TABLE OF CONTENT
1. MESSAGE FROM THE CEO OF THE COMPANY
2. COMPANY PROFILE
2.1 MISSION, VISION, PURPOSE AND VALUES
2.2 HISTORICAL INFORMATION
2.3 OWNERSHIP AND SHARES
3. OUR CORPORATE GOVERNANCE
3.1 CORPORATE GOVERNANCE FRAMEWORK
3.2 BOARD OF DIRECTORS
3.3 BOARD COMMITTEES
3.4 MAIN EXECUTIVES
3.5 ADHERENCE TO NATIONAL AND INTERNATIONAL CODES
3.6 RISK MANAGEMENT
3.7 RELATIONSHIP WITH STAKEHOLDERS AND THE GENERAL PUBLIC
4. STRATEGY
4.1 TIME HORIZONS
4.2 STRATEGIC OBJECTIVES
4.3 CAPITAL EXPENDITURE PLANS
5. OUR PEOPLE
5.1 LABOR ENDOWMENT
5.2 TYPES OF EMPLOYMENT CONTRACTS
5.3 WORKING HOURS
5.4 WAGE EQUITY
5.5 WORKPLACE AND SEXUAL HARASSMENT
5.6 OCCUPATIONAL SAFETY
5.7 POSTNATAL LEAVE
5.8 TRAINING AND BENEFITS
5.9 SUBCONTRACTING POLICY
6. OUR BUSINESS
6.1 INDUSTRIAL SECTOR
6.2 BUSINESS LINES
6.3 STAKEHOLDER GROUPS
6.4 PROPERTY, RESERVES AND FACILITIES
4
7
7
9
11
19
19
23
33
36
38
38
43
46
47
47
53
55
56
60
62
63
64
64
66
68
71
74
74
81
92
95
6.5 SUBSIDIARIES AND ASSOCIATES
7. SUPPLIERS MANAGEMENT
7.1 PAYMENT TO SUPPLIERS
7.2 EVALUATION OF SUPPLIERS
8. INDICATORS
8.1 LEGAL AND REGULATORY COMPLIANCE
8.2 SUSTAINABILITY INDICATORS BY INDUSTRY
9. ESSENTIAL OR RELEVANT FACTS
126
127
127
128
132
132
136
171
10. COMMENTS FROM SHAREHOLDERS AND THE DIRECTORS' COMMITTEE
173
11. FINANCIAL REPORTS
ANNEX
ANNEX 1. RISK FACTORS
ANNEX 2. SUBSIDIARIES AND ASSOCIATES
173
174
174
195
1. MESSAGE FROM THE CEO OF THE COMPANY
Dear employees, shareholders, customers, communities, collaborators, and stakeholders in
general, I would like to present SQM's 2022 Annual Report. This has been a record year in the
Company's history, due to several aspects mentioned below.
In 2022, we achieved the highest revenues in SQM's history, reaching US$10.711 billion, and we were
the largest contributor to the country's tax coffers, contributing over US$5 billion. All of this is the result
of our long-term vision, the new capacity investments we have made, our operational success, and the
responsible and sustainable use of our resources.
As for our business lines, for lithium, in 2022 we worked at maximum capacity with 180,000 tons of
lithium carbonate and 30,000 tons of lithium hydroxide to meet the needs of the market, which is making
great strides towards the energy transition. Lithium is an essential part of this transformation,
contributing to the development of electromobility, the decarbonization of the planet, and a more
sustainable future. During the year, we also announced expansion plans that will increase our capacity
to 210,000 tons of lithium carbonate by 2023 and 100,000 tons of lithium hydroxide by 2025.
At the same time, we are making smooth progress at our Mt. Holland project in Australia, together with
our partner Wesfarmers, to start producing spodumene concentrate by the end of 2023 and lithium
hydroxide by the first semester of 2025.
Another important milestone is that we acquired our first refining plant outside of Chile to produce
lithium hydroxide in China from lithium sulfate sourced from our Salar de Atacama operation.
Our Iodine and Derivatives business line reached record highs in terms of production volumes and sales
prices, driven by a healthy demand mainly due to the use of iodine in contrast media for the X-ray
industry, and we announced a US$1.2 billion investment for the 2023-2025 period to increase iodine and
nitrate production capacity.
As a result of fertilizer shortages and supply chain disruptions, our Specialty Plant Nutrition and
Potassium business lines experienced significantly higher average sales prices than in 2021. We also saw
the total market demand for these products contract, resulting in a decrease in our sales volumes. We
expect a recovery in demand by 2023, and we are convinced that the need for agricultural solutions that
increase yields and reduce the need for water will increase, favoring the consumption of our specialty
fertilizers.
Sustainability is an essential part of our business strategy and is embedded in all of SQM's activities and
projects. We measure and mitigate our carbon, water, and environmental footprints. Today, we maintain
an open-door policy and direct communication channels with the communities surrounding our
operations in the Tarapacá and Antofagasta regions, as well as sustained and joint work to contribute to
the development of their life plans.
Our Salar de Atacama operation has one of the lowest carbon footprints on the planet and our Sustainable
Development Plan, presented in 2020, challenges us to further meet the targets we set for 2025, 2030,
and 2040, which can be seen in detail in this Annual Report, our website, Sustainability Report, and
social media.
In 2022, we announced the Salar Futuro project, which deepens our commitment to developing a
sustainable, high value-added lithium industry in Chile. This project involves important technological
MESSAGE FROM THE CEO OF THE COMPANY
4
challenges and direct investments of more than US$1.5 billion that will allow us to have the most
sustainable mining operation in the world and reduce our emissions and footprint beyond our previous
goals through innovation, research, and the application of new technologies such as Advanced
Evaporation Technologies (AET), Direct Lithium Extraction (DLE), increased yields, and seawater use.
As part of our sustainability initiatives, in 2022 we continued with the IRMA (Initiative for Responsible
Mining Assurance) certification process and completed phase 2 of the certification audit at the Salar de
Atacama operation, for which we expect to receive the final report in the coming months. In 2022, we
participated in the evaluation of the Dow Jones Sustainability Index (DJSI); we were accepted in the
MILA and Chile indices for the third consecutive year, and we were included in the Sustainability
Yearbook 2023. We were also evaluated in the Carbon Disclosure Project (CDP), where we obtained a
B category, i.e. in the management band above the average of the South American region (C) and above
the average of the Chemicals sector (-B). We also completed phase 2 of the ISO 14001 and 45001
certification process at the Salar de Atacama and Carmen lithium chemical plants and continued with the
process of implementing ISO 50001 at Salar de Atacama and Nueva Victoria to support the
decarbonization targets for energy management systems.
Finally, and in line with the Company's social commitment to the people living in the territories where
we operate, we participated, among other things, in 34 working groups to increase our interaction with
the communities and we also created the Atacameña Women's Alliance (Alianza Mujer Atacameña,
AMA) to carry out a series of actions aimed at strengthening the role of women. We are also continuing
to implement different programs that we have been working on for years, such as "Health and Healthy
Life", which offers preventive exams to detect breast cancer, medical specialties, and free dental care
through our mobile dental clinics in San Pedro de Atacama, Toconao, Peine, Socaire, and Talabre;
"Agriculture, Water Conservation, and Land", which seeks the diligent use and care of natural resources;
"Productive Development and Trade", to explore new ways to add value to our products, empower
entrepreneurs and businesswomen, and coordinate strategies with other public or private organizations;
and "Cultural Heritage and the Environment", which promotes the maintenance, care, and enhancement
of the Lickanantay culture and the historical inhabitants of Tarapacá.
In terms of gender equity, at SQM we are committed to encouraging the incorporation of women into
chemical and mining activities by strengthening the Company's links with technical-vocational high
schools, technical training centers, and universities, to encourage women to pursue STEM careers so that
they can become professionals in the specialties required by the mining industry. We are also proud that
in 2022, 20% of SQM's employees were women, recognized as the highest in the industry by the Impulsa
award, and that we obtained the Standard 3262 Certification for Gender Equality and Work-Life Balance
in the Metropolitan Region. We are already working to achieve this seal in Antofagasta and Tarapacá as
well.
Finally, I would like to thank our employees and stakeholders for their support, since each of them, in
their own capacity, contributes towards SQM's efforts to improve people's quality of life by providing
solutions for human progress.
With my warmest regards,
Ricardo Ramos Rodríguez
CEO
MESSAGE FROM THE CEO OF THE COMPANY
5
SQM IN NUMBERS
SQM is a global chemical company that is listed on the New York Stock Exchange and the Santiago
Stock Exchange (NYSE: SQM; Santiago Stock Exchange: SQM-B, SQM-A). SQM develops and
produces diverse products for several industries essential for human progress, such as health, nutrition,
renewable energy and technology through innovation and technological development. We aim to
maintain our leading world position in the lithium, potassium nitrate, iodine and thermo-solar salts
markets.
Through the specialized international commercial network, SQM reaches more than 110 countries with
its products with 98% of its total sales during 2022 coming from export.
TOTAL REVENUE
NET INCOME
US$10,710.6
million
US$3,906.3
million
CONTIRNUTION TO
CHILEAN TREASURY
US$5,000
million
6,997 employees
IN CHILE AND GLOBALLY
20% of employees
ARE WOMEN
US$885 million
SPENT ON TRAINING
PROGRAMS
MENSAJE DEL GERENTE GENERAL DE LA COMPAÑÍA
6
2. COMPANY PROFILE
2.1 MISSION, VISION, PURPOSE AND VALUES
The following corporate principles guide SQM's actions and are continuously indorsed in the interactions
with all of our stakeholders.
Mission
We are a global company with a team of people committed to excellence. Our activities focus on the
extraction of minerals that can be selectively integrated into the processing and sale of products for
industries essential for human development.
Vision
We are a global company that is recognized for its competitiveness, excellence and innovation in its lines
of business. We focus on the development of products essential for human development in accordance
with the highest standards of integrity.
Purpose
We aspire to make a distinctive contribution to the world's sustainable development, delivering solutions
for industries essential to human progress, in harmony with our environment and our people.
Values
Excellence
▪ We are an organization that challenges itself permanently to achieve better results every time,
with the purpose of creating shared value for shareholders, collaborators, clients, suppliers and
communities.
▪
In our daily work and challenges we face, we strive to be creative, agile and innovative.
▪ We operate within a framework of sustainability and respect for the environment.
▪ We aim at creating an organization culture of excellence based on the ten principles of the Lean
methodology (M1).
▪ We encourage and value internal meritocracy as the main way of professional growth, favoring
equal opportunities, inclusion and diversity. We seek to generate professional growth
opportunities for people to reach their maximum potential.
Security
▪ Caring for people is an organizational priority commitment that mobilizes us daily, working
towards safe and accident-free operations.
▪ We are responsible for creating the conditions for the safe development of each job; as well as
promoting behaviors focusing on the physical and psychological safety of all people who work
at SQM.
▪ Each person in the organization is responsible for taking care of themselves and looking out for
the other members of the team, as well as maintaining a mandatory safe behavior commitment.
We promote open and permanent feedback to make safety improvement opportunities visible.
2 COMPANY PROFILE
7
Integrity
▪ We seek to carry out our daily work with high standards of integrity described in the internal
Code of Ethics. At the same time, we are open and interested in identifying and implementing
better ways of working that ensure and facilitate compliance with these standards.
▪ We encourage respect for and compliance with each of the commitments assumed with
shareholders, clients, collaborators, regulators, communities, suppliers and authorities.
Sustainability
▪ A voluntary commitment that envisions a future where SQM becomes a relevant actor in a
cultural change, contributing to the sustainability of the planet that we all want and dream of,
and doing it not only through the contribution that its products make to health, food, green
energies and technology, but also through the sustainability of its supply chain.
▪ Sustainability leads us to rethink our processes, activities and operation to materialize concrete
actions.
SQM, as a company with a global reach, understands the responsibility that its work entails and aims at
the continuity of its business in the long term. For this reason, since its inception the Company has been
committed to sustainable development in harmony with its environment, business ethics and respect for
and promotion of human rights, in accordance with current national and international standards.
With the goal of consolidating these commitments from the highest corporate level and throughout the
entire operational chain, in 2021, the Company published its Sustainability, Ethics and Human Rights
Policy, based on the United Nations Sustainable Development Goals (SDGs); the Principles of the
International Council on Mining and Metals; the International Standard ISO 14001 (Environmental
Management Systems); the applicable standards of the International Finance Corporation (IFC) and the
framework of "Protection, Respect and Remediation" of the Guiding Principles on Business and Human
Rights of the United Nations, inspired by the Universal Declaration of Human Rights, Convention 169
on Indigenous and Tribal Peoples of the International Labor Organization, among other guidelines.
SQM's Sustainability, Ethics and Human Rights policy is available at: https://www.sqm.com/en/politica-
de-sostenibilidad-etica-y-derechos-humanos/ and considers all areas of the company and business, such
as: Ethics and Corporate Governance; Employees; Value chain; Environment and Sustainable
Development and Communities.
2 COMPANY PROFILE
8
2.2 HISTORICAL INFORMATION
Below are the milestones in the company's history:
1968: SQM was formed through a joint venture between Compañía Salitrera Anglo Lautaro S.A. (“Anglo
Lautaro”) and the Production Development Corporation (Corporación de Fomento de la Producción or
“Corfo”), a Chilean government entity.
1971: Anglo Lautaro sold all its shares to Corfo and SQM was wholly owned by the Chile Government.
1983: Corfo began a process of privatization by selling our shares to the public and subsequently listing
such shares on the Santiago Stock Exchange.
1985: SQM began to use heap leaching processes to extract nitrates and iodine.
1986: The potassium nitrate production commenced at the Coya Sur facility.
1988: The company's privatization process concluded with all the shares publicly owned.
1993: SQM´s ADSs started to trade on the NYSE under the ticker symbol “SQM”. Each ADS represents
one Series B common share.
1994: Investments into the development of the Salar de Atacama project in northern Chile began, which
enabled us to produce potassium chloride, lithium carbonate, potassium sulfate and boric acid.
1996: Production of lithium carbonate began at the Carmen Lithium Chemical Plant, near the city of
Antofagasta.
2005: Lithium hydroxide production began at the Carmen Lithium Chemical Plant.
2011: The expansions of lithium carbonate capacity were completed, achieving 48,000 metric tons of
capacity per year. During this year, the construction of a new potassium nitrate facility in Coya Sur was
completed, increasing the overall production capacity of potassium nitrate by 300,000 metric tons per
year.
2013: The expansions in the production capacity of iodine plants in Nueva Victoria were completed.
2015: Focusing on increasing the efficiency of our operations, the Company announced a plan to
restructure the iodine and nitrate operations.
2017: The iodine production capacity at Nueva Victoria was increased to approximately 10,000 metric
tons per year. Including Pedro de Valdivia and Nueva Victoria, the total effective iodine capacity reached
approximately 14,000 metric tons per year.
This year, SQM entered a 50/50 joint venture with Wesfarmers Limited to develop a Mt. Holland lithium
hydroxide project in Western Australia. The project includes design, construction and operation of a
mine, concentrator and refinery for the production of lithium hydroxide with total capacity of 50,000
metric tons.
2 COMPANY PROFILE
9
2020: SQM announced the Sustainable Development Plan, which included voluntarily expanding
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, the company also set a goal to obtain international certifications and participate in
international sustainability indices, and for the first time entering the Dow Jones Sustainability Chile and
the Dow Jones Sustainability MILA Pacific Alliance Indices.
2021: The Board approved the investment of approximately US$700 million for the 50% share of the
development costs of the Mt. Holland lithium hydroxide project in Western Australia.
The Company completed the US$1.1 billion capital increase.
2022: SQM was included in the Dow Jones Sustainability Chile and the Dow Jones Sustainability MILA
Pacific Alliance Indices for the third year in a row.
SQM es incluida en los índices Dow Jones Sustainability Chile y Dow Jones Sustainability Mila Pacific
Alliance, por tercer año consecutivo. In addition, during this period the external audit was completed in
IRMA's rigorous responsible mining certification process.
This year, the production of lithium carbonate in SQM's local operation reached an effective capacity of
180,000 metric tons. During 2023, the Company expects to increase it to reach 210,000 metric tons and
40,000 metric tons of lithium carbonate and lithium hydroxide capacity, respectively, with latter reaching
100,000 metric tons by 2025.
In addition, the purchase and development of a new plant in China is announced, which will allow the
company to produce up to 30,000 metric tons of lithium hydroxide per year from lithium sulfate coming
from Chile.
In the third quarter of this year, SQM announced plans related to the Salar Futuro project, deepening its
commitment to the development of a sustainable lithium industry in Chile. This project entails important
technological challenges and investments of more than US$1.5 billion, which will make it possible to
have the most sustainable mining operation in the world and reduce the footprint beyond the previously
established objectives, based on innovation, new technologies, such as Advanced Evaporation
Technologies (AET), Direct Lithium Extraction (DLE), yield improvements and use of seawater.
2 COMPANY PROFILE
10
2.3 OWNERSHIP AND SHARES
2.3.1 Ownership control situation
As of December 31, 2022, SQM does not have a “controlling group” as such term is defined in Title XV
of Chilean Law No. 18,045.
2.3.2 Significant changes in share ownership
During 2022, there have been no significant changes in the ownership or control of the Company.
2.3.3
Identification of major shareholders
The following chart represents the ownership and major shareholder groups as of December 31, 2022.
STOCK BROKERS,
2.79%
OTHERS, 2.40%
BANKS FOR
FOREIGN
ACCOUNTS, 11.51%
PAMPA GROUP,
25.76%
CHILEAN PENSION
FUNDS, 10.58%
THE BANK OF NEW
YORK MELLON
(ADRS), 22.60%
KOWA GROUP,
2.20%
INVERSIONES TLC
SPA (TIANQI
LITHIUM), 22.16%
2 COMPANY PROFILE
11
As of December 31, 2022, the following shareholders own more than 1% of the Company's shares, and/or can appoint at least one member to the
Company's Board of Directors.
SOCIEDAD DE INVERSIONES PAMPA CALICHERA S.A.
Company Name
Chilean Tax ID
96.511.530-7
N° of Series A
shares
44,989,231
N° of Series B
shares
1,611,227
N° of Series A +
Series B shares
46.600.458
POTASIOS DE CHILE S.A.
76.165.311-3
18,179,147
INVERSIONES GLOBAL MINING CHILE LTDA
96.863.960-9
8,798,539
-
-
Subtotal PAMPA GROUP
THE BANK OF NEW YORK MELLON ADRS1
INVERSIONES TLC SPA2
71,966,917
1,611,227
59.030.820-K
-
64,555,045
76.902.021-7
62,556,568
INVERSIONES LA ESPERANZA CHILE LIMITADA
79.798.650-K
4,246,226
KOCHI S.A.
KOWA CO. LTD
KOWA HOLDINGS AMERICA INC.
Subtotal KOWA GROUP
BANCO DE CHILE POR CUENTA DE STATE STREET
AFP HABITAT
96.518.570-4
1,014,860
59.046.730-8
59.023.690-K
97.004.000-5
98.000.100-8
781,429
227,550
6,270,065
79,265
-
BANCO SANTANDER POR CUENTA DE INV EXTRANJEROS
97.036.000-K
545,729
AFP CUPRUM
BANCO DE CHILE POR CUENTA DE TERCEROS NO RESIDENTES
AFP CAPITAL
AFP PROVIDA
BANCO DE CHILE POR CUENTA DE CITI NA NEW YORK CLIENT
76.240.079-0
97.004.000-5
98.000.000-1
76.265.736-8
97.004.000-5
-
62,829
-
-
67,463
Subtotal Major Sahreholders
Total Shares
141.548.836
123,391,110
264,939,946
92,75%
142.819.552
142,818,904
285,638,456
100,00%
1 The Bank of New York Mellon is the depositary bank for the Company’s ADSs traded on the New York Stock Exchange. Information about ADS holders is provided at the end
of this section.
2 The number of shares does not include 748,490 ADRs of Tianqi Lithium Corporation.
2 COMPANY PROFILE
12
18.179.147
8.798.539
73.578.144
64.555.045
62.556.568
4.246.226
1.014.860
781.429
227.550
6.270.065
-
-
-
-
-
-
10,979,388
11.058.653
9,504,885
8,181,775
6,535,039
6,181,476
5,652,982
5,263,361
4,925,932
9.504.885
8.727.504
6.535.039
6.244.305
5.652.982
5.263.361
4.993.395
% Ownership
16.31%
6.36%
3.08%
25.76%
22.60%
21.90%
1.49%
0.36%
0.27%
0.08%
2.20%
3.87%
3.33%
3.06%
2.29%
2.19%
1.98%
1.84%
1.75%
2.3.4 Shares and their characteristics and rights
Description of series of shares
The Company's capital is US$1,577,385,979 and divided in 142,819,552 Series A shares and
142,819,552 Series B shares. All these shares are registered, have no par value, and are issued, subscribed
and paid. Article 5 of the Company's By-laws establishes that Series B shares have a restricted right to
vote as they can only elect one Director of the Company, regardless of their capital stock’s share, and
have the right to :
(a)
5% of the Series B shares request so; and
call for an Ordinary or Extraordinary Shareholders’ Meeting when the shareholders of at least
(b)
when it is requested by the Director elected by the shareholders of the Series B shares.
call for an Extraordinary Board of Directors Meeting without the Chairman’s authorization
The limitation and preferences of the Series B shares have a duration of 50 consecutive and continuous
years starting as of June 3, 1993.
Series A shares have the option to exclude the Director elected by Series B shareholders from the voting
process in which the Chairman of the Board is to be elected, if there is a tie in the first voting process.
The limitation and preferences of the Series A shares have a duration of 50 consecutive and continuous
years starting as of June 3, 1993.
The second transitory article and articles 31 and 31 bis of the Company’s By-laws establish that in
General Shareholders’ Meetings each shareholder will have a right to one vote for each share he owns
or represents and (a) that no shareholder will have the right to vote for himself or on behalf of other
shareholders of the same Series A or Series B shares representing more than 37.5% of the total
outstanding shares with right to vote of each Series and (b) that no shareholder will have the right to vote
for himself or on behalf of other shareholders representing more than 32% of the total outstanding shares
with a right to vote. In calculating a single shareholder’s ownership of Series A or B shares, the
shareholder’s stock and those pertaining to third parties related to them are to be added.
The second transitory article provides as follows:
“Throughout the period running from the date of the extraordinary shareholders’ meeting at which this
transitory article is incorporated, and December 31, 2030, the restriction against voting on behalf of more
than 37.5% of any series of shares in the Company, established in Article 31 hereof, shall be subject to
the following exception, applicable only to the election of board members by means of Series A shares
in the Company: If two or more persons, regardless of whether or not they are related parties to each
other (the incoming shareholders), act prior to December 31, 2030 such as to acquire a sufficient number
of Series A shares to allow them to hold voting powers for the selection of directors of the Company
amounting to more than 37.5% of that series, then any registered shareholder or group of shareholders
holding more than 37.5% of all Series A shares in the Company shall be entitled to vote for the selection
of directors of the Company amounting to whichever is less, between a number of the Series A shares
that are held (i) by existing shareholders as of that date, and (ii) by the incoming shareholders with voting
rights.
2 COMPANY PROFILE
13
Similarly, if for any reason a registered shareholder in the Company as of the date hereof who holds
more than 37.5% of Series A shares in the company between the date hereof and December 31, 2030,
comes to hold more voting shares for the selection of directors of the Company than the votes allocated
for holding 37.5% of said Series A shares, either through a joint action agreement with other
shareholders, including existing shareholders, or by any other means, then any other shareholder or group
of shareholders in the Company that is not a related party to the same and holds more than 37.5% of all
voting Series A shares in the Company, including both existing and incoming shareholders, shall be
entitled to vote for the selection of directors of the Company in accordance with whichever number of
Series A shares in the Company is the lesser, between (i) the number held by this shareholder or group
of shareholders, and (ii) the existing shareholder may have the capacity to vote in excess of the restriction
amounting to 37.5% of said shares.”
Article 5 bis of the Company's By-laws establishes that no person can directly or through third parties,
state owned companies, decentralized, autonomous, municipal or other institutions, hold more than 32%
of the Company’s total shares with right to vote.
Each Series A share and Series B share is entitled to share equally in the Company’s profits, i.e., they
have the same rights on any dividends declared on the outstanding shares of SQM.
The Company By-laws do not contain any provision relating to (a) redemption provisions (b) sinking
funds or (c) liability to capital calls by the Company.
As established in article 103 of Law No. 18,046, a company subject to the supervision of the SVS may be
liquidated in the following cases:
• Expiration of the duration term, if any, as established in its By-laws;
• All the shares end up in the possession of one individual for more than ten continuous days;
• By agreement of an Extraordinary Shareholders Meeting;
• By abolition, pursuant to applicable laws, of the decree that authorized its existence;
• Any other reason contemplated in its By-laws.
Article 40 of the Company’s By-laws states that in the event of liquidation, the Shareholders’ Meeting will
appoint a three-member receiver committee that will have the authority to carry out the liquidation process.
Any surplus will be distributed equally among the shareholders.
The only way to change the rights of the holders of the SQM shares, including holders of our ADSs, is by
modifying its By-laws, which can only be carried out by an Extraordinary Shareholders’ Meeting, as
established in article 28 of the Company By-laws.
2 COMPANY PROFILE
14
Dividend Policy
Dividends are annually distributed to the Series A and Series B shareholders of record on the fifth
business day prior to the date for payment of the dividends. The By-laws do not specify a time limit after
which dividend entitlement elapses but Chilean regulations establish that after 5 years, unclaimed
dividends are to be donated to the Chilean Fire Department.
SQM’s dividend policy for 2022, reported at the Annual General Shareholders’ Meeting held on April
26, 2022, included the following: distribute and pay, as a final dividend (dividendo definitivo) to the
corresponding shareholders, a percentage of the net income that shall be determined per the following
financial parameters:
Dividend Payment (% of the 2022 Net Income)
100%
80%
60%
“Total Current Assets” / “Total Financial Liabilities”
≥
2.5
"Total current and non/current liabilities −Cash and cash equivalents
−Other current financial assets"/ “Total equity”
≤
0.8
2.0
0.9
1.5
1.0
If none of the foregoing financial parameters are met, the Company shall distribute and pay, as a final dividend,
and in favor of the respective shareholders, 50% of the 2022 net income.
b) Distribute and pay, if possible and during 2022, interim dividends (dividendos provisorios) that will
be charged against the aforementioned final dividend.
(c) The amount of the interim dividends may vary up or down, pursuant to the information available to
the Board of Directors on the date on which it agrees to the distribution of said dividends given that the
dividend will not materially or negatively affect SQM’s ability to make its investments, fulfill its
liabilities, or in general, comply with the investment and finance policy approved at the ordinary general
shareholders’ meeting.
(d) At the ordinary general shareholders’ meeting that will be held in 2023, the Board of Directors shall
propose a final dividend pursuant to the financial parameters expressed in letter a) above, discounting
the total amount of the interim dividends previously distributed during 2022.
(e) If there is an excess of net income in 2022, this may be retained and assigned or allocated for
financing its own operations, to one or more investment projects of the Company, notwithstanding a
possible distribution of special dividends (dividendos eventuales) charged to the retained earnings and
approved at the shareholders’ meeting, or the possible and future capitalization of all or part of the latter.
(f) The payment of additional dividends (dividendos adicionales) is not considered.
2 COMPANY PROFILE
15
Statistical information: dividends
All series A and series B shares carry equal rights to share in any dividend declared on SQM’s
shareholder capital in circulation. During the past three years, the Company has paid out the following
dividends:
Payout Year
Earnings for the Year
US$ Total
(in millions)
US$/Share
2020 (Final)
2020 (Interim)
2020 (Special)
2021 (Final)
2021 (Interim)
2021 (Interim)
2021 (Special)
2022 (Final)
2022 (Interim)
2022 (Interim)
2022 (Interim)
2019
2020
retained
2020
2021
2021
retained
2021
2022
2022
2022
66.9
45.0
100.0
4.4
68.0
89.8
400.0
27.7
796.1
528.2
879.9
0.25414
0.17092
0.37994
0.01530
0.23797
0.31439
1.40037
0.09691
2.78716
1.84914
3.08057
2 COMPANY PROFILE
16
Statistical information: share transactions
SQM’s Series A and Series B shares are traded on the Santiago Stock Exchange and the Santiago Electronic Stock Exchange. The Company’s Series
B shares have been traded as ADSs on the New York Stock Exchange since September 20, 1993.
Information on SQM’s shares on Chilean stock exchanges:
Average Price
(Ch$/Share)
SQM-A
67,393
54,517
68,884
74,524
71,645
SQM-B
73,851
51,323
73,834
87,359
82,888
Number of Shares Traded
SQM-A
14,974,322
14,444,872
168,590
246,535
114,325
SQM-B
118,189,858
29,672,770
35,630,778
25,140,711
27,745,599
2022
I Quarter
II Quarter
III Quarter
IV Quarter
Fuente: Bloomberg, Composite Exchange
Amount Traded
(Millions of Ch$)
SQM-A
825,668
787,491
11,613
18,373
8,191
2022
I Quarter
II Quarter
III Quarter
IV Quarter
Average Price
(US$/ADS)
SQM-B
83.83
63.67
87.81
94.55
89.31
Number of Shares Traded
SQM-B
433,388,816
99,534,992
125,790,310
102,195,839
105,867,675
Fuente: Bloomberg, Composite Exchange
Statistical information: number of shareholders
The following table details the total number of SQM shareholders as of December 31, 2022:
Número Total de Accionistas Series A y B
Número Total de Accionistas Serie A
Número Total de Accionistas Serie B
1.158
360
1.068
135
-
135
Registro de Accionistas
Registro de Tenedores de ADSs
2 COMPANY PROFILE
SQM-B
8,649,703
1,522,896
2,630,763
2,196,267
2,299,777
Amount Traded
(Millions of Ch$)
SQM-B
36,501
6,337
11,046
9,663
9,455
Total
1.293
360
1.203
17
2.3.5 Other Securities
The Company has issued securities other than shares that correspond to different types of bonds placed in national and international markets to finance its
activities and businesses. The following table sets forth key information about other securities issued by the Company as of December 31, 2022.
Security (1)
3.63% Notes due 2023 — US$300 million
4.38% Notes due 2025 — US$250 million
4.25% Notes due 2029 — US$450 million
4.25% Notes due 2050 — US$400 million
3.50% Notes due 2051 — US$700 million (Green
Bond)
Series H Bond — UF 4 million
Series O Bond — UF 1.5 million
Series P Bond — UF 3 million
Series Q Bond — UF 3 million
Short-term
amount (in
million US$)
302.5
4.2
2.2
7.3
7.0
Long-term
amount (in
million US$)
-
249.5
446.3
393.9
684.6
Interest
rate
Date of
Issuance
3.63%
4.38%
4.25%
4.25%
3.50%
03/04/2013
23/10/2014
07/05/2019
22/01/2020
10/09/2021
Date of Maturity Ammortization
03/04/2023
28/01/2025
07/05/2029
22/01/2050
10/09/2051
Bullet
Bullet
Bullet
Bullet
Bullet
17.4
0.9
1.8
0.3
95.9
4.90%
13/01/2009
05/01/2030
60.8
123.0
122.8
3.80%
3.25%
3.45%
04/04/2012
05/04/2018
08/11/2018
01/02/2033
15/01/2028
01/06/2038
Semi-annual,
starting in 2019
Bullet
Bullet
Bullet
(1) UF-denominated bonds are fully hedged to US dollars with currency swaps.
