. The SQM Party shall have complied, in all material respects, with the material obligations, commitments and agreements undertaken in this Agreement and the other Transaction Documents; (c) SQM Reorganization. That all acts necessary to carry out the SQM Reorganization (for the avoidance of doubt, including the transfer of the Korean Business after the Reference Date and prior to the Effective Date of the Joint Venture, and excluding the estacamento salitral referred to in Section 13.8, have been performed in accordance with the provisions of this Agreement; (d) Compliance. That the investigation by the U.S. Securities and Exchange Commission (SEC) named “In the Matter of Sociedad Quimica y Minera de Chile S.A. (HO-14756)”, is substantially completed and has not [***]; (e) Acts and Deliverables of the SQM Parties. All acts and deliverables of the CODELCO Party pursuant to Section 8.4 shall be performed or delivered on or prior to the Closing. 7.3 Conditions Precedent applicable to SQM Party The obligation of the SQM Party to consummate the Closing shall be subject to the satisfaction or waiver by the SQM Party, at or prior to the Closing, of the following conditions precedent:
Execution Version 40 (a) Representations and Warranties of the CODELCO Party, the Representations and Warranties made by the CODELCO Party in Article 12 shall be true and correct in their relevant respects as of the Agreement Date and the Reference Date as if made on each such date (except for those representations and warranties which relate to a specific date and which are required to be true and correct only as of that specific date); (b) SII Ruling. The Servicio de Impuestos Internes shall have issued the SII Ruling; (c) Compliance with CODELCO's obligations. The CODELCO Party shall have complied, in all material respects, with the material obligations, commitments and agreements undertaken in this Agreement and the other Transaction Documents; (d) Potassium Offtake Contract. The Parties shall have entered into a Potassium Offtake Contract on terms and conditions acceptable to both Parties; and (e) Acts and Deliverables of the Parties CODELCO. All acts and deliverables of the CODELCO Party pursuant to Section 8.4 shall be performed or delivered on or prior to the Closing. 7.4 Effect of the Waiver of a Condition Precedent The waiver of a Condition Precedent implies that the waiving Party may not excuse itself from attending the Closing by alleging the breach of such condition precedent, but in no way prevents or restricts the waiving Party from exercising its other rights, remedies, remedies or claims under the Agreement for the lack of truthfulness or correctness of a representation and warranty of the other Party or for the failure of the other Party to perform an obligation. SECTION 8 - Closing 8.1 Closing The execution of the Merger Meetings, the execution of the Shareholders Agreement, the Maricunga Asset Purchase and Sale Agreement, the IP License for CODELCO, the IP License for SQM, the Transitory Services Agreement, the Potassium Offtake Contract, and the execution of the other agreements mentioned in Sections 8.2, 8.3 and 8.4 (the "Closing") shall take place at noon (Santiago, Chile time), at the offices of Carey y Cia. Ltda. offices, on the fifth (5th) Business Day following the day on which the last of the Conditions Precedent (other than those which by their nature must be fulfilled at the Closing) has been fulfilled or waived, as the case may be, but in no event prior to January 1, 2025. 8.2 Acts and Deliverables of the Parties At or prior to the Closing, the Parties shall mutually perform, deliver or instruct to deliver the following: (a) Evidence that it has obtained, without conditions other than those negotiated by the Parties pursuant to Sections 6.2(b)(iv), 6.2(b)(v), 6.3(c)(iv) and 6.3(c)(v), Chilean OC Approval and Foreign OC Approvals, pursuant to Sections 6.2 and 6.3 and Foreign Investment Approvals; Execution Version 41 (b) A copy of the Maricunga Asset Purchase and Sale Agreement and a copy of the Potassium Offtake Contract, duly signed by the parties to each of them; (c) A copy of the IP License for the Operating Company, the IP License for CODELCO and the IP License for SQM, duly signed by the parties of each of them; (d) A copy of the Shareholders' Agreement, duly signed by the parties thereto; and All such additional acts, instruments, documents and certificates contemplated in this Agreement and agreed upon by the Parties in connection with the Closing. 8.3 Acts and Deliverables of the SQM Party At or prior to the Closing, the SQM Party shall perform, deliver or instruct to deliver to the CODELCO Party the following: (a) A certificate signed by a duly authorized Representative of SQM, confirming that the SQM Reorganization was carried out in accordance with the provisions set forth in Section 2.5; (b) A copy of the Consents and Authorizations that are the responsibility of the SQM Party, in accordance with Article 6; (c) A Copy of the amendments to the CORFO-SQM Contracts, duly signed by the SQM Party (and other applicable SQM Subsidiaries) and CORFO; (d) A Copy of the minutes of the SQM Salar Merger Meeting approving the Merger under the terms of Article 3, together with its respective notarization in a public deed; (e) The shareholders' registry of SQM Salar, where the Merger and the corresponding shares of the Operating Company are duly registered in the name of SDC; (f) A copy of the Transitory Services and Supply Contracts, and a copy of the Power Contracts Protocol, duly signed by the parties to each of them; and (g) An authorized copy of the current certificates of ownership, mortgages and liens, prohibitions and interdictions and litigation of the Mining Rights, the Real Estate and the Water Rights with a term of at least sixty (60) days prior to the Closing, evidencing the ownership of the Operating Company or CORFO, as applicable, over the same and the absence of Liens with respect thereto, except for those established in the CORFO-SQM Contracts; and (h) A certificate signed by a duly authorized Representative of SQM, dated as of the date of Closing, stating that the conditions set forth in Sections 7.1(c) (Consents and Authorizations), 7.2(a) (Representations and Warranties of SQM), 7.2(b) (Performance of SQM Obligations) and 7.2(d) (Compliance) have been fulfilled or satisfied in the manner required under this Agreement. The CODELCO Party (in its sole and absolute discretion) may waive the enforcement of some or all of the obligations of the SQM Party contemplated in this Section, in the terms of Section 7.4. Execution Version 42 8.4 Acts and Deliverables of the CODELCO Parties. At or prior to the Closing, the CODELCO Party shall perform, deliver or instruct to deliver to the SQM Party the following: (a) A copy of the Consents and Authorizations that are the responsibility of the CODELCO Party, in accordance with Article 6; (b) A copy of the CORFO-Tarar Contracts, duly signed by CODELCO and CORFO; (c) A copy of the minutes of the Tarar Merger Meeting, in accordance with Article 3, together with its respective notarization in a public deed; and (d) A certificate signed by a duly authorized Representative of CODELCO, dated as of the date of Closing, stating that the conditions set forth in Sections 7.1(c) (Consents and Authorizations), 7.3(a) (Representations and Warranties of CODELCO) and 7.3(b) (Performance of CODELCO's Obligations) have been satisfied or complied with in the manner required under this Agreement. The SQM Party (in its sole and absolute discretion) may waive the performance of some or all of the obligations of the CODELCO Party contemplated in this Section, in the terms of Section 7.4. 8.5 Closing Procedures. All procedures to be adopted by the Parties and all documents to be executed and delivered by them at the Closing shall be deemed to have been adopted and executed simultaneously and, except to the extent permitted in this Agreement, no procedure shall be deemed to have been adopted and no document executed or delivered until all of them have been adopted, executed and delivered. SECTION 9 - Working Capital and Dividends 9.1 Working Capital Adjustment (a) No later than March 31, 2025, the Operating Company shall prepare and deliver to the Parties: (i) A copy of the Reference Balance Sheet prepared in accordance with the Reference Accounting Policies, applied in the same manner in which SQM Salar applied them when preparing the Latest Audited Financial Statements, so that the differences between the Reference Balance Sheet and the Latest Audited Financial Statements reflect exclusively variations in the respective accounts, resulting from movements due to events occurring in said accounts between both dates, and not changes resulting from modifications of criteria, principles, assumptions, interpretations or the manner of applying certain accounting policies; and (ii) A written communication specifying, separately and including reasonable detail, its calculation with respect to the following amounts as of the Reference Date: (1) Operating Assets, Operating Liabilities, Cash and Debt; Execution Version 43 (2) The amount of the Deferred Tax Adjustment; (3) The amount of the CAPEX Adjustment; and (4) The amount of the Working Capital Adjustment calculated using amounts (1), (2) and (3) (the "Capital Adjustment Proposal"). (b) The CODELCO Party shall have thirty (30) Business Days from the date of receipt of the Working Capital Adjustment Proposal to review it (the "Review Period"). (c) The CODELCO Party may object to the Working Capital Adjustment Proposal exclusively by invoking one of the following grounds (the "Grounds for Objection"): (i) The Reference Balance Sheet was not prepared in accordance with the Reference Accounting Policies applied in the manner set forth in Section 9.1(a)(i); (ii) Operating Assets, Operating Liabilities, Cash and/or Debt as of the Reference Date were not calculated in accordance with the definitions contained in this Agreement; (iii) The Deferred Tax Adjustment at the Reference Date was not calculated in accordance with Annex 9; (iv) The CAPEX Adjustment as of the Reference Date was not calculated in accordance with Annex 9; (v) The Working Capital Adjustment was not calculated in the manner set forth in Section 9.1(a); and (vi) The Working Capital Adjustment contains one or more arithmetic errors. (d) The CODELCO Party may not object to the Proposed Working Capital Adjustment on the grounds that the Reference Balance Sheet (or the Operating Assets, Operating Liabilities, Cash and/or Debt determined thereunder) does not conform to a particular accounting standard or principle, other than the Reference Accounting Policies, unless the Reference Accounting Policies have not been applied in the manner set forth in Section 9.1(a)(i). (e) If the CODELCO Party disagrees with the Working Capital Adjustment Proposal on one or more of the Grounds for Objection, the CODELCO Party shall so state to the SQM Party no later than the last day of the Review Period, by sending a written communication (a "Deadlock Communication") in which it (i) states the invoked Grounds for Objection, (ii) explains in sufficient detail the reasons justifying its objection, and (iii) formulates an alternative Working Capital Adjustment proposal (each, an "Alternative Working Capital Adjustment Proposal"), which shall also include its proposal for: (a) amount of Operating Assets, Operating Liabilities, Cash and Debt as of the Reference Date calculated in accordance with the Reference Accounting Policies; (b) calculation of Deferred Tax Adjustment as of the Reference Date calculated in accordance with Annex 9; (c) calculation of the Reference Date CAPEX Adjustment calculated in accordance with Annex 9 and (c) Working Capital Adjustment calculated in the manner set forth in Section 9.1(a). (f) If the CODELCO Party fails to send a Deadlock Communication within the deadline, the determination of the Working Capital Adjustment contained in the Working Capital Adjustment Proposal shall become final and binding on the Parties.
Execution Version 44 (g) If the CODELCO Party sends a Deadlock Communication within the deadline, the SQM Party will have a period of twenty (20) Business Days from the receipt of the Deadlock Communication to review it ("Deadlock Review Period"). (h) If the SQM Party disagrees with the Alternative Working Capital Adjustment Proposal received, it shall so state to the CODELCO Party no later than the last day of the Deadlock Review Period, by sending a written communication (the "Alternative Proposal Deadlock Communication") in which it (a) specifies the matter or matters with respect to which it disagrees (each a " Matter of Deadlock") and (b) explains in sufficient detail the reasons justifying its disagreement. (i) In the event that one or more Deadlock Matters exist, the Parties shall attempt to resolve the Deadlock Matter(s), in good faith, during a period of fifteen (15) Business Days. If all Deadlock Matters are resolved directly by the Parties in accordance herewith, the Parties shall set forth such agreement, specifying the determination of the Working Capital Adjustment, in a written document signed by both Parties (j) If, however, one or more Deadlock Matters remain unresolved after the expiration of such fifteen (15) Business Day period, either Party may, by sending a written communication to the other Party (the "Request for Determination"), request that the outstanding Deadlock Matter(s) be determined by an external auditing firm (the "Audit Firm") from among those referred to in Section 4.13 of the Shareholders' Agreement, other than PriceWaterhouseCooper ("PWC") and Deloitte, chosen by mutual agreement, in good faith, between the Parties. If, within a period not exceeding seven (7) Business Days from receipt of the Request for Determination, the Parties do not agree on the appointment of the Auditor, PWC shall make the appointment from among one of the external auditors mentioned in Section 4.13 of the Shareholders' Agreement other than Deloitte. (k) The Auditor shall act as an independent third party expert and not as an arbitrator. (l) The Auditor shall make its determination within thirty (30) days, extendable once, at the Auditor's request, for another fifteen (15) days according to the following rules: (i) It shall decide only on those Deadlock Matters that the Parties have not been able to resolve between themselves; (ii) It shall do so strictly in accordance with the provisions of this Agreement and its Annexes. (iii) It shall be based exclusively on the information contained in the Working Capital Adjustment Proposal, in the Alternative Working Capital Adjustment Proposal(s) submitted in due time by the Parties, in the Alternative Proposal Deadlock Communication and in the written submission that each Party has delivered within the framework of the procedure described herein. (iv) In deciding on Deadlock Matters relating to the fact that the Operating Assets, Operating Liabilities, Cash and Debt as of the Reference Date were not calculated in accordance with the Reference Accounting Policies as applied in the manner set forth in Section 9.1(a)(i), the Auditor shall exclusively apply the Reference Accounting Policies in the same manner in which SQM Salar applied them in the preparation of the Latest Audited Financial Statements, so that the differences between the Reference Balance Sheet and the Latest Audited Financial Statements exclusively reflect variations in the respective accounts, Execution Version 45 resulting from movements due to events occurring in said accounts between both dates, and not changes resulting from modifications of criteria, principles, assumptions, interpretations or manner of applying certain accounting policies. (v) In deciding on Deadlock Matters relating to the calculation of the Deferred Tax Adjustment as of the Reference Date or the CAPEX Adjustment as of the Reference Date, the Auditor shall apply Annex 9 only. (vii) With respect to each Matter of Deadlock, the Auditor's decision shall be solely and exclusively to accept or reject the Grounds for Objection invoked by the Parties. (viii) In addition to making a determination with respect to each of the Deadlock Matters submitted for its review, the Auditor shall make a determination of the Working Capital Adjustment, reflecting its decision with respect to the Deadlock Matters submitted for its consideration, and maintaining the determinations made by the Parties that were not in dispute (the "Auditor's Decision"). (m) The Auditor's Decision shall be final, conclusive and binding on the Parties, as the Auditor's decision shall be deemed to have been made as a legitimate business decision and not as the resolution of a dispute subject to arbitration in accordance with the procedure agreed upon by the Parties. If the Auditor settles all the Deadlock Matters in favor of a Party, the other Party shall pay the Auditor's fees and expenses in full. If the Auditor resolves some of the Deadlock Matters in favor of one Party and others in favor of the other Party, both Parties shall pay the Auditor's fees and expenses on a 50/50 basis. (n) "Working Capital Adjustment Determination Date" shall mean the earlier of: (i) the date on which the Review Period would have ended without the CODELCO Party having filed a Notice of Deadlock, the date on which the Parties have resolved between themselves all Deadlock Matters under (j) above, or (iii) the date on which both Parties have been notified of the Auditor's Decision. (o) If the Dixin Adjustment is applicable pursuant to Section 10.3(e), the rules for the determination of the Working Capital Adjustment included in this Section 9.2. shall also apply to the determination of the Dixin Adjustment mutatis mutandis. In such sense, the determination of the Dixin Adjustment shall be made simultaneously and under the same process as the Working Capital Adjustment, as if it were an additional item thereof, being included in the determination of the Working Capital Adjustment for purposes of the Adjustment Account referred to in Section 9.2 below. 9.2 Adjustment Account (a) No later than ten (10) Business Days from the later of (y) the Working Capital Adjustment Determination Date and (z) the Effective Date of the Joint Venture, the Parties shall proceed as follows: (i) If the Working Capital Adjustment determined in accordance with Section 9.1 is zero, no adjustment is necessary. (ii) If the Working Capital Adjustment determined pursuant to Section 9.1 is a negative figure or, net of the Pre-Closing SQM Distributions, results in a negative figure, the Parties, in their capacity as shareholders of the Operating Company, shall approve a capital increase in an amount equal to the Working Capital Adjustment determined pursuant to Section 9.1 (less the Pre-Closing SQM Distributions), through a mechanism that: (1) does not alter the economic and political rights that correspond to each of the Parties under the Shareholders' Execution Version 46 Agreement in the First Period and Second Period, and (2) does not have an adverse tax impact for any of the Parties; capital increase that must be subscribed and paid by the SQM Party, in cash, within the five (5) Business Days following the date on which the capital increase is fully legalized. (iii) If the Working Capital Adjustment determined pursuant to Section 9.1 is a positive figure, the Parties shall cause the Operating Company to recognize an account payable in favor of the SQM Party in an amount equal to the Working Capital Adjustment determined pursuant to Section 9.1, less the Pre- Closing SQM Distributions (the "Adjustment Account"). (b) The procedure to be followed to implement the Adjustment Account, in case 9.2(a)(iii), shall be as follows: (i) Within the term set forth in Section 9.2(a), the Parties shall adopt a resolution, in their capacity as shareholders of the Operating Company, approving the distribution of an extraordinary dividend with the following characteristics (the "Adjustment Dividend"): (1) It shall be in an amount equal to the Working Capital Adjustment determined in accordance with Section 9.1; (2) It will be charged against retained earnings up to and including the Reference Date; (3) It will be paid exclusively to the SQM Party, that is, only the Series B Shares will be entitled to receive the Adjustment Dividend; and (4) Shall be payable as provided in (ii) below. (ii) Within the time period set forth in Section 9.2(a), the Parties shall cause the Operating Company to pay the Adjustment Dividend in cash or, in lieu of payment in cash, to execute an acknowledgment of indebtedness, by public deed, in favor of the SQM Party, evidencing the obligation to pay an amount equal to the Working Capital Adjustment determined pursuant to Section 9.1 and reflecting the terms set forth on Annex 9 (the "SQM Account Payable"). (c) Regardless of the date on which it is effectively recognized by the Operating Company, the Account Payable to SQM will begin to accrue the interest indicated in Annex 9 as of January 1, 2025 (including that day). For these purposes, at the time the SQM Account Payable is recognized, an amount equal to the interest that would have accrued if the SQM Account Payable had been recognized on the Reference Date (including that date), considering the total days elapsed from the Reference Date (including that date) until the date on which the SQM Account Payable is recognized (excluding that date), shall be added to the amount set forth in Section 9.2(a)(iii). (d) If, after the Reference Date, the Operating Company must make a write- off and/or adjustment to the amount related to the value added tax recoverable from SQM (Shanghai) Chemicals Corp. that has been included in the Reference Balance Sheet because the Governmental Tax Authority in China determines that any of the transactions that gave rise to such amount of value added tax recoverable did not exist, were not valid, or were not subject to value added tax, the Account Payable to SQM shall be reduced by an amount equal to such write-off and/or adjustment. If this occurs after the date set forth in Section 9.2(a), the parties will agree, in good faith, on the manner of adjusting the Account Payable to SQM, so that such adjustment will not have a tax impact for the Operating Company or the SQM Party. Execution Version 47 9.3 Accounts with entities related to SQM (a) As of the Reference Date (excluding such date), SQM Salar (prior to the Effective Date of the Joint Venture) and the Operating Company (as of the Effective Date of the Joint Venture) shall have no accounts receivable from or accounts payable to the SQM Party or its Related Persons (other than the Business Subsidiaries) that: (i) the Account Payable to SQM; (ii) accounts receivable and/or accounts payable in connection with Transitory Services and Supply Agreements; (iii) accounts receivable and accounts payable of an operational nature (i.e., for the purchase and sale of goods and/or the provision of services) that are related to the activities that the Operating Company is to continue to carry out in its Ordinary Course; (iv) other accounts receivable or payable for transactions that have been approved pursuant to this Agreement or the Shareholders' Agreement, including loans that may be made by the SQM Party as authorized by the Shareholders' Agreement; and (v) the account referred to in Section 9.3(b). (b) In order to comply with the provisions set forth in Section 9.3(a), prior to the Reference Date, the SQM Party shall cause to be set off, up to concurrence of the lesser amount, all accounts receivable or payable between SQM Salar and the SQM Party and its Related Persons (other than Business Subsidiaries) existing as of that date, other than the accounts referred to in paragraphs (i), (ii), (iii), (iv) and (v) of Section 9.3(a). (c) In the event that, after the offsets referred to in (b) above, there is a remaining of accounts receivable between the Operating Company and the SQM Party or its Related Persons (other than the Business Subsidiaries), such accounts receivable may be offset, to the extent applicable, against the Account Payable to SQM described in Section 9.2(b)(i). Conversely, if, after such offsets, what exists is an account payable from the Operating Company to the SQM Party or its Related Persons (other than the Business Subsidiaries), such account payable shall be replaced by an acknowledgment of indebtedness, by public deed, in favor of the SQM Party, evidencing the obligation to pay an amount equal to such account payable and reflecting the terms set forth in Annex 9. Such obligation shall increase the Account Payable to SQM referred to above and shall be treated for purposes of this Agreement as a single obligation. 9.4 Dividends between the Reference Date and the Effective Date of the Joint Venture (a) From the Reference Date until the Effective Date of the Joint Venture, SQM Salar may continue to distribute dividends out of the profits earned prior to the Reference Date, subject to the rules set forth in this Section 9.4. (b) Distributions made by SQM Salar in accordance with paragraph (a) above must necessarily be final dividends, charged against the profits of the last fiscal year or against retained earnings of previous fiscal years. Interim dividends may not be distributed against future profits. (c) The amounts that SQM Salar distributes as dividends pursuant to (b) above, or as capital decreases between the Reference Date and the Effective Date of the Joint Venture, will be called "Pre-Closing SQM Distributions", and will not affect the dividends of the Operating Company that, after the Effective Date of the Joint Venture, the SQM Party or the CODELCO Party would be entitled to receive. 9.5 Payments Received for IEAM Accounts (a) Annex 9 details certain asset accounts of SQM Salar that have been classified by the Parties as Retained Receivables which, as such, are not considered
