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.
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.
Beginning in 2015, we focused on increasing the efficiency of our iodine and nitrate operations. To take advantage of our highly efficient production facilities at our Nueva Victoria site, we suspended the mining and nitrate operations and reduced iodine production at our Pedro de Valdivia site and we increased our iodine production capacity at Nueva Victoria to approximately 10,000 metric tons per year in 2017. We continued expanding our iodine capacity in 2018, to approximately 14,000 metric tons per year, including both Pedro de Valdivia and Nueva Victoria.
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.
In September 2019, Wesfarmers Limited (“Wesfarmers”) became our 50% partner with out SQM Australia Pty subsidiary in the Covalent Lithium joint venture for the Mt. Holland lithium project.
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 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 also advanced in sustainability certifications (ISO and IRMA) across our operations and maintained strong external recognition, including in the Dow Jones Sustainability Index and a CDP climate rating of B.
In 2023, we continued to expand our lithium production capacity both in Chile and abroad. In addition, we advanced certifications and sustainability initiatives, including achieving a score of 75 under the IRMA standard at the Salar de Atacama, obtaining ISO 50001 (energy management system) certification for our northern operations, and maintaining inclusion in the DJSI and Emerging Markets indices, as well as a CDP water rating of B-.
In 2024, together with Hancock Prospecting, the owner of approximately 18.4% of the shares of Azure Minerals Limited (“Azure Minerals”), we completed the acquisition of all outstanding shares of Azure Minerals, with each company now owning a 50% interest. Azure Minerals’ principal asset is a 60% interest in the Andover lithium project in Western Australia, which is currently in the early exploration stage. 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 also signed a partnership agreement with Codelco for the joint exploitation of the Salar de Atacama between 2025 to 2060 period, subject to the fulfillment of a number of conditions precedent. See “—Nova Andino Litio SpA Joint Venture with Codelco” for further information regarding the joint venture.
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. In terms of production capacity, we continued with our expansion projects for both lithium carbonate and lithium hydroxide in Chile and in November 2024, we held our first auction of spodumene concentrate through our SQM Lithium International Division.
In May 2025, Mr. Gonzalo Guerrero resigned as Chair of the Board, and Mr. Patricio Contesse resigned as Vice Chair of the Board. The Board elected Mrs. Gina Ocqueteau as the new Chair of the Board and appointed Mr. Gonzalo Guerrero as Vice Chair.
In July 2025, Covalent Lithium announced initial production of lithium hydroxide at the Kwinana refinery, a key component of the Mt Holland project. The facility is designed to produce 50,000 metric tons of battery‑grade lithium hydroxide annually. Full completion of the refinery commissioning is targeted for 2027.
Throughout 2025, the Company also participated in several sustainability indices, such as Carbon Disclosure Project (CDP), Dow Jones Sustainability Index (DJSI), MSCI, FTSE Russell, with inclusion in the FTSE4Good IndeX AND Ecovadis.
During 2025, a number of the conditions precedent to the completion of the partnership agreement with Codelco were fulfilled, including the approval from the State Administration for Market Regulation (SAMR) of the People’s Republic of China, one of the more significant conditions to be met.
In December 2025, the Company completed the successful placement of Series S Bonds (a local hybrid bond) in the Chilean general securities market for a total amount of UF 10,000,000 (approximately US$430 million). The Series S Bonds mature on February 15, 2058. Proceeds from the placement will be used for general corporate purposes and to refinance existing debt.
On December 27, 2025, the Company announced the completion of the joint venture under the partnership agreement with Codelco for the mining, production, commercial, community, and environmental development of the Salar de Atacama, subject to the satisfaction of certain conditions subsequent relating to the Inversiones TLC legal challenge discussed below. The transaction was completed through the merger by absorption of Codelco’s subsidiary Minera Tarar SpA into the Company’s subsidiary SQM Salar SpA, which was the surviving entity renamed Nova Andino Litio SpA.
In January 2026, the Company issued US$600 million in aggregate principal amount of 5.625% Subordinated Capital Notes (the “Subordinated Capital Notes”) under Rule 144A /Regulation S under the Securities Act. The Subordinated Capital Notes will mature on April 22, 2056.
In January 2026, we executed a definitive Collaboration and Exploration Agreement with Ivanhoe Electric Inc. to explore 2,002 km² of SQM mining property in northern Chile in search of copper. In the initial phase, we will invest US$9 million to fund three years of exploration. In the event of successful results, the collaboration could lead to the formation of a 50/50 joint venture, in which SQM would have the option to operate and the right to select the joint venture's CEO.