The bond issuance contracts in the local market require the Company to maintain a total debt level ratio of no more than one times for Series H, Series O
and Series Q bonds, calculated for the period of the last 12 months.
2 COMPANY PROFILE
18
3. OUR CORPORATE GOVERNANCE
3.1 CORPORATE GOVERNANCE FRAMEWORK
SQM has a Corporate Governance Model based on its Corporate Governance Policy, which is the
reference framework for directors and was last updated in October 2022. This policy establishes the
Board's duty to exercise its best judgment based on what it reasonably believes to be in the best interests
of the Company and its shareholders. Thus, it serves as a guide to steer the responsible exercise of the
directors' duties without creating legal obligations, since they are assumed to be known.
Moreover—in line with best practices worldwide—SQM's Sustainability, Ethics, and Human Rights
Policy, and the commitments arising from it, embodies the Company's comprehensive approach to
sustainability. Progress in relation to these good governance, environmental, and social commitments is
led and supervised by the Board of Directors and involves workers, contractors, shareholders, the
supplier and supply chain, customers, as well as the communities and territories where we operate. (Data
regarding 2022 management in the areas of sustainability are reported in item 8.2 of this Report).
Acting ethically begins with each member of SQM and their fundamental commitment to the law and
the Company's values: Excellence, Integrity, Safety, and Sustainability. In this context, the Code of
Ethics and the Code of Conduct for Business Partners are essential documents for managing these matters
and are supported by related policies, procedures, and financial controls, which together are a relevant
component of the Company's Ethics and Compliance Program. These policy instruments and the
program apply to all members of the organization in all operations, whether local or international: senior
executives, board members, managers, full-time and part-time employees, etc.
The regulatory instruments that comprise SQM's ethical framework also include the Conflicts of Interest
Policy, which aims to protect the integrity of the Company's decision-making process; the Antitrust
Policy, which establishes rules regarding conduct that should never be engaged in in the market context
in order to avoid anti-competitive practices; and the Crime Prevention Model (CPM), which complies
with the provisions of Law 20,393 on the Criminal Liability of Legal Entities and its amendments. This
procedure also applies to SQM's operations globally and to all of its affiliates, subsidiaries, and
companies in which it has more than a 50% stake, at the discretion of the Risk Management and
Compliance Manager.
The CPM has the organizational structure established for this purpose, with a Crime Prevention Officer
whose duties include:
• Ensuring the proper development, implementation, operation, and update of the CPM.
• Reporting semiannually, or as circumstances warrant, to the Board of Directors on his/her
management and the operation of the CPM.
• Performing specific reviews to verify compliance with the main controls that prevent the crimes
referred to in Law 20,393.
Implementing a training program on the CPM aimed at SQM members.
•
• Ensuring the correct operation of the whistleblower channels and their respective procedures.
• Conducting or requesting that investigations be conducted when an unusual or suspicious
situation arises.
• Leading the control and analysis process of the risks and controls related to offenses under Law
20,393.
3 OUR CORPORATE GOVERNANCE
19
It should be noted that the Crime Prevention Officer has the autonomy and independence to access and
report directly to the Board of Directors, in order to report on his or her work.
The CPM includes prevention, detection, and response activities, including training and communication
to strengthen the company's ethics culture. All other policies related to matters that represent potential
risks, which have been duly disseminated throughout the organization, are part of this crime control and
prevention environment:
• Anti-Bribery and Corruption Compliance Policy
• Corporate Reimbursement and Expense Claim Policy
• Sponsorship and Membership Procedures
• Donation and Contribution Procedures
• Global Procedure for Internal Investigations and Sanctions.
• Global Whistleblower Procedure
SQM's formal Whistleblower Channels include the web form (www.SQM.ethicspoint.com), which is
also available on the company's website and intranet, as well as telephone numbers according to the
geographic location of the SQM unit or operation. It is worth noting that the use of these channels is
protected by confidentiality mechanisms, guaranteeing the anonymity of the whistleblower, both
employees and third parties, as required by local legislation.
Reported allegations are reviewed by the Crime Prevention Officer in conjunction with Audit
Management to assess whether they merit an investigation, as described in the Global Procedure for
Internal Investigations and Sanctions.
International anti-corruption laws which SQM is subject to include the Foreign Corrupt Practice Act
(FCPA), the regulations established by the Security and Exchange Commission (SEC) of the United
States, as well as similar laws applicable in the countries where the Company operates.
The aforementioned policies and codes (publicly available at www.sqm.com, Sustainability tab,
Corporate Governance section) also constitute the framework that sets out the criteria for a constructive
relationship with SQM's stakeholders. As stated in the Sustainability, Ethics, and Human Rights Policy,
along with promoting a culture of integrity and ethics, the Company encourages respect for and
compliance with the commitments made to customers, employees, regulators, communities, authorities,
shareholders, and suppliers. In order to regulate relations with the latter stakeholder, Chile has a
Responsible Sourcing Policy, which expresses specific commitments regarding fair treatment,
environmental protection, and unrestricted respect for human rights, as per its adherence to the UN
Universal Declaration of Human Rights, the Guiding Principles on Human Rights and Business, and the
International Labor Organization (ILO) Conventions, to which Chile is a signatory.
Aware of the need to address, among other relevant issues, the common challenges of the climate crisis,
inequalities, and emerging diseases, SQM aspires to a long-term and collaborative relationship with its
stakeholders, based on a responsible business strategy that includes action points and their respective
metrics. This model integrates technological developments and innovation to offer effective solutions
that contribute to the progress and well-being of people, co-constructing an economic, social, and
environmental value proposition together with the communities, workers, innovation centers, and
academia, as well as the Company's suppliers and customers.
Precisely in the area of innovation, in 2021 the Company incorporated an Innovation Governance System
that guides decision-making at the executive level with respect to definitions and priorities. Thus, an
Innovation Management area was created, reporting to the Vice-Presidency of People and Performance.
In both 2021 and 2022, efforts were made to centralize information on innovation challenges to share
best practices within the Company and connect it with the innovation ecosystem.
3 OUR CORPORATE GOVERNANCE
20
The year this area was created, we made progress in defining the innovation strategy, its focal points,
and a survey of the different projects under development by SQM that could be considered an innovation.
Likewise, the purpose of innovation at SQM was defined as creating unique and highly valued solutions
in the global markets of the chemical and non-metallic mining industries, which will allow us to
sustainably double the Company's value every five years.
For SQM, innovation should focus on business models, products, and processes that are unique in their
respective industries and markets, that deliver high-value solutions to customers, whose impact on results
exceeds US$5 million EBITDA on a regular basis, and that ensure competitiveness and sustainability in
the industry. With regard to identifying possible organizational, social, or cultural barriers and
determining the range of skills, knowledge, conditions, and experiences in the performance of different
functions, the Equality, Diversity, and Inclusion approach of SQM's Sustainability, Ethics, and Human
Rights Policy defines three areas to guarantee equal opportunities for the development of all members
of the Company, in an environment of cordiality, equality, respect, and openness:
• Ensuring no salary discrimination by hiring, promoting, and making employment decisions
based on objective criteria related to the person's aptitude for the position.
• Blind recruitment, evaluating applicants according to their competencies and requirements for
the position, with no discrimination of any kind.
• Development of activities or programs aimed at target audiences that require improvement or
preparation.
Likewise, the Opportunities, Development and Worker Satisfaction Approach, included in the same
policy, establishes the duty to generate the conditions for each SQM worker to reach his or her maximum
potential, systematically managing the following goals or lines of work in hiring and development
policies:
• Creation of offers and opportunities for internal mobility.
• Training for workers to improve their competencies for a position.
• Ongoing evaluation of employee performance through the implementation of plans that allow
for continuous improvement in their work.
Implementation of a rewards system to promote SQM's values in work teams.
•
• Monitoring work teams through surveys to determine strengths and opportunities for
improvement, establishing an action plan for this purpose.
3 OUR CORPORATE GOVERNANCE
21
Below is SQM's organizational chart, which shows the Company's main units/areas, as well as their
reporting lines and leadership:
Board of Directors Committee
Corporate Governance
Committee
Safety, Health and Environment
Committee
Board of Directors
CEO
Ricardo Ramos
Audit & Risk Management
Officer
Carolina Salinas
Ethics & Compliance Officer
Alberto Llona
Executive VP Nitrates
& Iodine
Pablo Altimiras
Executive VP Lithium
Carlos Díaz
Senior VP Corporate
Services
José Miguel Berguño
CFO
Gerardo Illanes
Sustainability Manager
Javier Silva
Investor Relations
Kelly O’Brien
Public Affairs
Manager
Ignacia López
3 OUR CORPORATE GOVERNANCE
22
3.2 BOARD OF DIRECTORS
Board Member Identification
SQM's Board of Directors consists of eight regular members. There are no alternate members. The entire Board of Directors is regularly elected
every three years at our Ordinary Shareholders’ Meeting. The Board of Directors may appoint replacements to fill any vacancies that occur during
periods between elections. If a vacancy occurs, the entire Board must be elected or re-elected at the next regularly scheduled Ordinary Shareholders’
Meeting. The last election of directors was at the Ordinary Shareholders' Meeting on April 26, 2022.
Name, Chilean ID,
Nationality
Position
Gonzalo Guerrero Yamamoto
Chilean ID 10.581.580-8
Chilean
Election date: April 2022
Chairman and Member of the
Safety, Health and Environment
Committee.
Patricio Contesse Fica
Chilean ID 15.315.085-0
Chilean Nationality
Election date: April 2022
Hernán Büchi Buc
Chilean ID 5.718.666-6
Swiss
Election date: April 2022
Vice Chairman and Member of the
Corporate Governance Committee
and the Safety, Health and
Environment Committee.
Director and Member of the
Corporate Governance Committee
Dang Qi
Chilean ID 48.220.394-9
Chinese
Election date: April 2022
Director and Member of the
Safety, Health and Environment
Committee.
Experience and Expertise
Mr. Guerrero earned a law degree from the Universidad de Chile and a Master of Business Law from the Universidad Adolfo
Ibáñez. He was General Counsel and substitute Board member of Integramédica S.A. for more than seven years and was a
Director of Inversiones Oro Blanco S.A., Asfaltos Chilenos S.A., VNT S.A. (Vantrust Capital Asset Management) and SMA
Clinica Internacional S.A. (Perú), among others. Currently, he is an Executive Board member of Guerrero and Associates,
Chairman of the Board of Sanasalud S.A., director of SQM Salar S.A. and Chairman of the Fundación para el Desarrollo
Social y Patrimonial de Maria Elena and Director of ICARE. Legal, regulatory, Corporate Governance, sustainable
development and community relations aspects are among his areas of experience. His areas of knowledge include regulatory
and Corporate Governance matters.
Mr. Contesse is a lawyer with a degree from the Pontificia Universidad Católica de Chile. Previously, he was a Board member
of SQM from 2013 until 2015. Since 2011, he has held senior executive positions in Pampa Group through 2021, where he
is currently Vice Chairman of the Boards of Directors of the Pampa Group entities.
Mr. Büchi earned a degree in Civil Engineering from the Universidad de Chile. He served on the SQM Board of Directors
for several years until April 2016, before rejoining in 2017. During his career, he advised different governments in Latin
America, Eastern Europe and Asia on the design and implementation of economic policies. He served the Government of
Chile in different capacities, including the positions of Undersecretary of Economy (1979 -1980) and Minister of Finance
(1985-1989). He is currently a Board member of Quiñenco S.A., among others. He is also Chairman of the Board of Directors
of the Universidad del Desarrollo. In addition to his experience in various industries, his areas of expertise include Finance,
Corporate Governance, Regulations and Public Policies.
Ms. Dang Qi earned a degree in Spanish Literature and Spanish-speaking Cultures from the Beijing Foreign Studies
University and has 17 years of experience at Xinhua News Agency as a director and correspondent in four Latin American
countries and a chief reporter in China. Between May 2017 and March 2019, she was director of the Xinhua News Agency
office in Chile. She held that same position in Costa Rica and Panama, in addition to being a Xinhua correspondent in Mexico.
In China, she served as a writer, editor and reporter for Xinhua. Other areas of expertise are Corporate Governance,
Regulations and Public Policies.
3 OUR CORPORATE GOVERNANCE
23
Name, Chilean ID,
Nationality
Position
Antonio Gil Nievas
Chilean ID 23.605.789-5
Spanish
Election date: April 2022
Director and Member of the
Directors' Committee.
Independent.
Gina Ocqueteau Tacchini
Chilean ID 8.431.507-9
Chilean
Election date: April 2022
Director and Member of the
Directors' Committee.
Independent.
Ashley Ozols
Chilean ID 48.218.888-5
Australian
Election date: April 2022
Director and Member of the
Directors' Committee.
Antonio Schneider Chaigneau
Chilean ID 6.027.199-2
Chilean
Election date: April 2022
Director and Member of the
Corporate Governance Committee
Experience and Expertise
Mr. Gil earned a degree in Industrial Engineering from ICAI (Universidad Pontificia Comillas, Spain), MBA from Harvard
University, Stanford Executive Program. He has more than 25 years of experience in strategic leadership, risk management
financial and investment roles at a global, European and Latin American level. Currently, he is director of Latam Airlines
Group and strategic and financial advisor to various national and international companies. Previously, he was CEO of Moneda
Asset Management, Vice President of ACAFI, Managing Director, global CFO and member of the global executive
committees of various businesses at JPMorgan and was a strategic consultant for BCG in Spain. In addition, he has knowledge
in regulatory matters and Corporate Governance.
Ms. Ocqueteau graduated as a nurse from the Universidad de Chile, holds an MBA from ESADE Business School and have
more than 30 years of career in different areas of ACHS. She is currently the director of the Asia Pacific Chamber of
Commerce and Fundación Marca Chile, counselor of Chile Mujeres, teacher of BOW Mujeres Empresarias, co-founder of
Unión Emprendedora, founding partner of Crosscheck and CEO of Waygroup Chile. Throughout her professional career, she
has accumulated extensive experience in risk management, security, and cybersecurity. Previously, she was also the director
of ASECH and was a member of the Advisory Council of the Ministry of Women and Gender Equality in 2021. Aspects of
Corporate Governance, sustainable development and relations with communities are among his areas of experience.
Mr. Ozols earned a Bachelor of Commerce degree from the University of New South Wales, Sydney and is also a CFA
charterholder. He has over 20 years of international business experience providing strategic, financial and advisory services
to American, Australian and Asian based clients. Between 2003 and 2017, he worked at several investment banks, including
Macquarie Group, Grant Samuel, and CLSA. Between 2017 and beginning his role as a board member at SQM in 2021, he
worked at Tianqi Lithium as an executive focused on corporate development. In addition, he has knowledge in regulatory
matters and Corporate Governance.
Mr. Schneider has a doctorate from The New School, New York and has a degree in Economics from Universidad de Chile.
He has worked in Chile in the cosmetics, forest products, salmon and food crops, fruit export, and food products industries.
He is associated with financial and banking representations, mainly in Larrain Vial S.A., in international business, mining
and its development as a national investment bank. He has been a director at InvertecFoods, Pesquera Yadran, ChileFoods,
Indura Peru, Salmonfood, and Banco Estado, among others.
3 OUR CORPORATE GOVERNANCE
24
Board of Directors Diversity
Diversity
Women (25%)
Men (75%)
Chilean Directors (50%)
Foreign Directors (50%)
Independence
Under the Chilean Law (25%)
Under the NYSE regulations (88%)
Age
30 to 40 years old (25%):
41 to 50 years old (25%):
51 to 60 years old (25%):
Over 70 years old (25%):
Board Tenure
Less than 3 years (63%):
Between 3 and 6 years (13%):
Between 6 and 9 years (25%):
Board Attendence
> 90% of ordinary sessions
None of our directors has a disability.
Gonzalo
Guerrero
Yamamoto
Patricio
Contesse
Fica
Hernán
Büchi Buc
Dang Qi
Antonio
Gil Nievas
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
Gina
Ocqueteau
Tacchini
●
Ashley
Ozols
Antonio
Schneider
Chaigneau
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
●
We have been informed that only one of the directors indirectly owns 1,730 of SQM’s outstanding shares as of December 31, 2022.
3 OUR CORPORATE GOVERNANCE
25
Board of Directors Compensation
At the Ordinary Shareholders’ Meeting held on April 26, 2022, shareholders approved the compensation
for the Board of Directors and members of the Audit and Financial Risk Committee, Corporate
Governance Committee and the Safety, Health and Environmental Committee for the 2022 business year,
as follows:
Board Position
Chairman
Vice Chairman
Director
Member of the Directors’ Committee
Member of the Safety, Health and
Environment Committee
Member of the Corporate Governance
Committee
Fixed compensation,
gross monthly payment,
regardless of attendance
and number of sessions
800 UF2
700 UF
600 UF
200 UF
100 UF
Variable compensation1, as a
percentage of the Company's
net income obtained during
the business year of 2022
0.12%
0.12%
0.06%
0.02%
-
100 UF
-
1For the calculation of the variable compensation that the directors will be entitled to receive, the 2022 net income will be
considered with a maximum limit of 110% of the 2021 net income. The variable compensation will not be paid together with
the amounts of the fixed compensation, and will be paid after the approval of the Company's financial statements as of December
31, 2022 by the ordinary shareholders' meeting, in proportion to the time served by the director, considering the period from
May 2022 to April 2023, based on the Company's 2022 financial results.
2 Unidades de Fomento. The UF is an inflation-indexed, peso-denominated unit that is linked to, and adjusted daily to reflect
changes in, the previous month’s Chilean consumer price index
Shareholders also approved a budget for board operating expenses equal to the sum of the directors'
annual remunerations.
The Board compensation is equal for all board members, regardless of their gender, and only differs for
the position held within the Board and participation in committees as presented in the table above.
The following tables show the remuneration paid to each of our directors who served on the Board of
Directors during 2022 and 2021 (amounts in thousands of Chilean pesos):
3 OUR CORPORATE GOVERNANCE
26
Summary of Board Compensation January - December 2022 (thousands of Chilean pesos)
Directors
ALBERTO SALAS MUÑOZ
ANTONIO GIL NIEVAS
ANTONIO SCHNEIDER
ASHLEY OZOLS
DANG QI
FRANCISCO UGARTE LARRAIN
GEORGES DE BOURGUIGNON
ARNDT
GINA OCQUETEAU
GONZALO GUERRERO
YAMAMOTO
HERNAN BÜCHI BUC
Board of Directors
SQM S.A.
Directors’ Committee
SQM S.A.
Fixed
101,325
163,081
163,081
Variable
597,760
Fixed
25,331
54,360
Variable
99,627
224,006
107,597
47,338
142,014
75,994
298,881
75,994
298,881
25,331
99,627
163,081
54,360
293,435
298,881
239,075
298,881
LAURENCE GOLBORNE RIVEROS
75,994
298,881
25,331
99,627
Corporate
Governance
Committee
SQM S.A.
Safety, Health
and
Environment
SQM S.A.
Fixed
Fixed
Consulting
Contract
Representation
& Travel
Expenses
Total
27,180
12,666
39,846
13,665
20,555
39,846
20,000
315
315
91,399
86,611
53,214
16,877
46,729
824,043
217,756
190,576
484,005
249,180
387,541
499,833
270,655
669,039
624,531
499,833
PATRICIO CONTESSE FICA
278,920
597,760
39,846
39,846
48,866
1,005,238
ROBERT ZATTA
TOTAL
14,696
191,284
205,980
2,010,696
2,988,806
232,051
298,881
119,538
113,912
20,000
344,326
6,128,210
3 OUR CORPORATE GOVERNANCE
27
Summary of Board Compensation January - December 2021 (thousands of Chilean pesos)
Board of Directors
SQM S.A.
Directors’
Committee
SQM S.A.
Corporate
Governance
Committee
SQM S.A.
Safety, Health
and
Environment
SQM S.A.
Consulting
Contract
Representation
& Travel
Expenses
Total
Directores
Fixed
Variable
Fixed Variable
Fixed
Fixed
ALBERTO SALAS MUÑOZ
FRANCISCO UGARTE
LARRAÍN
GEORGES DE
BOURGUIGNON ARNDT
GONZALO GUERRERO
YAMAMOTO
HERNÁN BÜCHI BUC
LAURENCE GOLBORNE
RIVEROS
PATRICIO CONTESSE FICA
ROBERT J. ZATTA
TOTAL
286,831
104,447
71,708
17,408
215,124
52,224
35,854
215,124
52,224
71,708
17,408
215,124
52,224
215,124
52,224
215,124
52,224
71,708
17,408
250,977
213,971
104,447
52,224
35,854
35,854
1,827,399
522,238
215,124
52,224
107,562
480,394
303,202
356,464
363,681
323,075
356,464
431,959
301,857
479
19,873
4,827
35,854
60,000
35,854
35,662
107,370
60,000
25,179
2,917,096
3 OUR CORPORATE GOVERNANCE
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Policy for Hiring Advisors by the Board of Directors
The Company has no policy in place for the Board of Directors to hire experts to advise it on accounting,
tax, financial, legal, or other matters.
Under the Corporations Act, companies are subject to "pre-approval" requirements, whereby all audit
and non-audit services provided by the independent auditor must be pre-approved by the Directors'
Committee. SQM's Board of Directors approves all audit, tax, and other services provided by the
auditors.
Any services provided by the auditors that are not specifically included within the scope of the audit
must be previously approved by the Directors' Committee prior to their execution.
In 2022, the Board of Directors hired the following consultants:
Entity
PriceWaterhouseCoopers
Others
TOTAL
Type of Service
Amount (US$)
Audit of Financial Statements
Legal and other advisory servcies
US$1.31 million
US$0.04 million
US$1.35 million
Onboarding of New Board Members
All new directors receive orientation on the Company, its business, risks, policies, procedures, principal
accounting criteria, sustainability, and the legal framework applicable to the Company and its directors.
No later than 60 days after the election of a new Board of Directors, the Board will be provided with the
pertinent information on the Company, including, among others, the Company's Bylaws, Code of Ethics,
Market Interest Information Management Manual, Antitrust Policy, Sustainability Report, Annual
Report in Form 20-F, and the Company's most recent annual report. General Management will coordinate
meetings between directors and relevant management units to review business issues and risks, including
those related to sustainability, site visits, and other briefings, as appropriate. Through the Sustainability
Report, the Board of Directors is informed about relevant stakeholders, and a meeting is coordinated
with the Sustainability and Community Relations Manager to explain to Board members the relevance
of these groups and their expectations, in an effort to maintain a stable, long-term relationship with them.
Likewise, at least one annual training course on corruption risks, the Company's Ethics and Compliance
Program, and antitrust risks are coordinated with the Compliance Manager. This training can be
conducted alongside the training for new directors or as a stand-alone activity.
Meetings with the Compliance, Risk Management, Internal and External Audit Departments
The Board of Directors meets as needed through the Directors' Committee, but it meets at least twice a
year with the Audit and Risk Management Manager to review: (i) the annual audit program or plan; (ii)
the recommendations and improvements that, in the opinion of the Audit and Risk Management
Manager, should be made to prevent the occurrence of irregularities or fraud; (iii) the effectiveness of
the crime prevention models implemented by the Company; and (iv) that the entire organization actually
complies with the Company's internal controls, procedures, and policies, and to be informed of the
opinion of the Audit and Risk Management Manager regarding the effectiveness and adequacy of such
policies, procedures, and controls, and any possible improvements thereto.
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The Board of Directors also meets as necessary, but no less than twice a year, with the Audit and Risk
Management Manager and the Ethics and Compliance Manager to (i) analyze the proper functioning of
the risk management process, which is developed following international principles, guidelines, and
recommendations of the Committee of Sponsoring Organizations (COSO) 2013; (ii) review the risk
matrix used by the unit, as well as the main sources of risk and methodologies for detecting new risks,
and the probability of those new risks occurring and their possible impact; (iii) review the
recommendations and improvements that in the opinion of the Audit and Risk Management Manager
make the Company's risk management more efficient; and (iv) review the contingency plans designed to
react to the occurrence of critical events, including the continuity of the Board of Directors in crisis
situations.
In addition, the Board of Directors meets as necessary, but no less than twice a year, with the external
audit firm in charge of auditing the Financial Statements to review: (i) the audit program or annual
program; (ii) any differences detected in the audit with respect to accounting practices, administrative
systems, and internal auditing; (iii) any serious deficiencies that may have been detected and those
irregular situations that by their nature must be reported to the corresponding auditing bodies; (iv) the
results of the annual audit program; and (v) possible conflicts of interest that may exist in the relationship
with the auditing firm or its personnel, both for the provision of other services to the Company or to the
companies of its corporate group, as well as for other situations.
Periodicity of reporting on environmental and social matters
The Board of Directors considers the social and community, safety, health, environmental and
sustainability impact of its decisions. For this reason, the Safety, Health, and Environment Committee
(the "SHEC") was established to assist the Board in its review of the Company's policies, and any
changes or improvements to them related to these matters that may affect the Company. Each year, the
SHEC reviews the framework of the Company's sustainability policies and strategies including, in
addition to the aforementioned issues, human rights aspects, monitoring the Company's performance
with respect to these challenges, and reviewing their adequate disclosure in the Company's Sustainability
Report. The SHEC meets as needed, but not less than four times a year.
Site visits
The Board of Directors makes reasonable efforts to hold at least one Board meeting per year at or near
the Company's operating facilities. The Board of Directors visits at least one facility to get a better idea
of the unit’s condition and operation, the main responsibilities and concerns of those who work in those
offices and facilities, and the recommendations and improvements that, in the opinion of those
responsible for those units and facilities, should be made to optimize their operation.
In October 2022, the Board of Directors held its ordinary meeting at the Company's facilities located in
the Salar de Atacama. In addition, as part of the induction process for new Board members in June 2022,
directors Antonio Gil Nievas and Antonio Schneider visited the Company's facilities in Nueva Victoria,
Coya Sur, Tocopilla, Salar de Atacama, and the Carmen Lithium Chemical Plant.
Evaluation and Training of the Board of Directors
Every year, the Board of Directors analyzes its own processes and performance through an evaluation
designed to promote efficiency and continuous improvement. This evaluation could be performed by a
third party. At the end of this evaluation, the Board of Directors defines the specific training measures
3 OUR CORPORATE GOVERNANCE
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that it believes should be implemented, considering the advice of a third-party expert to identify and
implement any improvements.
Organizational, social, or cultural barriers
In order to detect and reduce organizational, social, or cultural barriers that may be inhibiting the natural
diversity of capabilities, visions, characteristics, and conditions that would have been present in the
absence of such barriers, this matter is analyzed on an ongoing basis to ensure that the Board of Directors
represents a multiplicity of approaches and the greatest expertise to examine and address the matters
within its purview.
Ensuring compliance with this goal is part of the responsibilities assigned to the Company's Safety,
Health, and Environment Committee, which operates at the Board level.
Director Assistance
Pursuant to Article 15 of the Company's Bylaws, the Board of Directors shall meet at least once a month.
Directors may attend the sessions in person or by conference call or videoconference, for which
appropriate means are available. Members of the Board of Directors and of the various committees on
which they serve are expected to attend meetings fully prepared and to remain for the duration of the
meeting. Attendance at Board meetings is disclosed annually in the Board of Directors' report card, which
is published on the Web Site.
Pursuant to Article 13 of the Bylaws, a director who fails to attend three consecutive meetings without a
cause qualified as sufficient by the Board of Directors, shall cease to hold office ipso jure and shall be
replaced without further proceedings. In such case, and in the event of incompatibility, resignation,
removal, death, bankruptcy, or any other incapacity of a director that disqualifies him/her from holding
office, the Board of Directors shall appoint the corresponding replacement or replacements in conformity
with the provisions of the Corporations Law and they shall remain in office until the next ordinary
meeting of shareholders to be held by the Company, at which time, moreover, all of the directors shall
be elected. Board members are expected to have at least 75% attendance at meetings each year.
During 2022, the Company's Board of Directors met 19 times, holding 13 ordinary meetings and 6
extraordinary meetings. No director attended less than 90% of the total number of regular Board
meetings. The Board's average attendance was 99%.
Operational continuity plan
SQM has an Operational Continuity Policy intended to ensure that all the Company's activities and those
of its subsidiaries can remain stable in the event of an incident with the potential to interrupt or affect
critical business processes or assets.
People's health and safety is the first priority in the event of incidents or catastrophic events, for which
SQM has Emergency Plans in addition to this policy (see Section 5.6).
Thus, the Business Continuity Policy sets the foundations for each of the procedures aimed at minimizing
the impact that events of this nature could have on the normal development of the Company's operations.
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The Operational Continuity Policy has Operational Continuity Plans (OCP) for each of the following
areas:
• Mining area
• Process and production areas
• Camp and passenger transportation areas
• Logistics, warehousing, and product transportation areas
•
IT and information security areas
In addition, each site has its own OCP covering the aforementioned areas.
Each vice-presidency is responsible for assessing the critical processes and assets required to meet its
objectives and commitments, and for planning to mitigate potential impacts of possible incidents.
Information system
SQM has business information systems that technologically support the company's BackOffice processes
in areas such as Finance, Accounting, Human Resources, and Logistics. It also has information systems
that support operational processes for maintenance, production management, product inventory, and
quality, among others.
SQM has a corporate ERP system for its base in Chile, as well as an ERP system for its commercial
offices, which then consolidate the information in the head office’s platforms.
SQM seeks to optimize the management and deployment of its technological services through leading
cloud service platforms, achieving cost efficiencies and response times that allow rapid adaptation to
business flows and market conditions.
With regard to information security and cybersecurity, we have an awareness program aligned with the
strategic goals of the business and risk committee, in order to safeguard our most important information
assets and ensure high standards of information security, with world-class tools to mitigate potential
attacks on our infrastructure.
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3.3 BOARD COMMITTEES
Directors' Committee/ Audit & Financial Risk
As of December 31, 2022, the Company has a Directors' Committee to perform the functions provided
for in Article 50 bis of Law No. 18,046.
The Directors' Committee was elected on April 26, 2022, and consists of Directors Antonio Gil Nievas,
Gina Ocqueteau Tacchini, and Ashley Ozols. Under the provisions applicable as of December 31, 2022,
Antonio Gil Nievas and Gina Ocqueteau Tacchini held and still hold the status of Independent Director.
Ashley Ozols was and still is the Chair of the Company's Directors' Committee.