Execution Version 48 within Operating Assets for purposes of determining the Working Capital Adjustment as of the Reference Date. Moreover, the collection rights that SQM Salar has, or in the future will have, in the framework of contentious proceedings (whether administrative or judicial) with the Chilean Internal Revenue Service for the application of the specific tax on mining activities with respect to extraction are not considered as part of the Operating Assets for the determination of the Working Capital Adjustment, production and commercialization by SQM Salar of Lithium Products and Other Lithium Products in the fiscal years ended on or before the Reference Date (the "IEAM Collection Rights" and together with the Retained Receivables, the "IEAM Accounts"). (b) With respect to amounts received by SQM Salar (after the Reference Date but prior to the Effective Date of the Joint Venture) or the Operating Company (as of the Effective Date of the Joint Venture) from the IEAM Accounts, the following rules shall apply: (i) With respect to amounts received by SQM Salar between the Reference Date and the Effective Date of the Joint Venture, regardless of whether the amounts received are equal to, greater than or less than the amounts recorded on the balance sheet, such amounts will be distributed in full as extraordinary dividends from SQM Salar to the SQM Party out of retained earnings from prior years or out of the profit associated with the amounts received, or as an interim dividend out of net income for the year. This distribution will not affect in any way the dividends corresponding to the Series A Shares and Series B Shares under the Shareholders' Agreement. (ii) With respect to the amounts received by the Operating Company as of the Effective Date of the Joint Venture, within five (5) Business Days following the date on which the Operating Company has received the respective amount, the Parties shall adopt a resolution, in their capacity as shareholders of the Operating Company, approving the distribution of an extraordinary dividend, against the profits of previous years or against the profit associated with the amounts received, or as an interim dividend against the profits of the year, for an amount equal to the amounts received by the Operating Company, regardless of whether the amounts received are equal to, higher or lower than the amounts recorded in the balance sheet. Such dividend will be distributed only to the Series D Share. (c) Moreover, in the Reference Balance Sheet, provisions will be made to meet future collections related to the mining specific tax, which will be considered for the determination of the Working Capital Adjustment (the "IEAM Provisions"). With respect to the IEAM Provisions, if the Internal Revenue Service does not issue drafts for specific mining taxes, or those issued are for amounts lower than the respective IEAM Provisions, then such difference will be treated as any amount received for IEAM Account, and the Operating Company will distribute such balance as dividends to the SQM Party in accordance with the preceding rules. If, on the other hand, the money orders received by the Operating Company are for amounts greater than the respective IEAM Provisions, then the SQM Party must indemnify the Operating Company for such greater value by reducing the dividends to which the Series B Shares are entitled thereafter by an amount equal to the difference by which the amount finally paid exceeds the respective IEAM Provision. (d) Upon the Closing, the SQM Party shall retain for itself the right to continue to manage, at its own expense and with its own legal counsel, the collection of the IEAM Accounts, in the manner to be regulated in the Shareholders' Agreement. For these purposes, the Operating Company shall (i) grant the SQM Party a free and irrevocable power of attorney to manage the collection, in which the agent shall be liable only for gross negligence and shall not be obliged to render an account; and (ii) make available to the SQM Party all available information related to the IEAM Accounts. Execution Version 49 SECTION 10 – Salar de Maricunga Assets, Intellectual Property Licenses and Sichuan Plant 10.1 Transfer of Salar de Maricunga Assets (a) On the Effective Date of the Joint Venture, the SQM Party and its Subsidiaries will enter into an asset transfer agreement with CODELCO or its designated Subsidiary for all of the mining concessions (pending and constituted) (the "Maricunga Concessions") and other rights owned by SQM or any of its Subsidiaries in the Salar de Maricunga, located in the Atacama Region, and in the area within 5 kilometers from the outer perimeter of the salt flat (the "Maricunga Assets"). The assets to be transferred together with a reference plan showing the area of the Salar de Maricunga and the area referred to above are incorporated as Annex 10.1(a). (b) For purposes of transferring the Maricunga Concessions and the Maricunga Assets, SQM must execute, or cause its respective Subsidiary to execute, the asset purchase and sale agreement with CODELCO or its designated Subsidiary, on terms substantially similar to the draft incorporated as Annex 10.1(b) (the "Maricunga Asset Purchase and Sale"). (c) Until the execution of the Maricunga Asset Purchase and Sale, the SQM Party undertakes in favor of CODELCO not to encumber or dispose of the Maricunga Concessions. For the avoidance of doubt, the prohibition on encumbrance and sale does not extend to those Maricunga Concessions that may be divested or annulled prior to the Effective Date of the Joint Venture identified in notes on Annex 10.1(a). 10.2 Intellectual Property Licenses (a) On the Effective Date of the Joint Venture, SQM Salar and the relevant Business Subsidiary will grant CODELCO: (i) a non-exclusive, non-transferable, perpetual and irrevocable sublicense in respect of the SQM Intellectual Property of the Business that was licensed to SQM Salar or the respective Business Subsidiary pursuant to Section 2.5; and (ii) (ii) a non-exclusive, non-transferable, perpetual and irrevocable license in respect of the Intellectual Property of SQM Salar or the Business Subsidiaries existing as of the Effective Date of the Joint Venture. The sublicense and license referred to in paragraphs (i) and (ii) above shall be granted on substantially similar terms to the form incorporated as Annex 10.2(a) (identified as the "License and Knowledge Transfer Agreement") and shall be collectively referred to as the "IP License for CODELCO". (b) Under the IP License for CODELCO, the Intellectual Property licensed thereunder may be used and exploited by CODELCO and its Subsidiaries for the purpose of using such licensed Intellectual Property in other lithium projects in Chile of CODELCO or its Subsidiaries, with a non-exclusive, non-transferable, perpetual and irrevocable right to do so. With respect to Subsidiaries that are one hundred percent (100%) owned by CODELCO, the license shall be free of charge, while in any other case it shall be subject to market conditions. Execution Version 50 (c) On the Effective Date of the Joint Venture, SQM Salar and the applicable Business Subsidiary, with respect to the Intellectual Property of SQM Salar or the Business Subsidiaries in existence as of the Effective Date of the Joint Venture, shall grant to SQM and its Subsidiaries a non-exclusive, non-transferable, perpetual and irrevocable license on terms substantially similar to those of the model incorporated as Annex 10.2(c) (the "IP License for SQM "). Under the IP License for SQM , the Intellectual Property licensed thereunder may be used and exploited, free of charge, by SQM and its Subsidiaries for the purpose of using such licensed Intellectual Property in other lithium projects, in Chile or abroad, with a non-exclusive, non-transferable, perpetual and irrevocable right to do so. (d) If the CODELCO Subsidiary using the Intellectual Property licensed under the IP License for CODELCO ceases to be one hundred percent (100%) owned by CODELCO, the parties to such agreement shall negotiate in good faith to amend the IP License for CODELCO to provide that such CODELCO Subsidiary's use shall cease to be free of charge (and shall become compensated on market terms) as of the date on which such Subsidiary ceased to be one hundred percent (100%) owned by CODELCO, or they will enter into a new license and advisory agreement between such Subsidiary, SQM and the Operating Company, whereby the IP License for CODELCO will not apply to such Subsidiary (but will remain applicable to CODELCO and the rest of its one hundred percent (100%) owned Subsidiaries). (e) The IP License for CODELCO and the IP License for SQM do not include Intellectual Property developed by the Operating Company or the Business Subsidiaries as from the Effective Date of the Joint Venture (the "Operating Company Intellectual Property"). However, and as long as the CODELCO Party and the SQM Party maintain an ownership interest in the Operating Company, the CODELCO Party and the SQM Party may negotiate with the Operating Company licenses over the Operating Company Intellectual Property (subject to the provisions set forth in the Shareholders' Agreement for transactions with Related Parties in all respects), and the Operating Company shall not be able to arbitrarily discriminate between the CODELCO Party and the SQM Party, and the Licensor and the Licensee Entity shall also ensure compliance with the applicable regulations, ensuring that the respective licenses on the Operating Company Intellectual Property are granted under market conditions. (f) For the avoidance of doubt, it is placed on record that the Intellectual Property of Adionics (SAS) ("Adionics"), an Entity in which SQM has a non-controlling interest, as well as any Intellectual Property or rights related to SQM's operations in its Australian Subsidiaries, are not considered for purposes of this Agreement to be part of SQM Intellectual Property of the Business, and if used or necessary for the Business, shall not be used free of charge by the Operating Company or the Business Subsidiaries or CODELCO. In the event that SQM becomes to hold a Controlling Interest in Adionics, SQM will cause Adionics to negotiate in good faith a license of Adionics' Intellectual Property on market terms and conditions, including a remuneration that, while complying with such requirement, is also consistent with the transfer pricing rules that would be applicable in France and a term or exit conditions in favor of the Operating Company. (g) If any information contained in or related to the SQM Intellectual Property of the Business, the IP License for the Operating Company, the IP License for SQM and the IP License for CODELCO is also considered as Confidential Information, its use and safeguarding shall be governed by the provisions set forth in the referred Intellectual Property licenses, with priority over the rules established regarding Confidential Information in Section 13.2. Execution Version 51 10.3 Sichuan Plant (a) SQM Industrial S.A. ("SQM Industrial") owns the Dixin Company, owner of the Sichuan Plant, which was acquired pursuant to the terms and conditions contained in the English-language agreement entitled "Equity Transfer Agreement for the transfer of equity interest in Sichuan Dixin New Energy Co, Ltd.", entered into between SQM Industrial and Sichuan Union Shine New Energy Sci-Tech Co., Ltd. on July 21, 2022, as amended on March 27, 2024 ("Sichuan Purchase and Sale"). On April 17, 2024, the Chinese Governmental Authority approved this transaction and on May 7, 2024, the transfer of the Dixin Company took place, and SQM Industrial acquired full control over it. (b) Dixin currently provides SQM (Shanghai) Chemicals Co., Ltd. with a lithium sulfate toll processing service in accordance with the terms and conditions contained in the English-language the agreement "Lithium Hydroxide Toll Processing Contract" entered into by both parties on May 8, 2024 (the "Maquila Contract"), which is duly identified in Annex 2.5(c) of the Related Contracts. (c) The Sichuan Plant is not a Business Asset, nor is it required to be contributed to SQM Salar as part of the SQM Reorganization. However, the SQM Party will request, within the same timeframe that this Agreement establishes for the application for the Foreign OC Approvals, that the Chinese Governmental Authorities give their approval to the contribution of the Sichuan Plant or the Dixin Company to the Operating Company. For these purposes, the Operating Company will issue a single series E share (the "Series E Share") to be subscribed by the SQM Party, who will undertake to pay for it by (i) the contribution in kind of all the corporate rights or shares it holds in the Dixin Company (or in a company that exclusively owns the shares of the Dixin Company), valued at an amount equivalent to the value at which the SQM Party would have registered its investment, to the extent that the Chinese Governmental Authorities approve such transfer on or before the Effective Date of the Joint Venture, or (ii) in the event that the Chinese Governmental Authorities do not authorize the contribution of the Sichuan Plant to the Operating Company on the terms indicated above, the cash contribution for the price that the SQM Party obtains for the sale of the Dixin Company to a third party, as a consequence of not having been able to contribute it to the Operating Company due to the failure to obtain the Permits required by the Chinese Governmental Authority, less the amounts of any loans that may have been made to the Dixin Company (including those that the SQM Party may have chosen to grant to it as indicated in paragraph (d) below), the fees of the advisors involved in such sale, the transaction expenses , any Taxes that may have been required to be paid in any jurisdiction as a result of the sale of the Dixin Company and the remittance of the funds to Chile (the "Dixin Company Price"). In the event that the Dixin Company is contributed to the Operating Company as a contribution in kind after the Effective Date of the Joint Venture, any Tax that the SQM Party must pay to any Governmental Authority due to such contribution as a result of increases in value of the shares of the Dixin Company during the time it takes to obtain the approval of the Chinese Governmental Authorities for its contribution to the Operating Company, shall be borne by both Parties (i.e., the SQM Party and the CODELCO Party), on a 50/50 basis. For these purposes, the portion of such tax to be borne by the CODELCO Party shall be deducted from the dividends to which it is entitled under the Shareholders' Agreement and the same amount shall be added to the dividends to which the SQM Party is entitled under the Shareholders' Agreement. Moreover, if it is not possible for the Dixin Company to contribute in kind, and the SQM Party contributes in cash, the Operating Company must distribute the amounts received as an extraordinary dividend to be paid to the Series A Shares and Series B Shares, in proportion to the number of shares comprising each series.
Execution Version 52 Moreover, after making such a contribution in kind, both the Dixin Company and the Sichuan Plant shall be deemed to have been Business Assets since the Agreement Date. (d) As long as the payment of the Series E Share has not been made in the terms set forth in paragraph (c) above, the SQM Party shall cause that: (i) SQM Industrial does not dispose of or create Liens on the shares of Dixin Company owned by it; (ii) Dixin Company does not dispose of or create Liens on the Sichuan Plant; (iii) Dixin Company and the Sichuan Plant operate under its Ordinary Course on terms consistent mutatis mutandi with the provisions set forth in Section 2.7(b) with respect to the Business Subsidiaries; and (iv) no dividend distributions, capital decreases, or any other type of payments are made by the Dixin Company in favor of the SQM Party or its Subsidiaries, except for those arising from the Maquila Contract or the loans referred to in the following paragraph. The Parties expressly agree that the SQM Party or any of its Related Persons may grant loans to the Dixin Company on terms similar to those that the SQM Party elects to make to SQM Salar or the Operating Company pursuant to the Transaction Documents. Such loans shall not be extinguished either by the contribution of the shares of the Dixin Company to the Operating Company or by the sale of the Dixin Company to a third party. Notwithstanding the foregoing, (i) if the Dixin Company is sold to a third party pursuant to this Section 10.3, the funds received by the SQM Party shall be allocated, first, to repay the loans granted to the Dixin Company pursuant to this paragraph by discounting such amounts from the Dixin Company Price to be contributed pursuant to paragraph (c) above; and (ii) if what is contributed to the Operating Company were the shares in the Dixin Company, then the cash available in the Dixin Company and the Operating Company shall be allocated first to pay these loans, without the Operating Company being able to distribute dividends to its shareholders until such loans are fully repaid. (e) In the event that the contribution of the Dixin Company is not made prior to the Reference Date and, for purposes of sizing its impact on the Working Capital Adjustment, the Parties shall prepare a balance sheet of the Dixin Company as of the Reference Date (the "Dixin Balance Sheet") and determine the amounts that would be payable in respect thereof to (or by) the SQM Party if the contribution of the Dixin Company were to be made prior to the Reference Date (the "Dixin Adjustment"). For these purposes, the same items will be determined for the Dixin Company as are determined with respect to SQM Salar for purposes of the Working Capital Adjustment, following the procedure described in Section 9.1 and the rules included for such purposes in Annex 9. The Dixin Balance Sheet and the other items necessary for the determination of the Dixin Adjustment will not alter the amounts calculated based on the Reference Balance Sheet. (f) The SQM Party agrees to exercise any rights or remedies available under the Sichuan Purchase and Sale (or assign them to the Operating Company to the extent permitted) in order to mitigate and minimize any damages suffered by the Operating Company from causes which are the Seller's responsibility under the Sichuan Purchase and Sale promptly and in a timely manner from the date it becomes aware of any fact, event or circumstance which could reasonably be expected to give rise to any damages to the Dixin Company or the Operating Company. SECTION 11 - Representations and Warranties of SQM Party The SQM Party represents to the CODELCO Party that, except as set forth in the Side Letter, the representations and warranties set forth in this Article 11 are true, Execution Version 53 correct and complete as of the date of this Agreement and shall continue to be true and complete as of the Reference Date as if made on such date (except for those representations and warranties that relate to a specific date and are required to be true and correct only as of such specific date). 11.1 Existence of SQM and SQMK SQM and SQMK are companies validly incorporated and in good standing under Chilean law. SQM and SQMK have the capacity and power to own SQMK (in the case of SQM), SQM Salar and the Business Subsidiaries, and the Business Assets owned by them, and to subscribe, deliver and perform their obligations under the Agreement and the other Transaction Documents to which they are a party. 11.2 Subscription, execution and enforceability Except as provided for in Section 11.2 of the Side Letter, the subscription, execution and performance of the Agreement and each of the other Transaction Documents have been duly authorized by the SQM Party by all necessary corporate actions and constitute, or will constitute, once subscribed, and executed, a legal, valid and binding obligation of the SQM Party enforceable by the CODELCO Party in accordance with its terms, except to the extent enforceability may be limited by applicable liquidation or insolvency rights. 11.3 Absence of conflict Except as set forth in Paragraph 11.3 of the Side-Letter, the execution of the Agreement and the other Transaction Documents, the performance by the SQM Party of its obligations under the Agreement and the other Transaction Documents, and the consummation of the SQM Reorganization, will not violate any relevant provisions of, conflict with or result in a breach of any material provisions of the bylaws and other organizational documents of the SQM Party or the Business Subsidiaries, nor constitute a breach of any material provision of the bylaws or other organizational documents of the SQM Party or the Business Subsidiaries, or of any Relevant Contract to which the SQM Party or the Business Subsidiaries is a party or by which the SQM Party or the Business Subsidiaries is bound, or gives rise to the creation of a Lien (other than a Permitted Liens) on SQM Salar, the Business Subsidiaries or any of the Business Assets or gives rise to a violation in any material respect of any of the terms and provisions of any Law applicable to the SQM Party or the Business Subsidiaries. 11.4 Existence of SQM Salar and Business Subsidiaries (a) SQM Salar is a corporation validly incorporated and in good standing under Chilean Law, has the capacity and power to own the Business Assets owned by it, and to carry on the Business in the manner in which it currently does, and to enter into, deliver and perform its obligations under the Agreement and the other Transaction Documents to which it is a party. On the Effective Date of the Joint Venture, SQM Salar will become a sociedad por acciones (stock company) under Chilean law and, absent a Material Adverse Effect, will have the ability to conduct the Business. (b) Annex A sets forth a true and complete list of each Business Subsidiary including the name and jurisdiction of incorporation of such Subsidiary, the capital and registered owners of each Business Subsidiary as of the Agreement Date. Each of the Business Subsidiaries is or will be a corporation validly organized under the Laws applicable under its jurisdiction of incorporation and has or will have the capacity and is or will have the power to carry on its business. Execution Version 54 (c) Except as set forth in Section 11.4(c) of the Side Letter, the corporate books and records of SQM Salar and the Business Subsidiaries have been kept and maintained in all material respects in accordance with applicable law. 11.5 Ownership of Shares in SQM Salar; Subsidiaries (a) SQM, directly or indirectly through a Subsidiary, is the beneficial and registered owner of all SQM Salar Shares, all of which are fully paid and free of all Liens. (b) None of the SQM Salar Shares or the shares or rights of any of the Business Subsidiaries are subject to a shareholders' agreement or joint action agreement and there are no options, warrants, convertible or exchangeable securities or other rights, agreements, covenants or commitments related to the equity interests in SQM Salar or the Business Subsidiaries, nor are there any pending obligations of SQM Salar or the Business Subsidiaries, to repurchase, redeem or otherwise acquire any of the outstanding shares. (c) No Person other than the CODELCO Party has any oral or written agreement or option or right or privilege that may be converted into an agreement or option for the purchase or acquisition of any of the shares in SQM Salar or the shares or rights of the Business Subsidiaries. (d) As of the Effective Date of the Joint Venture, SQM Salar shall not own or beneficially own any securities or other interests in the property, capital or ownership rights of any Entity, other than the Business Subsidiaries pursuant to this Agreement, and shall not be bound by any commitment or obligation to acquire any securities or other interests in the property, capital or ownership rights of any Entity, other than the Business Subsidiaries. (e) SQM Salar and the Business Subsidiaries do not own treasury shares, nor have they received treasury shares as collateral, nor have they constituted reciprocal equity interests, either directly or through an intermediary, nor have they carried out any type of business or action contrary to the legally applicable treasury stock regime for each of these companies. Neither SQM Salar nor the Business Subsidiaries have registered contributions for future capital increases, nor has it been agreed to pay or distribute any amount as a return of capital to their shareholders that is pending payment or distribution. (f) As of the Effective Date of the Joint Venture, neither SQM Salar nor the Business Subsidiaries will have compensation plans for executives and workers, incentive plans, stock option programs, or any other equivalent that may entitle any Person to claim rights or options on shares issued by such companies or convertible securities therein. (g) Except as set forth in Section 11.5(g) of the Side Letter, the SQM Party has not been notified in writing of any claims, demands, legal actions, judicial and/or extrajudicial proceedings that could affect the ownership of the SQM Salar Shares or the shares or rights of the Business Subsidiaries nor is it aware of any serious written threats of such claims, demands, legal actions, judicial and/or extrajudicial proceedings. 11.6 Consents Except as provided for in Section 11.6 of the Side Letter and the Consents and Authorizations, the SQM Party is not required to obtain or file any statement, filing, consent, approval, Order or authorization from any Governmental Authority or any third Execution Version 55 party in connection with the consummation of the transactions contemplated by this Agreement, the other Transaction Documents and the SQM Reorganization, the failure to obtain which could reasonably be expected to have a Material Adverse Effect. 11.7 Financial Information (a) The Latest Audited Financial Statements have been prepared in accordance with Chilean GAAP, as applied on a basis consistent with prior periods (except for changes indicated in the respective notes), and present fairly, in all material respects, the financial position of SQM Salar as of December 31, 2023, the results of its operations and its cash flows for the fiscal year then ended. (b) The Latest Business Subsidiary Financial Statements have been prepared in accordance with GAAP, and considering the Consolidation Adjustments, present fairly, in all material respects, the financial position of each Business Subsidiary as of December 31, 2023, as well as the results of its operations and cash flows for the fiscal year then ended. (c) The financial statements attached as annexes to Section 11.7(c) of the Side Letter contain provisions consistent with Chilean GAAP or Subsidiaries’ GAAP, as applicable, and that SQM Salar and Business Subsidiaries, including the Consolidation Adjustments, as applicable, have customarily applied in the past in respect of bad and doubtful debtors, obligations and liabilities (actual, contingent and other), including, among others, tax obligations, obligations with related companies and financial commitments existing at the date thereof. All reserves and provisions included in the financial statements adequately and sufficiently reflect the amounts of such obligations and liabilities, in accordance with Chilean GAAP or Subsidiaries GAAP, as applicable. As of the date of the financial statements, SQM Salar and the Business Subsidiaries did not have any obligations or liabilities, contingent or otherwise, arising from their business activities or events occurring on or prior to those dates, which, in accordance with Chilean GAAP or Subsidiary GAAP, as applicable, are not reflected in the financial statements. (d) Subsequent to the closing date of the financial statements, the accounting records of SQM Salar and the Business Subsidiaries correctly register the financial position of these Entities, as well as the results of their operations and their net worth. Moreover, during the period between the closing date of the financial statements and the Agreement Date, the accounting of SQM Salar and the Business Subsidiaries has been maintained in a manner consistent with Chilean GAAP or Subsidiaries GAAP, as applicable, and which SQM Salar and the Business Subsidiaries have customarily applied in the past. (e) All accounts receivable of SQM Salar and Business Subsidiaries have arisen from bona fide transactions. These accounts receivable are due and payable in accordance with their terms for the amounts recorded therein, subject to uncollectibility in the Ordinary Course. (f) SQM Salar and the Business Subsidiaries have established and maintain, comply with and enforce a system of records, accounts and internal accounting control to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with Chilean GAAP or Subsidiary GAAP, as applicable, having policies and procedures that provide reasonable assurance that (i) transactions, revenues and expenses are executed only in accordance with the authorization procedures established for SQM Salar and the Business Subsidiaries; (ii) transactions are properly recorded to permit the preparation of financial statements in accordance with Chilean GAAP or GAAP Subsidiaries, as applicable; and (iii) any