On January 26, 2026 the Supreme Court of Chile confirmed the judgment of the Court of Appeals of Santiago, thereby rejecting the appeal filed by Inversiones TLC SpA and confirming the validity of the Joint Venture for all legal purposes. See “—Novandino Litio Joint Venture with Codelco” below.
Novandino Litio Joint Venture with Codelco
Our subsidiary, Nova Andino Litio SpA (formerly named SQM Salar SpA and now known as “Novandino Litio”), as leaseholder, holds exclusive and temporary rights to exploit Mineral Resources in the Salar de Atacama in northern Chile. These rights are owned by Corfo, a Chilean governmental entity, and leased to Novandino Litio pursuant to (i) a lease agreement over mining exploitation concessions and related project agreement, as amended from time to time, originally granted to SQM Salar for the period ending on December 31, 2030, and (ii) a lease agreement over mining exploitation concessions and related project agreement, originally granted to Minera Tarar SpA for the 2031 to 2060 period (collectively, the “Corfo Agreements”).
The Corfo Agreements require Nova Andino Litio SpA to, among other things: (i) make quarterly lease payments to Corfo based on product sales from the leased mining properties and annual contributions to research and development, local
communities, the Antofagasta Regional Government and the municipalities of San Pedro de Atacama, María Elena and
Antofagasta; (ii) preserve Corfo’s rights over the mining exploitation concessions; and (iii) make annual payments to the
Chilean government for such concession rights. For further information regarding these agreements, see “Item 10.C.
Material Contracts—Corfo Agreements.”
On May 31, 2024, SQM and Codelco, the Chilean state-owned copper mining company designated by the Chilean
government to negotiate its participation in lithium operations in the Salar de Atacama, entered into a partnership
agreement (the “Partnership Agreement”) establishing the rights and obligations of the parties in connection with their joint
venture (the “Joint Venture”). The Joint Venture is intended to develop mining and production activities aimed at the
production of lithium, potassium and other products from Corfo’s properties in the Salar de Atacama and their subsequent
marketing, directly or through subsidiaries or representative offices (the “Business”), for the period from 2025 to 2060.
The Joint Venture was formed on December 27, 2025 through the merger by incorporation of Codelco’s subsidiary, Minera
Tarar SpA, which held the Salar de Atacama lease agreement with Corfo for the period from 2031 to 2060, into our
subsidiary SQM Salar SpA, which held the lease agreement with Corfo for the period ending on December 31, 2030, as
well as the fixed assets, intangible assets, know-how, distribution network and employees related to SQM’s lithium
business in connection with the Salar de Atacama. These assets include extraction and production facilities in the Salar de
Atacama and processing facilities in Chile and abroad where lithium from the Salar de Atacama is processed and
commercialized. SQM Salar SpA survived the merger under the name Nova Andino Litio SpA, subject to the terms and
conditions of the Partnership Agreement.
As a result of the merger, Nova Andino Litio SpA holds the Corfo Agreements for the Salar de Atacama for the period ending in
2060.
Following the merger, Codelco holds one share more than 50% of the outstanding shares of Nova Andino Litio SpA, and SQM
holds one share less than 50%.
Governance Structure
During the first term of the Joint Venture from 2025 to 2030 (the “First Term”), SQM and Codelco each nominate an equal
number of directors to the board of Novandino Litio. During the First Term, SQM controls the management of the
Business and holds the majority of votes required to adopt operational decisions, subject to certain matters that require a
supermajority vote and grant Codelco certain veto rights.
During the second term of the Joint Venture from 2031 to 2060 (the “Second Term”), the board of Novandino Litio will
be composed of an odd number of directors, with Codelco nominating the majority. During the Second Term, Codelco will
control the management of the Business and hold the majority of votes required to adopt decisions at both the board and shareholder levels, subject to certain matters requiring a supermajority vote that grant SQM certain veto rights substantially
equivalent to those held by Codelco during the First Term.
Economic Arrangements
During the First Term, Codelco is entitled to certain preferential economic benefits with respect to lithium production, with
retroactive effect as of January 1, 2025. During the Second Term, the parties will receive economic benefits in proportion
to their respective ownership interests in Novandino Litio.