On April 26, 2022, SQM's General Ordinary Shareholders' Meeting agreed to pay each director member
of the Directors' Committee a monthly remuneration equivalent to UF 200 and an annual remuneration
equivalent to 0.02% of the Company's net income for the 2022 fiscal year.
For details of the compensation received by each member of the Committee during fiscal years 2022 and
2021, see section 3.2, specifically the Board of Directors' Summary Per Diem tables.
During 2022, the Directors' Committee met 11 times. The Chair of the Committee reports on its activities
no later than at the next Company Board of Directors meeting. In 2022, the Committee analyzed or
reviewed, as the case may be, the following matters:
(i)
(ii)
(iii)
(iv)
(v)
(vi)
(vii)
(viii)
(ix)
(x)
(xi)
the Company's Unaudited Financial Statements and Reports;
the Company's Audited Financial Statements and Reports;
the Reports and proposals of the Company's External Auditors, Account Inspectors, and
Independent Risk Rating Agencies;
the proposal to the Board of Directors regarding the External Auditors and the Independent Risk
Classifiers that said Board of Directors may recommend to the respective Shareholders' Meeting
for their subsequent appointment;
tax and other services, other than auditing services, rendered by the Company's external auditors
on behalf of the Company and its subsidiaries in Chile and abroad;
the remuneration systems and compensation plans for the Company's employees, managers, and
senior executives;
proposals to the Board of Directors on corporate policies that the Company must have, as
required by law;
the Company's risk matrix;
activity related to the Company's compliance program;
the Company's Internal Control Report; and
the different matters referred to in the chapter "Directors' Committee", which is included in the
Company's Financial Statements as of December 31, 2022.
In this context and in relation to the above, the Committee:
(a)
Examined the background information on the Company's Financial Statements for the 2022
fiscal year and the Report issued by the Company's External Auditors. Likewise, it also
examined the Company's Interim Consolidated Financial Statements for the 2022 business
year.
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(b)
Proposed to the Board of Directors the names of the Company's external auditors and
independent risk classifiers that the Board of Directors of the Company, in turn, could suggest
for appointment to the respective Ordinary General Shareholders' Meeting of the Company.
The Board of Directors approved these suggestions and the Board, for its part, also accepted
them.
(c)
Reviewed and approved the compensation systems and compensation plans for the Company's
employees and Senior Executives.
The Committee also (i) authorized the Company's engagement of various non-audit related consulting
services with PwC, (ii) reviewed the expenses of the Company's general manager, (iii) reviewed the
reports of the Company's internal audit and risk and compliance areas, and (iv) reviewed the information
presented by the external auditors.
The Committee issued the Annual Management Report referred to in Law No. 18,046. During 2022, the
Company had no related party transactions that must be executed under the requirements and procedures
established in Title XVI of the Corporations Law.
During 2022, the Committee incurred internal audit consulting expenses of approximately US$832.8
thousand.
Corporate Governance Committee
The purpose of the Corporate Governance Committee ("CGC") is to assist the Board of Directors in
fulfilling its responsibilities of reviewing and recommending policies related to corporate governance
matters affecting the Company. The CGC consists of three directors and meets as needed, but not less
than twice a year. Two members of the CGC shall constitute a quorum. The responsibilities of the CGC
include, but are not limited to:
(a) Annually, the CGC reviews the corporate governance policy and, if appropriate, recommends
changes to the document;
(b) Annually, the CGC reviews compliance with the corporate governance policy and ensures
compliance with applicable regulatory requirements. As part of the process, the Board of Directors
reviews the best corporate governance practices adopted by other entities, both locally and
internationally;
(c) The CGC ensures that a proper succession plan is in place for the General Manager and
management. This includes a list of possible candidates available to replace the General Manager in the
event that the Board of Directors determines such a change or in the event that an emergency replacement
is necessary, taking into consideration the skills, experience, independence, and expertise required for
the position.
(d) The CGC ensures that there is a proper succession plan for the Chair of the Board of Directors,
taking into consideration his/her skills, experience, independence, and the expertise required for the
position. The CGC will make its best effort to identify suitable potential candidates to propose to the
Board of Directors;
(e) The CGC receives and reviews, upon request from management, an update on communication with
the Company's shareholders, including institutional shareholders, analysts, and potential shareholders;
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(f) The CGC receives and reviews any Directors' and Officers' Liability Policy before it is implemented
by the Company.
Health, Safety, and Environment Committee
The purpose of the Safety, Health, and Environment Committee ("SHEC") is to assist the Board of
Directors in fulfilling its responsibilities in the review and recommendation of policies related to social,
safety, health, environmental, and sustainability issues affecting the Company. The SHEC meets as
needed, but not less than four times a year. Two members of the SHEC shall constitute a quorum. The
SHEC will report its key findings to the Board on a regular basis.
Review the Company's safety, health, environmental, and
Its main responsibilities include: (a)
sustainability policies periodically and recommend changes to such policies to the Board of Directors or
management. In relation to defining policies, indicators, and reports, the Board will ensure that
international standards such as the guidelines of the Sustainability Accounting Standards Board (SASB),
Global Reporting Initiative, or equivalent are followed;
(b) Receive and review, at least once a year, written reports from management on the compliance status
of safety, health, environmental, and sustainability policies and on compliance with applicable
regulations;
(b) Receiving and reviewing, at least once a year, written reports from management on the compliance
status of safety, health, environmental, and sustainability policies and on compliance with applicable
regulations;
(d) Review monthly management reports received by the Board of Directors that mention any
occurrence of a safety, health, or environmental incident that is required to be reported to the relevant
regulatory authorities. If a member of the SHEC deems it necessary, he/she may call a meeting of the
relevant personnel to receive further information detailing the nature of the incident and describing the
action taken to remedy it;
(e) Review the management of the Company's safety, health, and environmental emergency response
planning procedures; and
(f) Receive and review, at least once a year, the organizational, social, or cultural barriers detected that
could be inhibiting the natural diversity that would have occurred in the absence of those barriers.
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3.4 MAIN EXECUTIVES
Identification of the main executives
As of December 31, 2022, the main executives of SQM are the following:
Name
Position
Profession
Chilena ID
Appointment
Date
Ricardo Ramos R.
CEO
Civil Industrial
Engineer
Gonzalo Aguirre T.
General Counsel
Lawyer
Pablo Altimiras C.
José Miguel Berguño
C.
Carlos Díaz O.
Executive Vice President
Nitrates and Iodine
Senior Vice President of
Corporate Services
Executive Vice President
Lithium
Gerardo Illanes G.
CFO
Ignacia López B.
Natalia Pizarro G.
Rodrigo Vera D.
Public Affairs Manager
Vice President of Human
Recourses and
Performance
Vice President of Mining
Operations
Remuneration of main executives
8.037.690-1
January 2019
13.441.419-7
September 2016
13.657.862-6
December 2021
10.903.992-6
December 2021
10.476.287-5
December 2021
13.904.120-8
October 2018
10.777.962-0
October 2019
Civil Industrial
Engineer
Civil Industrial
Engineer
Civil Industrial
Engineer
Civil Industrial
Engineer
Journalist
Civil Engineer
14.167.897-3
March 2019
Civil Industrial
Engineer
9.120.446-0
March 2020
For the years 2022 and 2021, the total remunerations received by the main executives are the following:
Number of
Executives
Fixed
Remuneration
(in millions of
CLP)
Variable
Remuneration (in
millions of CLP)
Total
Remuneration (in
millions of CLP
9
10
3,365
2,866
3,575
3,921
6,940
6,787
Year
2022
2021
Compensation plans
The Company has compensation plans to motivate a group of Company executives and encourage them
to remain with the Company. There are 2 compensation plans in effect as of December 31, 2022:
Equity-based compensation plan
Plan established for the period 2017 to 2022 by granting payments based on changes in the Company's
share price. There is a partial payment of the stock benefit program in the event of termination for reasons
other than resignation and application of article 160 of the Labor Code. This compensation plan is linked
to the Company's performance through the price of the Company's Series B shares (Santiago Stock
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Exchange). The compensation plan considers 29 Company executives who are entitled to this benefit,
provided that they remain in the Company until a certain date, recognizing on an accrual basis: i) a 2021
bonus that will be paid by paying 146,708 shares distributed over the four quarters of 2021 and ii) a 2022
bonus for 42,032 shares that will be paid in the first quarter of 2023. Each executive's compensation is
the value of multiplying:
•
•
•
the average price of the series B shares on the Santiago Stock Exchange during the fourth quarter
of 2020, in its equivalent in U.S. dollars (with a value of US$41.93 per share).
the average price of SQM's Series B shares for the last quarter of 2022 with a maximum cap of
US$54.00 per share.
a number of equivalent shares that were individually assigned to each executive who is part of
the plan.
The current plan was approved by the Board of Directors and considers 188,740 shares. The effects on
the income statement correspond to a charge of US$2.251 bn and US$5.978 bn for the periods ended
December 31, 2022 and 2021, respectively. Shares exercised through December 31, 2022 were 188,740.
Compensation plan based on financial goals
This compensation plan is linked to the Company's achievement of specific financial goals. There is a
partial payment of the stock benefit program in the event of termination for reasons other than resignation
and application of article 160 of the Labor Code. This compensation plan includes 40 Company
executives, who are entitled to this benefit, provided that they remain with the Company until the end of
2025. Payment dates, if applicable, will be during the first quarter of 2026.
This compensation plan was approved by the Board of Directors and became effective as of January 1,
2022. The charge to income for the period corresponds to US$8.495 bn as of December 31, 2022.
We have been informed that the following senior executives hold SQM shares as of December 31, 2022:
Name
Position
Gerardo Illanes G.
CFO
José Miguel Berguño C.
Senior Vice President of Corporate
Services
Percentage of SQM’s
outstanding shares
<1%
<1%
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3.5 ADHERENCE TO NATIONAL AND INTERNATIONAL CODES
The company does not adhere to any Code issued by public or private organizations. Nevertheless, it has
a corporate Code of Ethics and a Sustainability, Ethics, and Human Rights Policy, based on the United
Nations Sustainable Development Goals (SDGs); the Principles of the International Council on Mining
and Metals; the International Standard ISO 14001 (Environmental Management Systems); the applicable
standards of the International Finance Corporation (IFC) and the "Protect, Respect, and Remedy"
framework of the United Nations Guiding Principles on Business and Human Rights, inspired—in turn—
by the Universal Declaration of Human Rights, Convention 169 on Indigenous and Tribal Peoples of the
International Labor Organization, to mention some guidelines on the subject.
3.6 RISK MANAGEMENT
The risk management area is responsible for promoting the company's risk culture, managing the
Business Risk Management Model, and providing methodological support to the different areas involved
in the process.
Its main responsibilities are:
• To evaluate and monitor the activities developed by the business areas: identifying, evaluating,
treating, monitoring, and communicating business risks and their associated controls.
• To define an annual risk management work plan. This plan should consider the information and
evaluation provided by the different areas involved in risk management, monitoring of the
activities carried out by these areas, updating of the risk identification and evaluation, and
training or dissemination activities.
• To facilitate risk management training, mainly for areas that manage critical processes.
• To ensure the efficient application of the risk management methodology, adhering to the
organization's policies, standards, manuals, and procedures.
• To facilitate and coordinate the identification, evaluation, treatment, and follow-up of critical
risks with the business areas.
• To provide methodological support to the different areas involved in risk management, regarding
the implementation of the risk management policy and procedure.
• To monitor that the corresponding responsible parties adequately implement the action plans for
critical risks.
• To periodically report to the Directors/Audit and Financial Risk Committee. This report shall
contain, at a minimum, the management activities performed (including identification,
evaluation, and action plans) with regard to the risks and critical processes.
There is also an Internal Audit area, where the scope of activities includes, but is not limited to, objective
examinations of evidence for the purpose of providing independent assessments to the Directors/Audit
and Financial Risk Committee and senior management on the adequacy and effectiveness of the
Company's processes, risk management, and controls.
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The audits performed by the Internal Audit area include verifying whether:
• The actions of the Company's directors, officers, employees, and contractors comply with the
Company's policies, procedures, and applicable laws and regulations.
• The processes and systems in place enable control and compliance with policies, procedures,
laws, and regulations that could significantly affect the Company.
• The information and the means used to identify, measure, analyze, classify, and report such
information are reliable and of high integrity.
• Resources and assets are acquired cost-effectively, used efficiently, and adequately protected.
Internal Audit also provides the following services:
• Risk management and control consulting, as required by senior management and not affecting
the objectivity and independence of the function.
• To evaluate the design and effectiveness of internal controls for issuing financial statements,
reporting the results to the Chief Executive Officer and the Vice President of Finance, in order
to comply with Section 302 of the Sarbanes-Oxley Act.
The Audit and Risk Manager will report periodically to senior management and the Directors/Audit and
Financial Risk Committee, regarding:
• The purpose, authority, and responsibilities of the Audit and Risk Manager.
• The Audit Plan and its development.
•
Internal Audit's compliance with the Standards, and action plans to address any significant
breaches.
• Significant risk exposures and control issues, including fraud risks, FCPA, governance issues,
and other matters requiring the Committee's attention.
• Results of audit work or other activities.
• Resource requirements.
• Any risk that may be assumed by senior management that is unacceptable to the Company.
The Audit and Risk Manager also coordinates activities, where possible, and may rely on the work of
other internal and external assurance and consulting service providers as needed. The audits may identify
opportunities to improve the efficiency of risk management processes and controls. These opportunities
are communicated to the appropriate level of senior management, the Chief Executive Officer and the
Directors/Audit and Financial Risk Committee.
Risk Management Model
3 OUR CORPORATE GOVERNANCE
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Based on the Corporate Risk Management Policy, the company's Risk Management Model consists of a
methodology that establishes a process under the principles and guidelines of ISO 31000 and COSO
ERM (Committee of Sponsoring Organizations of the Treadway), which determine a set of coordinated
activities to reasonably direct and control the achievement of its goals.
The risk management process considers the following stages:
a)
b)
c)
d)
e)
Identification
Evaluation
Treatment
Monitoring
Communication
Risk assessment consists of determining two dimensions for each risk: the probability of occurrence and
the impact on the Company if the risk materializes.
Risk assessment is carried out on the basis of inherent risk, to document what the impact and probability
would be if controls were not mediated, or if they did not operate satisfactorily, and then on residual risk,
i.e., considering the mitigation measures identified by the areas. Probability and impact are quantified
from 1 to 5, with 1 being the lowest level. Impact can be:
Negligible, Minor, Moderate, High, or Very High, while Probability can be: Improbable, Unlikely,
Possible, Probable, or Almost Certain. If an undesired event could have more than one type of
consequence, impact is determined by the greatest consequence.
On the other hand, the level of risk is determined by weighting impact and probability. Being a 5x5
matrix, there are 25 risk levels, which for simplicity are divided into 4 main categories: Extreme (red),
Significant (orange), Medium (yellow), and Low (green). The Risk Owner(s) is/are defined in order to
adequately manage each risk.
In addition to the risk assessment, the area identifies which Control Activities it has implemented for
each risk. This allows the risk management area, together with the Control Owner, to identify the specific
controls for each risk.
Once the assessment has been completed and the controls identified, the risk management area sends the
risk matrix, including the controls identified, to each area for its management and control.
Each person responsible presents the main results to the Risk Committee for its knowledge and
validation. With this process, the cycle is closed.
Regardless of this update, each area is responsible for keeping its matrix up to date and managing the
correct application of the controls. In addition, it must inform the risk management area in the event that
an identified risk materializes or if there is a significant change in the matrix.
Human Rights Risk Management
In order to comply with the Human Rights Due Diligence commitments undertaken by the company and
reflected in its Sustainability, Ethics, and Human Rights Policy, SQM commissioned a Human Rights
Impact Assessment (HRIA) from a specialized law firm. This first HRIA followed the methodological
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standard developed by the Danish Institute for Human Rights, coupled with the reporting criteria of the
Global Reporting Initiative (GRI) and based on the UN Principles on Business and Human Rights. The
purpose of this survey was to identify, understand, evaluate, and take charge of any potential adverse
effects of SQM's activities on the enjoyment of its main stakeholders' human rights (workers,
communities surrounding the project, suppliers, etc.).
This survey's baseline and findings were subsequently subject to an on-site participatory review process
with the principal stakeholders, carried out by a consultant, in order to corroborate and/or modify the
initial findings and generate the controls, policies, and action and monitoring plans suitable for
responding to these challenges.
Based on the aforementioned inputs, SQM's Risk Management area proceeded to consolidate and unify
the information to generate the Participatory Matrix, which should be completed during the second
quarter of 2023.
Role of the Board of Directors and Senior Management in Risk Management
The Board of Directors oversees the supervision and development of the business risk management
model through the Directors/Audit and Financial Risk Committee.
The Vice-Presidencies are responsible for identifying, evaluating, quantifying, and communicating the
risks associated with their activity and the defined goals, as well as for defining controls and risk
treatment, each with defined responsibilities and deadlines, and for monitoring control and its principal
risks. These processes are conducted following the risk management procedure for the Business.
The Business Risk Committee supervises, analyzes, and evaluates the development of the Risk
Management Model. This committee, together with the vice presidencies, defines the company's strategic
risks.
In addition, the Sustainability Committee monitors the main commitments and risks related to: Water
Management, Emissions, Waste Management, Electric Power, and Communities. This committee is
formed by the General Manager, the senior vice presidents and those responsible for the areas according
to the topics discussed.
Succession Plans
The Company does not have a Succession Plan as such, but the Corporate Governance Policy defines
that it is the Board's responsibility to annually identify potential replacements for the Chief Executive
Officer and other senior executives of the Company, who possess the skills, knowledge, conditions,
experiences, and vision necessary for each position and to ensure that there is a plan to replace the Chief
Executive Officer and other senior executives in a timely manner, in the event of their unforeseen
absence, minimizing any possible impacts on the Company.
Salary Structure Review
Salary structures and compensation and indemnification policies for the CEO and other senior executives
are not subject to shareholder approval or review by outside parties. It should be noted, however, that
the Board of Directors and its respective committees act in accordance with what is reasonably in the
best interest of the Company and its shareholders.
3 OUR CORPORATE GOVERNANCE
41
The Corporate Governance Policy establishes that the Directors/Audit and Financial Risk Committee's
responsibilities include reviewing the compensation and remuneration plans of the chief executives, the
Chief Executive Officer and the company's employees, as well as reviewing in detail the quarterly
expenses incurred by the Chief Executive Officer.
Code of Conduct and Whistleblower Channel
As mentioned above, the company's Code of Ethics establishes the standards to be followed by all
employees in the performance of their duties. By complying with the Code, SQM ensures that work is
being done in the right way with the right people and in a way that everyone can be proud of, creating
value for all stakeholders.
The Code is supported by policies, procedures, and related financial controls, which together are an
important part of the Ethics and Compliance Program, based on a corporate culture of integrity and
adherence to best practices.
Violations of the Code of Ethics are reported through the formal support and reporting channels that are
available to all SQM employees worldwide and also to third parties (shareholders, customers, suppliers,
and business partners, among others). The corporate website and intranet have direct access to the
whistleblower channel for people to access and make their respective reports. The formal channels are:
• Website: http://www.SQM.ethicspoint.com
• Helpline / Hotline by location:
Location
Free dial-in
Chile
Belgium
USA
Mexico
Spain
ENTEL: 800-360-312
Movistar: 800-800-288
Claro: 800-225-288
0-800-100-10
844-330-7095
001-800-658-5454
900-99-0011
South Africa
0-800-99-0123
Ecuador
1-999-119
China (Shanghai)
10-811
China (Beijing)
108-888
In addition to encouraging employees to access the corporate Whistleblower Channel, there is also the
possibility for them to consult directly with the Ethics and Compliance Management on different matters
related to the program.
All reports of concerns are kept confidential in accordance with SQM policies and procedures. Reports
may also be made anonymously, where permitted by local law. Whistleblowers can know the status of
their submission, if required.
3 OUR CORPORATE GOVERNANCE
42
Anyone expressing concerns in good faith will be protected from retaliation. Retaliation can occur in
many forms, including harassment, intimidation, demotion, or the assignment of unwanted tasks as a
result of making a report in good faith. Retaliation against workers who report is, in itself, a violation of
this Code. This will be investigated and, if proven, sanctioned.
A good faith report is one in which the whistleblower believes that what they are reporting is true or that
there is a strong possibility that misconduct has occurred or is occurring, and the report was not made
maliciously. A report does not necessarily have to be substantiated to be made in good faith, but the
whistleblower must believe that it is a genuine concern of possible misconduct.
Regarding the use of the Whistleblower Channel, during 2022 a communication campaign was
conducted to promote it by sending periodic emails to employees and placing posters in different parts
of the facilities, among others.
As a complement to the above, it should be noted that the Code of Ethics is delivered to 100% of
employees; new employees joining the company must complete the Compliance e-learning course; and
for other employees, as appropriate, they can access the "Reinforcement of Ethics and Compliance
Program" course each year for executive, supervisory, and general roles.
Crime Prevention Model
As explained in item 3.1, SQM has a Crime Prevention Model, which includes a set of policies,
procedures, standards, and controls that constitute a preventive and monitoring process through different
control activities on the processes that are exposed to the risks of committing the crimes indicated in
Law 20,393. The Model establishes the Prevention, Detection, and Response activities and the roles of
each of the stakeholders involved in the CPM. This document sets out the activities that involve the
company's Crime Prevention Officer, as well as the different support areas.
The Crime Prevention Model is certified by certifying firm Feller-Rate from September 2021 to
September 2023.
3.7 RELATIONSHIP WITH STAKEHOLDERS AND THE GENERAL PUBLIC
As regards the stakeholder relations units and channels identified in item 6.3 of this Report, SQM has an
Investor Relations area for Shareholders and Investors, which can be contacted at the following e-mail
ir@sqm.com. Through this email, stakeholders can clarify doubts on various business matters.
In addition to strictly complying with the legal obligations related to market disclosures, SQM has a
series of additional mechanisms that allow it to disseminate these relevant facts, as well as the Company's
performance, to a wider public through press releases issued by the Communications unit. (See summary
table on following page)
At the same time, these units, together with SQM's Sustainability area, prepare the Annual Report and
Sustainability Report and disseminate them to all stakeholders, along with other communication media,
allowing stakeholders to evaluate the information reported on the Company's economic, social, and
environmental performance. This feedback is given through surveys and consultations that are managed
both via e-mail (sustentabilidad@sqm.com; ir@sqm.com) and social media platforms, as well as in
person, in the case of the Sustainability Report, when it is presented to the communities in the area of
influence of the Company's operations in various on-site meetings.
3 OUR CORPORATE GOVERNANCE
43
These mechanisms as a whole provide valuable input and information for continuous improvement in
the process of developing and disseminating topics of interest.
Below are the main channels and forums for relations with SQM's stakeholders, as well as the frequency
with which they are carried out:
3 OUR CORPORATE GOVERNANCE
44
Main Relationship Channels with Stakeholders
Stakeholders
How We Engage and Communicate
Employees
Daily interactions in the workplace/ Direct communication between supervisors and area managers and
the workers reporting to them/ Regular union meetings, meetings between workers, management, senior
vice-presidents and managers. Internal communication channels, such as data screens in common areas,
newsletters, bulletin boards, intranet and mailings/ Key information is delivered on digital platforms such
as: the website, email, Facebook, Instagram, LinkedIn, YouTube channel and the app “Mi SQM” (My
SQM).
Shareholders /
Investors
Board meetings, regularly issued information, direct contact with Investor Relations, financial reports,
web page, site visits, shareholder meetings, meetings like SQM Day, provision of key information about
the company through digital platforms such as: the website, e-mail, Facebook, Instagram, LinkedIn and
our YouTube channel.
Contractors and
Suppliers
Meetings with personnel from the supply and contracting departments, as well as operational managers
and supervisors where services are provided/ Visits by the Supply Department to supplier facilities or
offices/ Orientation courses, safety training/ Follow-up and ongoing contacts with service providers
selling our products in order to guarantee deliveries/ Special programs for supplier training attended by
SQM in the regions/ Meetings with trade associations attended by SQM/ Delivery of important
information on digital platforms such as: the website, e-mail, Facebook, Instagram, LinkedIn and our
YouTube channel.
Customers
Periodic, direct communication and visits with customers/ Site visits and surveys on products and
operating standards/ Delivery of important information about the company through digital platforms such
as: the website, e-mail, Facebook, Instagram, LinkedIn and our YouTube channel.
Community
Communication and regular meetings with SQM representatives, community leaders and members/ Site
visits/ Involvement in local working groups and operational inspections alongside public agencies/
Community activities and festivities/ Daily interaction with programs developed in conjunction with the
community or organizations/ Delivery of important information about the company through digital
platforms such as: the website, e-mail, Facebook, Instagram, LinkedIn and our YouTube channel.
Organizations
and Institutions
Meetings with participation by our representatives/ Meetings to support initiatives/ Technical meetings/
Visits to sites or areas of interest/ Participation in seminars, training, etc./ Delivery of key information
for the company through digital platforms such as: the website, e-mail, Facebook, Instagram, LinkedIn
and our YouTube channel.
Innovation,
Academic and
Research and
Development
Centers
Meetings with participation by our representatives/ Meetings to support initiatives/ Technical meetings/
Visits to sites or areas of interest/ Participation in seminars, training, etc./ Delivery of key information
for the company through studies, publications promoted or supported by SQM and digital platforms such
as: the website, e-mail, Facebook, Instagram, LinkedIn and our YouTube channel.
Authorities
Official or formal meetings/ Technical meetings/ Work meetings related to public and private initiatives/
Inspections / Delivery of information using official platforms, documents or e-mail.
Media
Contact with media through communications area/ Press releases, interviews or meetings/ Delivery of
important information about the company through digital platforms such as: the website, e-mail,
Facebook, Instagram, LinkedIn and our YouTube channel.
3 OUR CORPORATE GOVERNANCE
45
4. STRATEGY
SQM is a global company that develops and produces diverse products for various industries essential
to human progress such as health, nutrition, clean energy, and technology, through innovation and
technological advancement. Our goal is to sustain our world leadership position in the lithium, potassium
nitrate, iodine, and salts markets.
• Securing access to the best assets related to our current businesses, expanding our global
presence
• Actively pursuing attractive minerals, allowing us opportunities for diversification to replicate
and expand our current mining capabilities
• Strengthening our operational, logistical, and commercial excellence, from end to end, while
seeking to be cost leaders; and
• Maintaining a conservative financial policy that allows us to successfully face economic cycles
that could affect the markets where we sell.
We are a dynamic company. In pursuit of our goals, 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 interests we have acquired to deploy funds for other investments or
other purposes in pursuit of our goals 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 by fostering talent attraction, retention, and
development, as well as an inclusive work environment to ensure distinctive knowledge and innovation
to sustain our business. We strive for safe and accident-free operations by promoting behaviors that
promote the physical safety and psychological well-being of all those who work directly and indirectly
with the Company.
We position ourselves as leaders in sustainability and are committed to a sustainable future where we
work consistently to responsibly manage natural resources, protect human rights, care for the
environment, build 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 customers through established business models and the production and
development of distinguishing products that respond to the specific needs of the industry and the market,
constantly creating and providing a sustainable improvement in quality of life. We will continue to create
value for all of our stakeholders through responsible natural resource management, sustainable expansion
projects, and enhancement 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.
4 STRATEGY
46
4.1 TIME HORIZONS
Items of property, plant and equipment are depreciated by distributing their cost over their estimated
technical useful life on a straight-line basis, which is the period the Company expects to use them. When
separate components of an item of property, plant and equipment have different useful lives, they are
recorded as separate items and depreciated over their own useful lives. Useful lives are reviewed
annually.
The useful lives of items of property, plant, and equipment located in the Salar de Atacama are the lesser
of their technical useful life and the remaining years to 2030.
Specific items of mobile equipment are depreciated on the basis of operational hours.
The principal useful lives used to depreciate property, plant and equipment are as follows in years:
Property Classes Plants and
Equipment
Life or minimum
rate in years
(short term)
Life or maximum
rate in years
(long term)
Life or average
rate in years
(medium term)
Mining assets
Power generating assets
Buildings
Household goods and accessories
Office equipment
Transportation equipment
Network
equipment
and
communications
Computer equipment
Machinery, plants and equipment
Other fixed assets
3
5
3
4
5
8
4
5
3
3
4.2 STRATEGIC OBJECTIVES
Our Strategy, how do we understand our approach?
10
16
25
10
10
9
12
10
25
15
8
10
13
8
9
9
8
8
10
9
The approach of a responsible business strategy includes, by definition, sustainability in its design and
operation. When we evaluate and analyze, we make the decision to commit to sustainability in the
business, which is set out in our Sustainability, Ethics, and Human Rights Policy. Then, we define our
strategic axes that respond to the materialization of our purpose. From this approach we organize
business development proposals based on establishing targets and goals and linking them to the SDG
targets that are integrated into these definitions.
At the same time, we work to reduce our ecological footprint throughout our value chain, from our
suppliers to our production and responsible consumption practices. We have set targets related to
decarbonization, biodiversity conservation, and environmental impact reduction. Responsible action is
part of our culture. This also includes respecting the interests of our employees, customers, investors,
and the community.
4 STRATEGY
47
In addition, our business has been marked by constant innovation challenges, which have become
opportunities to strengthen the internal management of our business. Given the above, there are constant
changes and adaptations.
Our innovative, high-quality products help us contribute to solving global challenges and, at the same
time, ensure our financial performance. Safety and ethics are fundamental drivers for a sustainable
approach to our business, both for labor relations and for our stakeholders.
We mitigate ethical, economic, social, and environmental risks by applying strong control measures. We
strive to minimize our impact on the environment by applying safe and innovative production techniques,
generating high environmental standards and strict quality management, which are key processes for our
organization. Moreover, we aim to strengthen our company by recruiting, developing, and motivating
talented employees.
We closely follow new global trends and challenges. To understand the nature and complexity of the
expected changes, we make use of the so-called scenario technique, which allows us to identify and
incorporate aspects that are of strategic relevance. We also participate in dialogues and initiatives, share
lessons learned and best practices with other organizations in our industry, and assess developments of
cross-cutting concern to humanity. This allows us to minimize risks while taking advantage of new
business opportunities.
Our Sustainability Plan
Our Sustainability Plan commits us to meeting new environmental, social, and governance requirements
and expectations. We have developed a plan based on the United Nations Sustainable Development
Goals, which is complemented by a series of initiatives to ensure that we live in harmony with the
environment, the communities surrounding our operations, and our own employees.
The plan has 3 work pillars, based on which we have set medium- and long-term goals in the areas of:
water, carbon neutrality, waste management, ecosystem protection, contributing to sustainable
industries, as well as the co-creation of value with communities and workers.
Contributions to Sustainable Industries
• To continue being a relevant player in the sustainable development of the world, with a high
participation in key industries for human development (health, food, renewable energies, and
sustainable mobility) that improve the quality of life of people around the world.
• To build trust and credibility for years to come, enhancing a brand that is publicly associated
with the world's other green industries.