Execution Version 56 unauthorized acquisition, disposition or use of assets is prevented or detected in a timely manner. (g) All stocks and inventories reflected in the financial statements have been valued in accordance with Chilean GAAP or Subsidiaries GAAP, as applicable, including applicable adjustments for obsolete, defective, damaged or spoiled inventories. Except as provided for in the Latest Audited Financial Statements or Section 11.7(g) of the Side Letter, none of the stocks and inventories are subject to any consignment, commodatuum (loans for use), warehousing or similar agreement. In the case of any consignment, commodatuum (loans for use), warehousing or similar with respect to any stock or inventory, SQM Salar and the Business Subsidiaries have taken all necessary steps to ensure that such stock and inventory are not subject to any Lien (other than the Permitted Liens) granted by or in favor of the consignee, borrower, bailee, warehouseman or similar. 11.8 Absence of undisclosed liabilities (a) Except for (i) liabilities, contingencies or events reflected in the Latest Audited Financial Statements, and (ii) liabilities incurred in the ordinary course of business after the date of the Latest Audited Financial Statements, SQM Salar has no other liabilities that under Chilean GAAP are required to be reflected in SQM Salar's statement of financial position. (b) Except for (i) liabilities reflected in the Latest Business Subsidiary Financial Statements, and (ii) liabilities incurred in the Ordinary Course of Business after the date of the Latest Business Subsidiary Financial Statements, the Business Subsidiaries have no other liabilities that under GAAP Subsidiaries are required to be reflected in a statement of financial position of the Business Subsidiaries. 11.9 Absence of changes (a) From December 31, 2023 and until the Agreement Date, except as provided for in Section 11.9(a) of the Side Letter and the SQM Reorganization, (i) the activity of SQM Salar and the Business Subsidiaries has been conducted in a manner consistent with the Ordinary Course of each of them, and (ii) no Material Adverse Effect has occurred with respect to SQM Salar and the Business Subsidiaries. (b) Without prejudice to the provisions set forth in paragraph (a) above, from December 31, 2023 through the Agreement Date, except as provided for in Section 11.9(b) of the Side Letter and the SQM Reorganization, SQM Salar and the Business Subsidiaries have not done or performed any of the facts or acts listed in Section 2.7(b) of this Agreement in violation of such section. 11.10 Mining rights and ancillary rights (a) Section 11.10(a) of the Side Letter contains a list of all mining rights comprising the Business and located at both the Carmen Plant and the Salar de Atacama (including the area within ten kilometers of the outer perimeter of the OMA Mining Properties and Rigo Mining Properties), including all mining concessions (in process or constituted) and salt stakes, owned, leased or usufructed by the SQM Party, miner's water rights, mining easements and accessory rights of Article 3 of the Chilean Mining Code contained in Law No. 18.248 of 1983 (and its amendments); and all of the Maricunga Concessions (hereinafter jointly referred to as, the "Mining Rights"). Execution Version 57 (b) Except as provided for in Section 11.10(b)(i) of the Side Letter, the Mining Rights are registered in the name of CORFO, the SQM Party or the Business Subsidiaries. Except as stated in Section 11.10 (b)(ii) of the Side Letter, the Mining Rights are valid and currently in force and there is no outstanding payment in respect of the Mining Patents; and are free and clear of all Liens (other than the Permitted Liens) and, to the knowledge of the SQM Party, litigation affecting their existence, validity, preference or area, and all rents, fees, expenses and other relevant payments due in respect thereof to the Governmental Authorities or third parties have been paid and all representations to the Governmental Authorities in respect thereof have been made. (c) Except as provided for in Section 11.10(c) of the Side Letter, to the knowledge of the SQM Party, no Person other than the SQM Party or the Business Subsidiaries (in connection with the SQM Reorganization) has any preemptive right in the Mining Rights or in the production or benefits therefrom or any royalty with respect thereto or any right to acquire any such interest. (d) Except as provided for in Section 11.10(d) of the Side Letter the Mining Rights enjoy a preference over the entire area they cover and do not overlap with any rights of third parties that may allow such third parties to explore or exploit any concessionable or non-concessionable mineral substance in the same area. (e) Section 11.10(e) of the Side Letter sets forth a list of all easements and surface land rights owned by private parties or Governmental Authorities issued or granted in connection with the Business (hereinafter jointly referred to as, the "Ancillary Rights"). The Ancillary Rights are the only surface land rights owned by private parties or Governmental Authorities necessary to carry on the Business as currently conducted. (f) The Ancillary Rights are valid, currently in effect and all rents and other relevant payments due in respect thereof to the Governmental Authorities or third parties have been paid. (g) No authorization, concession for the use, commodatum, lease, contract or other obligation of any kind is in force in favor of third parties other than CORFO that materially affects or may materially affect the Mining Rights, the Ancillary Rights or any part thereof. They are not aware of any administrative declarations issued by any Governmental Authority to declare sites of archaeological, paleontological, historical or natural interest with respect to the area in which the Mining Rights and the Ancillary Rights are located. They are not aware of the existence of their own- or third-party applications for exploration and exploitation mining concessions, which are currently in process within the area where the Mining Rights or the Ancillary Rights are located. (h) The Mining Rights and Ancillary Rights comprise all mining rights necessary for the development of the Business as it is currently conducted. As of the Effective Date of the Joint Venture, all Mining Rights (except for the Mining Properties and other rights that will become the property of CORFO) will be owned by SQM Salar or the Business Subsidiaries and SQM Salar or the Business Subsidiaries will have all easements (whether civil or mining) and surface land rights owned by private parties or Governmental Authorities necessary to continue developing the Business in the manner in which it is currently conducted. Execution Version 58 11.11 Water Rights (a) Section 11.11(a) of the Side Letter establishes a list of all water rights currently used for the development of the Business (the "Water Rights"), as well as other water rights owned by SQM Salar or the Business Subsidiaries that are not in use. (b) The SQM Salar Party or the Business Subsidiaries will, as of the Effective Date of the Joint Venture, be the sole and exclusive owners of the Water Rights, the titles to which are in force in accordance with Chilean Law. No other water-related rights, other than the Water Rights, are necessary for the development of the Business as currently conducted. (c) Except as provided for in Section 11.11(c) of the Side Letter, all Water Rights are duly registered in the name of the SQM Party or the Business Subsidiaries in the Water Property Registries of the competent Real Estate Registries and in the Catastro Público de Aguas (Public Water Cadastral Register) kept by the Dirección General de Aguas de Chile, (General Water Directorate of Chile), and to the knowledge of the SQM Party, there are no defects in the creation or acquisition of the Water Rights or circumstances that may affect its ownership and possession with respect to the Water Rights. (d) Except as provided for in Section 11.11(d) of the Side Letter, all Water Rights are legitimately exercised by the SQM Party from its authorized puntos de captación autorizados y sus obras de captación (catchment points and its catchment works) are in good condition and are used free of any illegality and violence and without recognizing third parties’ ownership. (e) Except as provided for in Section 11.11(e) of the Side Letter, all Water Rights are free and clear of Liens (other than the purchase option and the prohibitions on encumbrance and disposition set forth in favor of CORFO in the CORFO-SQM Contracts) affecting the interest of the SQM Party or the Business Subsidiaries in the Water Rights; and except as provided for in Section 11.11(e) of the Side Letter, no Person other than the SQM Party and the Business Subsidiaries (in connection with the SQM Reorganization) has any ownership interest or other security interests or personal rights with respect to the Water Rights or any right to acquire any such interest, nor any right to use the intake works thereof or occupy any surface land thereon (f) As of this date there are no relevant payments due, including but not limited to non-use patents, with respect to the Water Rights to Governmental Authorities or water user organizations, and, to the best of SQM Party's knowledge (i) there are no extrajudicial claims or administrative or judicial proceedings initiated or to be initiated against SQM Party or the Business Subsidiaries for the collection of such concepts, (ii) the Water Rights have not been included in lists of unpaid non-use patents sent by the Chilean Water Board to the General Treasury of the Republic of Chile to initiate legal proceedings for the collection of non-use patents applied to the Water Rights; and important declarations and information reports to the Governmental Authorities with respect to the same or required under Article 56 bis of the Chilean Water Code have been made, and there are no sanctioning procedures associated with the breach of declaration or information reporting obligations other than those indicated in Section 11.11(f) of the Side Letter. In particular, the SQM Party and the Business Subsidiaries have obtained the approvals of the Water Rights withdrawal works from the Chilean Water Authority, in the manner and by the means provided for by Chilean Law; installed, where applicable under Chilean Law, the systems for measuring, monitoring and transmitting actual withdrawals at the withdrawal works; and, where applicable under Execution Version 59 Chilean Law, reported the information on actual withdrawals to the Chilean Water Authority. (g) Except as provided for in Section 11.11(g) of the Side Letter, there are no measures of restriction, redistribution or temporary reduction of the exercise of water rights, as applicable, imposed by any Governmental Authority or water users' organization that limit or affect the exercise of the Water Rights. Moreover, to the knowledge of the SQM Party, there are currently no litigations or proceedings commenced or to be commenced, or serious written threats of serious proceedings, claims or disputes formulated in writing by any particular person, affecting the Water Rights that could reasonably be expected to restrict or interfere with the expected use of such Water Rights, including but not limited to proceedings for the formation of water user organizations of which the Water Rights are or should be a part thereof. (h) Except as disclosed in Section 11.11(h) of the Side Letter, the SQM Party and the Business Subsidiaries have all relevant authorizations and relevant Permits necessary from the Chilean Water Authority or other Governmental Authorities and all easements and surface rights from landowners or relevant Governmental Authorities necessary for the use of the Water Rights for the development of the Business as it is currently conducted. (i) Except as disclosed in Section 11.11(i) of the Side Letter, the SQM Party or the Business Subsidiaries have not been notified or received any communication from which it could reasonably be inferred that the Water Rights relevant to the development of the Business are subject to expropriation, requisition, nullity, termination, cancellation, or extinguishment of title, by order of any Governmental Authority. (j) To the best of SQM's knowledge, it is not necessary to apply to the competent Governmental Authorities for changes in the points of capture of the Water Rights in order to develop the Business in the form in which it is currently carried out, pursuant to the state of maintenance and operation of the infrastructure, equipment and technology used in the wells from which the Water Rights are exercised, or to avoid legal contingencies. 11.12 Permits. (a) Section 11.12(a) of the Side Letter contains a list of the material Permits that the SQM Party and the Business Subsidiaries have for the conduct of the Business as currently conducted. Such Permits are currently valid and in effect, and such Entities are not in default or breach of any such Permits, nor will any such Permits be terminated or breached as a result of the transactions contemplated by the Transaction Documents, including the SQM Reorganization, except with respect to those Permits the invalidity, unenforceability, breach, violation or termination of which could not reasonably be expected to have a Material Adverse Effect. (b) With respect to such Permits and except as indicated in Paragraph 11.12(b) of the Side Letter: (A) to the knowledge of the SQM Party, there is no reason to believe that such Permits will not be renewed or any event, circumstance or condition that could reasonably be expected to result in the termination, revocation, or suspension of such Permits, B) no Permit has been revoked or is currently under discussion with the relevant Governmental Authority, nor are SQM Salar and the Business Subsidiaries in breach of any relevant term or condition thereof that could reasonably be expected to result in a Material Adverse Effect, and (C) there are no official investigations or proceedings by the relevant Governmental Authority that affect or could reasonably affect the operations of SQM Salar or the Business Subsidiaries, or that are
Execution Version 60 intended to revoke, restrict or suspend any of their Permits necessary for the operation of the Business. (c) The Permits listed in Section 11.12(a) of the Side Letter are all Permits necessary for the Business as currently conducted. 11.13 Personal and Real Property (a) Section 11.13(a) of the Side Letter contains a list of all real property (other than the Mining Rights, the Ancillary Rights and the Water Rights) owned by the SQM Party and the Business Subsidiaries relating to the Business as heretofore developed. The SQM Party and the Business Subsidiaries own such real property free and clear of any Liens (other than the Permitted Liens). (b) Section 11.13(b) of the Side Letter contains a list of all significant real property (other than the Mining Rights, the Ancillary Rights and the Water Rights) leased by the SQM Party and the Business Subsidiaries relating to the Business as heretofore developed. The SQM Party and the Business Subsidiaries have the right, by virtue of valid and effective lease agreements, to use all such real estate. (c) The SQM Party and the Business Subsidiaries have a valid and marketable title free of Liens (other than the Permitted Liens) or a valid personal right to use the tangible personal property used in the conduct of the Business, except where the lack of title could not reasonably be expected to have a Material Adverse Effect. (d) As of the Effective Date of the Joint Venture, SQM Salar and the Business Subsidiaries will have a valid title to use the assets related to the Business in the form that has been developed so far, in the same manner and conditions as those set forth in paragraphs (a), (b) and (c) above. (e) Except as stated in Section 11.13(e) of the Side Letter, the assets with respect to which the SQM Party and the Business Subsidiaries as of the Agreement Date, (and SQM Salar and the Business Subsidiaries as of the Effective Date of the Joint Venture) are owners, lessees or lawful users (A) comprise all assets relevant to the conduct of the Business in the manner in which it is currently conducted, (B) with respect to those assets in which it is the lessee or lawful user, none of them is owned by any Related Person of the SQM Party, (C) they are in good condition and reasonable use considering their age, wear and tear or normal depletion for this type of assets; and (D) the SQM Party is not aware of any proceedings, claims, disputes or conditions materially affecting any such assets. 11.14 Relevant Contracts. Marketing (a) Section 11.14(a) of the Side Letter contains a list of all Relevant Contracts entered into by the SQM Party or the Business Subsidiaries and which, according to their terms, will be in effect as of January 1, 2025 (other than distribution or commercialization contracts). (b) Section 11.14(b) of the Side Letter contains a list of all distribution or marketing agreements entered into by the SQM Party or the Business Subsidiaries for the marketing of the Business Products (the "Marketing Contracts") in effect as of the Agreement Date and which, according to their terms, should be in effect as of January 1, 2025. (c) Except as provided for in Section 11.14(c) of the Side Letter, to the knowledge of the SQM Party: Execution Version 61 (i) the SQM Party and the Business Subsidiaries have complied with in all material respects with all material obligations under the Relevant Contracts and Marketing Contracts, and all disputes related to contractual breaches have, as of this date, been resolved; (ii) as of the date of this Agreement, the SQM Party and the Business Subsidiaries have not incurred an attributable material breach with respect to any of the Relevant Contracts and Marketing Contracts, except for non-performance tacitly or expressly consented to by the respective counterparty; (iii) All Relevant Agreements and Marketing Contracts are validly entered into and binding on their respective parties; (iv) as of the date of this Agreement, no event, condition or occurrence has occurred that would constitute a material breach by any other party of any of the Relevant Contracts and Marketing Contracts, and (v) the SQM Party has not received any written notice or claim of termination, termination, nullity or breach of any Relevant Contract or Marketing Agreement as of the date of this Agreement. 11.15 Transactions with related parties Except as set forth in Section 11.15 of the Side Letter and the amounts to be considered for purposes of Section 9.1, (a) SQM Salar and the Business Subsidiaries have no overdue debts to their Related Parties, nor are they party to any other act or contract with them that is currently in force; and (b) SQM Salar and the Business Subsidiaries have no accounts or receivables of any kind from any Related Party. All contracts and transactions with Related Parties have been carried out on an arm's length basis. 11.16 Environmental issues Except as provided for in Section 11.16(a) of the Side Letter; (i) during the last three (3) years SQM Salar and the Business Subsidiaries have complied with all relevant Environmental Laws applicable to the development of the Business as currently conducted; (ii) the SQM Party and the Business Subsidiaries have not received in the last three (3) years any Order from any Governmental Authority in relation to the material non-compliance with any Environmental Law or Permit, which could result in a Loss to the Operating Company after the Effective Date of the Joint Venture or which could result in the imposition of measures or Orders by Governmental Authorities or courts involving the total or partial stoppage or closure or hindering the normal development of the Business; and (iii) there are no pending Claims or, to the knowledge of the SQM Party, serious written threats of Claims related to SQM Salar and the Business Subsidiaries. 11.17 Condition and sufficiency of assets and properties The Business Assets (a) have been maintained in the Ordinary Course in accordance with customary industry practice, and (b) are sufficient (subject to regular wear and tear) for the conduct of the Business in substantially the same manner as it was conducted prior to the Agreement Date. Execution Version 62 11.18 Insurance (a) Section 11.18(a) of the Side Letter contains a listing of the insurance policies in force as of the date of this Agreement with respect to the development of the Business (the "Existing Insurance Policies") that are held by the SQM Party and the Business Subsidiaries, specifying in each case, the name of the insurer, the relevant risks insured, the period of coverage, the net premium, the policy number, the description of the insured and any outstanding claims under each policy in excess of [***] Dollars (USD [***]). (b) The Existing Insurance Policies are currently in full force and effect and the SQM Party is in full compliance with all of its material obligations thereunder. (c) To the knowledge of the SQM Party, the SQM Party and the Business Subsidiaries have not failed to timely report or claim any loss occurring during the past twelve (12) months and covered by the Existing Insurance Policies as required thereunder, none of them has placed at risk or otherwise prejudiced through any act, omission or failure to report, the full recovery of any claim under such policies, and there does not exist as of the Agreement Date any claim filed by any of the SQM Party or the Affiliates of the Business in respect of which the insurance company has refused to pay indemnity or denied liability or refused to assume its defense under a reservation of rights or other similar cause of action. Furthermore, to the knowledge of the SQM Party, as of the Agreement Date, there are no claims pending reporting by SQM Salar or any of the Business Subsidiaries or circumstances with respect to any of such companies that may result in an increase in premium or adversely affect the renewal of the Existing Insurance Policies. 11.19 Litigations Except as stated in Section 11.19 of the Side Letter, no Claims are pending, nor have any serious written threats of Claims been received, against the SQM Party or the Business Subsidiaries with respect to (i) the conduct of the Business, or (ii) that would materially limit or restrict, or otherwise prohibit the transactions and operations described in this Agreement or relating to the Joint Venture; in either case, before or by any court or Governmental Authority, reasonably expected to be relevant to the SQM Party or the Business Subsidiaries in connection with the conduct of the Business. 11.20 Free Competition: During the last three (3) years, the SQM Party and the Business Subsidiaries have complied in all material respects with all applicable Laws and resolutions of the Governmental Authorities regarding free competition that are applicable to them in the jurisdictions in which they carry out their activities, and in particular (i) the SQM Party and the Business Subsidiaries have not coordinated, (i) the SQM Party and the Business Subsidiaries have not coordinated, concerted or agreed on prices, strategies, market shares, geographic areas, or commercial conditions of any kind to be offered to customers or service providers, and has not engaged in any of the aforementioned behaviors in public or private bidding processes to which it submits its bids for the commercialization of its services; (ii) the SQM Party and the Business Subsidiaries have not obtained sensitive information from competitors by illegitimate means or contrary to the applicable Law; (iii) the SQM Party and the Business Subsidiaries have not developed activities, actions, conducts or omissions of unfair competition, anticompetitive conduct, collusion, or other equivalent defaults; y (iv) to the knowledge of the SQM Party, neither SQM nor the Business Subsidiaries are currently subject to any investigation by State agencies or Governmental Authorities in matters of free competition and public procurement, as well Execution Version 63 as any auditing, review or oversight process by such agencies and Governmental Authorities, except for standard procedures for requesting information carried out by the Fiscalía Nacional Económica. 11.21 Taxes (a) During the past three (3) years, SQM Salar and the Business Subsidiaries have filed with the competent Governmental Authority all material Tax Returns required under applicable Law, including, among others, those relating to their income taxes, value added tax, withholding taxes, stamp taxes, land tax, regional development contributions and municipal patents, to the extent applicable, as well as filed all required affidavits and any other relevant information related to Taxes required by and with the Governmental Authority. All Tax Returns and the assessments and tax bases on which they are based are complete and accurate in all material respects, in accordance with applicable Law. During the last three (3) years, SQM Salar and the Business Subsidiaries have paid all Taxes due and payable (except for those Taxes that have been contested in good faith and in accordance with existing procedures under applicable Law). SQM Salar and the Business Subsidiaries have at their disposal the supporting documents related to the Tax Returns. (b) There are no agreements, waivers or other provisions providing for an extension of time for SQM Salar or the Business Subsidiaries to file any tax returns or pay any significant Taxes or for any Governmental Authority to examine any of the Tax Returns beyond the statute of limitations periods in accordance with applicable Law. (c) During the last three (3) years, SQM Salar and the Business Subsidiaries have withheld the amount of all material Taxes and other deductions required to be withheld in accordance with applicable Law and have paid the same to the competent Receiving Governmental Authorities within the term required by applicable Laws. (d) During the last three (3) years, SQM Salar and the Business Subsidiaries have withheld and/or paid all significant amounts required to be collected for material Taxes and have remitted these, in all material respects, to the Governmental Authority, when required by Law. (e) Material Taxes accrued during the last three (3) years have been paid or have been duly provided for by SQM Salar and/or Business Subsidiaries, or have been contested in good faith and in accordance with existing procedures under applicable law, or are those that SQM Salar contests in the Ordinary Course. Provisions associated with Taxes have been made, implemented and accounted for as required by Chilean GAAP or GAAP Subsidiaries, as applicable. (f) During the last three (3) years all expenses, deductions, disbursements, costs, write-offs, credits, amortizations, depreciation, losses and any other relevant item to be deducted in the determination of the Tax base, particularly those related to carryforward losses (if any), have been duly determined in all material respects by SQM Salar and/or the Business Subsidiaries in accordance with applicable law, and may be duly supported by relevant documentation. (g) SQM Salar and the Business Subsidiaries have all the relevant documentation that justifies and supports their accounting and tax records in all material respects, in compliance with current law or the law in effect at the time the transaction in question was carried out.
