SQM to boost lithium capacity in Chile

Chilean mining and fertilizer group SQM plans to boost lithium carbonate production from its Chilean operations by an additional 15,000t/y to 63,000t/y.

The aim is to meet growing global demand and take advantage of strong lithium prices, CEO Patricio de Solminihac said during the company's first quarter results webcast.

The company said that the increased capacity will be achieved during the second half of 2018, will require US$50mn in capital expenditures, and won't require any specific approval from government authorities related to lithium extraction other than the expected environmental permits.

SQM said in a statement that lithium demand so far this year has been stronger than expected, and it now estimates that will grow 14% year-on-year.

De Solminihac said that its Caucharí-Olaroz 50:50 JV in Argentina with Lithium Americas remains on schedule. Once operational, scheduled for 2019, "will make us the operators of what we believe will be the two most efficient lithium projects in the world."

The Caucharí-Olaroz project (pictured) aims to produce 25,000t/y in a first phase, with planned investment of US$425mn. A second phase, aimed at doubling output to 50,000t/y, would require an additional US$250mn in investment.

FIRST QUARTER RESULTS

SQM posted US$103mn in first quarter net income compared with US$58.6mn in the year-ago period.

The company attributed the increase to higher sales volumes across all of its business lines, as shown in its Q1 financial statements.

SQM said its plans to increase iodine sales volume is yielding results, reporting the highest quarterly sales in over five years, with volume growth expected to surpass 15% in 2017.

First quarter revenue rose to US$532mn from US$392mn, while Ebitda margin for the first three months was 40.7%.

Lithium sales volume increased 12% to 12,300t in Q1, almost doubling associated revenue, which was up 98% to US$156mn.

SQM said previously it plans to spend US$170m this year, for maintenance expenses, construction of a new lithium hydroxide plant, and the expansion of its potassium nitrate capacity.