Our People
• Establish a strong local presence and be a good neighbor.
• Participate in sustainable value co-creation with communities over time.
• Enhance local economies and the development of neighboring communities, contributing to the
creation of shared social value.
• All SQM employees are responsible community agents.
• Continue to ensure safe and inclusive working conditions.
• Through its operations, SQM ensures safe and inclusive working conditions while participating
in local economies and the sustainable development of neighboring communities.
4 STRATEGY
48
Our Environment
•
Improve the ecosystem monitoring systems surrounding our operations so that we can provide
an even more timely response.
• Reduce brine abstraction by 50% by the year 2030. This process began with a 20% reduction in
abstraction in November 2020.
• Reduce inland water consumption by 65% by 2040, starting with a 40% reduction by 2030, as
projected in 2020.
• To be carbon neutral in all our products from cradle to customer by 2040 and in the case of
lithium, potassium chloride, and iodine by 2030.
• Creation of a corporate waste management system to promote a cultural change towards
sustainability. The first step is to measure, and then find out how to reduce, including that of its
suppliers, workers, collaborators, and offices in Chile and the rest of the world.
• SQM is committed to responsibly managing the natural resources used, minimizing its direct
impact on flora and fauna, and working together with the communities to support the care and
protection of these ecosystems.
SDG and Business Strategy Goals
4 STRATEGY
49
At the Center
SDG
Integration into the Business Strategy
SDG 12 y
SDG 13
(12) Responsible consumption and production and (13) Climate action: We work towards
responsible consumption and production as part of our purpose. We develop products to contribute
to meeting society’s needs, and we do so based on challenging ecological footprint reduction goals.
•
12.2 By 2030, achieve the sustainable management and efficient use of natural resources.
Some of the
SDG
targets that
we
support:
•
Some of
our actions
/ examples
of our
progress:
Outcome
SDG
SDG 3,
SDG 7 y
SDG 15
Some of the
SDG
targets that
we
support:
12.4 By 2020, achieve the environmentally sound management of chemicals and all wastes throughout
their life cycle, in accordance with agreed international frameworks, and significantly reduce their release
to air, water and soil in order to minimize their adverse impacts on human health and the environment..
12.5 By 2030, substantially reduce waste generation through prevention, reduction, recycling, and reuse.
13.2 Integrate climate change measures into national policies, strategies and planning.
13.3 Improve education, awareness-raising and human and institutional capacity on climate change
mitigation, adaptation, impact reduction and early warning.
Responsible Care Certification.
Certification from the International Fertilizer Association.
Solar power use at our operations.
Waste management system at the corporate level.
Recycling plans at operations and in offices.
Air Decontamination Plan in communities production sites.
Development and implementation of the Sustainability, Ethics and Human Rights Policy.
Carbon footprint measurement (GHG).
Establishment of greenhouse gas reduction targets based on science (SBTi).
Sustainability talks.
IRMA Certification in process.
Integration into the Business Strategy
The results that we are seeking to produce through responsible business activities are related to our
purpose:
(3) Good health and wellbeing: One of our goals is contributing to the development of innovative
solutions in order to improve access to and the quality of healthcare and thus move towards wellbeing
for all people.
(15) Life on land: We protect our ecosystems, improving our production processes and developing
products that contribute to the preservation of biodiversity.
(7) Affordable and clean energy: We understand the opportunity that we have to contribute key
solutions for generating and storing NCREs with affordable and effective solutions.
We also contribute to the production of foods, providing solutions for the efficient use of soil and water
resources.
3.9 By 2030 substantially reduce the number of deaths and illnesses from hazardous chemicals and air,
water, and soil pollution and contamination.
7.2 Increase substantially the share of renewable energy in the global energy mix by 2030.
15.1 By 2020, ensure the conservation, restoration and sustainable use of terrestrial and inland freshwater
ecosystems and their services, in particular forests, wetlands, mountains and drylands, in line with
obligations under international agreements.
4 STRATEGY
50
Some of
our actions
/ examples
of our
progress:
Compliance with Operational Risk Management System.
Training on Occupational Health and Safety.
Implementation of photovoltaic plants.
Solar power use at our operations.
Implementation of Environmental Monitoring Plan in the Salar de Llamara.
Implementation of Environmental Monitoring Plan in the Salar de Atacama.
Articulators and Facilitators
SDG
Integration into the Business Strategy:
These are levers for establishing good, responsible and viable business. They sustain our ethical practices
and teamwork, which promote and catalyze the development and innovation proposals that
yield our products and technologies.
(9) Industry, innovation and infrastructure: R+D+I is one of the axes of our strategy. It is a cross-
cutting practice related to how and what we do. We maintain practices of innovation, development and
research as one of the critical processes in our business. We are responsible for uncovering
and integrating our customers’ new needs and global challenges. We are continually changing and
improving our processes and proposals in order to respond to these needs.
SDG 9,
SDG 16 y
SDG 17
(16) Peace, justice and strong institutions: This is a cross-cutting process that is part of the strategic
operational decisions that we make on a daily basis. It builds the context in which we engage with all
of our stakeholders. We are constantly improving and strengthening our business integrity practices. We
establish ethics and transparency as the foundations of having a viable business.
(17) Partnerships for achieving our goals: We could not develop our business without the support and
strengthening that we achieve through our partnerships. An active connection to the community helps us
to understand our customers’ needs and challenges and to promote effective solutions. This is also how
we perform our role as an entity that contributes to the following areas:
Social and economic: We make local development investments through partnerships with public- and
private sector organizations based on our social investment focus areas.
Science-based development: We support research programs through academic and public production
development organizations, strengthening acceleration programs for innovative enterprises. We also
contribute to the public good through scientific publications and patents.
9.2 Promote inclusive and sustainable industrialization and, by 2030, significantly raise industry’s share
of employment and gross domestic product, in line with national circumstances, and double its share in
least developed countries.
9.4 By 2030, upgrade infrastructure and retrofit industries to make them sustainable, with increased
resource-use efficiency and greater adoption of clean and environmentally sound technologies and
industrial processes, with all countries taking action in accordance with their respective capabilities.
16.5 Substantially reduce corruption and bribery in all their forms.
16.b Promote and enforce non-discriminatory laws and policies for sustainable development.
17.16 Enhance the Global Partnership for Sustainable Development, complemented by multi-stakeholder
partnerships that mobilize and share knowledge, expertise, technology and financial resources, to support
the achievement of the Sustainable Development Goals in all countries, in particular developing
countries.
17.17 Encourage and promote effective public, public- private, and civil society partnerships, building
on the experience and resourcing strategies of partnerships.
Some of the
SDG
targets that
we
support:
Some of
our actions
/ examples
Work with local suppliers.
Development of and compliance with the Code of Conduct for Business Partners.
We are in the process of developing a Responsible Sourcing Policy.
Participation in the Más Proveedores program in Tarapacá.
4 STRATEGY
51
of our
progress:
Solar power use at our operations.
Compliance with the Code of Ethics.
Implementation of and compliance with the Ethics and Compliance Program.
Implementation of and compliance with the Crime Prevention Model.
Development of and compliance with the Sustainability, Ethics and Human Rights Policy.
Compliance with the Diversity and Inclusion Policy.
Development of Inclusive Labor Practices.
Development of the Apprentices Program.
Development of the Internal Mobility Program.
Alliances with: Global Battery Alliance, the Global Compact, Acción Empresas and other entities.
Participation in HuellaChile.
Development of working groups with communities.
Development and implementation of social programs with communities.
Our main policy to generate a positive impact on different objectives of social interest is the Sustainability,
Ethics and Human Rights Policy, which is based on the United Nations Sustainable Development Goals
(SDGs), the Principles of the International Council on Mining and Metals, International Standard ISO 14001
Environmental Management Systems, the applicable standards of the International Finance Corporation (IFC)
and the “protect, respect and remedy” framework of the United Nations Guiding Principles on Business and
Human Rights, and inspired by in the Universal Declaration of Human Rights, Convention 169 on Indigenous
and Tribal Peoples of the International Labor Organization, among others. Our policy includes the following
areas of the company and the business: ethics and corporate governance; employees; value chain;
environment and sustainable development; and communities.
4 STRATEGY
52
4.3 CAPITAL EXPENDITURE PLANS
SQM regularly reviews different opportunities to improve its production methods, reduce costs, increase
production capacity of existing products and develop new products and markets. Additionally,
significant capital expenditures are required every year in order to sustain the Company’s production
capacity.
The Company is focused on developing new products in response to identified customer demand, as well
as new products that can be derived as part of its existing production or other products that could fit its
long-term development strategy. SQM’s capital expenditures in Chile have been mainly related to the
organic growth and sustainability of its business, including the construction of new facilities and the
renovation of plants and equipment. In 2022, the Company also worked on the expansion of its lithium
carbonate and lithium hydroxide capacity in Chile, which reached 180,000 metric tons and 30,000 metric
tons respectively, by the end of 2022. We also began expansions related to the mining and production
facilities of nitrates and iodine in Chile and lithium hydroxide in Western Australia.
The capital expenditures for the years ended December 31, 2022, 2021 and 2020 were as follows:
(In million US$)
Capex……………….
2022
905.8
2021
471.5
2020
322.2
2022
During 2022, we had total capital expenditures of US$905.8 million. Our 2022 capital expenditure was
primarily related to:
• Capacity expansion projects related to the completion of our increase of our lithium carbonate
production in Chile from 120,000 metric tons per year to 180,000 metric tons per year by the
end of 2022;
• Completion of capacity expansion of lithium hydroxide production in Chile from 21,500 metric
tons per year to 30,000 metric tons per year;
•
Investment in our new 50,000 metric ton Mt. Holland lithium hydroxide mine and refining plant
in Western Australia;
• Acquisition of the 20,000 metric ton lithium hydroxide refining plant in China; and
•
Investment in the development of new caliche projects to optimize the iodine and nitrate
production plants and carry out general maintenance of all production facilities, among others.
2021
During 2021, we had total capital expenditures of US$471.5 million. Our 2021 capital expenditure was
primarily related to:
• Capacity expansion projects related to the completion of our increase of our lithium carbonate
production in Chile from 70,000 metric tons per year to 120,000 metric tons per year by the end
of 2021 and investment in further lithium carbonate production capacity expansion from 120,000
to 180,000 metric tons per year in 2022;
4 STRATEGY
53
• Completion of capacity expansion of lithium hydroxide production in Chile from 13,500 metric
tons per year to 21,500 metric tons per year and commencement of a further expansion of lithium
hydroxide production capacity in Chile from 21,500 metric tons per year to 30,000 metric tons
per year in 2022;
•
Investment in our new 50,000 metric ton Mt. Holland lithium hydroxide facility in Western
Australia;
• Optimization projects related to iodine production plants in Nueva Victoria; and
• General maintenance of all production units in order to ensure the fulfillment of production and
sales targets.
2020
During 2020, we had total capital expenditures of US$322.2 million, a decrease compared to the US$450
million that was originally expected as a result in the delay of the purchasing of equipment. Our 2020
capital expenditure was primarily related to:
• Capacity expansion projects related to the increase of our lithium carbonate production in Chile
from 70,000 metric tons per year to 120,000 metric tons per year;
• Capacity expansion of lithium hydroxide production in Chile from 13,500 metric tons per year
to 21,500 metric tons per year;
• Optimization projects related to potassium nitrate production plants in Coya Sur; and
• General maintenance of all production units in order to ensure the fulfillment of production and
sales targets.
The Company believes that its capital expenditures for 2023 could reach approximately US$1.2 billion
focused on the increase of its production capacity, primarily related to lithium carbonate and lithium
hydroxide capacity expansions and nitrates and iodine capacity in Chile, and development of the Mt.
Holland lithium hydroxide project in Australia, as well as the maintenance of the production facilities in
order to strengthen its ability to meet its production goals. SQM’s installed capacity of lithium carbonate
and lithium hydroxide in Chile is expected to reach approximately 210,000 and 40,000 metric tons,
respectively, during 2024. The Company will also continue to invest in the construction of the Mt.
Holland lithium project in Western Australia and with the adjustments necessary to produce lithium
hydroxide from lithium sulfate in China.
4 STRATEGY
54
5. OUR PEOPLE
People are the center and the basis of our activities. This is why we foster respectful labor relations,
creating the necessary conditions for each person to develop his or her capabilities. At SQM we value
meritocracy, and we favor equal opportunities, inclusion and diversity, non-discrimination, and respect
for human rights and individual and collective labor rights recognized by the main instruments of the
International Labor Organization, as well as by the applicable legislation in each of the countries where
we operate.
To build our human team, we have done important work to adapt our selection and recruitment systems
to include diverse groups of people, ensuring the inclusion of women in the mining industry. We have
people from different professions and trades, operators, technicians, men and women of different ages
and nationalities who contribute with their qualities, experience, and capabilities.
Our Diversity and Inclusion Policy commits us as a company to:
• Promote an internal culture of diversity, non-discrimination, and respectful treatment.
• Promote equal opportunities, valuing and evaluating people based on their merits, performance,
and efforts to generate value.
• Adopt conditions and jobs, when required, to facilitate the gradual incorporation of people with
disabilities.
• Continuously challenge selection and evaluation processes to facilitate meritocracy and attract,
develop, and retain talented people.
• Build heterogeneous work teams, with people who share a common purpose in SQM and who
permanently seek excellence.
• Expand female participation at all levels and in all areas of the organization, and increase local
employment around our operations.
As of December 31, 2022, SQM's workforce in Chile and worldwide consists of 6,997 people. Eighty-
three percent of our employees work in the company's operations in the north of Chile, mainly in the
Tarapacá and Antofagasta Regions.
For us, human capital—its technical and intellectual capabilities—are the foundation of our business
approach to achieve our development, innovation, and product quality goals. Experience and competence
is of high value for us to implement our business plan.
Some important figures to highlight regarding our staff:
20% of Company employees
are women
Of the total number of
people in Leadership
positions (Senior
Management, Management
and Head of Division),
17.7% are women
65% of the workforce works
in the Antofagasta Region
and 18% in the Tarapacá
Region
94% of the workforce has an
indefinite-term contract
5 OUR PEOPLE
5.1 LABOR ENDOWMENT
5.1.1 Number of People by Gender
We have a staff of 6,997 SQM workers, 19.58% of whom are women. Much of our workforce is found
in the positions "operators", "other professionals" and "other technicians".
Direct Employees by Position Category and Gender in 2022
Position Category
Senior Management
Managers
Division Head
Operators
Sales Force
Administrator
Auxiliary
Other Professionals
Other Technicians
Total
Male
16
104
565
2,615
34
40
6
1,174
1,072
5,626
Female
2
18
127
230
39
81
1
748
125
1,371
Total
18
122
692
2,845
73
121
7
1,922
1,197
6,997
5.1.2 Number of People by Nationality
We have a workforce made up of 90.2% Chilean nationality, followed by Mexican nationality with
2.22%. We have a diverse staff, where we have people of 24 different nationalities.
Direct Employees by Position Category, Gender and Nationality in 2022, table 1
Position Category Gender
Senior
Management
Managers
Division Head
Operators
Sales Force
Administrator
Auxiliary
Other
Professionals
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Chilean
15
2
78
17
534
100
2,430
201
5
6
33
70
4
0
1,053
621
Mexican
0
0
9
1
8
10
60
12
0
0
3
1
1
1
22
15
Nationality
Venezuelan
0
0
0
0
8
4
10
1
0
0
0
1
0
0
21
19
Belgian
1
0
7
0
2
2
2
0
8
11
0
3
0
0
10
20
5 OUR PEOPLE
Bolivian
0
0
0
0
0
0
35
4
0
0
1
0
0
0
4
12
Colombian
0
0
2
0
3
0
20
4
0
0
1
2
0
0
11
3
56
Other
Technicians
Subtotal
Total
Male
Female
Male
Female
1,026
116
5,178
1,133
6.311
12
0
115
40
155
3
4
42
29
71
1
0
31
36
67
4
0
44
16
60
7
2
44
11
55
Direct Employees by Position Category, Gender and Nationality in 2022, table 2
Position
Category
Senior
Management
Managers
Division Head
Operators
Sales Force
Administrator
Auxiliary
Other
Professionals
Other
Technicians
Subtotal
Total
Gender
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Spanish
0
0
2
0
3
3
15
0
0
6
0
0
0
0
12
9
1
0
33
18
Chinese
0
0
2
0
1
3
0
0
7
10
0
1
0
0
8
15
3
0
21
29
Nationality
Peruvian
0
0
0
0
0
1
12
4
0
0
0
0
0
0
7
0
8
3
27
8
South
African
0
0
1
0
3
0
20
3
3
1
0
1
0
0
3
3
2
0
32
8
51
50
40
35
USA
0
0
1
0
1
2
0
0
9
0
1
0
0
0
8
11
0
0
20
13
33
Direct Employees by Position Category, Gender and Nationality in 2022, table 3
Position
Category
Nationality
Gender
Dutch
0
0
0
0
1
0
4
Australian
0
0
0
0
0
0
0
Brazilian
0
0
0
0
0
1
1
Korean
0
0
0
0
0
0
0
Italian
0
0
1
0
0
0
0
Senior
Management
Managers
Division Head
Operators
Male
Female
Male
Female
Male
Female
Male
5 OUR PEOPLE
Ecuadorian
0
0
1
0
1
1
3
0
0
0
0
0
1
0
3
6
2
0
11
7
18
Japanese
0
0
0
0
0
0
0
57
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Sales Force
Administrator
Auxiliary
Other
Professionals
Other
Technicians
Subtotal
Total
0
0
0
0
1
0
0
2
1
1
0
8
2
10
0
0
0
0
0
0
0
6
1
0
0
6
1
7
1
0
0
1
0
0
0
1
2
0
0
3
4
7
0
0
2
0
0
0
0
1
2
1
0
2
4
6
0
1
0
0
1
0
0
0
2
0
0
2
3
5
Direct Employees by Position Category, Gender and Nationality in 2022, table 4
0
0
3
0
0
0
0
0
2
0
0
0
5
5
Position Category Gender
Senior
Management
Managers
Division Head
Operators
Sales Force
Administrator
Auxiliary
Other
Professionals
Other
Technicians
Subtotal
Total
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
German
0
0
0
0
0
0
0
0
1
0
0
0
0
0
0
2
0
0
1
2
Argentine
0
0
0
0
0
0
2
0
0
0
0
0
0
0
0
0
0
0
2
0
3
2
Nationality
Indian
0
0
0
0
0
0
0
0
0
0
0
0
0
0
2
0
0
0
2
0
2
Cuban
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
2
0
0
0
2
2
5.1.3 Number of People by Age Range
We have a young workforce, with 82.5% of employees between 18 and 50 years old.
Paraguayan Moroccan
0
0
0
0
0
0
1
0
0
0
0
0
0
0
0
0
0
0
1
0
1
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
0
1
0
1
0
1
5 OUR PEOPLE
58
Direct Employees by Position Category, Gender and Age Range in 2022
Position
Category
Senior
Management
Managers
Division Head
Operators
Sales Force
Administrator
Auxiliary
Other
Professionals
Other
Technicians
Subtotal
Total
Gender
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
5.1.4 Years of Service
Age Range
<30 years
old
0
0
1
0
30
8
483
78
3
5
12
13
0
0
256
221
207
39
992
364
30-40
years old
0
0
35
3
211
62
931
98
15
19
10
23
2
1
509
368
445
47
2,158
621
41-50
years old
9
1
36
9
183
41
625
37
7
8
7
24
2
0
260
117
252
21
1,381
258
51-60
years old
7
1
27
3
111
14
454
16
8
6
5
18
0
0
115
35
140
15
867
108
61-70
years old
0
0
5
3
29
2
117
1
1
1
5
3
2
0
32
7
28
3
219
20
1.356
2,779
1,639
975
239
>70 years
old
0
0
0
0
1
0
5
0
0
0
1
0
0
0
2
0
0
0
9
0
9
Total
16
2
104
18
565
127
2.615
230
34
39
40
81
6
1
1.174
748
1.072
125
5.626
1.371
6,997
Direct Employees by Position Category, Gender and Years of Service in 2022
Years of Service
Position Category
Gender
<3 years
3-6
years
6-9 years
9-12 years
>12
years
Senior
Management
Managers
Division Head
Operators
Sales Force
Administrator
Auxiliary
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
1
0
23
4
167
41
947
158
10
13
15
26
0
0
3
0
25
5
140
27
747
51
10
12
11
25
1
1
0
0
10
0
53
6
287
13
1
1
3
6
0
0
3
0
9
1
77
20
330
4
6
3
2
10
3
0
9
2
37
8
128
33
304
4
7
10
9
14
2
0
Total
16
2
104
18
565
127
2.615
230
34
39
40
81
6
1
5 OUR PEOPLE
59
Other Professionals
Other Technicians
Subtotal
Total
Male
Female
Male
Female
Male
Female
602
448
360
50
2.125
740
2.865
300
168
327
34
1.564
323
1.887
82
35
119
11
555
72
627
98
50
144
16
672
104
776
92
47
122
14
710
132
842
1.174
748
1.072
125
5.626
1.371
6.997
5.1.5 Number of People with Disabilities
Direct Employees with Disabilities by Position Category and Gender in 2022
Position Category
Senior Management
Gerencia
Managers
Operarios
Division Head
Administrativo
Operators
Otros Profesionales
Sales Force
Total
Men
Women
Total
N°
0
0
6
12
0
3
0
8
10
39
N°
0
0
0
1
0
0
0
2
0
3
N°
0
0
6
13
0
3
0
10
10
42
5.2 TYPES OF EMPLOYMENT CONTRACTS
Out of our workforce, 94.48% has an indefinite-term contract and the remaining 5.52% has a fixed-term
contract. We do not have any employment regimes per specific task, per mining site or per hour payment.
5 OUR PEOPLE
60
Direct Employees by Position Category, Gender and Contract Type in 2022
Position Category
Gender
Senior Management
Managers
Division Head
Operators
Sales Force
Administrator
Auxiliary
Other Professionals
Other Technicians
Subtotal
Total
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Employment Contract
Indefinite-Term
16
2
104
18
554
126
2,477
193
34
38
38
74
6
1
1,122
692
1,002
113
5,353
1,257
6,610
Fixed-term
0
0
0
0
11
1
138
37
0
1
2
7
0
0
52
56
70
12
273
114
387
Total
16
2
104
18
565
127
2,615
230
34
39
40
81
6
1
1,174
748
1,072
125
5,626
1,371
6,997
% of Direct Employees by Position Category, Gender and Contract Type in 2022
Position Category
Gender
Senior Management
Managers
Division Head
Operators
Sales Force
Administrator
Auxiliary
Other Professionals
Other Technicians
Subtotal
Total
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Employment Contract
Indefinite-Term
0.23%
0.03%
1.49%
0.26%
7.92%
1.80%
35.40%
2.76%
0.49%
0.54%
0.54%
1.06%
0.09%
0.01%
16.04%
9.89%
14.32%
1.61%
76.52%
17.96%
94.48%
Fixed-term
0.00%
0.00%
0.00%
0.00%
0.16%
0.01%
1.97%
0.53%
0.00%
0.01%
0.03%
0.10%
0.00%
0.00%
0.74%
0.80%
1.00%
0.17%
3.90%
1.62%
5.52%
Total
0.23%
0.03%
1.49%
0.26%
8.08%
1.81%
37.37%
3.29%
0.49%
0.55%
0.57%
1.16%
0.09%
0.01%
16.78%
10.69%
15.32%
1.78%
80.42%
19.58%
100.00%
5 OUR PEOPLE
61
5.3 WORKING HOURS
Approximately 27.66% of our employees work the standard hours and 72.30% of our employees work
various shift schedules (4x3, 7x7, or 14x14, among others). We do not have formal employment contracts
with adaptable and/or remote working hours.
Direct Employees by Position Category, Gender and Working Hours in 2022
Position Category
Gender
Senior Management
Managers
Division Head
Operators
Sales Force
Administrator
Auxiliary
Other Professionals
Other Technicians
Subtotal
Total
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Standard
16
2
104
18
283
91
140
19
34
39
28
64
6
1
551
433
71
36
1.233
703
1.936
Working Hours
Shifts
0
0
0
0
282
36
2.475
211
0
0
12
17
0
0
621
315
1.001
88
4.391
667
5.058
Part-time
0
0
0
0
0
0
0
0
0
0
0
0
0
0
2
0
0
1
2
1
3
Total
16
2
104
18
565
127
2.615
230
34
39
40
81
6
1
1.174
748
1.072
125
5.626
1.371
6.997
% of Direct Employees by Position Category, Gender and Working Hours in 2022
Working Hours
Shifts
Position Category
Gender
Standard
Senior Management
Managers
Division Head
Operators
Sales Force
Administrator
Auxiliary
Other Professionals
Other Technicians
Subtotal
5 OUR PEOPLE
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
0,23%
0,03%
1,49%
0,26%
4,04%
1,30%
2,00%
0,27%
0,49%
0,55%
0,40%
0,92%
0,09%
0,01%
7,87%
6,19%
1,01%
0,51%
17,62%
10,04%
0,00%
0,00%
0,00%
0,00%
4,04%
0,51%
35,37%
3,02%
0,00%
0,00%
0,17%
0,24%
0,00%
0,00%
8,88%
4,50%
14,31%
1,26%
62,77%
9,53%
Part-time
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,00%
0,03%
0,00%
0,00%
0,01%
0,03%
0,01%
Total
0,23%
0,03%
1,49%
0,26%
8,08%
1,81%
37,37%
3,29%
0,49%
0,55%
0,57%
1,16%
0,09%
0,01%
16,78%
10,69%
15,32%
1,78%
80,42%
19,58%
62
Total
27,66%
72,30%
0,04% 100,00%
5.4 WAGE EQUITY
5.4.1 Equity Policy
Our company is made up of talented people with the capabilities to contribute to the development of our
activities. We do not have plans or targets to reduce wage inequalities; however, our goal is to provide
our employees with the opportunities and conditions necessary for each of them to develop and
contribute in an environment of cordiality, equality, respect, and openness. To this end, in our
Sustainability, Ethics, and Human Rights Policy, in our Equality, Diversity, and Inclusion Approach, we
have defined the following development axes:
• Ensuring no salary discrimination, hiring, promoting, and making employment decisions based
on objective criteria related to the person's aptitude for the position.
• Development of activities or programs aimed at target audiences that require improvement or
preparation.
• Blind recruitment, evaluating applicants according to their competencies and requirements for
the position, with no discrimination of any kind.
5.4.2 Wage Gap
The wage gap presented was calculated using the gross hourly wage of each labor category considering
workers active as of December 31, 2022.
The gaps reported are mainly due to the fact that the data represent Group companies with very different
lines of business, and therefore, the roles of their employees and their job evaluations differ.
In the case of operators, their salaries are established in the collective bargaining agreements and are the
same for each position for both men and women. Each position has a different remuneration according
to its evaluation. It should be noted that there is no gender discrimination, but grouping them into a single
category shows a gap since women account for 8% of the total operator workforce.
Moreover, we meet the gender gap measured in the NCH3262 certification process.
5 OUR PEOPLE
63
Salary Gap by Position Category, Mean and Median
Position Category
Average Salary Gap
Median Salary Gap
Senior Management
Managers
Division Head
Operators
Sales Force
Administrator
Auxiliary
Other Professionals
57%
94%
97%
85%
70%
101%
N/A
84%
Other Technicians
Note: does not include the employees of our subsidiaries abroad or Ajay.
78%
5.5 WORKPLACE AND SEXUAL HARASSMENT
70%
113%
103%
85%
63%
96%
N/A
85%
79%
The company has a procedure for investigating sexual harassment, which is contained in the RIOHS
(Internal Regulations for Order, Hygiene and Safety), as well as a procedure for investigating and
sanctioning workplace harassment contained in the same regulation.
As part of the above procedures, the company has set up a website for reporting complaints related to
the ethics hotline, including complaints regarding workplace and sexual harassment (website:
www.SQM.ethicspoint.com), as well as a toll-free helpline in several countries: Chile, Belgium, USA,
Mexico, Spain, South Africa, Ecuador, China (Shanghai), China (Beijing).
In case of complaints, these can be received through the specified channels or directly by the human
resources teams deployed in all locations in the country, which are analyzed and investigated within a
period not exceeding 30 days.
In 2022, one report for Sexual Harassment was filed with the organization itself, as well as four reports
for Workplace Harassment, three of which were filed with the organization and one with the Labor
Authority.
It is also worth mentioning that during 2022 there were no trainings on Workplace and Sexual
Harassment.
5.6 OCCUPATIONAL SAFETY
Workplace health and safety are material aspects of managing mining operations. For this reason, SQM
has a permanent, systematic process to keep workers protected and safe in each of the tasks they perform
in its operations. In addition to the role played by the Company in this important matter, the Chilean
State has a regulatory function, enacting and enforcing regulations to protect and ensure worker health
and safety. The Chilean Government, acting through the Ministry of Labor and Social Security, the
Ministry of Health, and Sernageomin, oversees occupational health and safety standards at mining sites;
in particular, Sernageomin supervises mining projects, among other tasks, and has exclusive powers to
5 OUR PEOPLE
64
enforce standards related to environmental conditions and the health and safety of persons engaged in
mining-related activities.
As mentioned above, SQM has a Sustainability, Ethics, and Human Rights Policy that sets out its
commitment to the sustainable development of its business, as well as to guaranteeing Occupational
Health and Safety and respect for the people who work at its facilities, the community, and its customers.
To this end, it has a Risk Prevention and Occupational Health Management System capable of
identifying, developing, and sustaining behaviors and conditions that guarantee the care of all those who
work at the Company's sites, projects, and offices. This policy applies to all SQM operations.
As part of the operationalization of its Occupational Health and Safety (OHS) commitments, SQM has
developed an Integrated Occupational Health and Safety System, the purposes of which are as follows:
• To establish obligations and responsibilities in order to adopt all necessary measures to
effectively protect and safeguard the life and health of all employees working at SQM, including
contractors and subcontractors.
• To define and establish standards to control all risks inherent to the processes, in order to define
and set the minimum specifications for Occupational Health and Safety Management.
• To safeguard the facilities, equipment, machinery, and all critical materials related to SQM's
operations and processes.
As part of the implementation of the Occupational Health and Safety management system, SQM has
developed an Operational Risk Management System (SISGRO), which contains a series of activities
grouped into 13 elements:
1.- Leadership
2.- Behavior-
Based Prevention
3.- Health and
Safety Joint
Committee
4.- Incident
reporting and
investigation
5.- Field
Activities
6.- Legality
7.- Control of
Contractors
8.- Personal
Protection
Elements
9.- Occupational
hygiene and
health
10.- Emergency
Plans
11.- Training
12.- Order and
cleanliness
13.- Management
System Audit
5 OUR PEOPLE
65
All these SISGRO activities are integrated into the Operational Excellence Program, called M1, which
allows us to homologate the tools of the M1 Lean system to risk management, thus obtaining better
results.