Execution Version 64 (h) Except as stated in Section 11.21(h) of the Side Letter, there are no outstanding Claims or, to the knowledge of the SQM Party, serious written threats against SQM Salar or the Business Subsidiaries relating to material Taxes, nor is there an ongoing audit process by any Governmental Authority on a material matter under discussion by SQM Salar or the Business Subsidiaries relating to material Taxes, other than audits in the Ordinary Course. (i) During the last three (3) years SQM Salar and the Business Subsidiaries have complied in all material respects with the relevant intercompany transfer pricing provisions of the applicable Tax Law and the provisions of Article 64 of the Chilean Tax Code. (j) All material Taxes arising directly from the SQM Reorganization, which are payable by SQM Salar, the Business Subsidiaries, or the Operating Company prior to the Merger shall be duly declared and timely paid or identified in the balance sheet of the Operating Company, as applicable, before the Governmental Authority, as set forth in Section 2.5. 11.22 Labor matters (a) Section 11.22(a)(i) of the Side Letter specifies, as of the effective date set forth therein, the names of all employees with whom they have employment contracts, including current Business Personnel. Except as set forth in Section 11.22(a)(ii) of the Side Letter, SQM Salar and the Business Subsidiaries have not hired any employee to provide services for the development of the Business without a written employment contract. (b) SQM Salar and the Business Subsidiaries are in compliance and have been in compliance for the past three (3) years in all material respects with (i) applicable laws regarding individual and collective employment and labor practices, including terms and conditions of employment, wages, overtime, vacations, working hours, bonuses, working week, benefit plans, occupational health and safety, accidents at work and occupational diseases, indemnities, bonuses, whether by virtue of the Law and/or their respective individual or collective labor contracts, union contributions and family allowances, all social security obligations and debts arising from, but not limited to, pension fund contributions, mandatory health contributions, severance insurance contributions, welfare, social benefits, occupational accident and occupational disease insurance contributions; and (ii) any other applicable labor and social security laws. SQM Salar and the Business Subsidiaries have no responsibility with respect to employees' post- retirement medical, dental or life insurance benefits (other than the coverage required by applicable Law and current contracts). (c) SQM Salar and the Business Subsidiaries do not have verbal agreements or tacit clauses regarding Benefit Plans for material amounts with any of their employees. Except as provided in Section 11.22(c) of the Side Letter there are no other Benefit Plans to which the employees of SQM Salar and the Business Subsidiaries are entitled. (d) There are no overdue debts to employees of SQM Salar and/or the Business Subsidiaries for remuneration, compensation, allowances, bonuses, benefit plans or for any other concept under applicable labor and social security legislation, as well as under individual and collective labor contracts. (e) Section 11.22(e) of the Side Letter contains a list of all contractors and subcontractors currently providing relevant services to SQM Salar or to Business Subsidiaries in connection with the development of the Business under any Subcontracting Law. These contractors and subcontractors, as well as their workers, Execution Version 65 provide services in accordance with the respective service contracts entered into with SQM Salar or the Business Subsidiaries (if applicable). The employees of contractors and subcontractors are not subject to any subordination or dependence on SQM Salar or its Subsidiaries. To the best of SQM's knowledge, these contractors and subcontractors are up to date with their labor and social security obligations with respect to their workers. (f) During the last five (5) years SQM Salar and the Business Subsidiaries have complied in all material respects with their obligations under Article 184 of the Labor Code, Law No. 16,744 on Occupational Accidents and Occupational Diseases and other Chilean Laws. (g) Except for the provisions of Section 11.22(g) of the Side Letter there are no personnel providing fee-based services to SQM Salar or the Business Subsidiaries. The personnel who provide fee-based services to SQM Salar and the Business Subsidiaries provide such services without subordination or dependence on them. (h) Except as provided for in Section 11.22(h) of the Side Letter, neither the execution of this Agreement or the other Transaction Documents, nor the consummation of the SQM Reorganization or the transactions contemplated by the Transaction Documents (either alone or together with any other event, including the termination of the employment relationship) constitutes a termination event of any agreement between SQM Salar or the Business Subsidiaries and their respective employees, labor unions or workers' associations. (i) Neither the execution of this Agreement or the other Transaction Documents, nor the consummation of the SQM Reorganization or the transactions contemplated by the Transaction Documents (either alone or together with any other event, including the termination of employment) shall result in any employee of the SQM Party or the Business Subsidiaries becoming entitled to, or to an increase in, any payment or benefit (including severance pay) or accelerate the timing of payment or vesting of any compensation or benefit, in either case under any Employee Benefit Plan. (j) Except as provided for in Section 11.22(j) of the Side Letter, no legal action has been notified to SQM Salar and/or the Business Subsidiaries seeking to pursue its liability for occupational accidents and/or occupational diseases, for amounts in excess of the amount equivalent to [***] Dollars (USD [***]). 11.23 Collective bargaining agreements (a) Except as provided for in Section 11.23(a) of the Side Letter there are no labor unions and workers' assemblies, committees and other similar workers' organizations at SQM Salar and the Business Subsidiaries. (b) Except as provided for in Section 11.23(b) of the Side Letter, SQM Salar and the Business Subsidiaries have not entered into any collective bargaining agreement or similar agreements with any labor union, bargaining group or workers' association. (c) Except for the provisions set forth in Section 11.23(c) of the Side Letter during the last three (3) years, SQM Salar and the Business Subsidiaries have not been involved in any anti-union or unfair labor practices, fundamental rights violations and/or discrimination (as such terms are defined in the Chilean Law or applicable Foreign Law) and there are no charges or claims for anti-union or unfair labor practices or fundamental rights violations and/or discrimination against SQM Salar and the Business Subsidiaries Execution Version 66 that are pending in any Governmental Authority and of which SQM Salar or the Business Subsidiaries have been notified. (d) Section 11.23(d) of the Side Letter describes all work stoppages, disputes, slowdowns, lockouts and strikes (legal or otherwise) suffered by SQM Salar or the Business Subsidiaries in the last twelve (12) months, including the dates and duration of each of them. As of this date, the SQM Party does not anticipate any work stoppages or strikes (legal or otherwise) other than those that may occur in the regular course of upcoming collective bargaining negotiations with respect to SQM Salar or the Business' Subsidiaries. 11.24 Intellectual Property (a) Annex 2.5(e) lists and describes all of the SQM Intellectual Property of the Business related to lithium. The SQM Party and its Subsidiaries (i) are the owners of the SQM Intellectual Property of the Business free and clear of all Liens (other than the Permitted Liens), and (ii) have not granted to any Person any interest in or right to use on all or part of the SQM Intellectual Property of the Business, except as provided for in Section 2.5 and Section 10.2. (b) The Intellectual Property of SQM Salar and the Business Subsidiaries as of the Agreement Date is free and clear of all Liens (other than the Permitted Liens) and no Person has been granted any interest in or right to use all or any part of such Intellectual Property, except as provided for in Section 2.5 and Section 10.2. (c) With the right to be granted by the IP License for the Operating Company, with respect to the SQM Intellectual Property of the Business, the Intellectual Property as of the Agreement Date that is owned by SQM Salar and the Business Subsidiaries, and the Know-How of the Business Personnel, the Operating Company will have the Intellectual Property it requires to continue developing the Business after the Effective Date of the Joint Venture as it has done up to this date. (d) The SQM Party is not aware of any written claim of infringement or breach by the SQM Party or the Business Subsidiaries of any industrial or intellectual property right of any Person relating to the conduct of the Business, nor has the SQM Party or the Business Subsidiaries received notice that the conduct of the Business, including the use of Intellectual Property, infringes or violates any industrial or intellectual property rights of any other Person, or the trade secrets, know-how or confidential or proprietary information of any other Person, and is not aware of any infringement or violation of any of the rights of the SQM Party and the Business Subsidiaries and their Intellectual Property. The SQM Party is not aware of any facts that challenge the validity or enforceability of the Intellectual Property. 11.25 Information Technology (a) Section 11.25(a) of the Side Letter lists and describes all computer hardware and software, electronic devices, communications and geolocation equipment, networks and information technology systems (collectively the "IT Systems") that SQM Salar and the Business Subsidiaries use for the development of the Business. (b) The SQM Party and its Subsidiaries hereby represent and warrant that (i) they own the IT Systems and the IT Systems are free and clear of all Liens (other than the Permitted Liens) or, as detailed in Paragraph 11.25(b) of the Side Letter, have obtained from third parties sufficient rights to use the IT Systems in the conduct of the Business; (ii) there are no restrictions or impediments, of any nature, for the SQM Party and its Subsidiaries to transfer title to the IT Systems to the Operating Company, or to Execution Version 67 transfer or share with the Operating Company the rights or authorizations necessary for it to use them in the conduct of the Business. (c) Furthermore, the SQM Party and its Subsidiaries represent and warrant that: (i) the IT Systems comply in all relevant aspects with the technical and regulatory requirements set forth in the applicable Laws; (ii) IT Systems are adequate and sufficient in all aspects relevant to the development of the Business as it has been carried out so far; (iii) the IT Systems are properly maintained and functioning properly, in accordance with their technical specifications and user manuals, and have not suffered any relevant malfunctions or failures at any time during the last six (6) months; (iv) have adopted technical, contractual and organizational measures to reasonably safeguard the security, confidentiality, integrity, availability and permanent resilience of the IT Systems, which are consistent with the state of the art, the different levels of criticality of the information involved, the probabilities and risks of a breach of the security measures of the IT Systems and the seriousness of the effects that such a breach would have, including mechanisms to control access to the information, avoid its alteration, destruction, loss or unauthorized access, generate periodic backups of it and restore its availability and access quickly in case of physical or technical incidents; and (v) regularly carry out processes of verification, evaluation and assessment of the effectiveness of the technical and organizational measures adopted to safeguard the security, confidentiality, integrity, availability and permanent resilience of the IT Systems, with a view to their continuous improvement. 11.26 Anticorruption (a) Except as indicated in Section 11.26(a) of the Side Letter, during the last five (5) years, the SQM Party, the Business Subsidiaries and, to the best of the SQM Party's knowledge, none of their directors, chief executives, legal or conventional representatives, and any other Person holding an office, function, or equivalent position in the SQM Party or the Business Subsidiaries, or third parties related to such Entities under the terms of Article 3 of Law No. 20.393, acting in each case in the exercise of their position or relationship (collectively, the "SQM Linked Parties"), have made, either directly or indirectly, Prohibited Payments or have been involved in Prohibited Transactions. The SQM Party assures and confirms that the SQM Linked Parties have been bound by internal compliance rules whose object and purpose is to prevent, avoid and sanction Prohibited Payments and Prohibited Transactions, as well as to comply with national Anti-Corruption Regulations. (b) Neither the SQM Party and the Business Subsidiaries nor the SQM Linked Parties have taken any action that could result in SQM Salar or the Business Subsidiaries violating any Anti-Corruption Regulations, or have committed any of the offenses set forth in the Anti-Corruption Regulations that harm or could harm the interests, reputation, property, and/or assets of the Operating Company or the Business Subsidiaries, or that could result in administrative, criminal, civil or any other type of sanctions for the Operating Company or the Business Subsidiaries.
Execution Version 68 (c) Except as indicated in Section 11.26(c) of the Side Letter, during the past five (5) years the SQM Party, the Business Subsidiaries and, to the knowledge of the SQM Party, the SQM Linked Parties, have carried on the Business fulfilling its compliance standards, and have not participated in any activity, practice or conduct in breach of any Anti-Corruption Regulations (d) The resources, funds, cash, assets and/or goods that are part of the equity of SQM Salar or the Business Subsidiaries, as well as all the resources that are used and/or related to the Business or are part of the SQM Reorganization, are of lawful origin and are not linked to money laundering, financing of terrorism and/or any other crime related to the Anti-Corruption Regulations. (e) Any and all interactions with public agents were conducted in accordance with good market practices in terms of ethics, as well as applicable law, including in terms of transparency and record keeping. (f) Except as set forth in Section 11.26(f) of the Side Letter, neither the SQM Party, the Business Subsidiaries nor, to the Knowledge of the SQM Party, the SQM Linked Parties, have in the past five (5) years (i) been convicted of any criminal offense involving corruption, money laundering, drug trafficking, or other economic crime or modern slavery, or (ii) been or is subject to any investigation, inquiry or enforcement proceeding by any Governmental Authority, with respect to any corruption, money laundering or other economic crime or modern slavery offense and, to the best of his knowledge, there are no circumstances that would give rise to an investigation, inquiry or proceeding with respect to such offenses. (g) The statements made by the SQM Party with respect to Anti-Corruption Regulations are also made with respect to events occurring within the last five (5) years in relation to compliance by the SQM Party and the SQM Linked Parties with the U.S. Foreign Corrupt Practices Act of 1977 (FCPA) and the UK Bribery Act (UK Bribery Act). 11.27 Intermediary fees There is no investment bank, broker or dealer, securities intermediary or other intermediary retained by or authorized to act on behalf of the SQM Party who may be entitled to receive fees or commissions from SQM Salar or the Business Subsidiaries in connection with the transactions contemplated by this Agreement and the other Transaction Documents after the Effective Date of the Joint Venture. SQM is solely responsible for any and all fees and commissions that may be due to such bankers, advisors, agents or intermediaries. 11.28 Dissolution, liquidation or insolvency The SQM Party and the Business Subsidiaries have not incurred in the suspension of payments or any grounds for dissolution, liquidation, reorganization, insolvency or bankruptcy under Law 20.720 or the applicable Foreign Law, nor are they subject to any proceedings to that effect. None of the creditors of the SQM Party or the Business Subsidiaries has brought any dissolution, liquidation, bankruptcy or insolvency proceedings, pursuant to Law 20.720 or the applicable Foreign Law, against them. The SQM Party and the Business Subsidiaries have not filed or do not intend to file for dissolution, liquidation, reorganization, bankruptcy or insolvency proceedings, pursuant to Law 20.720 or the applicable Foreign Law. Execution Version 69 11.29 Compliance with applicable laws Except as provided for in Section 11.29 of the Side Letter, the SQM Party and the Business Subsidiaries comply in all material respects with applicable Law in connection with the conduct of the Business, except where the lack of such compliance could not reasonably be expected to have a Material Adverse Effect. 11.30 Knowledge of the SQM Party The SQM Party expressly declares that it has the knowledge and experience in financial and business matters necessary to evaluate the merits and risks of the Joint Venture and also confirms that it can bear the economic risk of its investment in the Joint Venture. Moreover, the SQM Party expressly declares that it has relied solely and exclusively upon its own investigation and the representations and warranties of the CODELCO Party contained in Article 12 for purposes of entering into this Agreement and the Transaction Documents. The SQM Party further acknowledges, represents, warrants and agrees that, except as set forth in this Agreement in Article 12, the CODELCO Party, any of its respective Representatives or any other Related Person has not made any representation or warranty, whether express or implied, regarding projections, forecasts, estimates, plans, financial information or budgets of future revenues, expenses or expenditures, future results of operations (or any component thereof), future cash flows (or any component thereof) or future financial condition (or any component thereof) of Tarar. 11.31 Exclusivity of representations and warranties The SQM Party expressly declares that the only and exclusive representations and warranties it has made in connection with this Agreement and the other Transaction Documents are those expressly contained in this Article 11, it being expressly stated that the delivery or disclosure of any documentation or information (including any financial projections or related documents) by the SQM Party to the CODELCO Party or any of its Subsidiaries, Representatives or advisors does not and shall not constitute, in any event, a representation or warranty of any kind or nature, oral or written, express or implied, relating to the SQM Party and/or any of the Business Subsidiaries. SECTION 12 - Representations and Warranties of CODELCO The CODELCO Party hereby represents to the SQM Party that the representations and warranties set forth in this Article 12 are true, correct and complete as of the date of this Agreement and shall continue to be true and complete as of the Reference Date as if made as of that date (except for those representations and warranties that relate to a specific date and are required to be true and correct only as of that specific date). 12.1 Existence of CODELCO CODELCO is a State-owned, mining, industrial and commercial company, with legal personality and its own assets, created by Law. CODELCO has the capacity and power to own SDC and Tarar and to carry on its business as it currently does and to enter into, deliver and perform its obligations under the Agreement and the other Transaction Documents. 12.2 Subscription, execution and enforceability Execution Version 70 The execution, delivery and performance of the Agreement and each of the other Transaction Documents have been duly authorized by the CODELCO Party by all necessary corporate action and constitute, or will upon execution and delivery constitute, a legal, valid and binding obligation of the CODELCO Party enforceable by the SQM Party in accordance with their terms, except to the extent enforceability may be limited by applicable liquidation or insolvency rights. 12.3 Absence of conflict The execution of the Agreement and the other Transaction Documents and the performance by the CODELCO Party of its obligations under the Agreement and the other Transaction Documents do not violate any provision of the bylaws and other organizational documents of the CODELCO Party, shall not conflict with or result in a breach of any provision of, or constitute a default under (or an event which, by the lapse of time, would constitute a breach of) any provision of, the bylaws or organizational documents of the CODELCO Party; or result in a violation in any material respect of any of the terms and provisions of any Law applicable to the CODELCO Party. 12.4 Existence of SDC and Tarar (a) SDC and Tarar are sociedades por acciones (joint stock companies) validly incorporated under Chilean law and have the capacity and power to carry on business as currently conducted. (b) Tarar's corporate or partnership books and records have been kept and maintained in all material respects in accordance with applicable law. 12.5 Ownership of Shares in Tarar (a) CODELCO, directly or indirectly through SDC, is the beneficial and registered owner of all of the Tarar Shares, all of which are fully paid and free of all Liens. (b) None of the Tarar Shares are subject to a shareholders' agreement or joint action agreement and there are no options, warrants, convertible or exchangeable securities or other rights, agreements, covenants or undertakings relating to Tarar's equity interests, nor are there any outstanding obligations of Tarar to repurchase, redeem or otherwise acquire any of the outstanding shares. (c) No Person other than the SQM Party has any oral or written agreement or option or right or privilege that could be converted into an agreement or option to purchase or acquire any of the Tarar Shares. (d) As of the Effective Date of the Joint Venture, Tarar will not own or beneficially own any securities or other interests in the property, capital or ownership rights of any Entity and will not be bound by any commitment or obligation to acquire any securities or other interests in the property, capital or ownership rights of any Entity. (e) Tarar does not own treasury shares, nor has it received treasury shares as collateral, nor has it constituted reciprocal equity interests, either directly or through an intermediary, nor has it carried out any type of business or action contrary to the legally applicable treasury stock regime for each of these companies. Tarar has not registered any contributions for future capital increases, nor has it agreed to pay or distribute any amount for the return of capital to the shareholders thereof that is pending payment or distribution. Execution Version 71 (f) As of the Effective Date of the Joint Venture, Tarar will not have any compensation plans for executives and workers, incentive plans, stock option programs, or any other equivalent that may entitle any Person to claim rights or options on shares issued by such companies or convertible securities therein. (g) The CODELCO Party has not been notified in writing of any lawsuits, claims, legal actions, judicial and/or extrajudicial proceedings that could affect the ownership of Tarar Shares. 12.6 Consents Except for the Consents and Authorizations, the CODELCO Party is not required to obtain or file any representations, filings, consents, approvals, Orders or authorizations from any Governmental Authorities or third parties in connection with the consummation of the transactions contemplated by this Agreement and the other Transaction Documents. 12.7 Financial Information (a) The financial statements of Tarar have been prepared in accordance with Chilean GAAP and are attached hereto as Annex 12.7, present fairly, in all material respects, the financial position of Tarar as of December 31, 2023, and the results of its operations and cash flows for the fiscal year then ended. (b) Tarar's financial statements contain provisions consistent with Chilean GAAP for bad and doubtful accounts receivable, obligations and liabilities either (actual, contingent and other), including, among others, tax obligations, obligations with related companies and financial commitments existing at the date thereof. All reserves included in the financial statements adequately and sufficiently reflect the amounts of such obligations and liabilities, in accordance with Chilean GAAP. As of the date of the financial statements, Tarar did not have any obligations or liabilities, contingent or otherwise, arising from its business activities or events concurrent with or prior to such dates, which, in accordance with Chilean GAAP, should not be reflected in the financial statements. (c) Subsequent to the closing date of the financial statements, Tarar's accounting correctly records its financial position, as well as the results of its operations and its statement of shareholders' equity. Moreover, during the period between the closing date of the financial statements and the Agreement Date, Tarar's accounting has been kept in a manner consistent with Chilean GAAP. (d) All of Tarar's accounts receivable have arisen from bona fide transactions. Such account receivables are due and payable in accordance with their terms for the amounts recorded therein. (e) Tarar has established and maintains, complies with and enforces a system of records, accounts and internal accounting control to ensure the reliability of financial reporting and the preparation of financial statements in accordance with Chilean GAAP, having policies and procedures that provide reasonable assurance that (i) transactions, revenues and expenses are executed only in accordance with the authorization of Tarar's management; (ii) transactions are properly recorded to permit the preparation of financial statements in conformity with Chilean GAAP; and (iii) any unauthorized acquisition, disposition or use of assets is prevented or detected in a timely manner.