Other Agreements and Condition Subsequent
In connection with the merger and as contemplated by the Partnership Agreement, the parties entered into additional
agreements and related documentation, including: a shareholders’ agreement; a sales agreement relating to SQM’s mining
assets in the Salar de Maricunga; a license agreement pursuant to which SQM granted Novandino Litio the right to use
certain intellectual property rights; a license agreement pursuant to which Novandino Litio granted Codelco and SQM
rights to use certain lithium-related intellectual property owned by, or licensed to, Novandino Litio; and a long-term
supply agreement pursuant to which Novandino Litio agreed to sell to SQM a substantial portion (and potentially all) of
the potassium extracted from the Salar de Atacama, among other agreements.
The merger forming the Joint Venture was consummated on December 27, 2025, subject to a condition subsequent that
would be triggered if all of the following events occurred: (a) the appeal filed by Inversiones TLC SpA before the Supreme
Court challenging the decision of the Santiago Court of Appeals rejecting its claim of illegality with respect to Exempt
Resolution No. 6,441 of the CMF was upheld (the “Tianqi Appeal”); (b) either (x) an extraordinary shareholders’ meeting
of SQM did not approve the formation of the Joint Venture or (y) such approval was obtained but shareholders representing
more than a specified percentage of SQM’s equity exercised their appraisal rights; and (c) SQM executed a public deed
certifying that the events described in clauses (a) and (b) had occurred and that SQM had not waived the relevant condition
subsequent.
However, on January 26, 2026, the Supreme Court rejected the Tianqi Appeal, confirming the judgment of the Santiago
Court of Appeals. As a result, the condition subsequent was definitively resolved and the Joint Venture became fully
effective.
Environmental Permit
In order to exploit lithium from the Salar de Atacama during the period from 2031 to 2060, the Joint Venture must obtain
an environmental permit (Resolución de Calificación Ambiental, or “RCA”) from the Chilean Environmental Authority
(Servicio de Evaluación Ambiental, or “SEA”) for the mineral exploitation activities required to conduct operations in the
Salar de Atacama. The environmental permit currently in force expires on December 31, 2030.
We cannot assure that the Joint Venture will successfully obtain an RCA from the SEA to exploit lithium from the Salar de
Atacama beyond 2030. If the Joint Venture does not obtain the required RCA, it would be unable to continue extracting
lithium and potassium from the Salar de Atacama after December 31, 2030, which could have a material adverse effect on
our business, financial condition and results of operations.
Capital Expenditures
Our capital expenditures for the years ended December 31, 2025, 2024 and 2023 were as follows:
(in millions of US$) 2025 2024* 2023
Capital expenditures 876.7 971.8 1,103.6
(*) The 2024 amount has been restated to reflect a recalculation using methodology consistent with the calculations for 2025 and 2023.
During 2025, capital expenditures were focused primarily on continuing strategic projects aimed at expanding production capacity across the three business segments. Total investment reached approximately US$876.7 million, highlighting the following:
•Novandino Litio (formerly SQM Salar): continued expansion plans for the Lithium Chemical Plant, with the goal of reaching annual production capacities of 240,000 metric tons of lithium carbonate by 2028 and 100,000 metric tons of lithium hydroxide by the end of 2026.
•Iodine–Plant Nutrition Division: progress in the construction of the seawater pipeline (TEA project), advancement of the leaching piles project in María Elena, and efficiency improvements across various sites.
•International Lithium Division: at the Mount Holland project, continued and completed construction of the refinery in Kwinana, along with initial investments in connection with the Mount Holland expansion studies and the Andover project and other lithium exploration initiatives in Australia, Namibia and Canada.
During 2024, we had total capital expenditures of US$971.8 million. Our 2024 capital expenditure was primarily related to:
•Capacity expansion projects related to lithium facilities in Chile.
•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 Iodine-Plant Nutrition Division, including the investment in the seawater pipeline, scheduled to be finished in 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;
•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.
