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Lithium producer SQM’s net income in 2022 soars almost 7x from 2021 to $3.9B

Sociedad Química y Minera de Chile S.A. (SQM), one of the largest producers of lithium carbonate in the world, reported earnings for the twelve months ended 31 December 2022 of US$3,906.3 million—almost 7x the US$585.5 million for the twelve months ended 31 December 2021.

Gross profit reached US$5,736.6 million (53.6% of revenues) for 2022, higher than US$1,090.1 million (38.1% of revenues) recorded for 2021. Revenues totaled US$10,710.6 million for 2022, compared to US$2,862.3 million reported for 2021.

We are well pleased with the extraordinary results that the company delivered in 2022. While the positive price environment during the year contributed to the record earnings that we published today, our long-term view of the lithium market, the investments we made in new capacity, the risk we took and the operational success, all of that well positioned us to benefit from the market conditions seen last year.

The successful public-private alliance we have with CORFO is also yielding great results, allowing us to contribute more than US$5 billion to the Chilean treasury, along with important contributions to local governments and neighboring communities.

As electric vehicle sales continue to grow, we now expect the lithium demand to reach almost 1.5 million metric tons by 2025. This strong demand growth expectations give us confidence as we remain focused on expanding our lithium production capacity. In Chile, we have reached a run-rate of 180,000 metric tons of high-quality lithium products while working to further expand our lithium carbonate and lithium hydroxide capacity. With our lithium project in Australia in construction, we expect to be producing spodumene from the Mt. Holland site by the end of the year and lithium hydroxide during the first half of 2025. The Sichuan refinery is expected to be completed in the second quarter this year while we continue to invest in lithium exploration. Our 2023-2025 revised capital expenditure plan reflects our growth plans during this period.

Last year, we announced our vision for the sustainable future of lithium mining operations in the Salar de Atacama. Our team is fully dedicated advancing on the technical documentation that we expect to submit for evaluation to the Chilean authorities in 2024. We remain very optimistic about the Salar Futuro project, which when implemented, will ensure that the lithium products from the Salar de Atacama are produced in the most sustainable way, setting new standards, not just for the lithium industry, but for the mining industry as a whole.

—SQM’s Chief Executive Officer, Ricardo Ramos


SQM expects capital expenditure for the 2023-2025 period to reach approximately US$3.4 billion, including maintenance. As the company continues with lithium capacity expansion in Chile, it expects to invest approximately US$1.4 billion to increase lithium capacity to 210,000 metric tons, including 100,000 metric tons of lithium hydroxide capacity. The investment in the Mt. Holland project during this period is expected to be close to US$450 million.

Revenues for lithium and derivatives totaled US$8,152.9 million during the twelve months ended 31 December 2022—an increase of 770.9% compared to US$936.1 million recorded for the twelve months of 2021.

The record high sales volumes of almost 157,000 metric tons and average sales prices of close to US$52,000 per metric ton contributed to the outstanding lithium business results for 2022. SQM saw very strong demand in the fourth quarter 2022, driven by increased cathode and electric vehicle production in anticipation of the Chinese electric vehicles subsidies not being extended in 2023.

In response to this high demand, some of 2023 sales volumes were brought forward and delivered during the last months of 2022. As expected, advanced sales volumes in the fourth quarter 2022, followed by the usual slowdown surrounding the Chinese New Year celebration, resulted in lower monthly lithium sales rates during the first two months of 2023 than seen at the end of last year.

Fundamentals behind demand growth are strong, with sales of electric vehicles growing in all the markets, especially in the US market, positively impacted by the Inflation Reduction Act. SQM believes that demand this year should grow more than 20% when compared to 2022.

Gross profit for SQM’s Lithium and Derivatives segment accounted for approximately 79% of SQM’s consolidated gross profit for the twelve months of 2022.


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