Execution Version 72 (f) All stocks and inventories reflected in the financial statements have been valued in accordance with Chilean GAAP as applicable, including applicable adjustments for obsolete, defective, damaged or spoiled inventories. None of the stocks and inventories are subject to any consignment, bailment, warehousing or similar contract. In the case of any consignment, bailment, warehousing or a similar one with respect to any stock or inventory, Tarar has taken all necessary steps to ensure that such stock and inventory is not subject to any Lien (other than a Permitted Lien) granted by or in favor of the consignee, consignee, borrower, warehouseman or the like. 12.8 Absence of undisclosed liabilities Except for (i) liabilities, contingencies or events reflected in Tarar's financial statements as of December 31, 2023, and (ii) liabilities incurred in the Ordinary Course since the date of those financial statements, Tarar has no other Tarar liabilities that under Chilean GAAP are required to be reflected in a statement of financial position of Tarar. 12.9 Absence of activity Since the date of its incorporation, Tarar has not carried out or executed any transaction, or performed any act or entered into any contract, other than those listed in Section 2.8 of this Agreement. 12.10 CORFO-Tarar Contracts The CORFO-Tarar Contracts shall constitute once executed and delivered in accordance with the terms agreed by the Parties, and after completion of their processing before the Comptroller's Office, a legal, valid and binding obligation of the parties thereto, enforceable by Tarar (and thereafter the Operating Company) in accordance with their terms. The CORFO-Tarar Contracts will not terminate, nor will they entitle CORFO to request their termination by the Merger of Tarar into SQM Salar. 12.11 Taxes (a) Since its incorporation, Tarar has filed in due time and form with the competent Governmental Authority all Tax Returns required under applicable Law, including, among others, those relating to its income taxes, value added tax, withholding taxes, stamp taxes, land tax, regional development contributions and municipal patents, to the extent applicable, as well as having filed all required affidavits and any other Tax- related information required by and with the Governmental Authority. All Tax Returns and the assessments and tax bases on which they are based are complete and accurate in all material respects, in accordance with applicable Law. Since its incorporation, Tarar has paid all Taxes overdue and payable (including all installment and prepayments of Taxes required by applicable Law). Tarar has at its disposal the supporting documents related to the Tax Returns. (b) There are no agreements, waivers or other provisions providing for an extension of time for Tarar to file any tax declaration or pay any Taxes or for any Governmental Authority to examine any of the Tax Returns beyond the statute of limitations periods in accordance with applicable Law. (c) Since its incorporation Tarar has withheld the amount of all Taxes and other deductions required to be withheld in accordance with the applicable Law and has paid the same to the competent receiving Governmental Authorities within the time required by the applicable Laws. Execution Version 73 (d) Since its incorporation Tarar has withheld and/or surcharged all significant amounts to be collected for Taxes and has remitted them, in all material respects, to the Governmental Authority, when required by Law. (e) Taxes accrued in the period prior to the Effective Date of the Joint Venture have either been paid or are properly provided for by Tarar or have been contested in good faith and in accordance with procedures existing under applicable law, or are those that Tarar contests in the Ordinary Course. Provisions associated with Taxes have been made, implemented and accounted for as required by Chilean GAAP (f) Since its incorporation, all expenses, deductions, disbursements, costs, write-offs, credits, amortizations, depreciation, losses and any other item to be deducted in the determination of the Tax base, particularly those related to carry-forward losses (if any), have been duly determined in all material respects by Tarar in accordance with the applicable Law, and may be duly supported by the relevant documentation. (g) Tarar relies upon all the relevant documentation that justifies and supports its accounting and tax records in all material respects, in compliance with the applicable law. (h) There are no outstanding Claims or, to the knowledge of the CODELCO Party, serious written threats against Tarar in connection with material Taxes, nor is there an ongoing audit process by any Governmental Authority on a material matter under discussion by Tarar in connection with material Taxes. (i) Since its incorporation, Tarar has complied in all aspects with the relevant intercompany transfer pricing provisions of the applicable Tax Law and the provisions set forth in Article 64 of the Chilean Tax Code. 12.12 CODELCO Subsidiaries Due to the fact that CODELCO holds the majority of the shares issued by the Operating Company as of the Effective Date of the Joint Venture, the Operating Company will not have a different legal regime than any Chilean sociedad por acciones (joint stock company) except for (i) what CODELCO indicated to SQM by means of a letter issued on the date hereof called "Letter Section 12.12"; (ii) changes in Chilean Laws subsequent to the Effective Date of the Joint Venture; or (iii) those regulations that do not imply a restriction preventing the Operating Company from running an Ordinary Course similar to that of SQM Salar prior to the Effective Date of the Joint Venture. 12.13 Anti-corruption (a) During the past five (5) years, the CODELCO Party and, to the knowledge of the CODELCO Party, none of its directors, main executive officers, legal or conventional representatives, and any other Person holding an office, function, or equivalent position in the CODELCO Party, or third party related to such Entities in the terms of Article 3 of Law No. 20.393, acting in each case in the exercise of their position or relationship (collectively, the "CODELCO Linked Parties"), have made, either directly or indirectly, Prohibited Payments or have engaged in Prohibited Transactions. The CODELCO Party assures and confirms that the CODELCO Linked Parties have been bound by internal compliance rules whose purpose is to prevent, avoid and sanction Prohibited Payments and Prohibited Transactions, as well as to comply with national Anti- Corruption Regulations. Execution Version 74 (b) Neither the CODELCO Party nor the CODELCO Linked Parties have taken any action that could cause Tarar to violate any Anti-Corruption Regulations, or have committed any of the offenses set forth in the Anti-Corruption Regulations, that injures or may injure the interests, reputation, property, and/or assets of the Operating Company or the Business Subsidiaries, or that may result in administrative, criminal, civil or other penalties for the Operating Company or the Business Subsidiaries. (c) During the last five (5) years the CODELCO Party and, to the best of the CODELCO Party's knowledge, the CODELCO Linked Parties, comply with the compliance standards, and have not engaged in any activity, practice or conduct in breach of any Anti-Corruption Regulations. (d) The resources, funds, cash, assets and/or goods that are part of Tarar's shareholders’ equity are of lawful origin and are not related to money laundering, financing of terrorism and/or any other crime related to the Anti-Corruption Regulations. (e) Any and all interactions with public agents were conducted in accordance with good market practices in terms of ethics, as well as applicable law, including in terms of transparency and record keeping. (f) The CODELCO Party and, to the Knowledge of the CODELCO Party, the CODELCO Linked Parties, have not within the past five (5) years (i) been convicted of any criminal offense involving corruption, money laundering, drug trafficking, or other economic crime or modern slavery, or (ii) been or is subject to any investigation, inquiry or enforcement proceeding by any Governmental Authority, with respect to any corruption, money laundering or other economic crime or modern slavery offense and, to the best of his knowledge, there are no circumstances that would give rise to an investigation, inquiry or proceeding with respect to such offenses. 12.14 Intermediary’s fees There is no investment banker, broker or dealer, securities dealer or other intermediary, who has been engaged by or is authorized to act on behalf of the CODELCO Party, who may be entitled to receive fees or commissions from Tarar in connection with the transactions contemplated by this Agreement and the other Transaction Documents. CODELCO or SDC is solely responsible for any and all fees and commissions that may be due to such bankers, advisors, agents or brokers. 12.15 Dissolution, liquidation or insolvency The CODELCO Party has not incurred in suspension of payments or any other grounds for dissolution, liquidation, reorganization, bankruptcy or insolvency, pursuant to Law 20.720 or the applicable Foreign Law, nor is it subject to any proceeding to that effect. None of the creditors of the CODELCO Party has brought any dissolution, liquidation, bankruptcy or reorganization proceedings, pursuant to Law 20.720 or the applicable Foreign Law, against the CODELCO Party. The CODELCO Parties have not filed or intend to file a petition for dissolution, liquidation, reorganization, bankruptcy or insolvency proceedings under Law 20.720 or applicable Foreign Law. 12.16 Knowledge of the CODELCO Party The CODELCO Party expressly declares that it has the knowledge and experience in financial and business matters necessary to evaluate the merits and risks of the Joint Venture and further confirms that it can bear the economic risk of its investment in the Joint Venture. In addition, the CODELCO Party expressly declares that it has relied solely Execution Version 75 and exclusively upon its own investigation and the representations and warranties of the SQM Party contained in Article 11 (in each case, qualified in accordance with the Side Letter) for purposes of entering into this Agreement and the Transaction Documents. The CODELCO Party further acknowledges, represents, warrants and covenants that, except as set forth in this Agreement in Article 11, the SQM Party, SQM Salar, the Business Subsidiaries, any of their respective Representatives or any other Related Person thereof has made no representation or warranty whatsoever, whether express or implied, regarding projections, forecasts, estimates, plans, financial information or budgets for future revenues, expenses or expenditures, future results of operations (or any item thereof), future cash flows (or any item thereof) or future financial condition (or any item thereof) of SQM Salar and/or the Business Subsidiaries. 12.17 Exclusivity of representations and warranties The CODELCO Party expressly represents that the only and exclusive representations and warranties it has made in connection with this Agreement and the other Transaction Documents are those expressly contained in this Article 12, it being expressly stated that the delivery or disclosure of any documentation or information (including any financial projections or related documents) by the CODELCO Party to the SQM Party or any of its Subsidiaries, Representatives or advisors does not and shall not constitute, in any event, a representation or warranty of any kind or nature, oral or written, express or implied, relating to the CODELCO Party and/or its Subsidiaries. SECTION 13. Additional Obligations of the Parties 13.1 Communications with Governmental Authorities and Third Parties. (a) Subject to the Protocol, each Party shall provide to the other Party copies of all correspondence, submissions and communications (or memoranda setting forth the substance thereof) exchanged between them or their respective Representatives and the relevant Governmental Authority (or members of their respective staffs) in connection with this Agreement, the Regulatory Filings, Consent Solicitations and Consents and Authorizations, in each case and to the extent permitted by Law, sufficiently in advance of the delivery of such material to the respective Governmental Authority (or members of their respective staffs) in order to allow the other Party and its Representatives reasonable time to review and provide comments thereon. The Parties shall endeavor to respond to and comply with any request for information relating to the Joint Venture made by the relevant Governmental Authority. (b) If in connection with the Regulatory Filings or Consent Applications, SQM and/or CODELCO (including their respective Subsidiaries) are required or may submit any information about them or the Tarar Business, SQM Salar, the Business Subsidiaries or the Business Assets, or their cost structure, the disclosure of which could constitute a violation or potential violation of the Antitrust Law, such information shall be submitted by the SQM Party and/or CODELCO Party, as applicable, to the Governmental Authority on a confidential basis and the Party submitting such information shall not disclose or share such information with the other Party to this instrument or its Subsidiaries, unless such disclosure is required by the Governmental Authority. 13.2 Confidentiality (a) The Receiving Party Confidential Information undertakes, for itself and its Representatives, to keep the Confidential Information and any discussion and negotiation between the Parties about the Agreement and the Joint Venture, under strict
Execution Version 76 reserve and confidentiality and not to use it for purposes other than the evaluation, negotiation, execution and implementation of the Joint Venture. Accordingly, without the prior express written authorization of the Disclosing Party, the Receiving Party and its Representatives may not disclose, reveal or make available Confidential Information, either directly or indirectly, to Persons other than its Representatives and advisors who require knowledge of its content and scope (for the evaluation, negotiation, execution and implementation of the Joint Venture), including documents (whether drafts or final) relating to the Joint Venture, including the status thereof. (b) The Receiving Party shall limit access to the Confidential Information only to those Representatives and advisors who strictly require knowledge of its content and scope for the evaluation, negotiation, execution and implementation of the Joint Venture. Furthermore, the Receiving Party shall agree on confidentiality obligations, in terms similar to those established in the Agreement, with its Representatives and advisors who require knowledge of the content and scope of the Confidential Information for the evaluation, negotiation, execution and implementation of the Joint Venture, unless such Representatives or advisors already had equivalent confidentiality obligations agreed upon or legally imposed; and to deliver to the Disclosing Party, upon its sole request, the names of such Representatives and advisors. (c) The Receiving Party shall adopt the relevant measures to safeguard the Confidential Information, which shall be, at least, the same measures used by the Parties to protect their own documents, software and commercial secrets; it shall not make, order to make or allow to make other copies of the Confidential Information, additional to those strictly necessary to carry out its corresponding evaluation.. (d) The Receiving Party, in the event that the Disclosing Party so requests in writing, undertakes to deliver to the other, all Confidential Information in its possession or in the possession of its employees or collaborators, or to destroy it at the express request of the Disclosing Party and in the manner established by the latter, regardless of the medium in which this information is recorded. Furthermore, the Receiving Party is obliged to certify to the Disclosing Party in case the latter so requires, that all material in its possession has been returned, erased or destroyed in accordance with the foregoing and, therefore, that it does not have any copy of all or any part of the documentation associated therewith. Without prejudice to the return or destruction of the Confidential Information, the Receiving Party shall remain bound under the terms of this Agreement with respect to the Confidential Information. (e) Notwithstanding the foregoing, the Receiving Party and its Representatives and advisors (i) may retain such portion of the Confidential Information as is necessary to comply with its internal record keeping policies, a legal, statutory, regulatory or professional obligation; and (ii) shall be entitled to retain such portion of the Confidential Information that is automatically archived in its back-up files. In such cases, the Receiving Party and its Representatives and advisors shall remain obliged to maintain the confidentiality of such information for as long as they retain the Confidential Information. (f) The obligations of the Receiving Party set forth in the preceding paragraphs of this Section shall continue throughout the term of the Joint Venture and until two (2) years from the date of its termination. In the event of termination of this Agreement prior to the Effective Date of the Joint Venture, the obligations of the Receiving Party set forth in the preceding paragraphs of this Section shall continue for two (2) years from the termination of the Agreement. (g) The Receiving Party represents that it understands and agrees that the Confidential Information may include information not disclosed to the market and Execution Version 77 knowledge of which, by its nature, is capable of influencing the price of securities issued by the Disclosing Party ("Inside Information"). The Receiving Party understands and agrees, and shall instruct its Representatives and advisors, that the Securities Laws (including the LMV) prohibit, among other conducts, disclosing the Inside Information, or using for its own or another's benefit, acquiring or disposing for itself or for third parties, directly or indirectly, securities on which it possesses Inside Information or using the Inside Information to obtain benefits or avoid losses. The Receiving Party undertakes that neither it nor its Representatives shall acquire, sell or otherwise deal in securities issued by the Disclosing Party while in possession of Inside Information and until they are able to do so in compliance with the law. (h) The obligation of the Receiving Party not to disclose, reveal or make available Confidential Information set forth in this Section 13.2, shall not apply where such disclosure is (i) required by law, taking into special consideration CODELCO's and SQM's status as issuers of publicly offered securities, by virtue of which they are subject to the securities market disclosure rules set forth in the LMV and in General Rule No. 30 of the Financial Market Commission, and the oversight rules of COCHILCO and the Comptroller's Office applicable to CODELCO; and (ii) ordered by any Court Order or competent authority. (i) In the events described in paragraph (h) above, the Receiving Party may only disclose the Confidential Information in that part that is strictly necessary, and undertakes that the rest of the Confidential Information that has not been requested shall not be disclosed and shall be kept confidential. (j) In the cases in which the Receiving Party is obliged to disclose all or part of the Confidential Information, it shall use its Best Efforts in order that the party requesting the Confidential Information maintains the confidentiality of the information; and ensure that, to the extent possible, any Person to whom the Confidential Information has been disclosed maintains such confidentiality under the terms of this Agreement. (k) Prior to making any disclosure of information under the terms of this Section, the Receiving Party shall, as soon as legally possible: (i) Communicate such circumstance to the Disclosing Party immediately and in writing, indicating the reasons for the disclosure and a copy of the Confidential Information to be disclosed, so that the Disclosing Party may take the measures and actions it deems appropriate to protect its interests. (ii) provide all assistance and cooperation reasonably necessary to prevent or limit the disclosure of the Confidential Information, or in the case of disclosure, for the requesting party to maintain the confidentiality of the information. (l) The Parties acknowledge and agree that this Agreement and the delivery of Confidential Information to the Receiving Party shall not be construed to constitute a transfer or sale by the Disclosing Party of any rights, by license or otherwise, in the Confidential Information owned by the Disclosing Party, and no licenses or rights under patents, copyrights, trademarks or trade secrets are granted or shall be implied in this Agreement. Execution Version 78 13.3 Other activities of the Parties. Non solicitation (a) Until the Effective Date of the Joint Venture, except for the restrictions agreed to in this Agreement, each Party shall have no restriction to independently carry out its commercial activities and to receive all benefits derived from such commercial activities, without the need to consult or request authorization and without any obligation with respect to the other. The foregoing expressly includes the activities of the SQM Party in the Commonwealth of Australia, France and others, and the activities of the CODELCO Party in the Salar de Maricunga, Salar de Pedernales and Salar de Ollagüe. As of the Effective Date of the Joint Venture, the provisions of the Shareholders' Agreement shall apply. (b) From the Agreement Date and until the Effective Date of the Joint Venture, neither Party shall solicit, nor permit any of its Representatives, either for themselves or for any other Person, to induce, recruit or encourage any of the executives or employees identified as Business Personnel to leave their employment with SQM Salar or the Business Subsidiaries or not to accept to be rehired by or transferred to SQM Salar or the Business Subsidiaries. This obligation shall extend for a period of two (2) years from the date of termination of this Agreement. As of the Effective Date of the Joint Venture, the provisions of the Shareholders' Agreement shall apply. 13.4 Public Announcements (a) Any unauthorized disclosure of information related to the Agreement, the Joint Venture, the Shareholders' Agreement or the Salar Futuro Project, including communication actions of third parties that may affect the implementation of the Joint Venture or the Salar Futuro Project (for example, news, press reports, press releases, publications in social networks, among others) shall be qualified as a "communication contingency". The Party that becomes aware of a communicational contingency shall immediately (but no later than one Business Day) notify the other Party, and the Parties shall act jointly and in a coordinated way. (b) Any public announcement relating to the existence and content of this Agreement, the Operating Company or the Salar Futuro Project, whether written, radio, digital, television or by any other means, that one or both Parties wish to make or are required to make under the Law, including securities market disclosure rules, must, to the extent permitted by law, be disclosed in advance to the other Party, including the text, main ideas and/or content of the announcement intended to be disclosed, and must have the prior written consent of the other Party. Accordingly, the Parties shall consult with each other before issuing any press release, public statement or making any other public disclosure (including any mass communication to their employees) relating to the Agreement, the other Transaction Documents, and the implementation of the Joint Venture, and shall not issue any press release or public statement or make any other public disclosure on such matters without the prior written consent of the other Party (which shall not be unreasonably withheld or delayed). (c) In no event shall the provisions of (a) and (b) above be deemed to prohibit either Party from making any disclosure necessary to comply with such Party's disclosure obligations under applicable law, including disclosures to the Financial Market Commission, the U.S. . Securities and Exchange Commission, the Santiago Stock Exchange, the New York Stock Exchange, or any Governmental Authority or self- regulatory organization. The Parties agree that the execution of the Agreement shall be reported to the Financial Market Commission and to the public as a material fact in accordance with the LMV. Execution Version 79 13.5 Cooperation in good faith The Parties agree to cooperate in good faith with a view to making the Regulatory Submissions and Consent Applications and obtaining the Consents and Authorizations, and achieving compliance with the other Conditions Precedent and, ultimately, to enable the early consummation of the Joint Venture in accordance with the terms and conditions of this Agreement and the other Transaction Documents 13.6 Notifications up to the Effective Date of the Joint Venture. (a) Between the Agreement Date and the Effective Date of the Joint Venture or the date of early termination of the Agreement, each Party shall notify the other, in a timely manner as soon as it becomes aware of any of the following circumstances, matters or information: (i) Any fact, circumstance, change, effect, occurrence or event that could qualify as a Material Adverse Effect; (ii) Any notice or other communication from any Person alleging that the consent (or waiver, permission, release, order, order, approval, agreement, amendment or confirmation) of such Person is required in connection with this Agreement, the other Transaction Documents or the implementation of the Joint Venture;; (iii) Any notice or other communication from any Person that such Person is terminating or materially adversely modifying its relationship with SQM Salar, any of the Business Subsidiaries or the Business Assets as a result of this Agreement or the Joint Venture; (iv) Any notice or other communication from any Governmental Authority and any other filings, actions, complaints, lawsuits, claims, investigations or proceedings brought, filed or threatened by third parties, in connection with this Agreement, the implementation of the Joint Venture, any Submission or Permit or the obtaining of the Consents and Authorizations; (v) The occurrence, or the non-occurrence, of any event or occurrence, the occurrence or non-occurrence of which could, or is reasonably likely to, occur: (A) Cause any of the representations or warranties of a Party contained in this Agreement to be untrue or inaccurate; or (B) Result in the breach or failure to satisfy any obligation, condition or agreement to be performed or satisfied by that Party under this Agreement. (b) Notices given under this Section 13.6(a) shall not affect any representations, warranties, agreements or obligations of the Parties, or any rights, remedies, remedies or claims of the Parties under this Agreement with respect thereto 13.7 Exclusivity From the Agreement Date and until the Effective Date of the Joint Venture or earlier termination of this Agreement in accordance with its terms, the Parties and their respective Related Persons shall exclusively negotiate with each other all and any matter that is regulated in the Transaction Documents, including any matter relating to SQM Salar, the Business Subsidiaries, the Business Assets, the CORFO-Tarar Contracts and the Business in general (the "Purpose of the Joint Venture"), and shall especially, but not limited to, (A) terminating any negotiations or contracts with any Person that conflict or overlap with,