We expect our capital expenditure for the 2025-2027 period to be approximately US$2.7 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 a capital expenditure program 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 96.5% of our sales in 2025 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, 2025, we had revenues of US$4,576.2 million, gross profit of US$1,352.6 million and losses attributable to controlling interests of US$588.1 million. Our worldwide market capitalization as of December 31, 2025 was approximately US$19.4 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 2025, 2024 and 2023 according to our product lines:
2025 2024 2023
Specialty Plant Nutrition 21 % 21 % 12 %
Iodine and Derivatives 23 % 21 % 12 %
Lithium and Derivatives 50 % 49 % 69 %
Potassium 3 % 6 % 4 %
Industrial Chemicals 2 % 2 % 2 %
Other 1 % 1 % 0 %
Total 100 % — % 100 % — % 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 and iodine 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
In 2025, we announced a significant reduction in potash production, and consequently sales, from the Salar de Atacama as part of our plan to reduce brine extraction by 50% compared to permitted levels by 2028 (using 2020 as the base year). This strategy prioritizes higher lithium-content brines over higher potassium-content brines. As a result of lower potash production, we are prioritizing potassium chloride as a feedstock to increase potassium nitrate production in our Specialty Plant Nutrition business line. Consequently, less potassium will be available for third-party sales, resulting in lower future sales volumes.
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 participation 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 2025, we also expanded into early‑stage exploration projects in Namibia and Canada, with activities similar to those being carried out in Australia.
In Chile, we actively conduct metallic mineral exploration on the mining properties it owns. If such minerals are discovered, we may decide to exploit them, sell them, or enter into a partnership to extract these resources. SQM’s exploration efforts are currently focused on the bedrock layer located beneath the caliche ore that we use as the main raw material for iodine and nitrate production. This bedrock has significant potential for metallic mineralization, especially copper and gold. In January 2026, we announced a collaboration and exploration agreement with Ivanhoe Electric Inc. for the joint exploration for copper in our mining properties in northern Chile. A large portion of our mining properties is located in the Antofagasta region of Chile, where many major copper producers operate.
SQM has an internal geological exploration team that directly explores the area, identifies drilling targets and evaluates new prospects. We have generated more than 45 copper‑prospective projects, in greenfield and intermediate exploration stages, which are currently under study and drilling. We also have a metal business development team that works to attract partners interested in investing in metallic exploration within our mining properties.
As of December 2025, we maintain an active option agreement with a mining company owned by a private equity fund. In addition, 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 2025, specialty plant nutrients revenues increased to US$982.4 million, representing 21.5% of our total revenues for that year and a 4.3% increase from US$941.9 million in specialty plant nutrients revenues in 2024 due to increased sales volumes and a slight increase in average realized price of approximately 1.2% in 2025.
We believe that we are the world’s largest producer of potassium nitrate. We estimate that our sales accounted for approximately 39% of global potassium nitrate sales for all agricultural uses by volume in 2025.
The following table shows our sales volumes of and revenues from specialty plant nutrients for 2025, 2024 and 2023:
2025 2024 2023
Sales Volumes (Th. MT) 1,012.9 982.9 840.2
Sodium nitrate 8.6 12.5 16.7
Potassium nitrate and sodium potassium nitrate 517.5 534.0 443.5
Specialty blends(1) 301.6 276.7 243.4
Other specialty plant nutrients(2) 185.3 159.7 136.5
Total Revenues (in US$millions) 982.4 941.9 913.9
________________________________________________
(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.
We estimate that the Specialty Plant Nutrition market experienced continued recovery in 2025, with estimated growth of approximately 3% compared to the previous year. The Specialty Plant Nutrition market has surpassed 2020 levels by about 5%, clearly reflecting a sustained recovery in market conditions.
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 2025, 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 2025, we sold our specialty plant nutrients in approximately 100 countries and to more than 1,500 customers (excluding Chile). No single customer individually accounted for at least 10% of sales in this segment during 2025. The 10 largest customers collectively accounted for approximately 24% 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:
Revenues Breakdown 2025 2024 2023
North America 40 % 39 % 45 %
Europe 18 % 17 % 14 %
Chile 12 % 12 % 12 %
Central and South America (excluding Chile) 12 % 12 % 8 %
Asia and Others 18 % 21 % 21 %
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 2025, our sales represented approximately 39% 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 19% of global agricultural potassium nitrate sales in 2025 (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 14% of global agricultural potassium nitrate sales in 2025.
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 2025, our revenues from iodine and iodine derivatives amounted to US$1,042.8 million, representing 22.8% of our total revenues in that year and an increase from US$968.3 million in 2024. This increase was mainly attributable to higher sales volumes than in 2024. Average iodine prices were approximately 7.4% higher in 2025 than in 2024. Our sales volumes increased approximately 0.2% in 2025. We estimate that our sales accounted for approximately 37% of global iodine sales by volume in 2025.