The following are the main indicators of SQM's Occupational Health and Safety management, which
correspond only to management in Chile. We are updating our internal processes so that this information
is available soon. Regarding the Occupational Safety goals for the "Accident Rate per 100 workers",
"Occupational Illness Rate per 100 workers" and "Average Days Lost due to accidents", the information
is not available, since the targets have yet to be defined as requested by NCG 461. We expect to define
these targets in the medium term. It should be noted that additional OHS indicators corresponding to
Sustainability Accounting Standards Board (SASB) metrics are reported in item 8.2 of this Report.
Occupational Safety Goals by Type of Indicators
Type of Indicators
Accident rate per hundred workers
Fatality rate per hundred thousand workers
Rate of Occupational Diseases per hundred workers
Average days lost due to accidents
Occupational Safety Indicators by Type of Indicators
Type of Indicators
Accident rate per hundred workers
Fatality rate per hundred thousand workers
Rate of Occupational Diseases per hundred workers
Average days lost due to accidents
Fatality rate (or mortality)
Type of Employees
Direct Employees
Contrators
SQM Total
Note: Calculation factor for 200 thousand hours.
5.7 POSTNATAL LEAVE
2022
0
0
0
2022
N/D
0
N/D
N/D
2022
0.31
0
0.13
41.74
We do not have a policy on this matter; however, we comply with the current legal regulations in Chile,
granting pre- and postnatal leave as appropriate.
The data reported correspond only to Chile. Data for the countries where we operate is not available; we
are working internally on our internal systems so that this information is available in the medium term.
It should be noted that the difference in women eligible for and those who availed themselves of the
normal and/or parental postnatal period is mainly due to the fact that there are two women who will take
their postnatal leave in 2023. They were counted as eligible since they made use of their prenatal leave,
which continued into 2023.
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Direct Employees eligible to make use of the Postnatal by Position Category, Gender and Country
in 2022
Postion Category
Gender
Chile
Senior Management
Managers
Division Head
Operators
Sales Force
Administrator
Auxiliary
Other Professionals
Other Technicians
Subtotal
Total
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
0
0
0
0
12
1
90
8
0
0
0
2
0
0
44
29
50
3
196
43
239
Number and Percentage of Employees who used the Postnatal (normal and parental) by Position
Category and Country in 2022
Women
Men
Position Category
N°
0
0
12
90
0
0
0
44
50
196
Note: in the case of men, the 5-day postnatal period is reported.
Senior Management
Managers
Division Head
Operators
Sales Force
Administrators
Auxiliary
Other Professionals
Other Technicians
Total
%
0.0%
0.0%
0.4%
3.3%
0.0%
0.8%
0.0%
11.3%
1.3%
17.2%
N°
0
0
1
8
0
2
0
27
3
41
%
0.0%
0.0%
5.0%
37.7%
0.0%
0.0%
0.0%
18.4%
20.9%
82.0%
Average Days Used by the Own Staff for making use of the Postnatal by Position Category, Gender
and Country in 2022
Postion Category
Gender
Chile
Senior Management
Managers
Division Head
Operators
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Male
Female
Male
Female
Male
Female
Male
0
0
0
0
5
84
5
67
Sales Force
Administrator
Auxiliary
Other Professionals
Other Technicians
Average Days
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
Male
Female
84
0
0
0
84
0
0
5
86
5
84
5
84
5.8 TRAINING AND BENEFITS
SQM employees receive ongoing training on relevant topics, in line with their functions, to support their
professional development and performance excellence.
During the 2022 period, training totaled 140,185 hours. At the company level, the average number of
training hours per employee reached 20 hours. Women in our company completed 21,735 hours of
training, representing 15.5% of total training hours.
Training was predominantly received by Operators, who completed 58,913 hours of training, followed
by Other Professionals, with 34,973 hours of training. In terms of average hours of training per employee,
however, 25.5 hours of training per employee were recorded for the Management category.
A total of 6,232 employees were trained, representing 89.1% of the Company's workforce as of
December 31, 2022. US$885 thousand were invested in training, which includes Company and SENCE
costs. Training represents 0.01% of the company's annual revenues.
Average Training Hours Total Company in 2022
Position Category
Training Hours
Average Hours of
Training per Employee
Senior Management
Managers
Division Head
Operator
Sales Force
Administrator
Auxiliary
Other Professionals
Other Technicians
Total
146
1,383
17,677
58,913
48
783
32
34,973
26,230
140,185
8.1
11.3
25.5
20.7
0.7
6.5
4.6
18.2
21.9
20.0
Note: average training hours are calculated based on the number of employees as of December 31, 2022.
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Average Training Hours Women in 2022
Position Category
Training Hours
Average Hours of
Training per Employee
Senior Management
Managers
Division Head
Operator
Sales Force
Administrator
Auxiliary
Other Professionals
Other Technicians
Total
77
490
2,930
4,319
37
495
0
11,799
1,588
21,735
38.5
27.2
23.1
18.8
0.9
6.1
0.0
15.8
12.7
15.9
Note: average training hours calculated based on the number of employees as of December 31, 2022.
Average Training Hours Men 2022
Position Category
Training Hours
Average Hours of
Training per Employee
Senior Management
Managers
Division Head
Operator
Sales Force
Administrator
Auxiliary
Other Professionals
Other Technicians
Total
69
893
14,747
54,594
11
288
32
23,174
24,642
118,450
4.3
8.6
26.1
20.9
0.3
7.2
5.3
19.7
23.0
21.1
Note: average training hours calculated based on the number of employees as of December 31, 2022.
Main Training Program
Name of the
Programs
Description of the Programs
No. of Participants
Emergency
Response Team
Strengthen knowledge and techniques for the Emergency
Response Teams from all localities
Legal Certification
Accredit for 4 years the personnel that handles mobile
equipment in all the company's tasks.
Management
Specialty
Deliver the necessary knowledge to the workers and
workers so that they can fulfill their tasks.
Development Skills
Training programs in adaptive skills, strategic alignment or
team strengthening.
Languages
Strengthen the English language for those people whose
position requires it.
Risk Prevention
Topics associated with everything related to caring for
people.
1,546
1,579
2,490
942
70
17,004
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SQM Learning
Internal learning platform with both internal and external
training resources available to all SQM personnel.
9,026
Main Training Lectures
Name of the Lecture
Descripción de los Programas
N° de Participantes
Influence and Leadership
Introduction to Ed Successfactors Platform
Onboarding SQM (DO, RRHH, Inclusion
& Diversity, Compliance, Sustainability,
Safety)
Increase your Leadership 2022
SQM Women Leadership
Strategic Alignment workshop
Advanced Analytics
Aspirations workshop 2023
Aspirations and Common Objective
workshop Mantenance division
Alignment workshop
Leadership
Leaders community
Benefits
Lectures for all the company's
supervisors, as a way of
accompanying their professional and
personal development.
Generate a group learning space in
relation to the role of M1 leadership,
its behaviors and abilities.
112
660
172
27
24
7
14
19
147
83
401
We care about our workers, their welfare, and that of their families, so we have an area in the company
exclusively dedicated to overseeing the benefits we provide to our workers. The area is responsible for
their monitoring and coordination, so that they are available to every member of the organization in a
timely and effective manner. The benefits provided are for those who have a permanent contract; some
of them are provided for in the legislation in force, while others are company-specific or optional for
employees. There are also benefits that are contained in each collective bargaining agreement, depending
on the interests of the unions and their composition.
Our benefits are:
• Life insurance for the employee in case of natural death, accidental death, or disability;
supplemental health insurance; catastrophic health insurance, and dental insurance.
• Agreements with clinics to provide care for workers or their dependents covered by comfort
letters; agreements with gymnasiums and telephone companies for preferential plans.
• Scholarships for higher education studies for children of employees with outstanding
performance and scholarships for undergraduate and graduate studies for employees with
outstanding performance.
• Celebration of commemorative dates in offices and workplaces: Father's Day, Mother's Day,
Women's Day, Secretary's Day, Mining Day, and Labor Day.
• Christmas box for the employee and their family.
• Gift upon the birth of a child for employees with a permanent contract.
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• Christmas gifts for children and/or dependents from 0 to 12 years old.
• Birthday gift for all employees with fixed-term or permanent contracts
• Annual salary review in October, based on a comparative study of salaries established by other
companies in the comparable industry, which allows us to define an equitable and transparent
remuneration for all employees who are not subject to collective bargaining agreements or
contracts.
• Group Voluntary Pension Savings Agreement (APVG): a monthly contribution is made by the
company in the form of an Agreed Deposit to encourage pension savings by employees.
Indemnity for all events with different characteristics according to role.
•
• Christmas and Independence Day bonuses.
• Special bonuses for schooling, mortuary assistance, marriage, and birth.
• Leaves of absence for death, marriage, for exams such as mammograms or prostate exams, and
for moving house.
5.9 SUBCONTRACTING POLICY
We do not have a Subcontracting Policy as such; however, we do have internal documents such as the
Code of Ethics, the Code of Conduct for Business Partners, the Sustainability, Ethics, and Human Rights
Policy, the Responsible Sourcing Policy, the Procurement Procedure, the Service Contracting Procedure,
among others, which allow us to define the guidelines that we consider when selecting contractors and
subcontractors and/or any other business partner such as: suppliers, distributors, agents, consultants,
representatives, intermediaries, joint business partners, and any other third party.
In addition, we are committed to complying with all laws, rules, and regulations of the countries where
we operate, acting with the highest standards of integrity. Our goal is to build honest, clear, fair, and
lasting relationships with all our business partners associated with the Company or any of SQM's
subsidiaries around the world.
We also seek to extend our commitments to sustainability, good labor practices, and human rights to our
supply chain, with a view to promoting responsible and sustainable sourcing. We therefore commercially
and contractually urge our suppliers to protect their employees' health and safety, to respect their labor
and human rights, and to protect the environment. To this end, we have progressively incorporated the
criteria of sustainability and compliance with suitable working conditions in our evaluations, in the
continuous monitoring and risk assessment of our suppliers, and we have also incorporated criteria
associated with our regulatory documents in our purchasing decisions for inputs and services.
On the other hand, we have an Operational Risk Management System (SISGRO) that allows us to verify
that service providers (contractors and subcontractors) comply with all the legal provisions in force in
our country for their good performance. The Contract Bases establish the accident rates that must be met
by any company wishing to provide services to SQM, which must always be "at or below" the ranges
established for the economic activity, and also establish that all companies are required to implement a
Risk Prevention Program aligned with SQM's Integral Occupational Health and Safety Management
System.
Along the same lines, we regularly monitor labor variables to measure all contractors' compliance with
labor and social security obligations. External companies are monitored for employee health and safety,
basic sanitary and environmental conditions in the workplace, health and safety management systems,
the establishment and operation of joint committees, and compliance with labor legislation. During 2022,
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the emphasis was on ensuring compliance with Covid-19 protocols, in order to protect workers and
reduce the risk of contagion.
In addition, coordination meetings are held between the principal's professional manager, its prevention
department ,and a representative of each contractor and subcontractor, the first of which is held at the
beginning of each contract.
SQM's Controls for Contractors and Subcontractors
• That they be advised by an Expert in Occupational Risk Prevention, according to the number of
workers they have.
• That they constitute their own Joint Committee.
• That the Joint Committees operate as provided for by law.
• That the Joint Committees send their committee meeting minutes to the Technical Administrator
of the contract.
• That worker's representatives be invited to participate in training activities and meetings of the
Site Joint Committee.
• That they have drawn up and delivered their internal regulations to their workers.
• That they inform their workers of their occupational hazards.
• That their employees have and effectively use Personal Protective Equipment.
Responsible Sourcing Policy
This Policy establishes criteria for responsible sourcing, which our suppliers shall progressively
incorporate in their organizations in order to ensure a human rights-compliant supply chain. The Policy
is structured based on the 5 pillars of the Sustainability, Ethics, and Human Rights Policy: (i) Ethics and
Corporate Governance; (ii) Employees; (iii) Value Chain; (iv) Environment and Sustainable
Development; and (v) Communities. The criteria to be met by SQM's suppliers to ensure responsible
sourcing throughout its supply chain are established for each pillar.
Responsible Sourcing Policy Compliance Criteria
Ethics and Corporate Governance
• Expressly commit to the fundamental human rights and business pillars of "protect, respect, and
remedy".
• Fully comply with anti-corruption laws when working on behalf of SQM.
• Ensure that processes and supply chains are free of minerals from conflict zones.
• Ensure that no direct or indirect funding or benefits are provided to armed groups in countries
at
to
in
https://www.oecd.org/daf/inv/mne/OECD-Due-Diligence-Guidance-Minerals.
guidelines,
according
published
conflict
OECD
zones
• Combat money laundering, terrorist financing, and non-state armed groups. The requirements of
our SQM Code of Ethics must also be considered.
Workers
• Reject outright all forms of child labor.
• Expressly commit to the eradication of forced labor or any other type of modern slavery.
• Avoid wage discrimination by hiring, promoting, and making employment decisions based on
objective criteria.
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• Conduct a blind recruitment process, evaluating applicants according to their competencies and
requirements for the position, with no discrimination of any kind.
• Have a retrenchment plan or policy in place.
• Guarantee and promote the freedom and fundamental rights of workers.
• Respect workers' right to privacy and personal information.
• Have an anonymous, confidential, and non-retaliatory whistleblower channel, available to all
workers and managed by an independent company specializing in this area.
• Train managers and executives on the prevention of workplace harassment and harassment
•
culture.
Implement an operational risk prevention and occupational health management system based on
international standards, with a view to eliminating work-related deaths and injuries.
• Continuously train personnel to ensure a safe working environment and safe working conditions.
• Promote and exercise control in operations and facilities to ensure that they are alcohol- and
drug-free workplaces.
Value Chain
• Disseminate this Policy to company managers.
• Undergo evaluation by SQM.
• Ensure the quality of processes and products/services through adequate risk management and
analysis.
• Maintain permanently updated information on the products used and/or produced and their
potential effects on health and safety.
Environment and Sustainable Development
• Comply with environmental regulations.
• Have an impact management system in place to minimize and mitigate potential environmental
impacts in a timely manner.
• Ensure the responsible and efficient use of natural resources.
Communities
• Unrestricted respect for human dignity and the fundamental rights of individuals.
•
Identify social impacts and risks on communities that may be affected by the Company's
operations.
• Promote, as required by the regulations in force, citizen participation and provide transparent
and timely information regarding our projects, as well as periodically reporting on environmental
issues.
• Promote citizen participation with indigenous relevance and prior, free, informed, and good faith
consultation with the communities potentially affected by projects, as required by the legislation
in force and when pertinent.
• Comply with all such obligations it has undertaken with the communities.
We encourage our suppliers to progressively comply with the responsible sourcing criteria set out in this
Policy within their company and to implement it throughout their supply chains.
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6. OUR BUSINESS
6.1 INDUSTRIAL SECTOR
SQM is an integrated producer and distributor of specialty plant nutrients, iodine and derivatives, lithium
and derivatives, potassium fertilizers, and industrial chemicals. The Company's products are derived
from high-quality natural resources that allow SQM to be a cost leader, supported by a specialized
international distribution network with sales in more than 110 countries.
According to the Sustainable Industry Classification System (SICS), SQM belongs to the Chemical
Substances industry.
The Company is registered in the Securities Registry of the CMF, under No. 184 of March 18, 1983,
and, therefore, is subject to the supervision of this entity. By having its shares traded on the New York
Stock Exchange through an ADR (American Depository Receipts) program, the Company is also subject
to the regulations established by the United States Security and Exchange Commission (SEC) applied to
foreign issuers. such as SQM.
We believe that we are the world’s largest producer of lithium, iodine and potassium nitrate. We also
produce specialty plant nutrients, lithium and iodine derivatives, potassium chloride, potassium sulfate
and certain industrial chemicals (including industrial nitrates and solar salts). Our products are sold in
more than 110 countries through our worldwide distribution network, with 98% of our sales in 2022
derived from countries outside Chile.
Our products are currently derived primarily 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.
Information about the Company's results is disclosed based on six operating segments, in accordance
with IFRS requirements: specialty plant nutrients, iodine and derivatives, lithium and derivatives,
industrial chemicals, potassium, and other products and services.
Specialty plant nutrients are premium fertilizers that enable farmers to improve yields and the quality of
certain crops. Iodine and its derivatives are mainly used in the X-ray contrast media and biocides
industries and in the production of polarizing film, which is an important component in LCD screens.
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, solar thermal use and metal treatment. In addition, SQM complements
6 OUR BUSINESS
74
its portfolio of plant nutrients through the purchase and sale of other commodity fertilizers, mainly for
use in Chile.
The following table shows the percentage breakdown of our revenues for 2022, 2021 and 2020 according
to our product lines:
Specialty Plant Nutrition
Iodine and Derivatives
Lithium and Derivatives
Potassium
Industrial Chemicals
Other
Total
Total (in US$ millions)
2022
11%
7%
76%
4%
2%
0%
100%
2021
32%
15%
33%
15%
5%
1%
100%
2020
39%
18%
21%
12%
9%
2%
100%
10,710.6
2,862.3
1,817.2
For the year ended December 31, 2022, we had revenues of US$10,720.6 million, gross profit of
US$5,736.6 million and profit attributable to controlling interests of US$3,906.3 million. Our worldwide
market capitalization as of December 31, 2022 was approximately US$21.5 billion.
Within its industrial sector, the Company faces competition from other manufacturers of chemical
products similar to those produced and distributed by SQM. Details of the Company's main competitors
are presented by their respective markets in section 6.2 Business Segments.
The main SQM’s stakeholders are presented in section 6.3 Stakeholders.
6 OUR BUSINESS
75
LEGAL OR REGULATORY FRAMEWORK
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, fair 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 granted pursuant to applicable Chilean law. Exploitation concessions essentially grant a
perpetual right (with the exception of the Salar de Atacama rights, which have been leased to us until
2030) to conduct mining operations in the areas covered by such concessions, provided that annual
concession fees are paid. Exploration concessions permit us to explore for mineral resources on the land
covered thereby for a specified period, and to subsequently request a corresponding exploitation
concession.
Under Law No. 16,319 that created the Chilean Nuclear Energy Commission (Comisión Chilena de
Energía Nuclear), or “CCHEN”, we have an obligation to the CCHEN regarding the exploitation and
sale of lithium from the Salar de Atacama, which prohibits the use of lithium for nuclear fusion. In
addition, CCHEN has imposed quotas that limit the total tonnage of lithium authorized to be sold, along
with other conditions.
We also hold water use rights granted by the respective administrative authorities and which enable us
to have a supply of water from rivers or wells near our production facilities sufficient to meet our current
operating requirements. See section 3.6 Risk Factors.
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.
In 2005, Law No. 20,026, known as the “Law to Establish a Specific Tax on Mining Activity” (Ley que
Establece un Impuesto Específico a la Actividad Minera) or the “Royalty Law”, established a tax to be
applied to mining activities developed in Chile. In 2010, modifications were made to the Royalty Law
and taxes were increased.
On February 24, 2020, Law No.21,210 the “Law to Modernize the Tax Legislation” was published. As
a result of these reforms, open stock corporations, such as SQM, are subject to the general corporate tax
rules. The corporate tax rate that applies to us increased to 27% in 2018.
We are also subject to the Chilean Labor Code and the Subcontracting Law, 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.
In addition, we are subject to Law No. 20,393, which establishes criminal liability for legal entities, for
crimes such as, (a) asset laundering, (b) financing terrorism, (c) bribery and (d) obliging employees to
breach sanitary restrictions ordered by the local authorities. Potential sanctions for violations under this
law could include (i) fines, (ii) loss of certain governmental benefits during a given period, (iii) a
temporary or permanent bar against the corporation executing contracts with governmental entities, and
(iv) dissolution of the corporation.
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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.
Law No. 21,455, which was published in the Official Gazette on June 21, 2022, establishes a legal
framework for facing the challenges derived from climate change and complying with the Chilean State’s
international commitments regarding such issue. Law No. 21,455, amends the Chilean Corporations Act
to recquire open stock corporations registered in the Securities Register to periodically provide
information to CMF in connection with the impact of their activities on the environment and climate
change.
Law No. 21,521, which was published in the Official Gazette on January 4, 2023, seeks to promote
competition and financial inclusion in financial services through innovation and technology. Law No.
21,521 regulates the following financial services: (i) crowdfunding platforms; (ii) alternative systems for
the transaction of financial instruments or securities; (iii) credit advice; (iv) investment advice (v)
custody of financial instruments; (vi) order routing, and (vii) intermediation of financial instruments. In
addition, Law No. 21,521 amends the Chilean Corporations Act to increase by 2,000 (or the higher
number determined by the CMF) the number of shareholders that a closed corporation must have to be
required to register its shares in the Securities Registry and become an open stock corporation. Law No.
21,521 also amends the Securities Market Law to establish a simplified regime for debt securities, which
will be detailed by the CMF.
There are currently no material legal or administrative proceedings pending against the Company except
as discussed in section 8.1 of this report.
Safety, Health and Environmental Regulations in Chile
Our operations in Chile are subject to both national and local regulations related to safety, health and
environmental protection. In Chile, the main regulations on these matters that are applicable to us are the
Mine Health and Safety Act of 1989 (Reglamento de Seguridad Minera or the “Mine Health and Safety
Act”), the Health Code (Código Sanitario), the Health and Basic Conditions Act of 1999 (Reglamento
sobre Condiciones Sanitarias y Ambientales Básicas en los Lugares de Trabajo or the “Health and Basic
Conditions Act”), the Subcontracting Law, the Environmental Law of 1994, amended in 2010 (Ley sobre
Bases Generales del Medio Ambiente or the “Environmental Law”) and Law No.16,744 of the Labor
Code relating to workplace accidents and occupational diseases (“Law No. 16,744”).
Health and safety at work are fundamental aspects in the management of mining operations, which is
why we have made constant efforts to maintain good health and safety conditions for the people working
at our mining sites and facilities. In addition to the role played by us in this important matter, the Chilean
government has a regulatory role, enacting and enforcing regulations in order to protect and ensure the
health and safety of workers.
In November 2011, the Ministry of Mining enacted Law No. 20,551 that regulates the closure of mining
sites and facilities (Ley que Regula el Cierre de Faenas e Instalaciones Mineras). This statute entered
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 disclosures to the Sernageomin regarding decommissioning
plans for each mining site and its facilities, along with the estimated cost to implement such plans. The
6 OUR BUSINESS
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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 2022, updates of the Pedro de Valdivia and Tocopilla sites were approved and the process
continued according to the comments received. During 2022, Sernageomin approved the updates to the
closure plans of the Salar de Atacama, Carmen lithium chemical plant, Coya Sur, Nueva Victoria and
Orcoma. The approval updates for the closure plans of the Pampa Blanca and Maria Elena sites are still
pending.
Also, over time, new environmental standards and regulations have been enacted, which have required
minor adjustments or modifications of our operations. 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 (“EMS”).
Since our sustainable development plan was announced, we have participated in voluntary qualifications
such as Ecovadis, international certifications such as Responsible Conduct from the Association of
Chemical Industries of Chile, Protect&Sustain from the International Fertilizer Association, ISO 14001,
ISO 45001 and ISO 50001, and the Standard IRMA Certification Audit, to promote responsible mining.
In 2021, the Port of Tocopilla was certified for Responsible Conduct, obtaining level 2 certification.
Likewise, during 2022, the Nueva Victoria Site was recertified, obtaining level 1 certification. On the
other hand, the Protect&Sustain certification applies to the operations of Coya Sur, Salar de Atacama,
Antofagasta, Santiago and the Port of Tocopilla.
During 2022, the external IRMA certification audit (phase 2) began in the Salar de Atacama operation,
and we expect to receive the final results during 2023.
Regarding the ISO management systems, the Port of Tocopilla was certified in January 2022 in ISO
14001. We completed the phase 2 of ISO 14001 and 45001 certification process in the Salar de Atacama
and the Carmen chemical plant, and continued with the implementation process of ISO 50001 in the
Salar de Atacama and Nueva Victoria to support decarbonization goals associated with energy
management systems.
During 2022, we participated in the Dow Jones Sustainability Indices (DJSI) assessment and were
accepted into the MILA and Chile indices for the third consecutive year and were included in the
Sustainability Yearbook 2023. We evaluated ourselves in Carbon Disclosure Project (CDP) where we
received a category B rating, which is in the management band, higher than the South American region
average (category C) and higher than the Chemicals sector average (category B-).
We have submitted and will continue to submit environmental impact assessment studies related to our
projects to the governmental authorities. We require the authorization of these submissions in order to
maintain and to increase our production capacity.
International Regulations
We are subject to complex regulatory requirements in the various jurisdictions in which we operate,
including the following implemented during 2022:
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In 2019, Regulation (EU) 2019/1009 was published, which establishes provisions regarding the
marketing of fertilizing products and repeals Regulation (EC) No. 2003/2003. Regulation (EU)
2019/1009 entered into force in July 2022 and changed the way fertilizers are placed in the EU market.
All products manufactured by SQM in Chile meet the requirements of Regulation (EU) 2019/1009 and
the applicable type of conformity assessment has been carried out. We have also evaluated and continue
to evaluate if raw materials from third parties for the manufacturing of water soluble NPK formulas
produced in The Netherlands and Spain meet the new requirements of Regulation (EU) 2019/1009.
We continue our active participation as a member of the Standing Committee on Precursors of the
European Commission, which monitors and assists in the implementation of Regulation (EU) 2019/1148
on the marketing and use of explosive precursors. The invoices and safety data sheets of our products
covered by Regulation (EU) 2019/1148 inform of such a condition so that our European users are
informed and can take the pertinent measures.
Regulation (EC) 1907/2006 (REACH) is the main framework for chemical’s control in the EU. SQM
has acted as lead registrant for four substances: iodine, sodium nitrate, potassium nitrate and urea
phosphate. During 2022, the EU REACH iodine dossier was successfully updated, and we continue the
process for the other three substances with the aim of updating their dossiers during 2023. At the end of
2022, Commission Regulation (EU) 2020/878 replaced Annex II to REACH introducing changes to
safety data sheets, a key hazard communication tool. SQM adjusted its documents to the new format
accordingly.
Commission Delegated Regulation (EU) 2021/849 amended Part 3 of Annex VI to Regulation (EC) No
1272/2008 which introduced new concentration limits for boric acid, a micronutrient used in water
soluble NPK formulas. This amendment is effective beginning December 2022 and the hazard
classification of all formulas containing boric acid were reviewed and updated when needed.
Downstream users were all notified accordingly.
In other jurisdictions, in 2022 we continued our work for the registrations of products under other similar
chemicals control regulations, including UK REACH, Turkey REACH and Korea REACH.
In the field of international transport, SQM actively participated through the Chilean Chemical Industry
Association in the 36th and 37th meetings of the Editorial and Technical Group and the 8th meeting of
the Sub-Committee on Carriage of Cargoes and Containers of the International Maritime Organization
(IMO) proposing new entries for potassium nitrate and sodium nitrate in the IMSBC Code and
modifications to SP 964 in the IMDG Code.
Research and Development, Patents and Licenses
One of the main objectives of our research and development team is to develop new processes and
products in order to maximize the returns obtained from the resources that we exploit. Our research is
performed by three different units, whose research topics cover all of the processes involved in the
production of our products, including chemical process design, phase chemistry, chemical analysis
methodologies and physical properties of finished products.
Our research and development policy emphasizes the following: (i) optimizing current processes in order
to decrease costs and improve product quality through the implementation of new technology, (ii)
developing higher-margin products from current products through vertical integration or different
product specifications, (iii) adding value to inventories and (iv) using renewable energy in our processes.
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Our research and development activities have been instrumental in improving our production processes
and developing new value-added products. As a result, new methods of extraction, crystallization and
finishing products have been developed. Technological advances in recent years have enabled us to
improve process efficiency for the nitrate, potassium and lithium operations, improve the physical quality
of our prilled products and reduce dust emissions and caking by applying specially designed additives to
our products handled in bulk. Our research and development efforts have also resulted in new, value-
added markets for our products. One example is the use of sodium nitrate and potassium nitrate as
thermal storage in solar power plants.
The Company has patented various production processes for nitrate, iodine and lithium products. These
patents have been registered mainly in the United States of America, Chile and other countries, when
necessary. The patents used in SQM's production processes are Chilean patent No. 47,080 for iodine
(production of spherical-shaped granules for products that sublime) and Japan patent No. 4,889,848 for
nitrates (granular fertilizers).
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6.2 BUSINESS LINES
Lithium and Derivatives
SQM is one of the world's leading producers of lithium carbonate, which is used in a wide variety of
applications, including electrochemical materials for batteries (electric vehicles, laptops, tablets, cell
phones, electronic devices), frits for ceramic and metal surfaces, heat resistant glasses (ceramic glass),
air conditioning chemicals, casting powder for steel extrusion, pharmaceuticals and lithium derivatives.
In addition, the Company is a leading supplier of lithium hydroxide, which is used primarily as a raw
material in the cathode industry for high-energy capacity batteries and lubricating greases.
In 2022, our revenues from lithium sales amounted to US$8,152.9 million, representing 76.1% of our
total revenues. We believe we are one of the world’s largest producers of lithium carbonate and lithium
hydroxide, and we estimate that our sales volumes accounted for approximately 20% of the global
lithium chemicals sales volumes.
The following table shows our total production and sales volumes, and revenues from lithium and its
derivatives for 2022, 2021 and 2020:
Lithium and Derivatives
Production volumes (Th. metric tons)
Sales Volumes (Th. metric tons)
Revenues (in US$millions)
2022
168.4
156.8
8,152.9
2021
119.8
101.1
936.1
2020
81.3
64.6
383.4
Our revenues in 2022 were US$8,152.9 million, a 771% increase from US$936.1 million in 2021, due
to higher average prices and higher sales volumes during the year. The average price for 2022 was
approximately 462% higher than the average price in 2021. Our sales volumes increased approximately
55% in 2022. The lithium and lithium derivatives segment contributed approximately 79% to the
Company's consolidated gross margin in 2022.
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 principally used to produce the cathodes for rechargeable
batteries, taking advantage of lithium’s extreme electrochemical potential and low density. Batteries are
the leading application for lithium, accounting for approximately 90% of total lithium demand, including
batteries for electric vehicles, which accounted for approximately 70% of total lithium demand in 2022.
During 2022, lithium chemicals demand increased by approximately 43%, reaching approximately
760,000 metric tons. We expect applications related to energy storage to continue driving demand in the
coming years.