Execution Version 80 or otherwise relate in whole or in part to, the Purpose of the Joint Venture, and (B) refraining and procuring that its Representatives refrain from, directly or indirectly: (i) contracting, initiating discussions or participating in negotiations with any Person (whether such negotiations are initiated by the respective Party, its Related Persons, or any third party) that conflict or overlap, or of any other matter, relate in whole or in part to the Purpose of the Joint Venture; (ii) providing information or documentation with respect to SQM Salar, the Business Subsidiaries or Tarar as it relates to the Purpose of the Joint Venture; unless otherwise required under applicable law; or (iii) enter into a contract with any Person other than the other Party, which relates to the Purpose of the Joint Venture. 13.8 Estacamento Salitral As of the Agreement Date, the SQM Party undertakes to divide the SQM-owned estacamento salitral covering the area where, among other things, the El Carmen Plant is located, and upon such division, to transfer to the Operating Company that portion of such farm where the El Carmen Plant and its projected expansions are specifically located according to the plan incorporated as Annex 13.8, and such transfers may be made after the Effective Date of the Joint Venture, but must be completed within twenty-four (24) months after the Agreement Date. SECTION 14 – Implementation and Transitory Services 14.1 Implementation Coordination (a) Subject to compliance with the Antitrust Law, applicable regulatory restrictions and the provisions of the Protocol, the Parties shall meet to plan and monitor progress in the implementation of the Joint Venture in accordance with the Transaction Documents, including progress in the fulfillment of the Conditions Precedent set forth in Article 7. (b) Such coordination body shall meet in person or by video-conference as often as reasonably determined by the Parties, always ensuring that such meetings interfere as little as possible with the development of the activities of SQM Salar or the Business Subsidiaries. 14.2 Transitory Services and Supply Contracts In order to implement the Joint Venture and for SQM Salar to be the Operating Company that fully develops the Business as of the Effective Date of the Joint Venture, the SQM Party shall collaborate with the appropriate operational transition of SQM Salar so that it takes over all aspects of the Business. Prior to the Effective Date of the Joint Venture, the SQM Party shall enter into, or cause its Subsidiaries, as applicable, to enter into, with SQM Salar transitional services agreements and supply agreements on terms substantially similar to those drafts incorporated as Annex 14.2 (the " Transitory Services and Supply Contracts"). SECTION 15 - TERMINATION 91 15.1 Termination (a) Until the Effective Date of the Joint Venture, this Agreement may be terminated, and the operations contemplated hereby may be abandoned, at any time: (i) By mutual written consent of the Parties; Execution Version 81 (ii) By either Party, after written notice to the other Party, if any of the Conditions Precedent established in its favor or in favor of both Parties in Article 7 fails, and the cause for considering the Condition Precedent as failed cannot be cured or, if it could be cured, has not been cured within thirty (30) Business Days following the date on which one of the Parties has informed the other that a specific Condition Precedent has failed and its cause; or (iii) By either Party if the Closing has not occurred prior to December 31, 2025, unless the delay in Closing was the result of the willful misconduct or fault of that Party. (b) The notice of termination applicable under this Section shall be delivered to the other Party or Parties specifying the provision hereof pursuant to which such termination is made. 15.2 Termination effect In the event of termination of this Agreement, there shall be no further liability or obligation for the SQM Party or the CODELCO Party under this Agreement, except for: (i) the provisions set forth in Sections 13.2, 13.3, 15.2, 17.1 and 17.2, which shall survive such termination; (ii) gross negligence or willful misconduct or for breach of any provision of this Agreement prior to the termination of this Agreement; and (iii) the obligation to indemnify the damages suffered by the performing Party in the event of termination of the Agreement due to the other Party's negligent or willful breach of its obligations entitling the performing Party to terminate the Agreement. SECTION 16. Indemnity 16.1 Indemnification obligation of the SQM Party As of the Effective Date of the Joint Venture, the SQM Party agrees to indemnify, defend, and hold harmless the CODELCO Party, as set forth below, for any Losses (whether in connection with a Third Party Claim or Direct Claim), which the CODELCO Party suffers, incurs or pays personally or in its capacity as a shareholder of the Operating Company, by reason of or arising out of the causes set forth below: (a) Any misrepresentation or inaccuracy in any of the representations and warranties made by the SQM Party in Article 11 of this Agreement, or any Third Party Claim or Direct Claim arising from any misrepresentation or inaccuracy in any such representations and warranties; and (b) Any breach of the obligations of the SQM Party or its Subsidiaries provided for in this Agreement. 16.2 Indemnification Obligation of the CODELCO Party As of the Effective Date of the Joint Venture, the CODELCO Party agrees to indemnify, defend, and hold harmless the SQM Party, in the manner set forth below, for any Losses (whether in connection with a Third Party Claim or Direct Claim), which the SQM Party suffers, incurs or pays, whether personally or indirectly in its capacity as a shareholder of the Joint Venture, by reason of or arising out of: (a) Any misrepresentation or inaccuracy in any of the representations and warranties made by the CODELCO Party in Article 12 of this Agreement, or any Third Execution Version 82 Party Claim or Direct Claim arising from any misrepresentation or inaccuracy in any such representations and warranties; and (b) Any breach of the CODELCO Party's obligations under this Agreement or Section 12.12 Letter. 16.3 Third Party Claims (a) In the event that a third party, including a Governmental Authority, files any Claim (a “Third Party Claim”) against the Operating Company, the Business Subsidiaries or a Party (the “Indemnified Party”) that would cause Loss to the Operating Company, the Business Subsidiaries or the Indemnified Party, and the cause or basis of which would imply that any of the representations and warranties made by the other Party in Article 11 in the case of the SQM Party or Article 12 in the case of the CODELCO Party were inaccurate or untrue or arise from a breach of the other Party's obligations under this Agreement, the Indemnified Party shall give written notice (the “Notice of Third Party Claim”) to the other Party (the “Indemnifying Party”), of such Third Party Claim in a prompt and timely manner (prompt and timely in the case of Taxes provided always that it is given no later than fifteen (15) Business Days). The Operating Company shall be deemed an Indemnified Party of the CODELCO Party if the Third Party Claim relates to SQM Salar or one of the Business Subsidiaries but shall be deemed an Indemnified Party of the SQM Party if the Third Party Claim relates to Tarar. (b) The Notice of Third Party Claim shall state the nature of such Third Party Claim and the basis thereof, provided, always however, that the Indemnified Party's delay or failure to send such notice to the Indemnifying Party shall not relieve the Indemnifying Party of its obligations hereunder, except and only to the extent that it would actually be prejudiced by such delay or failure. (c) The Notice of Third Party Claim shall describe in reasonable detail such Third Party Claim and shall specify the Sections of this Agreement that would be the basis of the claim, include copies of any material written evidence in the Indemnified Party's possession and set forth the actual or estimated amount, to the best of its knowledge, of the Losses suffered or to be suffered by the Indemnified Party and include reasonable supporting documentation as appropriate. (d) The Indemnifying Party shall have fifteen (15) days from receipt of the Notice of Third Party Claim to decide, at its option, whether to assume and control the defense, at its own expense and with its own legal counsel, of such Third Party Claim and shall be entitled to assert all defenses available to the Indemnified Party to the fullest extent permitted by the applicable Laws. (e) If the Indemnifying Party elects to assume the settlement or defense of such Third Party Claim, the Indemnifying Party shall so notify the Indemnified Party, which shall fully cooperate with the Indemnifying Party and its legal counsel in the settlement or defense of such Third Party Claim, provided, however, that the Indemnifying Party shall not settle, compromise, or release, or admit any liability in connection with such Third Party Claim without the prior written consent of the Indemnified Party (which consent shall not be unreasonably withheld, conditioned or delayed), unless the relief solely consists of pecuniary Losses and provided that such settlement or compromise shall include a provision whereby the plaintiff or claimant releases the Indemnified Parties from any liability with respect thereto. The Indemnified Party shall make available to the Indemnifying Party all information available to such Indemnified Party relating to the Third Party Claim. If the Indemnifying Party elects to Execution Version 83 defend such Third Party Claim, the Indemnified Party may participate in such defense with legal counsel of its own choosing at its own expense. (f) If the Indemnifying Party receiving the Notice of Third Party Claim elects not to defend such Third Party Claim or fails to assume the defense thereof after the expiration of fifteen (15) days, in addition to any other rights or remedies to which it may be entitled, the Indemnified Party shall have the right to assume the defense of such Third Party Claim at the expense of the Indemnifying Party, which shall cooperate fully with the Indemnified Party and its counsel in the settlement or defense of such Third Party Claim, provided, however, that the Indemnified Party shall not settle, compromise, compromise or release, or admit any liability with respect to such Third Party Claim without the prior written consent of the Indemnifying Party (which consent shall not be unreasonably withheld, conditioned or delayed). The Indemnifying Party shall make available to the Indemnified Party all information available to such Indemnifying Party relating to the Third Party Claim. (g) For the avoidance of doubt, the Indemnified Party shall not have the right to settle a Third Party Claim without the written consent of the Indemnifying Party (in its sole discretion) if the Indemnifying Party assumes the defense of the Third Party Claim hereunder or if the period for determining whether or not to assume the defense of the claim has not expired. 16.4 Direct Claims (a) In the event that either Party has a claim against the other Party under this Agreement, which does not involve a Third Party Claim (a "Direct Claim"), but which gives rise to a claim for damages under this Article 16, the Party asserting the claim (the "Indemnified Party") shall as soon as practicable communicate in writing such Direct Claim to the Party against which it claims (the "Indemnifying Party") indicating the nature and basis thereof, provided, however, that the delay or failure of the Indemnified Party to send such notice to the Indemnifying Party shall relieve the Indemnifying Party of its obligations under this instrument only if and to the extent that it is prejudiced by such delay or failure. (b) The written communication with the Direct Claim shall describe in reasonable detail such Direct Claim, indicating the Sections of this Agreement that are the basis of the claim, include copies of all material written evidence in the Indemnified Party's possession and set forth the actual or estimated amount of Losses suffered or to be suffered by the Indemnified Party and include reasonable supporting documentation as appropriate. 16.5 Limitations on the Obligation to Indemnify The Parties agree that the indemnification obligations provided for in this Article 16 shall be limited as follows: (a) De Minimis. The Parties shall be liable to pay indemnifications for Losses suffered as a result of the grounds set forth in Section 16.1(a), Section 16.6(d), and Section 16.2(a), as applicable, only if each Loss, individually (or separate Losses to be considered as a single Loss when arising from the same act, origin, ground or legal basis), exceeds the amount of [***] Dollars (USD [***]) ("De Minimis Amount"), and no Losses below the De Minimis Amount, shall be accounted for purposes of determining actual compensable Losses (including with respect to the Deductible, as defined below). For the avoidance of doubt, upon the occurrence of an event or Claim not affecting a Party personally, but for a Loss sustained at the Operating Company level, the Loss sustained by the Operating Company shall be considered in determining
Execution Version 84 whether or not the De Minimis Amount is exceeded, provided always that the Loss suffered by the Party shall be considered in determining the actual indemnifiable Losses (including with respect to the Deductible, as defined below). (b) Deductible The Parties shall be liable to pay compensation for Losses suffered as a result of the grounds set forth in Section 16.1(a), Section 16.6(d), and Section 16.2(a), as applicable, if the sum of the indemnifiable Losses (i.e., those over the De Minimis Amount) suffered by the SQM Party or the CODELCO Party, as applicable, is equal to or greater than an amount equal to [***] Dollars (USD [***]) ("Deductible"); on the understanding that, if the total value of the indemnifiable Losses pursuant to the foregoing exceeds the Deductible, the Indemnifying Party shall be liable for the total indemnifiable Losses suffered by the SQM Party or the CODELCO Party, as the case may be, up to the Maximum Indemnity Amount, if applicable. (c) Maximum Amount The maximum aggregate amount that the SQM Party or the CODELCO Party, as applicable, as Indemnifying Party shall be obliged to pay to the other as Indemnified Party as compensation for Losses suffered as a result of the grounds set forth in Section 16.1(a), Section 16.6(d), and Section 16.2(a), as applicable, shall not at any time exceed the amount of [***] Dollars (USD [***]) ("Maximum Indemnity Amount") even if the total Losses amount to a higher amount. (d) Time Limit for Claiming. The Parties may give Notice of a Third Party Claim or file a Direct Claim relating to indemnities for Losses set forth in Section 16.1(a) and Section 16.2(a), as applicable, until the expiration of (i) eighteen (18) months from the Effective Date of the Joint Venture ; or (ii) thirty-six (36) months from the Effective Date of the Joint Venture for Losses related to a misrepresentation or inaccuracy in the representations and warranties made by the SQM Party in Section 11.16 (Environmental Matters) or for the Losses set forth in Section 16.6(d). With respect to any Third Party Claim or Direct Claim filed prior to the expiration of the aforementioned term, they shall remain in force provided that the Indemnified Party has filed, prior to the fourth anniversary of the Closing Date, the corresponding claim before the Arbitral Tribunal to enforce its resolution if such claim is the subject of a dispute between the Parties. (e) Other Losses. Notwithstanding the foregoing, and for the avoidance of doubt, the limitation of the De Minimis Amount, the Deductible, the Maximum Indemnity Amount and the time limit stated in paragraph (d) above shall not apply with respect to Losses attributable to willful misconduct or gross negligence, Losses related to Material Representations and Warranties, and Losses suffered as a result of the grounds stated in Section 16.1(b), Section 16.6 (a), (b) and (c), Section 16.2(b) and Section 16.7 (a), (b), (c) and (d). With respect to such Losses, a maximum indemnity amount (other than the Maximum Indemnity Amount) shall apply for each Indemnifying Party of [***] Dollars (USD [***]) and the term for giving Notice of Third Party Claim or file a Direct Claim for these Losses shall be the greater of the period corresponding to the statute of limitations established in Chilean Law and thirty-six (36) months from the Effective Date of the Joint Venture. (f) Obligation to Mitigate and Minimize Losses. Each Party undertakes to exercise available rights or remedies to mitigate and minimize any Loss subject to indemnification under this Article 16 promptly and in a timely manner from the date it becomes aware of any fact, event or circumstance that could reasonably be expected to give rise to any Loss. (g) Non-Indemnifiable Losses. The Indemnified Party shall not be entitled to indemnification for Losses under this Article 16 when: Execution Version 85 (i) The respective event or circumstance directly giving rise to the Losses is explicitly stated in this Agreement, in its Annexes or in the Side Letter; (ii) The respective event or circumstance directly giving rise to the Losses set forth in Section 16.1(a), Section 16.6(d) and Section 16.2(a) occurred after the Reference Date; or (ii) The respective event or circumstance giving rise to the Losses was the direct consequence of an act or omission of the Indemnified Party prior to the Reference Date. 16.6 Special SQM Party Indemnities As of the Effective Date of the Joint Venture, the SQM Party agrees to indemnify, defend, and hold harmless the CODELCO Party, as set forth below, for any Losses (even if the contingencies giving rise to such Losses have been disclosed in the Side Letter), whether in connection with a Third Party Claim or a Direct Claim, suffered, incurred or paid by the CODELCO Party in its personal capacity or as a shareholder of the Operating Company, by reason of or arising out of the causes set forth below: (g) any Taxes payable by SQM Salar, the Operating Company or the Business Subsidiaries for, or arising from, events that occurred prior to the Effective Date of the Joint Venture or taxable periods or portions of such periods prior to the Effective Date of the Joint Venture (including Taxes arising from the SQM Reorganization, but excluding any Taxes arising from the Merger), unless the full amount of such Taxes would have been paid or reflected in the Reference Balance Sheet accounts considered for the determination of the Adjustment Account, (or if less than the total amount, up to the amount of Taxes actually paid or reflected); (h) (any Losses suffered, assumed or paid by the Operating Company or the Business Subsidiaries, due to or arising from the SQM Reorganization (including the contribution of the Korea Business, notwithstanding occurring after the Reference Date), unless the total amount of such Losses has been paid or reflected in the Reference Balance Sheet accounts considered for the determination of the Adjustment Account (or if less than the total amount, up to the amount of the Losses actually paid or reflected); (i) any Losses suffered, or assumed or paid by the Operating Company, the Business Subsidiaries, or the CODELCO Party, for, or arising from, Prohibited Payments or Prohibited Transactions that occurred prior to the Effective Date of the Joint Venture, by the SQM Party, its Subsidiaries, or the SQM Linked Parties, unless the full amount of such Losses has been paid or reflected in the Reference Balance Sheet accounts considered for the determination of the Adjustment Account (or if less than the full amount, up to the amount of the Losses actually paid or reflected); and (j) any Loss suffered, or assumed or paid by the Operating Company or the Business Subsidiaries, for, or arising out of, any of the contingencies prior to the Effective Date of the Joint Venture (and in the case of contingencies which are Claims, also the events giving rise to such Claims), described in the document executed by the Parties on the date hereof, and entitled "Section 16 paragraph. 6", unless the total amount of such Losses has been paid or reflected in the accounts of the Reference Balance Sheet considered for the determination of the Adjustment Account (or if it is less than the total amount, up to the amount actually paid or reflected of the Losses). Execution Version 86 16.7 Special CODELCO Party Indemnities As of the Effective Date of the Joint Venture, the CODELCO Party agrees to indemnify, defend, and hold harmless the SQM Party, in the manner set forth below, for any Losses (whether in connection with a Third Party Claim or Direct Claim), which the SQM Party suffers, incurs or pays, whether personally or indirectly in its capacity as a shareholder of the Joint Venture, by reason of or arising out of: (a) any Taxes payable by Tarar or the Operating Company for, or arising from, events occurring prior to the Effective Date of the Joint Venture or taxable periods or portions of such periods prior to the Effective Date of the Joint Venture, to the extent such Taxes have not been paid or reflected in the balance sheet accounts considered in determining the Adjustment Account; (b) any Losses suffered, or assumed or paid by the Operating Company, the Business Subsidiaries, or the SQM Party, for, or arising from, Prohibited Payments or Prohibited Transactions that occurred prior to the Effective Date of the Joint Venture, by the CODELCO Party, Tarar, or the CODELCO Linked Parties; (c) payments due to CODELCO under Section 10.3(c); and (d) any Loss suffered or borne or paid by the Operating Company or the Business Subsidiaries, by reason of, or arising out of, the circumstances described in Section 12.12 of the Letter. 