The following table shows our total sales volumes and revenues from iodine and iodine derivatives for 2025, 2024 and 2023:
2025 2024 2023
Sales Volumes (Th. MT) 14.5 14.5 13.1
Total Revenues (in US$millions) 1,042.8 968.3 892.2
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 2025, X-ray contrast media was the leading application of iodine, accounting for approximately 38% 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, 6%.
In 2025, our estimates indicate that the market experienced a growth of approximately 0.6% compared to the previous year. Iodine demand expanded modestly during the year, reflecting a market driven more by resilience than momentum. Core applications, particularly medical and health‑related uses, continued to support demand, reinforcing confidence in the structural fundamentals of the market. However, sentiment across other segments remained cautious. Elevated prices weighed on more price‑sensitive applications, where customers remained conservative and focused on efficiency. At the same time, several legacy and non‑core uses continued to decline due to structural factors. Overall, the iodine market was characterized by a clear divergence between stable, high‑value uses and weaker traditional segments, resulting in a steady but subdued demand environment.
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, as well as in the Pedro de Valdivia plant and in our newest addition, Pampa Blanca mining site, both of which are located close to María Elena, Chile. We have a total production capacity of approximately 14,300 metric tons per year of iodine.
Through Ajay SQM Group (“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 2025, we sold our iodine products in approximately 31 countries to 113 customers (including Chile), and most of our sales were exports. Two customers individually accounted for at least 10% of sales in this segment, representing approximately 30% of iodine sales. The 10 largest customers together accounted for approximately 75% of sales during this period. On the other hand, no supplier had an individual concentration of at least 10% of the cost of sales of this line of business.
The following table shows the geographical breakdown of our revenues:
Revenues Breakdown 2025 2024 2023
North America 13 % 16 % 14 %
Europe 37 % 38 % 41 %
Chile 0 % 0 % 0 %
Central and South America (excluding Chile) 2 % 2 % 2 %
Asia and Others 48 % 43 % 42 %
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 61% of total global sales of iodine in 2025, including SQM, with approximately 37%, and four other producers accounting for the remaining 24%. 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 22% of global iodine sales in 2025, including recycled iodine.
We estimate that iodine producers in the United States accounted for nearly 5% of world iodine sales in 2025.
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 that 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 2025, our annual average iodine sales prices increased compared to 2024, reaching approximately US$72 per kilogram in 2025, from the average sales prices of approximately US$67 per kilogram observed in 2024.
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 sales 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 2025, our consolidated revenues from lithium sales amounted to US$2,288.2 million, representing 50.0% of our total revenues and a 2.1% increase from US$2,241.3 million in 2024, due to significantly lower average prices partially offset by higher sales volumes during the year. The average price for 2025 was approximately 19.0% lower than the average price in 2024. Our sales volumes increased approximately 26.0% in 2025.
We believe we are one of the world’s largest producers of lithium carbonate and lithium hydroxide, and we estimate that our sales volumes accounted for approximately 14% of the global lithium chemicals sales volumes.
The following table shows our total sales volumes and revenues from lithium carbonate and its derivatives for 2025, 2024 and 2023:
2025 2024 2023
Sales Volumes (Th. MT) 257.9 208.8 170.0
Novandino Litio (LCE) 233.1 204.9 170.0
International Lithium Division (LCE) 24.8 3.9 0.0
Total Revenues (in US$millions) 2,288.2 2,241.3 5,180.1
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 95% of total demand. Within this segment, electric vehicle batteries made up about 65% of total demand in 2025, while battery energy storage systems (BESS) was around 26% of total demand.
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 2025, demand for lithium chemicals increased by approximately 35%, exceeding 1.6 million metric tons. We expect applications related to EVs and BESS 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 2026. In addition, we produce lithium carbonate from lithium sulfate at our refining plant in China, which also has the capacity of producing lithium hydroxide. This facility has a design capacity of 20,000 metric tons per year. We have additional capacity, through toll manufacturing plants, to produce 30,000 metric tons of lithium carbonate from lithium sulfate per year. We are also operating the Mt. Holland lithium project in Australia through our joint venture with Wesfarmers. The concentrator plant reached its nameplate capacity production in 2025, while the Kwinana lithium hydroxide refinery commenced ramp-up, with a planned production capacity of 50,000 metric tons of lithium hydroxide (50% of which would be SQM's share).