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Lithium: Marketing and Customers
In 2022, we sold our lithium products in approximately 41 countries to approximately 198 customers,
and most of our sales were to customers outside of Chile. One customer accounted for approximately
19% of our lithium revenue in 2022. Our ten largest customers accounted in the aggregate for
approximately 60% of revenues. One supplier accounted for approximately 80% of the cost of sales of
this business line. 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 23.2 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 in 2022, 2021 and 2020:
Revenues breakdown
North America
Europe
Chile
Central and South America (excluding Chile)
Asia and Others
2022
2%
5%
0%
0%
93%
2021
5%
8%
0%
1%
86%
2020
7%
13%
0%
0%
80%
We sell lithium carbonate and lithium hydroxide through our own worldwide network of representative
offices and through our sales, support and distribution affiliates. We maintain inventories of these
products at our facilities throughout the world to facilitate prompt delivery to customers. Sales of lithium
carbonate and lithium hydroxide are made based on spot purchase orders or through different supply
contracts. The contracts generally specify minimum and maximum annual sales volumes commitments
while prices are adjusted periodically based on different price indices established in the market.
Lithium: Competition
Lithium is produced mainly from two sources: (i) concentrated brines and (ii) minerals. During 2022,
the main lithium brines producers were Chile, Argentina and China, while the main lithium mineral
producers were Australia and China. With total sales of approximately 156,800 metric tons of lithium
carbonate and hydroxide, SQM’s market share of lithium chemicals was approximately 20% in 2022.
The main competitors in the lithium market with their estimated market share are: Albemarle (16%),
Tianqi Lithium Corp. (7%), Jiangxi Ganfeng Lithium Co (6%), Allkem (4%) and Livent Corporation
(3%).
Tianqi is also a major shareholder of ours, holding approximately 22.16% of our shares as of December
31, 2022.
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Iodine and Derivatives
believes that it is the world's leading producer of iodine and its derivatives, which are used in a wide range
of medical, pharmaceutical, agricultural and industrial applications.
In 2022, our revenues from iodine and iodine derivatives amounted to US$754.3 million, representing 7.0%
of our total revenues in that year. We estimate that our sales accounted for approximately 33% of global
iodine sales by volume in 2022.
The following table shows our total sales volumes and revenues from iodine and iodine derivatives for
2022, 2021 and 2020:
Iodine and its Derivatives
Production volumes (Th. metric tons)
Sales Volumes (Th. metric tons)
Revenues (in US$millions)
2022
2021
2020
12.4
12.7
754.3
10.3
12.3
437.9
12.1
9.7
334.7
In 2022, our revenues from iodine and iodine derivatives amounted to US$754.3 million, an increase from
US$437.9 million in 2021. This increase was primarily attributable to slightly higher sales volumes and
significantly higher average prices during 2022. Average iodine prices were more than approximately 67%
higher in 2022 than in 2021. Our sales volumes increased approximately 4% in 2022. The iodine and its
derivatives segment contributed approximately 8% to the Company's consolidated gross margin in 2022.
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. X-ray contrast media is the leading application of iodine-
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.
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.
The demand for iodine varies depending on the general 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 its
derivatives. Iodine substitutes are available for certain applications, such as antiseptics and disinfectants,
which may represent a cost-effective alternative.
The following chart shows the distribution of iodine demand for various applications in 2022:
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Distribution of Iodine Demand in 2022
Others, 10%
X-Ray Contrast
Media, 31%
Nylon, 3%
Human Nutrition,
3%
Biocides, 5%
Fluroderivatives,
7%
Animal Nutrition,
7%
Iodophors and
Povidone Iodine,
8%
Pharmaceutical,
13%
Polarizing Films
(LCD and LED),
13%
During 2022, the demand for iodine increased approximately 2% compared to 2021. Main drivers of this
increase were in the X-ray contrast media market, in which demand grew by approximately 6% compared
to 2021, mainly due to worldwide growth in the healthcare industry spending during the year and increased
accessibility to these types of treatments in emerging economies, mainly China. Demand for other uses
grew at historical growth rate. Growth in demand over supply led prices to increase during 2022.
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 2022, we sold our iodine products in approximately 50 countries to approximately 258 customers, and
most of our sales were exports. Two customers each accounted for more than 10% of our iodine revenues
in 2022. These two customers accounted for approximately 41% of revenues, and our ten largest customers
accounted in the aggregate for approximately 75% of revenues. No supplier accounted for more than 10%
of the cost of sales of this business line.
The following table shows the geographical breakdown of our revenues:
Revenues breakdown
North America
Europe
Chile
Central and South America (excluding
Chile)
Asia and Others
2022
19%
38%
0%
2%
2021
23%
40%
0%
2%
2020
27%
42%
0%
3%
41%
34%
27%
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.
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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. In China, iodine is
extracted from seaweed.
The following chart shows the distribution of iodine supply by country of origin in 2022:
Iodine Supply Distribution in 2022
Others, 11%
USA, 5%
SQM, 33%
Japan, 26%
Chile
(Others), 25%
Five Chilean companies accounted for approximately 58% of total global sales of iodine in 2022, including
SQM, with approximately 33%, and four other producers accounting for the remaining 25%. The other
Chilean producers are Cosayach, ACF Minera S.A., Algorta Norte S.A. and Atacama Minerals.
We estimate that eight Japanese iodine producers accounted for approximately 26% of global iodine sales
in 2022, including recycled iodine.
Iodine recycling is a growing trend worldwide. Several producers have recycling facilities where they
recover iodine and iodine derivatives from iodine waste streams. We estimate the 17% 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 main factors of competition in the sale of iodine and iodine derivative products are reliability, price,
quality, customer service and the price and availability of substitutes. We believe we have competitive
advantages compared to other producers due to the size and quality of our mining reserves and the available
production capacity. We believe our iodine is competitive with that produced by other manufacturers in
certain advanced industrial processes. We also believe we benefit competitively from the long-term
relationships we have established with our largest customers.
Specialty Plant Nutrition
We produce and distribute specialty plant nutrients which offer nutritional solutions primarily for
fertigation applications on high value crops such as fruit, flowers and some vegetables. These fertilizers
must be highly soluble and free of impurities in order to be used by means of modern technical irrigation
techniques (drip irrigation, microaspiration). The latter are increasingly used in high-value fruit plantations
as well as in protected crops: greenhouses, tunnels for berries and shade houses for tomatoes. In addition,
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SQM participates in the specialty nutrient market for foliar and granular soil applications, in certain high-
value niches such as potato production.
Among the specialty plant nutrients for use in fertigation, potassium nitrate is one of the most important
fertilizers. Its advantage lies in being chlorine free, high solubility, adequate PH and free of impurities.
These advantages allow for a premium price compared to substitute commodity fertilizers such as
potassium chloride and sulfate.
We believe that we are the world’s largest producer of potassium nitrate. In 2022, specialty plant nutrients
revenues increased to US$1,172.3 million, representing 10.9% of our total revenues for that year. We
estimate that our sales accounted for approximately 45% of global potassium nitrate sales for all
agricultural uses by volume in 2022.
The following table shows the total production and sales volumes, and revenue of specialty plant nutrients
for 2022, 2021 and 2020:
Specialty Plant Nutrition
Production volumes (Th. metric tons)
Sodium nitrate
Potassium nitrate and sodium potassium nitrate
Specialty blends (1)
Other specialty plant nutrients (2)
Sales Volumes (Th. metric tons)
Sodium nitrate
Potassium nitrate and sodium potassium nitrate
Specialty blends (1)
Other specialty plant nutrients (2)
Revenues (in US$millions)
(1) Includes Yara’s products sold pursuant to our commercial agreement
(2) Includes trading of other specialty fertilizers.
2022
2021
2020
18.4
550.9
217.9
138.1
14.4
477.4
217.9
138.1
50.2
76.6
679.1 635.8
304.0 271.3
174.9 164.4
25.6
32.1
643.6 575.2
304.0 271.3
174.9 164.4
1,172.3 908.8 701.7
In 2022, our revenues in specialty plant nutrients business line increased by 29% compared to the US$908.8
million for the previous year, as a result of the higher average prices during the year. Average prices during
2022 increased approximately 76%. The specialty plant nutrition segment contributed approximately 8%
to the Company's consolidated gross margin in 2022.
Specialty Plant Nutrition: Market
The target market for specialty plant nutrients is farmers who produce high-quality crops such as
vegetables, fruits, cash crops, flowers, cotton, and other high-value crops. In addition, SQM sells specialty
plant nutrients to growers who maintain crops sensitive to chlorine. Since 1990, the international market
for specialty plant nutrients has grown at a faster rate than the international market for commodity
fertilizers. This is mainly due to: (i) the application of new agricultural technologies such as fertigation,
hydroponics and greenhouses; (ii) the increase in the cost of land and the scarcity of water, which has forced
farmers to improve their yields and reduce water use; and (iii) the increase in demand for higher quality
crops.
As an exception, during the year 2022 and due to the strong increase in price, the agricultural soluble
potassium nitrate market had a consumption reduction of between 12% and 16%. These estimates do not
consider potassium nitrate produced and sold locally in China, and only include net imports and exports.
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Specialty Plant Nutrition: Marketing and Customers
In 2022, we sold our specialty plant nutrients in approximately 103 countries and to more than 1,000
customers. None of our customers represented more than 10% of our specialty plant nutrition revenues
during 2022, and our ten largest customers accounted in the aggregate for approximately 34% of revenues
during that period. No supplier accounted for more than 10% of the costs of sales for this business line.
The table below shows the geographical breakdown of our revenues:
Revenues breakdown
North America
Europe
Chile
Central and South America (excluding Chile)
Asia and Others
2022
42%
16%
11%
11%
20%
2021
35%
20%
15%
10%
21%
2020
35%
21%
14%
10%
20%
We sell our specialty plant nutrition products globally mainly through our own worldwide network of
commercial offices and distributors. We have developed marketing channels, brands (Ultrasol, Champion,
Sangral, Qrop, Speedfol), supply chain, and mixing and packaging plants to be able to reach practically
the entire world with our products and have a direct presence in the main markets of America, Europe,
South Africa, and China. We maintain inventory of our specialty plant nutrients in our commercial offices
in our main markets in order to facilitate prompt deliveries to customers.
As part of our marketing strategy, we provide technical and agronomical assistance to our clients. We have
specific knowledge resulting from extensive research and numerous studies conducted by our agronomical
teams in close contact with producers throughout the world. The solid agronomical knowledge is key for
the development of specific formulas and hydroponic and fertigation nutritional plans, which allows us to
provide expert advice.
During 2022 we continued with the growth in sales of differentiated fertilizers such as Ultrasoline
(NPK+ME+Iodine), ProP for greater efficiency in phosphorus absorption and Prohydric which allows for
fertilization and more efficient water use.
Specialty Plant Nutrition: Competition
The principal means of competition in the sale of specialty nutrients are product quality, logistics,
agronomic service expertise and price.
SQM is the world’s largest producer of potassium nitrate for agricultural use. Our sales accounted for
approximately 45% of global agricultural potassium nitrate sales by volume during 2022. Potassium nitrate
products compete indirectly with specialty substitutes and other commodities, which may be used by some
customers in place of potassium nitrate, depending on the type of soil and crop to which the product will
be applied.
In the potassium nitrate market, the main competitors with their estimated market share are: Haifa
Chemicals Ltd. (22%) and Kemapco (12%). In addition, there are several producers of potassium nitrate in
China. Most of the Chinese production is used in the domestic market.
Potassium
We produce potassium chloride and potassium sulfate by extracting brines from the Salar de Atacama.
Potassium chloride is a basic fertilizer, of which more than 60 million tons are produced worldwide and is
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used to fertilize a wide variety of crops, including corn, rice, wheat, sugar, soybeans, and palm oil. At SQM
it is mainly used as a raw material to produce the specialty fertilizer potassium nitrate.
In 2022, our potassium chloride and potassium sulfate revenues amounted to US$437.2 million,
representing 4.1% of our total revenues and a 5% increase compared to 2021, as a result of increased
average prices offset by lower sales volumes. We estimate that we accounted for less than 1% of global
sales of potassium chloride in 2022.
The following table shows the total production and sales volumes and revenues for potassium chloride and
potassium sulfate for 2022, 2021 and 2020:
Potassium chloride and Potassium sulfate
Production volumes (Th. metric tons)
Sales Volumes (Th. metric tons)
Revenues (in US$millions)
2022
984.0
480.5
437.2
2021
1,407.5
893.2
416.6
2020
1,475.6
726.7
209.3
In 2022, our revenues increased 5% from US$416.6 million in 2021, due to higher sales prices that were
offset by a noticeable drop in sales volumes. The average price for 2022 was approximately 95.1% higher
than the average price in 2021. Our sales volumes in 2022 were approximately 46% lower than our reported
sales volumes in 2021. The Potassium segment contributed approximately 4% to the Company's
consolidated gross margin in 2022.
Potassium: Market
During the last decade, growth in demand for potassium chloride, and for fertilizers in general, has been
mainly due to a permanent growth in food supply. All of these factors contribute to fertilizer demand growth
as a result of efforts to maximize crop yields and use resources more efficiently. We estimate that demand
in 2022 reached approximately 61 million metric tons, a 14% decrease from approximately 70 million tons
during 2021, mostly as a result of sanctions imposed on Belarus and Russia that limited supply, raised
prices and affected demand.
The following graph represents the distribution of potassium demand by type of crop in 2022:
Potassium Demand Distribution in 2022
Wheat, 16%
Other crops,
47%
Corn, 14%
Soybeans, 9%
Sugar; 2%
Rice, 12%
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Potassium: Marketing and Customers
In 2022, we sold potassium chloride and potassium sulfate to approximately 467 customers in
approximately 32 countries. One individual customer accounted for more than 10% of our revenues of
potassium chloride and potassium sulfate in 2022, representing approximately 11% of our revenues in the
business line. We estimate that our ten largest customers accounted in the aggregate for approximately 49%
of such revenues. No supplier accounted for more than 10% of the cost of sales of this business line. 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 23.2 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 for 2022, 2021 y 2020:
Revenues breakdown
North America
Europe
Chile
Central and South America (excluding Chile)
Asia and Others
2022
16%
6%
15%
41%
22%
2021
14%
8%
12%
51%
14%
2020
19%
14%
11%
35%
21%
Potassium: Competition
SQM estimates that it contributed approximately 1% of global sales of potassium chloride in 2022. The
biggest competitors, with their market share in 2022, are: Nutrien (21%), Uralkali (15%), Mosaic (13%)
and Belaruskali (10%).
Industrial Chemicals
The Company produces and sells 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.
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.
In 2022, our revenues from industrial chemicals were US$165.2 million, representing approximately 1.5%
of our total revenues for that year. We believe that we are one of the world’s largest producers of industrial
sodium nitrate and potassium nitrate.
The following table presents the total production and sales volumes, and total revenues in 2022, 2021 and
2020:
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Industrial Chemicals
Production volumes (Th. metric tons)
Sales Volumes (Th. metric tons)
Revenues (in US$millions)
Note: The level of activity of intermediate products is reported as production.
2022
156.0
147.0
165.2
2021
97.9
174.5
132.0
2020
213.8
225.1
160.6
Revenues for industrial chemicals increased to US$165.2 million in 2022 from US$132.0 million in 2021,
as a result of higher sales volumes in this business line, which offset lower sales volumes. Sales volumes
in 2022 decreased 16% compared to sales volumes reported last year, while average prices in the business
line increased 47% during 2022 compared to average prices reported during 2021. The Industrial Chemicals
segment contributed approximately 1% to the Company's consolidated gross margin in 2022.
Industrial Chemicals: Market
As already mentioned above, industrial sodium and potassium nitrates are used in a wide range of industrial
applications, including the production of glass, ceramics and explosives, metal recycling, insulation
materials, metal treatments together with other various chemical processes.
In addition, this product line has also experienced growth from the use of industrial nitrates as thermal
storage in concentrated solar power plants (commonly known as “CSP”). Solar salts for this specific
application are a blend of 60% sodium nitrate and 40% potassium nitrate by weight ratio and are used as a
storage and heat transfer medium in those power plants. Unlike traditional photovoltaic plants, these plants
use a “thermal battery” that contains molten sodium nitrate and potassium nitrate, which store the heat
collected during the day. The salts are heated up during the day, while the plants are operating under direct
sunlight, and at night they release the solar energy that they have captured, allowing the plants to operate
even during hours of darkness. Depending on the power plant technology, solar salts are also used as a heat
transfer fluid in the plant system and thereby make CSP plants even more efficient, increasing their output
and reducing the Levelized Cost of Electricity (LCOE).
Thermal storage units based on Solar Salts (also known as Carnot batteries) are being developed decoupled
from CSP plants. These units are specifically developed for large capacity and long duration energy storage.
We expect a considerable growth of these storage units thanks to the efforts carried out worldwide to reduce
the GHG emissions together with the dependence from fossil fuels.
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Industrial Chemicals: Marketing and Customers
In 2022, we sold our industrial nitrate products in approximately 58 countries, to approximately 261
customers. One customer accounted for more than 10% of our revenues of industrial chemicals in 2022,
accounting for approximately 27.3%, and our ten largest customers accounted in the aggregate for
approximately 54.6% of such revenues. No supplier accounted for more than 10% of the cost of sales of
this business line. 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 23.2 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 for 2022, 2021 and 2020:
Revenues breakdown
North America
Europe
Chile
Central and South America (excluding Chile)
Asia and Others
2022
36%
17%
1%
7%
39%
2021
23%
14%
3%
6%
55%
2020
15%
7%
3%
3%
72%
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
The main competitors on refined grade sodium nitrate market are BASF AG, a German company, and
various producers in China and Eastern Europe. All of them are highly competitive and produce synthetic
sodium nitrate as a by-product of other chemical production processes. SQM's industrial sodium nitrate
products also compete indirectly with substitute chemicals, including sodium carbonate, sodium sulfate,
calcium nitrate and ammonium nitrate, which may be used in certain applications instead of sodium nitrate
and sold by a large number of producers from around the world.
The estimated market share of industrial sodium nitrate and potassium nitrate is reported in the following
table:
Industrial Sodium Nitrate
Producer
SQM
BASF .............................
Asia and Others .............
Europe ...........................
Chile (otros) ..................
2022
39%
28%
18%
10%
5%
Industrial Potassium Nitrate
2022
60%
16%
9%
7%
5%
3%
Producer
SQM
Asia and Others
Haifa Chemicals
Europe
Kemapco
Chile
The main competitors in the industrial potassium nitrate business are Haifa Chemicals, Kemapco and some
Chinese producers.
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.
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Other Products
SQM also derives revenue from the commercialization of third-party fertilizers (specialty and commodity).
These fertilizers are traded in large volumes worldwide and are used as raw material for our specialty mixes
or to complement our product portfolio. We have developed commercial management, supply, flexibility
and inventory management capabilities that allow us to adapt to the changing fertilizer market in which we
operate and obtain profits from these transactions.
Revenue from sales of other commodity fertilizers and other income reached US$28.6 million for the
twelve months ended December 31, 2022, less than the US$30.8 million registered during the same period
of 2021.
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 addition, we are actively conducting exploration for metallic minerals in the mining properties we own.
If such minerals are found, we may decide to exploit, sell or enter into an association to extract these
resources. Our exploration efforts are currently focused on the layer of bedrock that lies beneath the caliche
ore that we use as the primary raw material in the production of iodine and nitrates. This bedrock has
significant potential for metallic mineralization, particularly copper, gold and silver. A significant portion
of our mining properties are located in the Antofagasta region of Chile, where many large copper producers
operate.
We have an in-house geological exploration team that explores the area directly, identifying drilling targets
and assessing new prospects. In 2021, the team has confirmed the existence of high-grade copper and gold
mineralization at the Bufalo project, located 120 kilometers east of the city of Antofagasta. The Bufalo
project corresponds to a district that hosts several mineralized bodies of copper, copper-gold and copper-
gold-silver in which SQM has already drilled nearly 124,000 meters of drilling, using our own diamond
and RC drilling machines. We also have a metal business development team that works to engage partners
interested in investing in metal exploration within our mining properties.
6.3 STAKEHOLDER GROUPS
The Company has identified its stakeholders based on four factors that affect the relationship with them:
needs, impacts, interests and expectations.
This process is validated by the Board of Directors, which considers the expectations of the stakeholders
through permanent supervision of the commitments established with them, within the framework of the
Corporate Governance Policy and the Sustainability, Ethics and Human Rights Policy. The central
objective of this work is to create and strengthen long-term bonds of trust, since they are fundamental actors
in the Company's work.
The stakeholders that SQM has identified and the reasons for their importance are as follows:
Employees: strategic allies of the Mission and the Purpose of the Company and, therefore, contribute
directly to the fulfillment of the priority focuses of the business, through their talent, good performance and
sense of belonging to the organization..
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Shareholders / Investors: make it possible to materialize SQM's business strategy with the contribution
of capital and their permanent supervision of the progress of the business. They are the ones who place
their trust in the Company, supporting the creation of long-term value.
Collaborators and Suppliers: contribute to maintaining high standards in the processes, goods and
products produced by SQM, delivering quality inputs and services, in line with the company's requirements
and business sustainability criteria.
Customers: SQM's raison d'être, to whom it is indebted in fulfilling its corporate purpose, providing them
with innovative solutions and a broad portfolio of essential products with various industrial applications.
Community: The Company aspires to a constructive and transparent relationship with all the people and
groups of people that are part of its areas of influence, and of society in general, because this makes it
possible to prevent risks and detect opportunities for mutual benefit in the development of the SQM’s
business activity.
Institutions and Organizations: correspond to different entities with which initiatives for collaboration,
support and strengthening of relevant technical skills for the business and for the institutions themselves
are managed.
Innovation Centers, Academic Entities and Research and Development Centers: facilitate the
development of key projects for the Company, through joint innovation and R&D work, studies and training
that respond to current and future challenges, with the aim of permanently adding value to SQM products.
Authorities: establish the regulatory frameworks required in the development of the Company's activity
and, in addition, they are a fundamental interest group to explore and shape public-private initiatives that
contribute to development at the local, regional and national level.
Media: the bridge that makes SQM's work known to society in general: its scope and impact on the
development of the country, the generation of employment, the capture of growth and innovation
opportunities, and the efforts made by the Company to reconcile its economic, social and environmental
performance.
Within the framework of this identification of stakeholders, SQM has also detected those issues that are a
priority in the daily relationship with each one of them, being aligned with the sustainable business strategy.
These topics (some of which were mentioned in the Corporate Governance chapter) are the following:
• Fair Labor Practices
• Relationships with the community
• Transformation and Labor Challenges
• Global Health and Food Challenges
• Human Rights and Business
• Responsible Water Management
• Energy management
• Air Emissions
• Biodiversity
• Climate change
• Environmental Compliance
• Responsible Business Management
• Product Responsibility and Innovation
SQM is a member of the following associations:
• Acción Empresas
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Instituto Chileno de Administración Racional de Empresas (ICARE)
Instituto de Ingenieros de Chile
• Asociación de Concentración Solar de Potencia
• Asociación de Industriales de Antofagasta (AIA)
• Asociación de Industriales de Iquique (AII)
• Asociación Gremial de Industriales Químicos de Chile (ASIQUIM)
• Cámara Chilena Australiana de Comercio (AUSCHAM)
• Cámara Chileno Belgo Luxemburguesa de Comercio A.G.
• Cámara Chilena Norteamericana de Comercio (AMCHAM)
• Cámara de Comercio de Santiago
• Cámara Chileno China de Comercio, Industria y Turismo A.G.
• Consejo Regional de Seguridad Minera (CORESEMIN) Antofagasta
• Consejo Regional de Seguridad Minera (CORESEMIN) Tarapacá
• Fundación Chile del Pacífico
• Fundación Generación Empresarial – FGE
•
•
• Pacto Global Chile
• Sociedad de Fomento Fabril (SOFOFA)
• Sociedad Nacional de Minería (SONAMI)
• Asociación Comercial Española de Fertilizantes (ACEFER)
• Asociación Española para la Valorización de Envases (AEVAE)
• Asociación Internacional de Fertilizantes (IFA)
• Asociación Mundial de Yodo (WIA)
• Asociación Nacional de Comercializadores y Productores de Fertilizantes A.C.(ANACOFER)
• Belgian Electrotechnical Committee npo (BEC)
• Drug, Chemical & Associated Technologies Association, Inc. (DCAT)
• European Association for Storage of Energy (EASE)
• European Solar Thermal Electricity Association (ESTELA)
• Far West Agribusiness Association (FWAA)
• Georgia Citrus Association
•
• Nacional de Mastitis Council
• Protermosolar
• The Fertilizer Institute (TFI)
Independent Lubricant Manufacturers Association (ILMA)
It is worth mentioning that SQM is a member of the board of directors in five of the associations above.
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6.4 PROPERTY, RESERVES AND FACILITIES
Information concerning our mining properties in this Annual Report on Form 20 F has been prepared in
accordance with the requirements of subpart 1300 of Regulation S-K, which first applied to us for the fiscal
year ended December 31, 2021. These requirements differ significantly from the previously applicable SEC
Industry Guide 7 disclosure requirements. Among other things, subpart 1300 of Regulation S-K requires
disclosure of mineral resources, in addition to mineral reserves, as of December 31, 2022, both in the
aggregate and for each of our individually material mining properties. Our mineral reserves and resources
are estimated by individuals deemed Qualified Persons (QP) according to the standards set forth in subpart
1300 of Regulation S-K.
SQM believes it is a production stage company based on the classification of its material properties. SQM
reports mineral resource and reserve estimates for development and production stage projects, following
the classification done by SQM of its material properties. See the individual property disclosures below for
further details regarding the mineral rights, titles, property size, permits and other information for our
significant mineral extraction properties.
Mineral resources and reserves are defined in subpart 1300 of Regulation S-K as follows:
Mineral resource. A concentration or occurrence of material of economic interest in or on the earth’s crust
in such form, grade or quality, and quantity that there are reasonable prospects for economic extraction. A
mineral resource is a reasonable estimate of mineralization, taking into account relevant factors such as
cut-off grade, likely mining dimensions, location or continuity, that, with the assumed and justifiable
technical and economic conditions, is likely to, in whole or in part, become economically extractable. It is
not merely an inventory of all mineralization drilled or sampled.
Mineral reserve. An estimate of tonnage and grade or quality of indicated and measured mineral resources
that, in the opinion of a QP, can be the basis of an economically viable project. More specifically, it is the
economically mineable part of a measured or indicated mineral resource, which includes diluting materials
and allowances for losses that may occur when the material is mined or extracted.
Under subpart 1300 of Regulation S-K, mineral resources may not be classified as mineral reserves unless
the determination has been made by a QP that such mineral resources can be the basis of an economically
viable project. The conversion of reported mineral resources to mineral reserves should not be assumed.
Mineral resource classifications are differentiated under subpart 1300 of Regulation S-K, in part, as
follows:
Measured resource. That part of a mineral resource with the highest level of geological confidence;
quantity and grade or quality are estimated on the basis of conclusive geological evidence and sampling.
The level of geological certainty associated with a measured mineral resource is sufficient to allow a QP to
apply modifying factors in sufficient detail to support detailed mine planning and final evaluation of the
economic viability of the deposit.
Indicated resource. That part of a mineral resource with a level of geological confidence between that of
measured and inferred resources; quantity and grade or quality are estimated on the basis of adequate
geological evidence and sampling. The level of geological certainty associated with an indicated mineral
resource is sufficient to allow a QP to apply modifying factors in sufficient detail to support mine planning
and evaluation of the economic viability of the deposit.
Inferred resource. That part of a mineral resource with the lowest level of geological confidence; quantity
and grade or quality are estimated on the basis of limited geological evidence and sampling. The level of
geological uncertainty associated with an inferred mineral resource is too high to apply relevant technical
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and economic factors likely to influence the prospects of economic extraction in a manner useful for
evaluation of economic viability.
Caliche
Geologists and mining engineers who are QPs prepare our estimates of caliche ore resources and reserves.
The resource and reserve figures presented below are estimates and may be subject to modifications due to
natural factors that affect the distribution of mineral grades, which would, in turn, modify the recovery of
nitrate and iodine. Therefore, no assurance can be given that the indicated levels of recovery of nitrates and
iodine will be realized.
We estimate ore resources and reserves based on evaluations, performed by engineers and geologists, of
assay values derived from sampling of drillholes and other openings. Drillholes have been made at different
space intervals in order to recognize mining resources. Normally, we start with 400x400 meters and then
we reduce spacing to 200x200 meters, 100x100 meters and 50x50 meters. The geological occurrence of
caliche ore is unique and different from other metallic and non-metallic minerals. Caliche ore is found in
large horizontal layers at depths ranging from one to four meters and has an overburden between zero and
two meters. This horizontal layering is a natural geological condition and allows us to estimate the
continuity of the caliche bed based on surface geological reconnaissance and analysis of samples and
trenches.
Salar de Atacama
Hydrogeologists and geologists who are QPs prepare our estimates of the resource and reserve base of
potassium, sulfate, lithium and boron dissolved in brines at the Salar de Atacama. We have exploitation
concessions through Corfo covering an area of 81,920 hectares, in which we have carried out geological
exploitation, brine sampling and geostatistical analysis.
Mt. Holland
Geologists and mining engineers who are QPs prepared the mineral resource and reserve estimation for
lithium hydroxide contained in pegmatites at Mt. Holland. The mineral reserve has been calculated from
the mine plan created from the mineral resource estimation. Wireframes for the geological domains are
defined by mineralization style and based on a cut-off grade of 0.5% lithium oxide.
Derechos Mineros
The discussion of our mining rights is organized below according to the geographic location of our mining
operations. Our caliche ore mining interests are located throughout the valley of the Tarapacá and
Antofagasta regions of northern Chile (in a part of the country known as “El Norte Grande”). From caliche
ore, we produce products based on nitrates and iodine, and caliche also contains concentrations of
potassium. Our mining interests in the brine deposits of the Salar de Atacama are found within the Atacama
Desert, in the eastern region of El Norte Grande. From these brines we primarily produce products based
on potassium, sulfate, and lithium. Our spodumene mining interests are located in Mt. Holland in Western
Australia. From spodumene, we produce lithium hydroxide.
The map below shows the location of our principal mining operations in Chile and the exploitation and
exploration mining concessions that have been granted to us, as well as the mining properties that we lease
from Corfo:
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Figure 1. Location of SQM mining operations in Chile and the exploitation and exploration mining
concessions.
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The map below shows the location of our principal mining operations in Australia and the exploitation and
the Mt. Holland Joint Venture.
exploration mining concessions
that have been granted
to
Figure 2. Location of Mt. Holland JV mining operations in Australia and the exploitation and exploration
mining concessions.
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Mining Concessions in Chile
We hold our mining rights in Chile pursuant to mining concessions for exploration and exploitation of
mining resources granted pursuant to applicable law in Chile. For a discussion of the mining concessions,
see “Material Individual Properties — El Norte Grande — Mining Concessions for the Exploration and
Exploitation of Caliche Ore” and “—Salar de Atacama Mining Concessions for Exploitation of Brines.”
As of December 31, 2022, approximately 56% of SQM’s mining interests in Chile were held pursuant
to Mining Exploitation Concessions and 0.44% pursuant to Mining Exploration Concessions. Of the
Mining Exploitation Concessions, approximately 98% already have been granted pursuant to applicable
Chilean law, and approximately 2% are in the process of being granted. Of the Mining Exploration
Concessions, approximately 100% already have been granted pursuant to applicable Chilean law.