16.8 Indemnification payment mechanisms . (g) In the case of an event, situation or Claim that does not affect the Indemnified Party personally, but rather for a Loss suffered at the Operating Company level, the Indemnifying Party may elect to fulfill its obligation to indemnify the Indemnified Party through one of the following two alternative mechanisms: (ii) pay to the Operating Company directly the amount of the Indemnifiable Loss incurred at the Operating Company level, or (iii) deduct from the dividend to which the Indemnifying Party is entitled an amount such as to allow the Indemnified Party to receive as a dividend from the Operating Company an amount equal to the amount it would have received had such Loss not existed. For these purposes, the Adjusted Profit shall be calculated excluding the effect on results of the Indemnifiable Loss suffered at the Operating Company level, in accordance with the provisions set forth in Annex 5.2 of the Shareholders’ Agreement. Section (a)(ii) of Annex 16.8 includes an illustrative example of how this calculation should be made.. (h) In the case of an event, situation or Claim affecting the Indemnified Party in its personal capacity, the Indemnifying Party may elect to fulfill its obligation to indemnify the Indemnified Party through one of the following two alternative mechanisms: (ii) pay to the Indemnified Party directly the amount of the Indemnifiable Loss suffered by the Indemnified Party, or (iii) deduct from the dividend to which the Indemnifying Party is entitled an amount such that the Indemnified Party may receive as a dividend from the Operating Company an amount, in addition to the amount of dividends Execution Version 87 that it would have been entitled to receive pursuant to Annex 5.2 of the Shareholders’ Agreement, equal to the Indemnifiable Loss. Section (b)(ii) of Annex 16.8 includes an illustrative example of how this calculation should be made. (i) The Indemnifying Party may elect to satisfy its obligation to indemnify the Indemnified Party pursuant to the procedure described in paragraph (ii) of (a) and (b) above only in the event that the amount of the profits of the respective fiscal year of the Operating Company is greater than the Loss to be indemnified. 16.9 Exclusive Remedy (g) As of the Effective Date of the Joint Venture, this Article 16 shall be the sole and exclusive remedy of the SQM Party or the CODELCO Party with respect to this Agreement and the transactions contemplated hereby; (h) Neither Party shall be liable to an Indemnified Party except for the indemnification provisions hereof; (i) Except for (i) the indemnification provisions set forth in this Article 16, (ii) the right to compel performance of a breached obligation and (iii) actions against third parties, each Party waives, to the fullest extent permitted by law, any right, action or remedy, whether in contract, at law or otherwise, (and) arising out of any breach of any representation, representation, warranty or obligation under this Agreement; and (z) in any other manner relating to or arising out of this Agreement, including, as of the Effective Date of the Joint Venture, to the resolutory action arising out of this Agreement. (d) Any Loss subject to indemnification under Article 16 shall be determined without duplication by virtue of the facts giving rise thereto. 16.10 Insurance and others (g) Notwithstanding anything to the contrary contained in this instrument, (i) Losses shall be reduced by (w) any insurance payable or amount recoverable or received by the Indemnified Party, the Operating Company or its Subsidiaries from an insurance company in connection with, arising out of or relating to the events giving rise to the Loss; (x) any amount recoverable or received by the Indemnified Party, the Operating Company or its Subsidiaries from a third party in connection with, arising out of or relating to the events giving rise to the Loss; (y) any tax benefits that the Loss generates for the Indemnified Party and that the Indemnified Party actually takes advantage of; or (z) any accounting provisions that existed in connection with, arising out of, or relating to the events giving rise to the Loss, in the financial statements of SQM Salar or Tarar as of the Effective Date of the Joint Venture; and (ii) in determining the amount of the Losses, those resulting from any of the following events: (y) any change in the law, regulation, practice, interpretation or policy of any Governmental Authority, enacted or in effect after the Agreement Date; or (z) any matter or subject matter effected or excluded pursuant to and in compliance with this Agreement, or upon the prior written request or with the prior written approval of the Indemnified Party. (h) If an Indemnified Party recovers or has the right to be indemnified under insurance or by a third party for Losses already paid to it by the Indemnifying Party, the Indemnified Party shall promptly pay to the Indemnifying Party, in immediately available funds, an amount equal to the excess, if any, of (i) the sum of (y) the total amount of payments made in respect of such Losses and (z) the total amount of insurance or other amounts to which the Indemnified Party or its affiliates are entitled or have received in
Execution Version 88 connection with the events giving rise to the right of indemnification in excess of (ii) the respective amount of the Losses suffered by the Indemnified Party. (i) The Indemnified Party shall use its Best Efforts to recover any amounts recoverable under the insurance policies or third parties. (j) Notwithstanding the foregoing, the amount of indemnification for any Loss shall be net of any Taxes paid by the Indemnified Party under applicable Law as a result of the indemnification received from the Indemnifying Party, so that the amount received by the Indemnified Party shall be the full amount to be indemnified, without regard to any Taxes paid by the Indemnified Party.. 16.11 Exclusion of materiality qualifiers For purposes of the provisions set forth in this Article 16, the representations and warranties made by each Party pursuant to Articles 11 and 12 of this Agreement (respectively), shall be understood without regard to qualifiers of materiality, relevance, Material Adverse Effect, references to "substantial/material/relevant aspects" or other similar qualification, except for those contained in Section 11.7 and Section 11.29, which shall retain the qualifiers used therein. SECTION 17 – Governing Law and Settlement of Disputes 17.1 Governing Law This Agreement is governed by and shall be construed in accordance with the laws of the Republic of Chile. 17.2 Settlement of Disputes. (a) All difficulties or disputes relating to this Agreement, including, but not limited to, those relating to its performance or breach, application, interpretation, validity or invalidity, enforceability, nullity or termination, determination of damages in connection with the breach thereof, and matters related to the jurisdiction and venue of the tribunal itself, shall be settled by an arbitral tribunal composed of three (3) mixed arbitrators, i.e., arbitrators who shall act ex aequo et bono with regard to the procedure and shall render the award according to law, (the “Arbitral Tribunal”), in accordance with the Arbitration Procedural Rules of the Arbitration and Mediation Center of the Santiago Chamber of Commerce A.G. in force on the date on which the arbitration process commences. (b) The Party requesting the arbitration shall appoint the first arbitrator together with its request for arbitration filed with the Santiago CAM and shall give notice to the other Party of the name of the arbitrator appointed and of the request filed with Santiago CAM. The other Party shall appoint the second arbitrator within twelve (12) days after the request for arbitration and the name of the arbitrator appointed by the other Party have been notified to the other Party. The two arbitrators appointed by the Parties shall appoint the third arbitrator within fourteen (14) days after the notification of the appointment of the second arbitrator. In the event that (i) the other Party fails to appoint an arbitrator or (ii) the two arbitrators appointed by the Parties fail to reach an agreement with respect to the appointment of a third arbitrator within the time limits set forth above, it shall be the duty of the Santiago Chamber of Commerce A.G. to appoint the second arbitrator and third arbitrator, or only the latter, as the case may be, for which purpose the Parties hereby grant a special and irrevocable power of attorney to the Santiago Chamber of Commerce A.G., so that, at the written request of any of Execution Version 89 them, it may appoint said arbitrators from among the lawyers who are members of the arbitration panel of Santiago CAM. (c) The arbitration proceedings shall be conducted in the city of Santiago and in a confidential manner, and the appointed arbitrators and the Parties shall be prohibited from disclosing to third parties the terms of the arbitration and the background information submitted therein or brought to the consideration of the Arbitral Tribunal by the opposing party, except insofar as such disclosure is necessary on the occasion of the appeals or legal proceedings requested or made by the Parties or by operation of law. (d) The Parties consent to consolidate the arbitrations (joinder) subsequently brought between the Parties or those brought pursuant to other agreements or contracts entered into between the Parties (the "Agreements between the Parties"). Such joinder shall be subject to the following rules: (i) The joinder shall be requested to the Arbitral Tribunal that was set up prior to the others and shall be resolved (a "Joinder Resolution") by said tribunal; (ii) In deciding on the Joinder Resolution, the Arbitral Tribunal shall consider whether the various arbitrations raise common questions of law or fact and whether joinder of the various arbitrations would serve the interests of fairness and efficiency; (iii) The request for joinder shall not suspend the proceedings in any of the arbitrations, unless, for good cause, it is determined otherwise. If consolidation is ordered, all arbitrations shall continue to be heard and decided by the Arbitral Tribunal that ordered consolidation, to which the parties recognize full jurisdiction and competence. The other Tribunals shall cease at that time to exercise their jurisdiction, which shall be without prejudice to: (i) the validity of any act of the Arbitral Tribunal that decreed the joinder; (ii) the validity of any act performed or award rendered by the Arbitral Tribunal prior to that time, (ii) the right of the members of the Arbitral Tribunal who cease to hold office to receive their fees and disbursements therefor, (iii) that evidence submitted to the arbitrator and declared admissible prior to termination shall be admissible in arbitral proceedings joined after the Joinder Determination, and (iv) the rights of the Parties to legal and other costs incurred prior to termination. (e) The award rendered by the Arbitral Tribunal shall be final and conclusive and shall not be challenged on appeal. (f) If the time limit for the Arbitral Tribunal to exercise its jurisdiction expires, unless otherwise agreed upon by the Parties, a new Arbitral Tribunal shall be appointed in the same manner as the first Arbitral Tribunal, which shall continue the proceedings in the state in which they were being tried and heard at the expiration of the time limit of the first Arbitral Tribunal, and all the proceedings before the first Arbitral Tribunal shall be valid and effective. In this case, the new Arbitral Tribunal to be appointed shall be composed of persons other than those who were members of the tribunal that failed to perform its duties within the time limit. Execution Version 90 SECTION 18. Communications 18.1 Communications and notifications (a) Any communication or notice to the Parties arising under this Agreement shall be in writing in one of the following forms: (i)personally delivered, with receipt confirmed by the addressee’s signature; (ii) by electronic mail; or (iii) by letter sent through a notary public by registered mail. Changes in the address of each Party for the purposes of notifications or communications set forth in the following Section shall be notified in the same manner. (b) Notices, communications and notifications shall be deemed to have been received on the Business Day following the date of their dispatch, in the event that they were sent by electronic mail, or on the day of their receipt, in the event that they were sent by mail or delivered to the respective address. 18.2 Contact Information The respective contact information for each of the Parties is as indicated below: (i) If to the CODELCO Party: Corporación Nacional del Cobre de Chile Huérfanos No. 1270, Santiago, Chile Attention: Mr. Máximo Pacheco Matte Email: [***] With a copy to: Legal Vice-president Email: [***] With a copy to: Carey y Cía. Ltda. Attn.: Messrs. Rafael Vergara / Cristián Eyzaguirre Isidora Goyenechea 2800, piso 42, Las Condes, Santiago, Chile Email: [***] / [***] (ii) If to the SQM Party: Sociedad Química y Minera de Chile S.A. El Trovador N°4285, piso 6, Las Condes, Santiago, Chile Attention: Mr. Ricardo Ramos Rodríguez Email: [***] With a copy to: Legal Vice-President , Email: [***] Claro y Cía. Attn.: Messrs. Rodrigo Ochagavia / Nicolás Luco Av. Apoquindo 3721, piso 14, Las Condes, Santiago, Chile Email: [***] / [***] SECTION 19. Miscellaneous 19.1 Other guarantees The Parties shall execute and deliver such documents, agreements, instruments and certificates as may be necessary or reasonably requested for the implementation of the Joint Venture and other transactions described in the Transaction Documents and to Execution Version 91 demonstrate compliance with the Conditions Precedent (unless waived in writing by the applicable Party or Parties). For the avoidance of doubt, each Party shall execute and deliver all such further documents and instruments and perform all such further acts and formalities as the other Party may, either before or after each Effective Date of the Joint Venture, reasonably require to effectually carry out or better evidence or perfect the full intent and meaning of the Transaction Documents. 19.2 Successors and Assigns. All terms and provisions of this Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective successors and permitted assigns of the Parties. Neither Party may assign any of its rights or delegate any of its obligations under this Agreement except as set forth herein or with the prior written consent of the other Party. 19.3 Joint and Several Liability. (a) SQM, SQMK and SQM Salar shall be joint and several co-debtors, pursuant to the provisions set forth in articles 1511 et seq. of the Civil Code, without limitations of any kind (except for those established in this Agreement), of each and every one of the obligations of the SQM Party, of any of the members of the SQM Party individually, or of their respective Subsidiaries, that it has or assumes under the Agreement in favor of the CODELCO Party or any of the members of the CODELCO Party. In any case, as of the Effective Date of the Joint Venture, SQM Salar or its legal successor shall cease to be jointly and severally liable for the obligations of SQM and SQMK assumed under the Agreement prior to that date. (b) CODELCO, SDC and Tarar shall be joint and several co-debtors, in accordance with the provisions set forth in articles 1511 et seq. of the Civil Code, without limitations of any kind (except those set forth in this Agreement), of any and all obligations of the CODELCO Party, of any of the members of the CODELCO Party individually, or of their respective Subsidiaries, that it has or assumes under the Agreement in favor of the SQM Party or any of the members of the SQM Party. In any event, as of the Effective Date of the Joint Venture, Tarar or its legal successor shall cease to be jointly and severally liable for the obligations of CODELCO and SDC under the Agreement that it had assumed prior to that date. 19.4 Counseling, legal fees and expenses Except as otherwise expressly provided for herein, each Party shall pay its own costs and expenses in connection with the transactions contemplated herein, including disbursements and fees of its respective attorneys, accountants, advisors, agents, brokers and other representatives, in connection with the preparation and execution of this Agreement, whether or not the transactions contemplated herein are consummated. 19.5 Entire Agreement and Amendments (a) This Agreement and the remaining Transaction Documents constitute the entire agreement between the Parties with respect to the subject matter hereof and supersede and replace any prior negotiations and agreements between the Parties with respect thereto. There are no representations, warranties, terms, conditions, commitments or collateral agreements, express, implied or statutory, between the
Execution Version 92 Parties relating to the subject matter of the Agreement other than those expressly set forth in this Agreement and the other Transaction Documents. (b) No amendment to this Agreement shall be valid or binding unless set forth in writing and duly signed by both Parties. 19.6 Cumulative Resources No remedy conferred by the provisions of this Agreement is intended to be exclusive of any other remedy available at law, in equity, by statute or otherwise, and any and all other remedies shall be cumulative and in addition to any other remedies granted hereunder, now or hereafter existing at law, in equity, by statute or otherwise. The single or partial exercise by a Party of any right or remedy shall not preclude or otherwise affect the exercise of any other right or remedy to which such Party may be entitled. In the event that it is necessary to bring a lawsuit to enforce, construe or terminate the provisions set forth in this Agreement, the prevailing party shall be entitled to recover from the other party, in addition to other relief, reasonable attorneys' fees for services rendered prior to the lawsuit, at trial and on any appeal thereof. 19.7 Waiver. Any term, covenant or condition of this Agreement may be waived at any time by the Party entitled to the benefit thereof, but only by written notice signed by the Party waiving such term or condition. The practice or subsequent acceptance of performance of this Agreement by a Party shall not be deemed a waiver of any prior breach by another Party of any term, covenant or condition of this Agreement, regardless of such Party's knowledge of such prior breach at the time of acceptance of such performance. 19.8 Severability If any provision of this Agreement is held to be illegal, void or unenforceable under the Law , and if the rights or obligations of either party under this Agreement are not materially and adversely affected thereby, (a) such provision shall be severable, (b) this Agreement shall be construed and enforced as if such provision had never been a part hereof, (c) the remaining provisions of this Agreement shall remain in full force and effect and shall not be affected by such provision or its severance from this Agreement, and (d) in lieu of such provision, there shall be automatically added as part of this Agreement a legal, valid and enforceable provision as similar in terms to such provision as possible. SECTION 20 - Legal Capacity and Counterparts 20.1 Legal Capacities. Each attorney-in-fact subscribing this Agreement on behalf of each Party represents that it has no knowledge of the revocation or suspension, by the grantor or otherwise, of the power of attorney under whose authority the attorney-in-fact subscribes this Agreement. 20.2 Counterparts and Electronic Signature. This Agreement is subscribed and executed in one or several counterparts of equal tenor and date, which may be signed by handwritten signature or electronic signature (either simple or advanced). In case of electronic copies of the Agreement, a Execution Version 93 graphic representation (scan) of the handwritten signatures shall be added. In the case of paper copies, a paper printout of the electronic signatures must be added. In case of signing through an electronic signature platform (such as Docusign or others), all signatures must be made through the same platform. [Signature pages follow] [Page of Signatures of the Joint Venture Agreement between CODELCO et al. and SQM et al]. SQM et al]. IN WITNESS WHEREOF, the Parties have signed this Joint Venture Agreement on the date indicated on the first page hereof. CORPORACIÓN NACIONAL DEL COBRE DE CHILE /s/ Máximo Pacheco M. Name: Máximo Pacheco M. Title: Chairman of the Board of Directors SALARES DE CHILE SpA /s/ Eduardo Bitran Name: Eduardo Bitran Title: Director /s/ Máximo Pacheco M. Name: Máximo Pacheco M. Title: Chairman of the Board of Directors [Page of Signatures of the Joint Venture Agreement between CODELCO et al. and SQM et al]. SQM et al]. MINERA TARAR SpA /s/ Máximo Pacheco M. Name: Máximo Pacheco M. Title: Chairman of the Board of Directors /s/ Josefina Montenegro Name: Josefina Montenegro Title: Director
[Page of Signatures of the Joint Venture Agreement between CODELCO et al. and SQM et al]. SQM et al]. IN WITNESS WHEREOF, the Parties have signed this Joint Venture Agreement on the date indicated on the first page hereof. SOCIEDAD QUÍMICA Y MINERA DE CHILE S.A. /s/ Gonzalo Aguirre Name: Gonzalo Aguirre Title: Vice President Legal /s/ Ricardo Ramos Name: Ricardo Ramos Title: Chief Executive Officer SQM POTASIO S.A. /s/ Gonzalo Aguirre Name: Gonzalo Aguirre Title: Attorney-in-Fact /s/ Ricardo Ramos Name: Ricardo Ramos Title: Attorney-in-Fact [Page of Signatures of the Joint Venture Agreement between CODELCO et al. and SQM et al]. SQM SALAR S.A. /s/ Ricardo Ramos Name: Ricardo Ramos Title: Attorney-in-Fact /s/ Gonzalo Aguirre Name: Gonzalo Aguirre Title: Attorney-in-Fact ANNEX B MINING PROPERTIES Chapter I: OMA Mining Properties # Concession Name Type Status Concessionaire Current Title Registration pp No. Year Registry Registrar 1 OMA 1/59,820* Exploitation Constituted CORFO 926 248 2016 Real Estate CALAMA- EL LOA Out of the total of 59,820 OMA properties, 28,054 of them are leased to SQM Salar S.A. as stated in the SQM Lease Agreement. Chapter II: Rigo Mining Properties 1 # Concessi on Name Type Status Concessionai re Current Title Registration2 pp No . Yea r Registr y Registr ar 1 RIGO 1 to 3660 Exploitati on Constitut ed SQM Salar S.A. 65 1 48 12 5 9 199 3 199 4 Real Estate CALAMA 1 The Rigo Mining Properties are currently registered in the name of SQM Salar S.A. and are subject to a resolutory condition which, if fulfilled, will cause the Rigo Mining Properties to be returned to CORFO. 2 * The Rigo Mining Properties were re-registered in 1994. Chapter III: Sal and Salar Mining Properties 3 # Concession Name Type Status Concessionaire Current Title Registration4 pp No. Year Registry Registrar 1 SAL I 1 -20 Exploitation Constituted CORFO 1872 384 2012 Real Property CALAMA_EL LOA 2 SAL 2 1-10 Exploitation Constituted CORFO 1873 385 2012 Real Property CALAMA_EL LOA 3 SALAR I 1-5 Exploitation Constituted CORFO 1862 374 2012 Real Property CALAMA_EL LOA 4 SALAR II 1-5 Exploitation Constituye CORFO 1863 375 2012 Real Property CALAMA_EL LOA 5 SALAR III 1- 25 Exploitation Constituted CORFO 1864 376 2012 Real Property CALAMA_EL LOA 6 SALAR IV 1- 25 Exploitation Constituted CORFO 1865 377 2012 Real Property CALAMA_EL LOA 7 SALAR V 1-25 Exploitation Constituted CORFO 1866 378 2012 Real Property CALAMA_EL LOA 8 SALAR VI 1- 25 Exploitation Constituted CORFO 1867 379 2012 Real Property CALAMA_EL LOA 9 SALAR VII 1- 25 Exploitation Constituted CORFO 1868 380 2012 Real Property CALAMA_EL LOA 10 SALAR VIII 1-25 Exploitation Constituted CORFO 1869 381 2012 Real Property CALAMA_EL LOA 11 SALAR IX 1- 25 Exploitation Constituted CORFO 1870 382 2012 Real Property CALAMA_EL LOA 12 SALAR X 1-10 Exploitation Constituted CORFO 1871 383 2012 Real Property CALAMA_EL LOA 3 The Rigo Mining Properties are currently registered in the name of SQM Salar S.A. and are subject to a resolutory condition which, if fulfilled, will cause the Rigo Mining Properties to be returned to CORFO. 4 * The Rigo Mining Properties were re-registered in 1994.