Lithium: Marketing and Customers
In 2025, we sold our lithium products in 38 countries to approximately 165 customers (including Chile), and most of our sales were to customers outside of Chile. During 2025, 95% of our sales of lithium were in Asia. Two customers accounted
for at least 25% of lithium and lithium derivatives sales, representing approximately 24% of our lithium revenues in 2025. Our ten largest customers together accounted for approximately 63% of revenues. One supplier, Corfo, accounted for approximately 25% of this business line's cost of sales, mainly related to lease payments payable to Corfo under the 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 2025 2024 2023
North America 3 % 3 % 3 %
Europe 3 % 4 % 5 %
Chile 0 % 0 % 0 %
Central and South America (excluding Chile) 0 % 0 % 0 %
Asia and Others 95 % 93 % 92 %
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 2025, 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 233.1 thousand metric tons of LCE from Novandino Litio, we believe our market share of lithium chemicals was approximately 14% in 2025. The main competitors in the lithium market with their estimated market share are: Albemarle (12%), Jiangxi Ganfeng Lithium Co (6%), Tianqi Lithium Corp. (5%) and Rio Tinto (4%).
Tianqi is also a significant shareholder of SQM, holding approximately 21.9% of SQM's shares as of March 31, 2026.
We believe that lithium production will continue to increase this decade, in response to an increase in demand growth.
Potassium
In 2025, our potassium chloride and potassium sulfate revenues amounted to US$155.5 million, representing 3.4% of our total revenues and as anticipated, a 42.6% decrease compared to 2024. The average price for 2025 was approximately 21.8% lower than the average prices in 2024. Our sales volumes in 2025 were approximately 52.9% higher than sales volumes reported during 2024.
The following table shows our sales volumes of and revenues from potassium chloride and potassium sulfate for 2025, 2024 and 2023:
2025 2024 2023
Sales Volumes (Th. MT) 327.6 695.0 543.1
Total Revenues (in US$millions) 155.5 270.8 279.1
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 2025 reached approximately 73.6 million metric tons, an increase from approximately 72.8 million tons during 2024.
The latest 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). At the beginning of 2025, we announced to the market that our potassium chloride production would decrease over the coming years in order to prioritize extraction from brines rich in lithium. This decision also reflects our environmental commitment to reduce brine extraction by 50% in our concession by 2028 (using 2020 as the baseline year).
Potassium: Marketing and Customers
In 2025, we sold potassium chloride and potassium sulfate in 36 countries and to more than 760 customers (excluding Chile). One customer individually (Fertilizantes Tepeyac from Mexico) accounted for at least 11% of this segment's sales in 2025, due to a general decrease of potassium chloride sales which led to a higher concentration of sales with this customer. We estimate that the 10 largest customers together accounted for approximately 36% 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 2025 2024 2023
North America 32 % 23 % 24 %
Europe 12 % 15 % 11 %
Chile 13 % 13 % 11 %
Central and South America (excluding Chile) 21 % 33 % 34 %
Asia and Others 22 % 16 % 20 %
Potassium: Competition
We estimate that in 2025 we accounted for less than 1% of global sales of potassium chloride. Our main competitors are Uralkali, Belaruskali, Nutrien and Mosaic. In 2025, Uralkali was estimated to account for approximately 17% of global sales, Belaruskali for approximately 14%, Nutrien for approximately 19%, and Mosaic for approximately 12%.
Industrial Chemicals
In 2025, our revenues from industrial chemicals were US$75.4 million, representing approximately 1.6% of our total revenues for that year and a 3.5% decrease from US$78.2 million in 2024, as a result of lower sales volumes in this business line, which offset higher sales prices. Sales volumes in 2025 decreased 3.0% compared to sales volumes reported last year, while average prices in the business line decreased 0.6% during 2025 compared to average prices reported during 2024.
The following table shows our sales volumes of industrial chemicals and total revenues for 2025, 2024 and 2023:
2025 2024 2023
Sales Volumes (Th. MT) 51.0 52.6 180.4
Total Revenues (in US$millions) 75.4 78.2 175.2
Industrial Chemicals: Market
Industrial sodium and potassium nitrates are used in a wide range of industrial applications, including the production of glass, ceramics, explosives, metal recycling, insulation materials, metal treatments, thermal solar and various chemical processes.
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 2025, we sold our industrial nitrate products in 53 countries, to approximately 290 customers (excluding Chile). No single customer accounted for at least 10% of this segment's sales, and the 10 largest customers together accounted for approximately 28% 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 2025 2024 2023
North America 57 % 56 % 27 %
Europe 21 % 24 % 12 %
Chile 1 % 1 % 1 %
Central and South America (excluding Chile) 11 % 10 % 6 %
Asia and Others 10 % 9 % 54 %
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 2025, our estimated market share by volume for industrial potassium nitrate was 13% and for industrial sodium nitrate was 21% (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 45%, 6% and 6%, respectively, in 2025.