In 2022, we made payments of US$7.3 million to the Chilean government for Mining Exploration and
Exploitation Concessions, including the concessions we lease from Corfo. These payments do not
include the payments we made directly to Corfo pursuant to the Corfo Agreements, according to the
percentages of the sales price of products produced using brines from the Salar de Atacama.
The following table shows the Mining Exploitation and Exploration Concessions held by SQM,
including the mining properties we lease from Corfo, as of December 31, 2022:
Exploitation Concessions Exploration Concessions
Total
Region of Chile
Total Number Hectares Total Number Hectares Total Number Hectares
Region I
Region II
2,743
514,519
8,921
2,345,120
Region III and others
456
104,921
Total
12,120
2,964,560
2
17
3
22
1,000
2,745
515,519
10,900
8,938
2,356,020
500
459
105,421
12,400
12,142
2,976,960
The majority of the Mining Exploitation Concessions held by SQM were requested primarily for non-
metallic mining purposes. However, a small percentage of our Mining Exploration Concessions were
requested for metallic mining purposes. The annual payment to the Chilean government for this group
of concessions is higher.
Geological studies over mining properties that were requested primarily for non-metallic mining
purposes may show that the concession area is of interest for metallic mining purposes, in which case
we must inform the Chilean National Geology and Mining Survey (Sernageomin), indicating that the
type of substance contained by such Mining Concessions has changed, for purposes of the annual
payment for these rights.
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Mt. Holland Mining Rights
The Mt. Holland Lithium project development envelope for the Mine and Concentrator is spread across
three core mining tenements (M77/1065, M77/1066 & M77/1080), as well as exploration licenses,
general purpose licenses and miscellaneous licenses (Project Tenements), covering an approximate area
of 4,606 hectares. A summary map showing the main tenements is provided in Figure 2.
The majority of the project properties are currently registered in equal parts to MH Gold, an affiliate of
Wesfarmers Limited, and SQM Australia, an affiliate of SQM. Other exploration rights in the Mt.
Holland project are registered to MH Gold Pty Ltd or Montague Resources Australia Pty Ltd, both
ultimately controlled by Wesfarmers Chemicals, Energy and Fertilizers (WesCEF). The project is a joint
venture, in which SQM owns 50% and Wesfarmers Limited owns the remaining 50% (the “Mt. Holland
JV”), and is managed by Covalent Lithium Pty Ltd (“Covalent”), an entity owned 50% by SQM and
50% by Wesfarmers. Covalent is not the registered holder or applicant of the project properties under
the Mining Act of 1978 (WA) (Mining Act). Covalent and the joint venturers have entered into an access
agreement with Montague and MH Gold that authorizes the Mt. Holland Joint venture to access those
properties as required for the purpose of the project.
Costs
Caliche ore is the key raw material used in the production of iodine, specialty plant nutrients and
industrial chemicals. The following gross margins for the specified business lines were calculated on the
same basis as cut-off grades used to estimate our reserves. We expect costs to remain relatively stable in
the near future.
2022
2021
2020
Gross
margin
Price
Gross
margin
Price
Gross
margin
Price
Iodine and Derivatives
63%
US$59/kg
45%
US$36/kg
50%
US$35/kg
Specialty Plant Nutrition
Industrial Chemicals
38%
US$1,383/ton
29%
US$787/ton
23%
US$677/ton
32%
US$1,124/ton
17%
US$757/ton
26%
US$713/ton
Brines from the Salar de Atacama are the key raw material used in the production of potassium chloride
and potassium sulfate, and lithium and its derivatives. The following gross margins for the specified
business lines were calculated on the same basis as cut-off grades used to estimate our reserves. We
expect costs to remain relatively stable in the near future
2022
2021
2020
Gross
margin
Price
Gross
margin
Price
Gross
margin
Price
Potassium Chloride
Potassium Sulfate
and
56%
US$910/ton
39%
US$466/ton
11%
US$288/ton
Lithium and Derivatives
55%
US$52,000/ton
47%
US$9,300/ton
23%
US$5,931/ton
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Summary of Mineral Reserves and Resources
The following tables summarize our estimated mineral reserves and resources as of December 31, 2022.
The quantity of the mineral resources is estimated on an in situ basis as attributable to us. Mineral
resources are reported exclusive of mineral reserves. The quantity of the mineral reserves is estimated
on a saleable product basis as attributable to us. The relevant technical information supporting mineral
reserves and resources for each material property is included in the “Material Individual Properties”
section below, as well as in the technical report summaries (“TRS”) filed as to this Annual Report on
Form 20 F.
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Summary Mineral Reserves at End of the Fiscal Year Ended December 31, 2022 (1):
Proven Mineral Reserves
Probable Mineral Reserves
Total Mineral Reserves
Salar de Atacama, Chile
Volume
(Vol Mm3)
Grade
(% Li by
weight)
Volume
(Vol Mm3)
Grade
(% Li by
weight)
Volume
(Vol
Mm3)
Grade
(% Li by
weight))
Lithium—Brines:
(2), (3), (4), (5)
143
0.20
107
0.20
250
0.20
Mt. Holland, Australia
Volume
(MT)
Grade
(Li2O%)
Volume
(MT)
Grade
(Li2O%)
Volume
(MT)
Grade
(Li2O%)
Lithium—Pegmatite:
(6)
10.8
1.48
31.2
1.6
42.0
1.57
Salar de Atacama, Chile
Volume
(Vol Mm3)
Grade
(% K by
weight)
Volume
(Vol Mm3)
Grade
(% K by
weight)
Volume
(Vol
Mm3)
Grade
(% K by
weight)
Potassium: (2), (3), (4),
(5)
143
2.33
107
2.16
250
2.26
El Norte Grande Caliche, Chile
Nitrate: (7), (8), (9)
Volume
(MT)
Grade
(%NO3 by
weight)
Volume
(MT)
Grade
(%NO3 by
weight)
Volume
(MT)
Grade
(%NO3 by
weight)
Pedro de Valdivia
Maria Elena
Pampa Blanca
99
94
35
Nueva Victoria
220
Pampa Orcoma
0
Total
448
9.1
8.1
6.3
5.9
---
7.1
112
10
498
553
309
1,482
5.8
6.9
4.7
5.1
6.9
5.4
211
104
533
773
309
1,930
7.3
8.0
4.8
5.3
6.9
5.8
El Norte Grande Caliche, Chile
Iodine: (7), (8), (9)
Volume
(MT)
Grade
(I2 parts by
million)
Volume
(MT)
Grade
(I2 parts by
million)
Volume
(MT)
Grade
(I2 parts by
million)
Pedro del Valdivia
Maria Elena
99
94
522
491
112
10
366
374
211
104
439
480
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Pampa Blanca
35
Nueva Victoria
220
Pampa Orcoma
0
Total
448
________________
552
441
---
478
498
553
309
1,482
480
415
413
432
533
773
309
1,930
485
422
413
443
(1) Comparisons of values may not add due to rounding of numbers and the differences caused by averaging
(2) Salar de Atacama, Chile. The process efficiency is based on the type of extracted brine at each well over the course
of the simulation, the average process efficiency over the entire life of mine (LoM) is approximately 52% for lithium
and approximately 74% for potassium.
(3) Salar de Atacama, Chile. The average lithium and potassium concentration is weighted by the simulated extraction
rates in each well.
(4) (4)
Salar de Atacama, Chile. The mineral resource and reserve estimate considers a 0.05% w/w cut-off grade
for lithium based on the cost of generating lithium product, lithium carbonate sales, and the respective cost margin.
Based on historical lithium prices from 2010 and the forecast to 2040, a projected lithium carbonate price of
US$15,000 per metric ton with the corresponding cost and profit margin is considered with a small increase to
accommodate the evaporation area and use of additives. A similar analysis was undertaken for potassium where the
cut-off grade of 1% w/w has been set by SQM based on respective costs, sales, and margin.
(5) Salar de Atacama, Chile. This reserve estimate differs from the in-situ base reserve previously reported (SQM, 2020)
and considers the modifying factors of converting mineral resources to mineral reserves, including the production
wellfield design and efficiency, as well as environmental and process recovery factors. The reserve estimate also
considers the expiry of the Lease Agreement in 2030 (end of LoM). The Qualified Persons for the Mineral Reserves
are Rodrigo Riquelme and Gino Slanzi.
(6) Mt. Holland, Australia. Mineral reserve tonnage and grade have been rounded to reflect the accuracy of the estimate,
and numbers may not add due to rounding. Metallurgical processes are designed for nominal 2Mpta ore feed. Process
recovery to concentrate is estimated at 75% for lithium oxide for predominantly spodumene mineralization and 0%
for other mineralization types. Refinery process recovery is estimated at 85%. Tantalum recovery is estimated at 0%.
A total operating cost of US$4,979 per metric ton for Lithium hydroxide production was considered in the reserve
evaluation. The price, cost, and mass yield parameters, along with the internal constraints of the current operations,
result in a mineral reserves cut-off grade of 0.5% lithium oxide based on a selling lithium hydroxide price of
US$11,000 per ton FOB. The Qualified Person for the Mineral Reserves is David Billington with an effective date:
December 15, 2021. No material changes have been reported since that date.
(7) El Norte Grande Caliche, Chile. The cutoff grades of the proven and probable Reserves vary according to the required
targets at the different mines. The values assigned correspond to the averages of the different sectors. The cut-off
grade is for nitrate content, while also considering the iodine content.
(8) El Norte Grande Caliche, Chile. The average overall metallurgical recovery of the nitrate and iodine processes
contained in the recovered material varies between 50% and 70%.
(9) The mineral resource and reserve estimate considers a cut-off grade of 300 ppm for iodine (I2) based on the production
costs of iodine and derivate products. Based on historical iodine prices from 2010 and the forecast to 2040, a projected
Iodine price of US$47,500 per metric ton is determined, taking in account the corresponding operational, financial
and planned investment costs, depreciation, profit margin and taxes. A similar analysis was undertaken for nitrates
where the cut-off grade of 3.0% sodium nitrate has been set by SQM based on respective costs for potassium-sodium
nitrates (fertilizers) production. A projected price of US$820 per metric ton for potassium-sodium nitrates is
considered by SQM in the economic analysis executed from 2010 and the forecast to 2040. In addition, a projected
solar salts price of US$680 per metric ton has been considered by SQM. Modifying factors of historical operational
use in various of SQM’s mining facilities, are applied to iodine and nitrate grades reported as probable resource
estimates. The factors applied to iodine and nitrate grades are 0.9 and 0.85 respectively.
(10) Reserve estimates are shown for the area with environmental permits in force or currently pending for mining
operations. The Qualified Person for Nueva Victoria, Pampa Orcoma, Pedro de Valdivia and Pampa Blanca mining
reserves are Marco Lema and Marta Aguilera.
Summary Mineral Resources Exclusive of Reserves at End of the Fiscal Year Ended December 31,
2022 (1), (2):
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Measured Mineral
Resources
Indicated Mineral
Resources
Measured & Indicated
Mineral Resources
Inferred Mineral
Resources
Salar de Atacama, Chile
Volume
(Vol Mm3)
Grade
(% Li by
weight)
Volume
(Vol Mm3)
Grade
(% Li by
weight)
Volume
(Vol Mm3)
Concentration
(% Li by weight)
Volume
(Vol Mm3)
Grade
(% Li by
weight)
Lithium—
Brines:
(4)
(3),
Lithium—
Pegamite: (5)
Potassium:
(3), (4)
2.254
0.20
1.435
0.160
3.689
0.180
1.614
0.133
Mt. Holland, Australia
Volume
(MT)
Grade
(Li2O%)
Volume
(MT)
Grade
(Li2O%)
Volume
(MT)
Grade
(Li2O%)
Volume
(MT)
Grade
(Li2O%)
13.5
1.58
30.5
1.45
44.0
1.49
3.5
1.38
Salar de Atacama, Chile
Volume
(Vol Mm3)
Grade
(% K by
weight)
Volume
(Vol Mm3)
Grade
(% K by
weight)
Volume
(Vol Mm3)
Grade
(% K by weight)
Volume
(Vol Mm3)
Grade
(% K by
weight)
2.254
1.80
1.435
1.70
3.689
1.77
1.614
1.77
El Norte Grande Caliche, Chile
Nitrate: (6),
(7)
Volume
(MT)
Grade
(% NO3
by weight)
Volume
(MT)
Grade
(% NO3
by weight)
Volume
(MT)
Grade
(% NO3 by
weight)
Volume
(MT)
Pedro de
Valdivia
---
---
138
Maria Elena
21
11.1
119
Pampa
Blanca
Nueva
Victoria
Pampa
Orcoma
Total
17
---
---
38
5.3
---
---
48
20
18
8.5
343
7.6
10
8.9
4.7
7.4
8.4
138
140
65
20
18
381
7.6
10.2
8.0
4.7
7.4
8.5
El Norte Grande Caliche, Chile
52
117
223
31
---
423
Grade
(% NO3
by
weight)
6.1
7.2
5.4
6.5
---
6.1
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Iodine: (6),
(7)
Volume
(MT)
Grade
(I2 parts
per
million)
Volume
(MT)
Grade
(I2 parts
per
million)
Volume
(MT)
Grade
(I2 parts per
million)
Volume
(MT)
Grade
(I2 parts
per
million)
Pedro de
Valdivia
---
---
138
564
138
Maria Elena
21
489
119
465
140
Pampa
Blanca
Nueva
Victoria
Pampa
Orcoma
Total
17
---
---
38
________________
563
---
---
48
20
18
383
415
457
65
20
18
522
343
490
381
564
469
430
415
457
493
52
117
223
31
---
423
409
362
511
343
---
445
(1) Comparison of values may not add due to the rounding of numbers and differences caused by averaging.
(2) Mineral resources are not mineral reserves and do not have demonstrated economic viability. There is no certainty that all
or any part of the mineral resource will be converted into mineral reserves upon the application of modifying factors.
(3) Salar de Atacama, Chile. Mineral resources are reported as in-situ and exclusive of mineral reserves, where the estimated
mineral reserve without processing losses during the reported LoM and real declared extraction from 2022 were subtracted
from the mineral resource inclusive of mineral reserves. A direct correlation between proven reserves and measured
resources, as well as probable reserves and indicated resources was assumed.The Qualified Person for the Mineral Resources
is Andrés Fock.
(4) Salar de Atacama, Chile. The mineral resource and reserve estimate consider a 0.05% w/w cut-off grade for lithium based
on the cost of generating lithium product, lithium carbonate sales, and the respective cost margin. Based on historical lithium
prices from 2010 and the forecast to 2040, a projected lithium carbonate price of US$15,000 per metric ton with the
corresponding cost and profit margin is considered with a small increase to accommodate the evaporation area and use of
additives. A similar analysis was undertaken for potassium where the cut-off grade of 1% w/w has been set by SQM based
on respective costs, sales, and margin.
(5) Mt. Holland, Australia. Mineral resource tonnage and measured content have been rounded to reflect the accuracy of the
estimate, and numbers may not add due to rounding. Mineral resources are reported as exclusive of mineral reserves.
Resource disclosed corresponds to the resources attributable to SQM. Mineral resources are not mineral reserves and do not
have demonstrated economic viability. Resources have been reported as in situ (hard rock within optimized pit shell). Pit
optimization and economics for derivation of cut off grade include mine gate pricing of US$800 FOB per ton of 6% Li2O
concentrate, AUS$19 per bcm mining cost (LoM average cost-variable by depth), AU$65 processing cost per ton. Mining
dilution set at 5% and recovery at 95%. Royalty fees 5%. The optimization considered for the concentrator is 75%. Costs
estimated in Australian Dollars were converted to US Dollars based on an exchange rate of AU$0.75:US$1.00. These
economics define a cut-off grade of 0.50% Li2O. Kerry Griffin is the QP responsible for the mineral resource estimate with
an effective date: October 6, 2021. No material changes have been reported since that date.
(6) El Norte Grande, Caliche, Chile. To calculate measured resources, SQM uses the RGM100T and RGM50 data results
combined in a 3D block model built using Kriging and applying some criteria: caliche thickness ≥ 2.0 m; overload thickness
≤1.0 m; waste / Mineral Ratio ≤ 1.0; and cut-off grades of NaNO3 (3%) and Iodine (300 ppm). To calculate indicated
resources, SQM uses the RGM100 and RGM200 data results combined using the inverse distance weighting (IDW). To
evaluate Probable Reserves a reduction on grades mut be consider as consequence of the deposit geological variability
which determines a contrasting decrease in grades by going from 200x200m research grids to lower 100T (~100x50m) or
50x50m grids. The mineral resource estimates were prepared by Marta Aguilera (who is the independent Qualified Person
for these mineral resource estimates), reported using the S-K 1300 Definition Standards adopted December 2018. The
Qualified Persons for the Pedro de Valdivia, María Elena and Pampa Blanca Mineral Resources are Marco Lema and Marta
Aguilera.
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(7) El Norte Grande, Caliche, Chile. The estimate was completed using a SG of 2.1 ton/m³. Cut-off grade for iodine is 300 ppm.
The cutoff grades of the mineral resources vary according to the required targets at the different mines. The values assigned
correspond to the averages of the different sectors. In our mining sites, the cut-off grade is for nitrate content considers
iodine. The mineral reserve estimate considers a cut-off grade of 300ppm for iodine (I2) based on the production costs of
Iodine and derivate products. Based on historical iodine prices from 2010 and the forecast to 2040, a projected iodine price
of US$47,500 is determined, taking in account the corresponding operational, financial and planned investment costs,
depreciation, profit margin and taxes. A similar analysis was undertaken for nitrates where the cut-off grade of 3.0% NaNO3
has been set by SQM based on respective costs for potassium-sodium nitrates (fertilizers) production. A projected price of
US$820 per ton for potassium-sodium nitrates is considered by SQM in the economic analysis executed from 2010 and the
forecast to 2040. In addition, a projected solar salts price of US$680 per ton has been considered by SQM.
Material Individual Properties
To determine our individually material mining operations in accordance with subpart 1300 of Regulation
S-K, management considered both quantitative and qualitative factors, assessed in the context of our
overall business and financial condition. Such assessment included our aggregate mining operations on
all of our mining properties, regardless of the stage of production or the type of mineral produced.
Quantitative factors included, among others, mining operations’ relative contributions to our aggregate
historical and estimated revenues, cash flows, and EBITDA. Qualitative factors may include, as
applicable, capital expansion plans, long-term pricing outlook, the regulatory environment and various
strategic priorities.
We concluded that, as of December 31, 2022, our individually material mines are the caliche ore mines
at Nueva Victoria and Pampa Orcoma in El Norte Grande region of Chile, the brines in the Salar de
Atacama in Chile and the Mt. Holland lithium project in Western Australia. We will update our
assessment of individually material mines on an annual basis.
The information that follows relating to such individually material properties is derived, for the most
part, from, and in some instances is an extract from, from the TRS relating to such properties prepared
in compliance with Item 601(b)(96) and subpart 1300 of Regulation S-K. Portions of the following
information are based on assumptions, qualifications and procedures that are not fully described herein.
Reference should be made to the full text of the TRS, incorporated herein by reference and made a part
of this Annual Report on Form 20 F. The relevant TRS for the Salar de Atacama property, the Nueva
Victoria property, the Pampa Orcoma property, and the Mt. Holland lithium project properties are
included as Exhibits 96.1, 96.2, 96.3 and 96.4, respectively, to this Annual Report on Form 20 F.
Properties and Facilities el Norte Grande Caliche, Chile
Our mining operations are concentrated in the First Region of Chile, where we mainly work in the mining
areas of Tente en el Aire,Nueva Victoria Norte/West and Torcaza.
The El Norte Grande Caliche, found in Regions I and II of northern Chile, corresponds to flat areas or
“pampas”, that have been thoroughly explored. Results indicate that these prospects hold mineralization
of nitrate and iodine. The area is accessible from Santiago through Route 5. The mineralization is
stratiform in style, with a wide areal distribution, forming "spots" of several kilometers in extension,
where mineralization thicknesses are variable. As a result of geological activity over time (volcanism,
weathering, faulting) the deposits can be found as continuous mantles. Environmental permits for mining
operations, and the corresponding Environmental Qualification Resolution, grant access to the required
water and electricity supply, as well as the infrastructure required for the mining operation..
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Facilities
Nueva Victoria
The Nueva Victoria mine and facilities are located 140 kilometers southeast of Iquique and are accessible
by highway. Since 2007, the Nueva Victoria mine includes the mining properties Soronal, Mapocho and
Iris. At this site, we use caliche ore to produce salts rich in nitrates and iodine, through heap leaching
and the use of solar evaporation ponds. The main production facilities at this site include the operation
centers for the heap leaching process, the iodide and iodine plants at Nueva Victoria and Iris and the
evaporation ponds at the Sur Viejo sector of the site. The areas currently being mined are located
approximately 25 kilometers northeast of Nueva Victoria. Solar energy and electricity are the primary
sources of power for this operation. The nitrate-rich salts are sent to Coya Sur, which is a process plant
located approximately 15 kilometers south of María Elena, and production activities undertaken there
are associated with the production of potassium nitrate and finished products. The main production plants
at this site include four potassium nitrate plants with a total capacity of 1,300,000 metric tons per year.
There are also four production lines for crystallized nitrates, with a total capacity of 1,200,000 metric
tons per year, and a prilling plant with a capacity of 360,000 metric tons per year. The potassium nitrate
produced at Coya Sur is an intermediate product that is used as a raw material for the production of
finished products (crystallized nitrates and prilled nitrates). Therefore, the production capacities listed
above are not independent of one another and cannot be added together to obtain an overall total capacity.
Natural gas is the main source of energy for our Coya Sur operation.
Pampa Orcoma
The Pampa Orcoma Project is located in the Tarapacá Region of northern Chile. It is situated
99 kilometers to the northeast of the city of Iquique, in the community of Huara. The property covers an
area of 10,296 hectares and is composed of 45 mining concessions. The Pampa Orcoma Project aims to
produce iodide, iodine and nitrate-rich salts from the processing of caliche that will be extracted from
deposits rich in this mineral. The Pampa Orcoma Mining Plan considers an initial extraction of caliche
at a rate of 8.4 Mt/year between 2024 2027, followed by an extraction rate of 20 Mt/year from 2028
onwards. For the period 2024 2040 a total extraction of 287.4 Mt of caliche is projected with an average
grade of 408 ppm iodine and 6.7% nitrates. The production process to obtain iodine as the main product,
along with salts rich in sodium nitrate and potassium nitrate as by-products, involves leaching with
seawater or with recirculated solutions to obtain a solution rich in iodate, which will then be treated in
chemical plants to transform it into elemental iodine in prill format. The Pampa Orcoma Project
contemplates the construction of the following facilities: iodide and iodine production plants, with a
capacity of 2,500 t/year (of equivalent iodine), evaporation ponds to produce salts rich in nitrate at a rate
of 320,325 t/year and a seawater adduction pipe to meet the water needs. Solar energy and electricity are
the primary sources of power for this future operation.
The following table provides a summary of our El Norte Grande production facilities as of December
31, 2022:
Facility
Type of Facility
Approximate
Size
(hectares) (1)
Nominal Production
Capacity
(thousand of metric
tons/year)
Weighted
Average
Age (years)
(2)
Gross Book
Value
(millions of US$)
(2)
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Coya Sur (3), (4)
Nitrates production
1,518
Potassium nitrate: 1.300
Crystallized nitrates: 1.200
Prilled nitrates: 360
10.25
756.4
Nueva Victoria
(5), (7)
Pampa Orcoma
Concentrated nitrate
salts and iodine
production
Concentrated nitrate
salts and iodine
production
________________
47,492
Iodine: 13.0
6.92
625.8
7,387
2.5
-
-
(1) Approximate size considers both the production facilities and the mine for Nueva Victoria Mining areas are those
authorized for exploitation by the environmental authority and/or Sernageomin.
(2) Weighted average age and gross book value correspond to production facilities, excluding the mine, for Nueva Victoria.
(3) Includes production facilities and solar evaporation ponds.
(4) The potassium nitrate produced at Coya Sur is an intermediate product that is used as a raw material for the production of
finished products (crystallized nitrates and prilled nitrates). Therefore, the production capacities listed above are not
independent of one another and cannot be added together to obtain an overall total capacity.
(5) Includes production facilities, solar evaporation ponds and leaching heaps.
(6) The nominal production capacity for iodine considers the capacity of our plants. The effective capacity is 14,800 metric
tons per year.
We directly or indirectly through subsidiaries own, lease or hold concessions over the facilities at which
we carry out our operations. Such facilities are free of any material liens, pledges or encumbrances, and
we believe they are suitable and adequate for the business we conduct in them.
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Extraction Yields
The following table shows certain operating data relating to each of our El Norte Grande mines for 2022,
2021 and 2020:
(in thousands, unless otherwise stated)
2022
2021
2020
Coya Sur (1)
Metric tons of crystallized nitrate produced
725
820
935
Nueva Victoria
Metric tons of ore mined
Iodine (ppm)
Metric tons of iodine produced
________________
44.324
41.428
43.420
430
10,8
441
8,7
452
10,6
(1) Includes production at Coya Sur from treatment of nitrates solutions from María Elena and Pedro de Valdivia, nitrate salts
from pile treatment at Nueva Victoria, and net production from NPT, or technical grade potassium nitrates.
Reserves and Resources
According to our experience in caliche ore, the grid pattern drillholes with spacings between 50 and100
meters produce data on the caliche resources that is sufficiently defined to consider them measured
resources and then, adjusting for technical, economic and legal aspects, as proven reserves. These
reserves are obtained using the Kriging Method and the application of operating parameters to obtain
economically profitable reserves.
Similarly, the information obtained from detailed geologic work and samples taken from grid pattern
drillholes with spacings between 100 and 200 meters can be used to determine indicated resources. By
adjusting such indicated resources to account for technical, economic and legal factors, it is possible to
calculate probable reserves. Probable reserves are calculated by using a Inverse Distance Weighting
(IDW), and have an uncertainty or margin of error greater than that of proven reserves. However, the
degree of certainty of probable reserves is high enough to assume continuity between points of
observation.
The conversion of resources into reserves requires consideration of modifying factors, the most relevant
of which is the existence of a valid environmental license (RCA or Sectorial Authorization). The criteria
for converting resources into reserves, based on the environmental license modifying factor criterion,
adopted for caliche mines are as follows:
1.
Unit tonnage conversion criteria in both measured resources and indicated resources.
2.
Grade conversion criteria: unit factor in measured resources and lower than unit and variable
according to the mine, in the Iodine and Nitrate grades, for the indicated resources, due to the variability
of the deposit.
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Application of the factor associated with related environmental permit, not qualifying as reserves
3.
the resources defined in sectors without an environmental permit and qualifying as proven/probable
reserves the measured/indicated resources associated with sectors with an effective environmental permit
or Sectorial Authorization in force.
Nueva Victoria—Summary of Mineral Reserves at the End of the Fiscal Year Ended December
31, 20221,2,3,4,5,6,7,8,9
Amount
Nitrate grade
(MT)
(% by weight)
Iodine grade
(Parts per
million(ppm))
Cut-off grade1
Metallurgical
Recovery2
Proven mineral reserves
220
Probable mineral reserves 553
Total mineral reserves
773
5.9
5.1
5.3
441
415
422
______________
Nitrate 3.0%, Iodine
300 ppm
50%-70%
1. Mineral Reserves are based on Measured and Indicated Mineral Resources at an operating cutoff of 3% for nitrates and
300 ppm iodine. Operating constraints of caliche thickness ≥ 2.0 m; overburden thickness ≤1.0 m; and waste / caliche
ratio ≤01.0 are applied.
2. Proven Mineral Reserves are based on Measured Mineral Resources at the criteria described in (1) above. The average
overall metallurgical recovery of the nitrate and iodine processes contained in the recovered material varies between 50%
and 70%. Based on SQM’s operational experience and the laboratory and full-scale tests carried out, a progressive
increase, over time, in heap leaching yield is expected, as irrigation application rates increase.
3. Probable Mineral Reserves are based on Indicated Mineral Resources at the criteria described in (1) above with a grade
call factor of 0.9 for iodine and 0.85 for nitrates confirmed by operating experience.
4. Mineral Reserves are stated as in-situ ore (caliche) as the point of reference.
5. The units “Mt”, “kt”, “ppm” and % refer to million tonnes, kilotonnes, parts per million, and weight percent, respectively.
6. Mineral Reserves are based on an iodine price of US$47.5 per kilogram and a nitrate price of US$295 per ton. Mineral
Reserves are also based on economic viability as demonstrated in an after-tax discounted cashflow.
7. Marta Aguilera is the QP responsible for the Mineral Reserves.
8. The QP is not aware of any environmental, permitting, legal, title, taxation, socioeconomic, marketing, political or other
relevant factors that could materially affect the Mineral Reserve estimate that are not discussed in this TRS.
9. Comparisons of values may not total due to rounding of numbers and the differences caused by use of averaging methods.
Nueva Victoria—Summary of Mineral Resources Exclusive of Mineral Reserves at the End of the
Fiscal Year Ended December 31, 20221,2,3,4,5,6
Resources
Nitrate grade
Iodine grade
Amount
(Mt)
(% by
weight)
---
20
---
4.7
(Parts per
million(ppm))
Cut-off Grade5
---
415
Nitrate 3.0%, Iodine 300
ppm
Measured mineral resources
Indicated mineral resources
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Measured + Indicated mineral
resources
Inferred mineral resources
________________
20
31
4.7
6.5
415
343
1. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. There is no certainty that
all or any part of the Mineral Resource will be converted into Mineral Reserves upon the application of modifying factors.
2. Mineral Resources are reported as in-situ and exclusive of Mineral Reserves, where the estimated Mineral Reserve without
processing losses during the reported LoM was subtracted from the Mineral Resource inclusive of Mineral Reserves. All
Measured and Indicated Mineral Resources have been converted into Mineral Reserves; as a result, only Inferred Mineral
Resources are reported in this TRS.
3. Comparisons of values may not add due to rounding of numbers and the differences caused by use of averaging methods
4. The units “Mt”, “ppm” and % refer to million tonnes, parts per million, and weight percent respectively.
5. The Mineral Resource estimate considers a cut-off grade of 3% for nitrates and 300 ppm for iodine, based on accumulated
cut-off iodine grades and operational average grades, as well as caliche thickness ≥ 2.0 m and overburden thickness ≤ 1.0
m. The iodine cut-off grade considers the cost and medium- and long-term price forecasts of generating iodine as discussed
in Sections 11, 16 and 19 of the TRS.