Chapter IV: Referential Drawing REFERENTIAL DRAWING OF OMA MINING PROPERTIES, RIGO MINING PROPERTIES AD SAL-SALAR MINING PROPERTIES
EX-8.1
5
exhibit81-significantsubsi.htm
EX-8.1
Document
Exhibit 8.1
Significant Subsidiaries of Sociedad Química y Minera de Chile S.A.
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| Name of Subsidiary |
Country of Incorporation |
| SQM Nitratos S.A. |
Chile |
| SQM Potasio SpA |
Chile |
| Serv. Integrales de Tránsito y Transf. S.A. |
Chile |
| Ajay SQM Chile S.A. |
Chile |
| SQM Salar SpA |
Chile |
| SQM Industrial S.A. |
Chile |
| Exploraciones Mineras S.A. |
Chile |
| Soquimich Comercial S.A. |
Chile |
| SQM Nueva Potasio SpA |
Chile |
| SQM North America Corp. |
USA |
| SQM Ecuador S.A. |
Ecuador |
| SQM Brasil Ltda. |
Brazil |
| SQM Japan Co. Ltd. |
Japan |
| SQM Europe N.V. |
Belgium |
| SQM Comercial de México S.A. de C.V. |
Mexico |
| SQM Lithium Specialties Limited Partnership |
USA |
| SQM Iberian S.A. |
Spain |
| SQM África Pty Ltd. |
South Africa |
| SQM Colombia SAS |
Colombia |
| SQM Australia Pty |
Australia |
| SQM (Shanghai) Chemicals Co. Ltd. |
China |
| Soquimich LLC |
Korea |
| SQM Holland B.V. |
Netherlands |
| Soquimich Comercial Brasil Ltda. |
Brazil |
| Blue Energy Business and Trade (Shanghai) Co., Ltd. |
China |
| SQM Comercial Perú S.A.C. |
Peru |
| SQM India Private Limited |
India |
| Sichuan Dixin New Energy Co., Ltd. |
China |
| SQM (Shanghai) Industrial Co, Ltd. |
China |
| SQM Lithium North America Corporation |
USA |
| SQM Lithium Europe NV |
Belgium |
| SQM Japan Lithium Co. Ltd. |
Japan |
For a complete list of foreign and domestic subsidiaries see Note 11.3 to our Consolidated Financial Statements.
EX-11
6
exhibit111-manualforthem.htm
EX-11
exhibit111-manualforthem
2 3 4
5 6 7 8
9 10 11 12
13
EX-12.1
7
exhibit121-section302ceoce.htm
EX-12.1
Document
Exhibit 12.1
CHIEF EXECUTIVE OFFICER CERTIFICATION
(Pursuant to Section 302)
I, Ricardo Ramos, certify that:
1. I have reviewed this annual report on Form 20-F of Sociedad Química y Minera de Chile S.A.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
4. The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and
5. The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s Board of Directors (or persons performing the equivalent functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.
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| /s/ Ricardo Ramos R. |
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| Name: Ricardo Ramos R. |
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| Title: Chief Executive Officer |
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Date: April 23, 2025 |
|
EX-12.2
8
exhibit122-section302cfoce.htm
EX-12.2
Document
Exhibit 12.2
CHIEF FINANCIAL OFFICER CERTIFICATION
(Pursuant to Section 302)
I, Gerardo Illanes, certify that:
1. I have reviewed this annual report on Form 20-F of Sociedad Química y Minera de Chile S.A.;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
4. The company’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the company and have:
(a)Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b)Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
(c)Evaluated the effectiveness of the company’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d)Disclosed in this report any change in the company’s internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the company’s internal control over financial reporting; and
5. The company’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the company’s auditors and the audit committee of the company’s Board of Directors (or persons performing the equivalent functions):
(a)All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the company’s ability to record, process, summarize and report financial information; and
(b)Any fraud, whether or not material, that involves management or other employees who have a significant role in the company’s internal control over financial reporting.
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|
|
|
|
|
| /s/ Gerardo Illanes G. |
|
| Name: Gerardo Illanes G. |
|
| Title: Chief Financial Officer |
|
Date: April 23, 2025 |
|
EX-13.1
9
exhibit131-section906ceoce.htm
EX-13.1
Document
Exhibit 13.1
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Ricardo Ramos, Chief Executive Officer of Sociedad Química y Minera de Chile S.A. (“SQM”), a corporation incorporated under the laws of the Republic of Chile, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
1.The Annual Report of SQM on Form 20-F for the fiscal year ended December 31, 2024, as filed with the Securities and Exchange Commission, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.The information contained in such Annual Report on Form 20-F fairly presents, in all material respects, the financial condition and results of operations of SQM.
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| /s/ Ricardo Ramos R. |
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| Name: Ricardo Ramos R. |
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| Title: Chief Executive Officer |
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Date: April 23, 2025 |
|
EX-13.2
10
exhibit132-section906cfoce.htm
EX-13.2
Document
Exhibit 13.2
CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO 18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
I, Gerardo Illanes, Chief Financial Officer of Sociedad Química y Minera de Chile S.A. (“SQM”), a corporation incorporated under the laws of the Republic of Chile, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
1.The Annual Report of SQM on Form 20-F for the fiscal year ended December 31, 2024, as filed with the Securities and Exchange Commission, fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
2.The information contained in such Annual Report on Form 20-F fairly presents, in all material respects, the financial condition and results of operations of SQM.
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| /s/ Gerardo Illanes G. |
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| Name: Gerardo Illanes G. |
|
| Title: Chief Financial Officer |
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Date: April 23, 2025 |
|
EX-23.10
11
exhibit2310-consentxpamp.htm
EX-23.10
exhibit2310-consentxpamp
Exhibit 23.10 CONSENT OF QUALIFIED PERSON I, Marco Fazzi, state that I am responsible for preparing or supervising the preparation of part(s) of the technical report summary titled " Technical Report Summary, Feasibility Study, Pampa Orcoma" with an effective date of March 31, 2025, as signed, and certified by me (the “Technical Report Summary”). Furthermore, I state that: a. I consent to the public filing of the Technical Report Summary by Sociedad Química y Minera de Chile S.A. (the “Company”) as an exhibit to Form 6-K of the Company (“Form 6-K”); b. the document that the Technical Report Summary supports is the Company’s Annual Report on Form 20- F for the year ended December 31, 2024, and any existing amendments or supplements and/or exhibits thereto (the "Form 20-F") (the Form 6-K and Form 20-F, collectively the “Document”); c. I consent to the use of my name in the Document, to any quotation from or summarization in the Document of the parts of the Technical Report Summary for which I am responsible, and to the incorporation by reference of the Technical Report Summary into Form 20-F; and d. I confirm that I have read the Document, and that the Document fairly and accurately reflects, in the form and context in which it appears, the information in the parts of the Technical Report Summary for which I am responsible. By /s/ Marco Fazzi Marco Fazzi Mineral Resources & Long Term Planning Manager SQM Dated at Santiago, Chile on March 31, 2025
EX-23.11
12
exhibit2311-consentxpamp.htm
EX-23.11
exhibit2311-consentxpamp
Exhibit 23.11 CONSENT OF QUALIFIED PERSON I, Freddy Ildefonso, state that I am responsible for preparing or supervising the preparation of part(s) of the technical report summary titled " Technical Report Summary, Feasibility Study, Pampa Orcoma" with an effective date of March 31, 2025, as signed, and certified by me (the “Technical Report Summary”). Furthermore, I state that: a. I consent to the public filing of the Technical Report Summary by Sociedad Química y Minera de Chile S.A. (the “Company”) as an exhibit to Form 6-K of the Company (“Form 6-K”); b. the document that the Technical Report Summary supports is the Company’s Annual Report on Form 20- F for the year ended December 31, 2024, and any existing amendments or supplements and/or exhibits thereto (the "Form 20-F") (the Form 6-K and Form 20-F, collectively the “Document”); c. I consent to the use of my name in the Document, to any quotation from or summarization in the Document of the parts of the Technical Report Summary for which I am responsible, and to the incorporation by reference of the Technical Report Summary into Form 20-F; and d. I confirm that I have read the Document, and that the Document fairly and accurately reflects, in the form and context in which it appears, the information in the parts of the Technical Report Summary for which I am responsible. By /s/ Freddy Ildefonso Freddy Ildefonso Geosciences Superintendent SQM Dated at Santiago, Chile on March 31, 2025
EX-23.12
13
exhibit2312-consentxpamp.htm
EX-23.12
exhibit2312-consentxpamp
Exhibit 23.12 CONSENT OF QUALIFIED PERSON I, Gino Slanzi Guerra, state that I am responsible for preparing or supervising the preparation of part(s) of the technical report summary titled " Technical Report Summary, Feasibility Study, Pampa Orcoma" with an effective date of March 31, 2025, as signed, and certified by me (the “Technical Report Summary”). Furthermore, I state that: a. I consent to the public filing of the Technical Report Summary by Sociedad Química y Minera de Chile S.A. (the “Company”) as an exhibit to Form 6-K of the Company (“Form 6-K”); b. the document that the Technical Report Summary supports is the Company’s Annual Report on Form 20- F for the year ended December 31, 2024, and any existing amendments or supplements and/or exhibits thereto (the "Form 20-F") (the Form 6-K and Form 20-F, collectively the “Document”); c. I consent to the use of my name in the Document, to any quotation from or summarization in the Document of the parts of the Technical Report Summary for which I am responsible, and to the incorporation by reference of the Technical Report Summary into Form 20-F; and d. I confirm that I have read the Document, and that the Document fairly and accurately reflects, in the form and context in which it appears, the information in the parts of the Technical Report Summary for which I am responsible. By Gino Slanzi Guerra Gino Slanzi Guerra General Manager Inprotec SpA Dated at Santiago, Chile on March 31, 2025
EX-97
14
exhibit97-incentivexbasedc.htm
EX-97
Document
Exhibit 97
SOCIEDAD QUÍMICA Y MINERA DE CHILE S.A.
INCENTIVE-BASED COMPENSATION RECOVERY POLICY
1.Purpose. The purpose of the Sociedad Química y Minera de Chile S.A. Incentive-Based Compensation Recovery Policy (the “Policy”) is to set forth the circumstances under which Sociedad Química y Minera de Chile S.A. (the “Company”) will recover Erroneously Awarded Compensation (as defined below) received by a current or former Executive Officer (as defined below) of the Company.
The Company is adopting the Policy in order to comply with the applicable listing standards of the New York Stock Exchange (the “NYSE”), the U.S. national securities exchange on which the Company’s American Depositary Receipts (“ADRs”) are listed and traded in the United States (“U.S.”).
2.Definitions. For purposes of this Policy, the following terms have the definitions set forth below:
(a)“Accounting Restatement” shall mean the required revision of a previously issued financial statement for correction of an error in such financial statement that is (i) due to material noncompliance with any applicable financial reporting requirement under the U.S. federal securities laws, including any required accounting restatement to correct an error in a previously issued financial statement that is material to such previously issued financial statement, or (ii) not material to a previously issued financial statement, but would result in a material misstatement if the error were corrected in the current period (i.e., as of the time of the Accounting Restatement) financial statements or left uncorrected in the current period financial statements.
(b)“Board” shall mean the Board of Directors of the Company.
(c)“Committee” shall mean the Directors’ Committee of the Board or another committee of the Board made up of independent directors, or in the alternative, the Board acting by a majority of its independent members.
(d)“Effective Date” shall mean October 2, 2023.
(e)“Erroneously Awarded Compensation” shall mean, with respect to each Executive Officer and in connection with any Accounting Restatement, the amount of Incentive-Based Compensation received by such Executive Officer that exceeds the amount of Incentive-Based Compensation that would have been received by such Executive Officer had it been determined based on the restated amounts set forth in the Accounting Restatement.
(f)“Executive Officer” shall mean each individual designated as an Executive Officer for purposes of this Policy at least annually by the Committee, which shall include the Company’s chief executive officer, principal financial officer, principal accounting officer (or if there is no such accounting officer, the controller), any vice-president of the Company in charge of a principal business unit, division or function (such as sales, administration, or finance), any other officer who performs a policy-making function, or any other person who performs similar policy-making functions for the Company. Executive officers of the Company’s parent(s) or subsidiaries are deemed Executive Officers of the Company if they perform such policy-making functions for the Company.
For the avoidance of doubt, the identification of an Executive Officer for purposes of this Policy shall include each member of senior management of the Company who is or was identified pursuant to Item 6.A of Form 20-F and, to the extent not otherwise included, the principal financial officer and principal accounting officer (or, if there is no principal accounting officer, the controller) of the Company.
(g)“Financial Reporting Measures” means financial measures that are used for evaluating the attainment of Incentive-Based Compensation and that are determined and presented in accordance with the accounting principles used in preparing the Company’s financial statements, as well as any financial measures that are derived wholly or in part from such measures. For purposes of this Policy, the Company’s stock or ADR price and total shareholder return are Financial Reporting Measures. A Financial Reporting Measure need not be presented within the financial statements or included in a filing with the SEC. For illustrative purposes only, performance measures that would generally not be considered a Financial Reporting Measure include (i) strategic measures (e.g., consummation of a change in control), (ii) operational measures (e.g., completion of a project), or (iii) subjective standards (e.g., achievement based on demonstrated leadership and/or completion of an employment period).
(h)“Incentive-Based Compensation” means compensation that is granted, earned, or vested based wholly or in part upon the attainment of a Financial Reporting Measure. Incentive-Based Compensation is deemed received by an Executive Officer in the Company’s fiscal year during which the Financial Reporting Measure specified in the Incentive-Based Compensation award is attained, even if the payment or grant of the Incentive-Based Compensation occurs after the end of that period.
(i)“Required Restatement Date” shall mean the earlier to occur of (i) the date upon which the Board, the Committee, or the officer(s) of the Company authorized to take such action, concludes, or reasonably should have concluded, that the Company is required to prepare an Accounting Restatement, or (ii) the date upon which a court, regulator or other legally authorized body directs the issuer to prepare an Accounting Restatement in a final, non-appealable order or judgment.
(j)“SEC” shall mean the U.S. Securities and Exchange Commission.
3.Application.
(a)This Policy applies to all Incentive-Based Compensation received by a current or former Executive Officer: (i) on or after the Effective Date; (ii) after beginning service as an Executive Officer; (iii) who served as an Executive Officer at any time during the performance period for which Incentive-Based Compensation was received; (iv) while the Company has a class of securities listed on the NYSE or another U.S. national securities exchange or a U.S. national securities association; and (v) during the three completed fiscal years immediately preceding the Required Restatement Date.
(b)Notwithstanding Paragraph A of this Section 3, this Policy applies during any transition period that results from a change in the Company’s fiscal year within or immediately following the three completed fiscal year period. For the avoidance of doubt, any transition period between the last day of the Company’s previous fiscal year-end and the first day of its new fiscal year that comprises a period of nine to 12 months would be deemed a completed fiscal year.
(c)For the avoidance of doubt, references to Executive Officer throughout this Policy shall refer to current or former Executive Officers in accordance with this Section 3, unless otherwise noted.
4.Recovery of Erroneously Awarded Incentive-Based Compensation.
(a)In the event of an Accounting Restatement, the Company shall promptly determine the amount of any Erroneously Awarded Compensation for each Executive Officer in connection with such Accounting Restatement and shall provide written notice to each Executive Officer of (i) the Required Restatement Date, (ii) the amount of Erroneously Awarded Compensation received, and (iii) the method, manner, and time for repayment or return of such Erroneously Awarded Compensation, as applicable. The amount of Incentive-Based Compensation that is subject to recovery will be computed without regard to any taxes paid.
(b)The Committee shall have the discretion to determine reasonably the appropriate means of recovery of such Erroneously Awarded Compensation based on applicable facts and circumstances. If an Executive Officer fails to repay Erroneously Awarded Compensation to the Company by the time and in the manner set forth in writing by the Committee, the Company shall take all actions reasonable and appropriate to recover the Erroneously Awarded Compensation from the Executive Officer. The Executive Officer shall be required to reimburse the Company for all expenses reasonably incurred by the Company in recovering Erroneously Awarded Compensation.
(c)For Incentive-Based Compensation based on the Company’s stock or ADR price or total shareholder return, where the amount of Erroneously Awarded Compensation is not subject to mathematical recalculation directly from the information in an Accounting Restatement:
i.the amount will be based on a reasonable estimate of the effect of the Accounting Restatement on the Company’s stock or ADR price, as applicable, or total shareholder return upon which the Incentive-Based Compensation was received; and
ii.the Company will maintain documentation of the determination of that reasonable estimate and provide such documentation to the NYSE.
5.Recovery Exceptions. The Company will take all reasonable actions to recover Erroneously Awarded Compensation in accordance with this Policy, except to the extent that any of the following conditions are met and the Committee determines that recovery would be impracticable because:
(a)the direct expense reasonably expected to be paid to a third party to assist in enforcing this Policy would exceed the amount to be recovered; provided that before concluding it would be impracticable to recover any amount of Erroneously Awarded Compensation based on the expense of enforcement, the Company will make a reasonable attempt to recover such Erroneously Awarded Compensation without incurring any third party expense, document such reasonable attempt(s) to recover, and provide such documentation to the NYSE;
(b)recovery would violate the law of the Republic of Chile that was adopted prior to November 28, 2022, such date being the date on which the SEC approved Rule 10D-1 under the U.S. Securities Exchange Act of 1934, as amended (the “Exchange Act”); provided that before concluding that it would be impracticable to recover any amount of Erroneously Awarded Compensation based on violation of the Company’s home country law, the Company will obtain an opinion of country counsel, acceptable to the NYSE, that recovery would result in such a violation and provide such opinion to the NYSE; or
(c)recovery would likely cause an otherwise tax-qualified retirement plan, under which benefits are broadly available to employees of the Company, to fail to meet the requirements of Section 401(a)(13) or 411(a) of the U.S. Internal Revenue Code of 1986, as amended, and regulations thereunder.
6.Reporting and Disclosure Requirements. The Company shall file all disclosures with respect to this Policy in accordance with the requirements of the U.S. federal securities laws, including the disclosure required by the applicable SEC filings.
7.Indemnification Prohibition. The Company will not indemnify any current or former Executive Officer against any losses stemming from the application of this Policy to Erroneously Awarded Compensation, including by paying or reimbursing the Executive Officer for insurance policy premiums covering those losses.
8.Other Rights. This Policy is not intended to limit the Company’s ability to pursue equitable relief or other means to recover monetary damages resulting from an Executive Officer’s wrongdoing. The Company retains all rights it may have under applicable law.
9.Administration. The Committee shall have sole discretion in making all determinations under this Policy. Any determinations of the Committee shall be binding on the Executive Officer.
10.Amendment. This Policy may be amended from time to time in the Committee’s sole discretion.
11.Compliance with the Exchange Act. Notwithstanding the foregoing, this Policy shall be interpreted and administered consistent with the applicable U.S. federal securities laws, including the requirements of (i) Section 10D of the Exchange Act, as added by Section 954 of the Dodd-Frank Wall Street Reform and Consumer Protection Act, (ii) Rule 10D-1 under the Exchange Act, and (iii) the listing standards adopted by the NYSE pursuant to Rule 10D-1, and, to the extent this Policy is in any manner deemed inconsistent with such requirements, this Policy shall be treated as retroactively amended to be compliant with such requirements.
12.Acknowledgement. Each Executive Officer shall sign and return to the Company, within 15 calendar days following the later of (i) the Effective Date or (ii) the date the individual becomes an Executive Officer, the Acknowledgement Form attached as Exhibit A.
13.Savings Clause. To the extent that any of the provisions of this Policy are found by a court of competent jurisdiction to be illegal, invalid, or unenforceable for any reason, such provision shall be deleted, and the balance of this Policy shall not be affected.
Approved and Adopted: October 18, 2023
SOCIEDAD QUÍMICA Y MINERA DE CHILE S.A.
INCENTIVE-BASED COMPENSATION RECOVERY POLICY
ACKNOWLEDGEMENT FORM
By signing this Acknowledgement Form below, the undersigned (the “Executive Officer”) acknowledges and confirms that the Executive Officer has received and reviewed a copy of the Incentive-Based Compensation Recovery Policy (the “Policy”) of Sociedad Química y Minera de Chile S.A. (the “Company”).
In consideration of the Executive Officer’s eligibility to receive future Incentive-Based Compensation (as defined in the Policy) and to participate in Incentive-Based Compensation plans, as well as other good and valuable consideration, the receipt and sufficiency of which are acknowledged by the Executive Officer signing this Acknowledgement Form below, the Executive Officer acknowledges and agrees that:
1.the Executive Officer is and will continue to be fully bound by, and subject to, the Policy;
2.the Policy will apply both during and after the Executive Officer’s employment with the Company;
3.the Policy will apply to past and future Incentive-Based Compensation as provided in the Policy; and
4.the Executive Officer is required to comply with the terms and conditions of the Policy, including, without limitation, the requirement to return any Erroneously Awarded Compensation (as defined in the Policy) to the Company to the extent required by, and in a manner consistent with, the Policy.
EXECUTIVE OFFICER
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Signature
Print Name: ____________________
Date: __________________________
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