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 2025, 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. In 2025, El Toco resumed operations.
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 2025, 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 2025, 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 800,000 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 2025, 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 are certified under the ISO 9001:2015 standard by TÜV Rheinland, providing third‑party validation of our quality management system. In addition, these facilities hold Responsible Care certification (valid through November 2028), ISO 14001:2015 and ISO 45001:2018 certifications (both valid through February 2029), as well as ISO 50001 and ISO 55001 certifications (valid through March 2028).
Our total iodine production in 2025 was 12,832 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 1,400 m3/h of iodate solutions. The construction was completed by the end of 2024. This additional volume will require 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 mid-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 Corfo Agreements.
As of December 27, 2025, the Corfo Agreements establish a total production and sales limit of up to 405,914 metric tons of lithium metallic equivalent (2,160,600 tons of lithium carbonate equivalent) through 2030, of which we have consumed approximately 60% as of December 31, 2025, and 1,859,928 metric tons of lithium metallic equivalent (9,900,080 tons of lithium carbonate equivalent) from 2031 to 2060. See “Item 10.C. Material Contracts – Corfo Agreements.”
For the year ended December 31, 2025, revenues related to products originating from the Salar de Atacama represented 50.1% 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 Corfo Agreements.
Effective as of December 27, 2025, the Salar de Atacama operations are managed by the Novandino Litio Joint Venture which holds the mineral exploitation rights in the Salar de Atacama under the Corfo Agreements. See “Item 4. A. “—Nova Andino Litio Joint Venture with Codelco”.
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 2025 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 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, with a combined total production capacity of 40,000 metric tons per year. We expect our new line to be operational by mid‑2026, reaching a capacity of 100,000 metric tons and providing production flexibility in response to changes in demand. These plants are located at the Lithium 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; these are treated in an adjacent line, allowing for the production of additional potassium chloride.
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 then converted—if required—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 over 35,000 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, the construction of the concentrator plant was completed, and the construction of the refinery together with its commissioning yielded first product in July 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 finer section of the spodumene ore is diverted to a ball mill, magnetic separation circuit and deslimes before being fed into a larger flotation circuit.
Until full ramp up of the lithium hydroxide refinery at Kwinana, the concentrate will continue being trucked both to Bumbury warehouse and to the refinery for LiOH production. 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 36% 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 natural gas, we maintain a contract with Empresa Nacional del Petróleo (“ENAP”), which extends through December 31, 2026. In addition, we have a fuel supply contract with Compañía de Petróleos de Chile Copec S.A. (“Copec”), which is in effect through August 2026. The Company is currently conducting a tender process to secure future fuel supply arrangements, which is expected to be submitted to the Board of Directors for consideration in April.
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 are connected 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.
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, with gas supplied by a local supplier. A diesel refueling facility is installed on site 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 2025 we recovered approximately 1,292,000 m³ of ultrapure water from the plant's liquid residues. The remaining 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 is 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 Nova Andino Litio until 2060) 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 controls 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 and Law No. 21,713 of 2024) 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 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 Securities Market Law 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 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 21 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, last amended in 2024 (Ley sobre Bases Generales del Medio Ambiente) and Law No.16,744 of the Labor Code relating to workplace accidents and occupational diseases.
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 and maintaining high safety standards.
Law No. 20,551 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 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 (including Law No. 21,600, which creates the Biodiversity and Protected Areas Service and the National System of Protected Areas, establishes a framework for the conservation of biological diversity and the protection of Chile’s natural heritage), 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 Novandino Litio 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, cultural heritage, 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, cultural heritage management 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, as well as other states for early-stage exploration.
Environmental Laws
Environmental laws governing the mining sector in Australia are extensive. In Australia, the government owns the 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 Western Australian (WA) government to conduct its exploration and mining operations in Western 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 and various other conditions 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 on and annual basis.
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, world herritage properties and national heritage places (collectively reference as "matters of national environmental significance" (MNES)). 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 MNES. 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 also 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 is referred to the Western Australia Environmental Protection Authority ("EPA") 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 operating licenses to operate the respective facility under Part V of the EP Act.
The Western Australia Department of Mines, Petroleum and Exploration (DMPE) ensures the responsible development of Western Australia’s mineral, petroleum, and geothermal resources. DMPE 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 DMPE prior to ground disturbance. According to the Mining Act, a standalone Mine Closure Plan (MCP) must be submitted to DMPE 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 DMPE, 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 (in ramp up during 2026).
New laws for climate-related risk disclosures were 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) and targets. 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). Mandatory climate-related risk disclosure reporting for SQM Australia comes into effect in 2027 with the first report to be submitted in 2028.
Health and safety
The Western Australian government’s Department of Local Government, Industry Regulation and Safety (LGIRS) 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 implementation of 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 Safety Act 2004 and associated Regulations (2007), also administered by LGIRS, 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. Amendments to the Fair Work Act 2009 (Cth) and Sex Discrimination Act 1984 (Cth) through the "Closing the Loopholes" aimed to address gaps in workplace laws that undermine pay and working conditions by enforcing stricter penalties and increasing rights of workers; and "Respect@Work" changes place a positive duty on employers to take reasonable measures to eliminate sexual
harassment and other forms of unlawful discrimination, respectfully. Implementation of these amendments by government were completed in 2025.
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. SQM Australia will publish a Modern Slavery Statement in 2026.
Indigenous Peoples
Aboriginal cultural heritage is managed at a State or Territory level. In Western Australia this is under the Aboriginal Heritage Act 1972 (WA) (AH Act). 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 identify if Aboriginal heritage values are present that may be harmed by our activities. This usually takes the form of on-ground survey and is governed by the Native Title Agreement (NTA) between the parties. If an Aboriginal heritage site is identified that cannot be avoided by our activities, there is a process through which SQM can obtain a Ministerial Consent under section 18 of the AH Act to partially or completely impact the heritage place. This process includes substantive consultation with the relevant Aboriginal party to whom the heritage belongs.
In Western Australia, under the EP Act, social surroundings are a formal environmental factor. Social surrounds are the aesthetic, cultural, economic, and other social surroundings to the extent to which they directly affect or are affected by physical or biological surroundings. In this context, Aboriginal people must be consulted about the intersection of their rights and cultural heritage as it pertains to the environment for example, the preservation of ethnographically significant flora or fauna, or the impacts of dewatering on culturally significant water sources.
In the Northern Territory Aboriginal heritage is protected and managed by the Northern Territory Sacred Sites Act 1989 (NT) and the Aboriginal Heritage Act 2011 (NT) which protects Aboriginal and Macassan heritage. Under this legislation, SQM must engage with the relevant land council to secure a Sacred Sites Clearance Certificate for ground disturbing activities. In some instances, an Authority Certificate from the Aboriginal Areas Protection Authority may also be required. If sacred sites and heritage places cannot be avoided (e.g. by a mine footprint), there are processes to gain approval to impact the sites.
Additionally, Aboriginal persons and their designated representatives can invoke the provisions of the Aboriginal and Torres Strait Islander Heritage Protection Act 1984 (ATSIHP Act). The ATSIHP Act empowers the Commonwealth Minister for the Environment and Water to make emergency declarations (short term protection) and longer-term declarations that can stop or restrict activities where there is imminent harm to Aboriginal cultural heritage. In practice, the Commonwealth usually defers to the State legislation due to the robust protections in place in Australia.
The Native Title Act 1993 (Cth) (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 exploration, development or mining on native title land trigger the right to negotiate, a process of consultation that results in an NTA between the Parties that describe how the Parties will undertake activities and preserve native title rights and interests. These are usually reviewed if a project transitions from exploration to project development.
In the Northern Territory, in addition to the NT Act, SQM must comply with The Aboriginal Land Rights Act 1976 (NT) (ALR Act). The ALR Act establishes a legal framework for recognizing and granting land to Aboriginal people in the Northern Territory based on traditional ownership. It provides for the transfer of land as inalienable freehold title to Aboriginal Land Trusts and establishes Land Councils to represent Traditional Owners. The ALR Act also sets out how access, leasing, and mining on Aboriginal land can occur, requiring consent and negotiated agreements. Overall, its purpose is to restore land, recognize traditional relationships to country, and give Aboriginal people control over the use of their land. An Agreement negotiated under the ALR Act satisfies the right to negotiate provisions of the NT Act.
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 for their fertilization products. The Directive provides for the reporting of carbon dioxide emissions for such products between 2023 and 2025, and establishes, as from 2027, mandatory carbon tax payments on fertilizers marketed within 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.”