6. Marta Aguilera is the QP responsible for the Mineral Resources.
Pampa Orcoma—Summary of Mineral Reserves at the End of the Fiscal Year Ended December
31, 202211,2,3,4,5,6,7,8
Amount
Nitrate grade
(MT)
(% by weight)
Iodine grade
(Parts per
million(ppm))
Cut-off grade1
Metallurgical
Recovery2
Proven mineral
reserves
--
--
Probable mineral
reserves
309
Total mineral reserves
309
6.9
6.9
_____________
---
413
413
Nitrate 3.0%, Iodine 300
ppm
50%-70%
1. Comparisons of values may not add due to rounding of numbers and the differences caused by use of averaging methods.
2. The units “Mt” and “ppm” refer to million tonnes and parts per million, respectively. The average overall metallurgical
recovery of the nitrate and iodine processes contained in the recovered material varies between 50% and 70%. Based on
SQM’s operational experience and the laboratory and full-scale tests carried out, a progressive increase, over time, in heap
leaching yield is expected, as irrigation application rates increase.
3. The Mineral Reserve estimate considers a cut-off grade of 300 ppm for iodine and 3.0% for nitrates, based on accumulated
cut-off iodine grades and operational average grades, as well as the cost and medium- and long-term prices forecast of
generating iodine.
4. Modifying factors of historical operational use in various of SQM’s mining facilities, are applied to iodine and nitrate
grades, the factors applied to iodine and nitrate grades are 0.9 and 0.85, respectively.
5. Mineral Resources in the area without an environmental permit are estimated at 18 Mt.
6. Mineral Reserves are reported as in-situ ore.
7. Marta Aguilera is the QP responsible for the Mineral Reserves.
8. The QP is not aware of any environmental, permitting, legal, title, taxation, socioeconomic, marketing, political or other
relevant factors that could materially affect the Mineral Reserve estimate that are not discussed in this TRS.
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Pampa Orcoma—Summary of Mineral Resources Exclusive of Mineral Reserves at the End of The
Fiscal Year Ended December 31, 20221,2,3,4,5,6
Resources
Nitrate grade
Iodine grade
Amount
(Mt)
(% by
weight)
(Parts per
million(ppm))
---
18
18
---
---
7.4
7.4
---
---
457
457
---
Cut-off grade1,2
Nitrate 3.0%, Iodine 300
ppm
Measured mineral resources
Indicated mineral resources
Measured + Indicated mineral
resources
Inferred mineral resources
________________
1. Mineral Resources are not Mineral Reserves and do not have demonstrated economic viability. There is no certainty that
all or any part of the Mineral Resource will be converted into Mineral Reserves upon the application of modifying factors.
2. Mineral Resources are reported as in-situ and exclusive of Mineral Reserves, where the estimated Mineral Reserve without
processing losses during the reported LOM was subtracted from the Mineral Resource inclusive of Mineral Reserves.
3. Comparisons of values may not add due to rounding of numbers and the differences caused by use of averaging methods.
4. The units “Mt” and “ppm” refers to million tonnes and parts per million, respectively.
5. The Mineral Resource estimate considers a cut-off grade of 300 ppm for iodine and 3.0% for nitrates, based on
accumulated cut-off iodine grades and operational average grades, as well as the cost and medium- and long-term prices
forecast for prilled iodine production.
6. Marta Aguilera is the QP responsible for the Mineral Resources.
The proven and probable reserves shown above are the result of the evaluation of approximately 19.0%
of the total caliche-related mining property of our Company. However, we have explored more intensely
the areas in which we believe there is a higher potential of finding high-grade caliche ore minerals. The
remaining 81.4% of this area has not been explored or has had limited reconnaissance, which is not
sufficient to determine the potential and hypothetical resources. In 2022, we did not carry out basic
reconnaissance of new mining properties. With respect to detailed explorations, in 2022, a campaign was
carried out to recategorize indicated resources equivalent to 5,250 hectares in the TEA Sur, Franja Oeste,
Hermosa, and Sector IV sectors of Pampa Blanca. An advanced exploration program is already designed
for 2023, aimed at covering an area of 11,170 hectares in Tente en el Aire, Pampa Orcoma, Franja Oeste
and Sector V of Pampa Blanca. The reserves shown in these tables are calculated based on properties
that are not involved in any legal disputes between SQM and other parties.
We maintain an ongoing program of exploration and resource evaluation on the land surrounding our
production mines, and other sites for which we have the appropriate concessions.
The information presented in the table with respect to the Nueva Victoria, Coya Sur and Pampa Orcoma
mines has been validated by Qualified Persons:
Ms. Marta Aguilera is a Geologist with more than 38 years of experience in the mining industry,
including technical and general management, short- and long-term operational planning, cost estimation
and analysis, resource estimation, geostatistics, surveys of feasibility and reserve audits. Project
experience includes involvement with industrial minerals in design, analysis, planning and operational
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control. Ms. Aguilera is a Qualified Person as defined in subpart 1300 of Regulation S-K and is registered
under No. 441 in the Public Registry of Qualified Persons in Mining Resources and Reserves, in
accordance with Law No. 20,235 that regulates the role of Qualified Persons and creates the Qualifying
Commission of Competences in Mining Resources and Reserves ("Law for Qualified Persons") and its
current regulation in Chile.
Mr. Lema is a Civil Mining Engineer with more than 30 years of experience in the field. Currently, he
works for SQM as Superintendent of Mining Resources and Planning. He has worked as a Mining
Engineer in Metallic and Non-Metallic deposits, with vast experience in the latter. Mr. Lema is a
Qualified Person, as defined in subpart 1300 of Regulation S-K and is registered under No. 375 in the
Qualified Persons in Mining Resources and Reserves in accordance with the Law for Qualified Persons
and its current regulation in Chile.
Mr. Gino Slanzi is a Civil Engineer. He is currently the General Manager for Inprotec SPA and Senior
Consultant for Pares & Alvarez. He has worked for more than 35 years in the development of
metallurgical mining projects, the optimization of production plants and on management models. He
visited the site in 2022. Mr. Slanzi is a Qualified Personas defined in subpart 1300 of Regulation S-K
and is registered under No.441 in the Public Registry of Qualified Persons in Mining Resources and
Reserves, in accordance with the Law for Qualified Persons in Chile.
Concesiones mineras para la exploración y explotación del mineral Caliche
We hold our mining rights for caliche ore pursuant to mining concessions for exploration and
exploitation of mining resources that have been granted pursuant to applicable law in Chile:
“Mining Exploitation Concessions”: entitle us to use the land in order to exploit the mineral resources
contained therein on a perpetual basis, subject to annual payments to the Chilean government; and
“Mining Exploration Concessions”: entitle us to use the land in order to explore for and verify the
existence of mineral resources for a period of two years, at the expiration of which the concession may
be extended one time only for two additional years, if the area covered by the concession is reduced by
half. We may alternatively request an exploitation concession in respect of the area covered by the
original exploration concession, which must be made within the timeframe established by the original
exploration concession.
A Mining Exploration Concession is generally obtained for purposes of evaluating the mineral resources
in a defined area. If the holder of the Mining Exploration Concession determines that the area does not
contain commercially exploitable mineral resources, the Mining Exploration Concession is usually
allowed to lapse. An application also can be made for a Mining Exploitation Concession without first
having obtained a Mining Exploration Concession for the area involved.
As of December 31, 2022, the surface area covered by Mining Exploitation Concessions that have been
granted in relation to the caliche resources of our mining sites is approximately 558,500 hectares. In
addition, as of December 31, 2022, the surface area covered by Mining Exploration Concessions in
relation to the caliche resources of our mining sites is approximately 400 hectares. We have not requested
additional mining rights.
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Properties and Facilities in the Salar de Atacama, Chile
The operations of SQM in the Salar de Atacama are located in the Antofagasta Region of Chile, which
covers the El Loa Province and the San Pedro de Atacama commune. The Salar de Atacama Project is
currently in operation for the treatment of brines to obtain lithium and potassium salts, and as such it is
in a production stage. The Salar de Atacama deposits are owned by the Corporación de Fomento de la
Producción (CORFO) of Chile, which grants special operating contracts or administrative leases to
private companies for the extraction of brine. SQM and Albemarle have a lease agreement with Corfo to
extract and produce lithium from brines stored in the Salar de Atacama deposit. Consequently, SQM
must follow the terms of the agreement and also the conditions established in numerous RCA’s in order
to retain operations in the Salar de Atacama. Exploration is routinely carried out within the established
areas.
SQM leases an area of about 1,400 square kilometers with permission to extract brines from an area of
820 square km with two core operations. It currently produces lithium at its southwest operation. The
lease was signed in 1993 and expires on December 31, 2030.
The closest cities are Calama and Antofagasta, located 160 and 230 kilometers west of the site,
respectively. From Calama, the road to the site is through Route R 23, and from Antofagasta, it is via
Route B 385.
SQM’s mineral resource in the Salar de Atacama is constituted by in-situ brine within a porous media,
and the resource estimate depends on the brine concentration, aquifer geometry, and drainable
interconnected pore volume. Within SQM’s concessions, the lithium and potassium resources were
estimated based on extensive exploration and many depth-specific samples from each unit.
The geology in the Salar de Atacama is characterized by Paleozoic to Holocene igneous and sedimentary
rocks, as well as recent unconsolidated clastic deposits and evaporitic sequences. The salt flat itself
resides in a tectonic basin of recent compressive-transpressive behavior and is bounded by high angle
reverse and strike-slip faults. The Salar de Atacama surface is constituted by recent evaporitic deposits,
where over time the process of evaporation has precipitated salts, and surficial clastic sediments are
found mainly along the salt flat margins. The salt crust is mainly composed of halite, sulfates, and
occasional organic matter, with alluvial facies in the peripheral zones. Evaporitic and clastic deposits
within the salt flat host brine with depth and are delimitated and cut by local fault systems; several
structural blocks have been identified due to recent fault displacement.
The salar system of the Salar de Atacama basin is typical of a mature salar, with a nucleus constituted
by a thick section of halite (>90%) with sulfate and a minor percentage of clastic sediments, as well as
some interbedded clay sediments and sulfates over a surface area of 1,100 square kilometers and down
to a depth of 900 meters. Within SQM’s concessions, mineralization includes lithium and potassium-
rich brine in porous media of distinct zones and depths of the Salar de Atacama nucleus.
Facilities
Our facilities at the Salar de Atacama are located 210 kilometers to the east of the city of Antofagasta
and 190 kilometers to the southeast of the city of María Elena. At this site we use brines extracted from
the salar to produce potassium chloride, potassium sulfate, and lithium chloride solutions, which are
subsequently sent to our lithium carbonate plant at the Carmen Lithium facility for processing. The main
production plants at this site include the solar evaporations ponds systems, the potassium chloride
flotation plants (MOP-H I and II), the potassium carnallite plants (PC I and PC I extension), the
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potassium sulfate flotation plant (SOP-H), the potassium chloride drying plant (Dual Plant or MOP-S),
the potassium chloride compacting plant (MOP-G3), the potassium sulfate drying plant (SOP-S) and the
potassium sulfate compacting plant (SOP-G). The energy used consists primarily of solar energy, as well
as electricity, fuel and gas sources.
The Carmen Lithium facility site is located approximately 20 kilometers east of Antofagasta. The
production plants at this facility include the lithium carbonate plant, with a production capacity of
180,000 tons per year, and the lithium hydroxide plant, with a production capacity of 30,000 tons per
year. Lithium chloride (LiCl) solution is concentrated and purified in the lithium chemical plants through
stages of contaminant removal (specifically boron, magnesium and calcium content) and conversion
reaction to produce: technical grade lithium carbonate; battery grade lithium carbonate; technical grade
lithium hydroxide; and battery grade lithium hydroxide. Electricity and natural gas are the main sources
of energy for the operations of our Carmen Lithium facility.
The following table provides a summary of our Salar de Atacama production facilities as of December
31, 2022:
Facility
Type of Facility
(hectares) (1)
Approximate
size
Nominal Production
Capacity
(thousands of metric
tons/year)
Weighted
Average
Age
(years) (2)
Gross Book
Value
(millions of US$)
(2)
Salar de Atacama
(3)
Potassium chloride,
potassium sulfate,
lithium chloride, and
boric acid production
Carmen Lithium
facility,
Antofagasta (3)
Lithium carbonate and
lithium hydroxide
production
________________
35,911
Potassium chloride:
2,680 Potassium sulfate:
245 Boric acid: 15
13.00
1,652.2
126
Lithium carbonate: 180
Lithium hydroxide: 30
5.59
661.2
(1) Approximate size considers both the production facilities and the mine for the Salar de Atacama. Mining areas are those
authorized for exploitation by the environmental authority and/or Sernageomin.
(2) Weighted average age and gross book value correspond to production facilities, excluding the mine, for the Salar de
Atacama.
(3) Includes production facilities and solar evaporation ponds. During 2019, we began to work on the expansion of discard
deposit area of the new lithium hydroxide plant and accumulation ponds.
We directly or indirectly through subsidiaries own, lease or hold concessions over the facilities at which
we carry out our operations. Such facilities are free of any material liens, pledges or encumbrances, and
we believe they are suitable and adequate for the business we conduct in them.
Extraction Yields
The following table shows certain operating data relating to each of our Salar de Atacama operations for
2022, 2021 and 2020:
(in thousands, unless otherwise stated)
2022
2021
2020
Salar de Atacama (1)
Metric tons of lithium carbonate produced
152.5
108.4
72.2
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Metric tons of potassium chloride and potassium sulfate and
potassium salts produced
984
1,407
1,476
________________
(1) Lithium carbonate is extracted at the Salar de Atacama and processed at our facilities at the Carmen Lithium facility
near Antofagasta. Potassium salts include synthetic sylvinite produced in the plant and other harvested potassium salts
(natural sylvinite, carnallites and harvests from plant ponds) that are sent to Coya Sur for the production of crystallized
nitrates.
Reserves and Resources
The mineral reserve was estimated for potassium and lithium dissolved in brines of the Salar de Atacama
considering modifying factors for converting mineral resources to mineral reserves, including the
production wellfield design and efficiency, pumping scheme, and recovery factors for lithium and
potassium. The projected future brine extraction was simulated using a groundwater flow and solute
transport model. Numerical modeling was supported by a detailed calibration process and
hydrogeological, geological, and hydrochemical data within the exploitation concessions. Based on the
current SQM production wellfield, as of December 31, 2022, which corresponds to the effective date of
mineral resource and reserve declaration that is most representative of 2022, we estimate that our proven
and probable reserves of lithium and potassium are as follows:
Salar de Atacama—Summary of Mineral Reserves, Considering Process Recoveries (Effective
December 31, 2022)1,2,3,4,5,6
Brine Volume
(Million cubic
meters)
Amount
(Million metric
tons)
Grades/Qualities
(wt.%)
Cut-off
Grades
(wt.%)
Metallurgical
Recovery (%)
Lithium
Proven mineral
reserves (Years 1-4)
Probable mineral
reserves (Years 5-8)
Total mineral
reserves
Potassium
Proven mineral
reserves (Years 1-4)
Probable mineral
reserves (Years 5-8)
Total mineral
reserves
________________
143
107
250
143
107
250
0.18
0.14
0.32
3.03
2.12
5.15
0.20
0.05
0.20
0.05
0.20
0.05
2.33
2.16
2.26
1.0
1.0
1.0
52
52
52
74
74
74
(1) The process efficiency is based on the type of extracted brine at each well over the course of the simulation, the average
process efficiency over the entire LoM is approximately 52% for lithium and approximately 74% for potassium.
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(2) The values in the “Amount” column correspond to contained metallic lithium (LME) and potassium.
(3) The average lithium and potassium concentration is weighted by the simulated extraction rates in each well
(4) Comparisons of values may not add due to rounding of numbers and the differences caused by averaging
(5) The mineral resource and reserve estimate considers a 0.05% w/w cut-off grade for lithium based on the cost of generating
lithium product, lithium carbonate sales, and the respective cost margin. Based on historical lithium prices from 2010 and
the forecast to 2040, a projected lithium carbonate price of US$15,000 per metric ton with the corresponding cost and
profit margin is considered with a small increase to accommodate the evaporation area and use of additives. A similar
analysis was undertaken for potassium where the cut-off grade of 1% w/w has been set by SQM based on respective costs,
sales, and margin.
(6) This reserve estimate considers the modifying factors of converting mineral resources to mineral reserves, including the
production wellfield design and efficiency, as well as environmental and process recovery factors. The reserve estimate
also considers the expiry of the Corfo Agreements in 2030 (end of LoM). The Qualified Persons for the Mineral Reserves
are Rodrigo Riquelme and Gino Slanzi.
Production well locations are based on the Measured and Indicated Resource zones. Due to the mixing
of brines over time, hydrogeological processes, and pumping effects, the mineral reserve was classified
based on time:
• Proven Reserves were specified for the first four years of the simulation given that the model is
adequately calibrated to the 2015 2020 period, and the initial portion of the projected simulation
has higher confidence due to less expected short-term changes in pumping, conceptual hydraulic
parameters, and the water balance, among other factors.
• Probable Reserves were conservatively assigned for the last four years of the simulation
considering that the numerical model will be continually improved and recalibrated in the future
due to potential medium to long term changes in neighboring pumping, conceptual hydraulic
parameters, and the water balance, among other factors.
Probable reserves and inferred resources are being continually explored in order to be able to reclassify
them as proven reserves and indicated or measured resources, respectively. This exploration includes
systematic packer testing, chemical brine sampling, and long-term pilot production pumping tests.
Complementing the reserve information, SQM has an environmental impact assessment (RCA 226/06)
which defines a maximum brine extraction until the end of the Corfo Agreements (December 31, 2030).
Considering the authorized maximum net brine production rates under RCA 226/06 and voluntary
reduction plan announced by SQM, which is characterized by a reduction in future pumping from 1,280
L/s to 822 L/s during the 8 year LoM, a total of approximately 250 million cubic meters of brine will be
extracted from the producing wells, corresponding to 0.32 million metric tons of lithium (considering
processing efficiencies).
The lithium and potassium resource were classified into three categories (Measured, Indicated, Inferred)
according to the amount of information from the hydrogeological units, as well as geostatistical criteria.
Hydrogeological knowledge was prioritized as the first classification criterion based on exploration,
monitoring, and historical production data, while geostatistical variables were used as a secondary
criterion. We estimate that our lithium and potassium resources as of December 31, 2020, which we also
consider as an adequate representation of December 31, 2022, are as follows:
Salar de Atacama—Summary of Mineral Resources, Exclusive of Mineral Reserves (Effective
December 31, 2022)1,2,3,4,5,6,7
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Brin Volume
Amount
(Million cubic
meters)
(Million metric
tons)
Grades/Qualities
(wt.%)
Cut-off Grades
(wt.%)
Lithium
Measured mineral resources
2,254
Indicated mineral resources
1,435
Measured + Indicated
mineral resources
3,689
Inferred mineral resources
1,614
Potassium
Measured mineral resources
2,254
Indicated mineral resources
1,435
Measured + Indicated
mineral resources
3,689
Inferred mineral resources
1,614
________________
5.4
2.8
8.2
2.6
49.8
30.0
79.8
34.9
0.20
0.16
0.18
0.13
1.80
1.70
1.77
1.77
0.05
0.05
0.05
0.05
1.0
1.0
1.0
1.0
(1) Mineral resources are not mineral reserves and do not have demonstrated economic viability. There is no certainty that all
or any part of the mineral resource will be converted into mineral reserves upon the application of modifying factors.
(2) Mineral resources are reported as in-situ and exclusive of mineral reserves, where the estimated mineral reserve without
processing losses during the reported LoM (A direct correlation between proven reserves and measured resources, as well
as probable reserves and indicated resources was assumed.
(3) Effective porosity was utilized to estimate the drainable brine volume based on the measurement techniques of the SQM
porosity laboratory (Gas Displacement Pycnometer). The QP considers that the high frequency sampling of effective
porosity, its large dataset, and general lack of material where specific retention can be dominant permits effective porosity
to be a reasonable parameter for the resource estimate.
(4) The values in the “Amount” column correspond to contained metallic lithium (LME) and potassium.
(5) Comparison of values may not add due to the rounding of numbers and differences caused by averaging.
(6) The mineral resource and reserve estimate considers a 0.05% w/w cut-off grade for lithium based on the cost of generating
lithium product, lithium carbonate sales, and the respective cost margin. Based on historical lithium prices from 2010 and
the forecast to 2040, a projected lithium carbonate price of US$15,000 per metric ton with the corresponding cost and
profit margin is considered with a small increase to accommodate the evaporation area and use of additives. A similar
analysis was undertaken for potassium where the cut-off grade of 1% w/w has been set by SQM based on respective costs,
sales, and margin.
(7) Andrés Fock is the QP responsible for the Mineral Resources.
In regard to the amount of Measured and Indicated resources extracted during the 8 year LoM, the total
extracted reserve without processing losses represents only 8.9% of the total Measured + Indicated
Resource, and for potassium, the total extracted reserve without processing losses represents only 10.5%
of the total Measured + Indicated Resource; this is more than sufficient to satisfy the requirements of
RCA 226/06 and the Voluntary Extraction Reduction Plan for the project until the end of the current
LoM.
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The information presented in the tables above for Salar de Atacama were validated by:
Mr. Andrés Fock is a Geologist with a masters in geology and more than 18 years of experience in the
field of project evaluation, resource estimation, exploration and geostatsticas for different commodities
such as lithium, potassium, nitrates, copper and rare earth elements. Since 2019, Mr. Fock is a Qualified
Personas defined in subpart 1300 of Regulation S-K and is registered under No. 0388 in the Public
Registry of Qualified Persons in Mining Resources and Reserves, in accordance with the Law for
Qualified Persons and its current regulation in Chile. As a Geologist, he has evaluated multiple lithium
brine and lithium-bearing pegmatite projects. Mr. Fock acted as project manager during the preparation
of the TRS for the Mt. Holland Project. Mr. Fock is an employee of SQM.
Mr. Rodrigo Riquelme Tapia is a Mining Engineer. He is currently partner and General Manager of
GeoInnova, located at Antonio Bellet 444, Of. 1301, Providencia, Metropolitan Region, Chile. He has
worked as a mining engineer for more than 23 years after graduation, of which 17 have been focused on
resource and reserve estimation topics. Mr. Riquelme has been an external consultant for SQM since
2018, and visited the site in 2019. Mr. Riquelme is a Qualified Person as defined in subpart 1300 of
Regulation S-K and is registered under No. 50 in the Public Registry of Qualified Persons in Mining
Resources and Reserves, in accordance with the Law for Qualified Persons and its current regulation in
Chile.
Mr. Gino Slanzi is a Civil Engineer. He is currently the General Manager for Inprotec SPA and Senior
Consultant for Pares & Alvarez. Mr. Slanzi is a Qualified Person as defined in subpart 1300 of Regulation
S-K and is registered under No. 441 in the Public Registry of Qualified Persons in Mining Resources
and Reserves, in accordance with the Law for Qualified Persons and its current regulation in Chile. He
has worked for more than 35 years in the development of metallurgical mining projects, the optimization
of production plants, and on management models. He visited the site in 2021.
Mining Concessions for the Exploitation of Brines at the Salar de Atacama
As of December 31, 2022, our subsidiary SQM Salar held exclusive rights to exploit the mineral
resources in an area covering approximately 140,000 hectares of land in the Salar de Atacama in northern
Chile, of which SQM Salar is only entitled to exploit the mineral resources in 81,920 hectares. These
rights are owned by Corfo and leased to SQM Salar pursuant to the Corfo Agreements. Corfo cannot
unilaterally amend the Corfo Agreements, and the rights to exploit the resources cannot be transferred.
The Corfo Agreements provides for SQM Salar to (i) make quarterly lease payments to Corfo based on
product sales from leased mining properties and annual contributions to research and development, to
local communities, to the Antofagasta Regional Government and to the municipalities of San Pedro de
Atacama, María Elena and Antofagasta, (ii) maintain Corfo’s rights over the Mining Exploitation
Concessions and (iii) make annual payments to the Chilean government for such concession rights. The
Corfo Agreements were entered into in 1993 and expire on December 31, 2030.
Under the terms of the Corfo Agreements, Corfo has agreed that it will not permit any other person to
explore, exploit or mine any mineral resources in the approximately 140,000 hectares area of the Salar
de Atacama mentioned above.
SQM Salar holds an additional 241,867 hectares of constituted Mining Exploitation Concessions in areas
near the Salar de Atacama, which correspond to mining reserves that have not been exploited. SQM
Salar also holds Mining Exploitation Concessions that are in the process of being granted covering 3,001
hectares in areas near the Salar de Atacama.
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In addition, as of December 31, 2022, SQM Salar held Mining Exploration Concessions covering
approximately 9,100 hectares and has not applied for additional Mining Exploration Concessions.
Exploration rights are valid for a period of two years, after which we can (i) request a Mining Exploitation
Concession for the land, (ii) request an extension of the Mining Exploration Concession for an additional
two years (the extension only applies to a reduced surface area equal to 50% of the initial area) or (iii)
allow the concession to expire.
According to the terms of the Corfo Agreements, with respect to lithium production, the Chilean
Comission on Nuclear Energy (CCHEN) established a total accumulated extraction limit set as amended
by the Corfo Arbitration Agreement in January 2018, up to 349,553 metric tons of lithium metallic
equivalent (1,860,670 tons of lithium carbonate equivalent), which is in addition to the approximately
64,816 metric tons of lithium metallic equivalent (345,015 tons of lithium carbonate equivalent)
remaining from the originally authorized amount in the aggregate for all periods while the Corfo
Agreements are in force. As of December 31, 2022, only 8 years remain on the term of the Corfo
Agreements.
The environmental permit Resolución de Calificación Ambiental (RCA No. 226/2006, issued on October
19th, 2006, by COREMA (Comisión Regional del Medio Ambiente or Regional Environmental
Commission) authorizes SQM to extract brines via pumping wells from two areas in the western and
southwestern portions of the areas defined in the Corfo Agreements. SQM refers to these brine extraction
areas as AAE zones (Áreas Autorizadas para la Extracción or Authorized Areas of Extraction), and they
are further divided based on the products historically generated in each sector: (i) The northern portion
is denominated the AAE-SOP, where “SOP” signifies sulfato de potasio (potassium sulfate product), and
it covers a surface area of 10,512 hectares which is equivalent to 29.27% of the total AAE area; (ii) the
southern portion is referred to as AAE-MOP, where “MOP” indicates muriato de potasio (potassium
chloride product), covering a surface area of 25,399 hectares that is equivalent to 70.73% of the total
AAE area.
SQM routinely carries out exploration activities within the areas involved in the Corfo Agreements and
authorized by the Environmental Permits. These are aimed at maintaining the number of wells needed
for production.
The water that SQM uses for its mineral production in the Salar de Atacama is obtained from wells
located in the alluvial aquifer on the eastern edge of the Salar de Atacama, for which the company has
rights to use groundwater as well as the corresponding environmental authorization (RCA No.
226/2006). As part of the voluntary sustainability commitment assumed by SQM in 2020, the company
will reduce its water consumption by up to 50% in 2030.
SQM’s operations are subject to certain risk factors that may affect the business, financial conditions,
cash flow, or SQM’s operational results, such as: the potential inability to extend or renew mineral
exploitation rights in the Salar de Atacama beyond the defined expiration date (December 31, 2030) in
the Corfo Agreements; risks related to being a company based in Chile; potential political risks as well
as changes to the Chilean Constitution and legislation may affect development plans, production levels,
and costs; and risks related to financial markets.
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Mt. Holland Lithium Project, Australia
Facilities
The Mount Holland project is an integrated lithium project in Western Australia consisting of (i) an open
pit mine and lithium concentrator operation, at Mount Holland, 120 km southeast of Southern Cross, and
(ii) a lithium hydroxide (LiOH) refinery located in the Town of Kwinana, 26.5 km from the port of
Fremantle, from where the LiOH will be shipped.
The project is an unincorporated joint venture in which SQM owns 50% and Wesfarmers Limited,
through a wholly owned subsidiary, owns the remaining 50% and is managed by Covalent Lithium Pty
Ltd, an entity owned 50% by SQM and 50% by Wesfarmers.
The project is accessed by land using the Parker Range Road and Marvel Loch-Forrestania road, which
are an all-season gravel road. The Parker Range road is connected to the Great Eastern Highway which
is a paved road with connectivity to Southern Cross, Kalgoorlie and Perth. Also, the project has its own
access by air using an airstrip and infrastructure in the southern part of the mine.
On September 11, 2017, Kidman Resources Limited (Kidman) and SQM entered into an asset sale
agreement, pursuant to which SQM acquired its interest in the tenements for a total investment of SQM
of US$110 million, consisting of an initial payment of US$25 million and a deferred payment of US$85
million, both payments subject to certain preceding conditions. All payments were completed by
December 2018. In the asset sale agreement, the parties also agreed to form an unincorporated joint
venture to mine and process spodumene ore into spodumene concentrate or lithium hydroxide. The Mt.
Holland JV was established by the unincorporated joint venture agreement dated December 21, 2017,
between SQM Australia and MH Gold, a then wholly owned subsidiary of Kidman Resources Limited
(Kidman). Wesfarmers acquired Kidman Resources Limited in 2019, which resulted in Wesfarmers
taking over Kidman Resources’ interest in the Mt Holland JV on September 23, 2019.
SQM and Wesfarmers announced a positive investment decision in February 2021 following the
completion of a feasibility study by Covalent. The Mt. Holland project is currently in development stage.
Most construction contracts have been awarded and are underway, including the mining contract, the
concentrator plant engineering and construction contract and the refinery construction contracts.
The Mt. Holland project is focused on the exploitation of the resource in the Earl Grey pegmatite group.
The Earl Grey pegmatite group consists of a main tabular pegmatite body, flanked by numerous minor
dikes at both its top and bottom. The pegmatite field covers an area of up to 1 x 2 square km and a
thickness of up to 100 meters. The pegmatites become progressively narrower and branched to the south
and east of the main pegmatite until the main body divides into several narrower dikes. Isolated box rock
enclaves are sporadically found within the pegmatite body.
The pegmatites have an approximate strike of 210° to 220° and dip of 5° to 15° to the northwest. At their
western margin, the pegmatites appear to be affected by gentle folding. The dip of the pegmatites is
variable, with the pegmatite steepening from sub-horizontal in the south to 10° to 15° to the northwest
north of the Earl Grey gold pit.
Extensive exploration supports the characterization of the Earl Grey pegmatite, as the resource and
reserve estimation, and it is comprised of surface mapping and extensive subsurface drilling carried out
on the property in consideration that the pegmatite is not outcropping in the area. Exploration has
predominantly been carried out by Kidman Resources since 2016, for the discovery and resource
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definition. Since 2020, Covalent has conducted additional diamond drilling for metallurgical sampling,
grade control drilling campaigns and improvement definition of the orebody geometry in the proposed
starter pit area.
Most of the exploration holes present at Earl Grey have been drilled using standard reverse circulation
(RC) drilling techniques. Diamond drilling comprises boreholes with diameters of 47.6mm, 50.5mm,
63.5mm and 85mm, which are drilled for geological, metallurgical and geotechnical purposes.
Recoveries for RC drilling range from 70-90% in this geological/geomorphological setting. The
recoveries for diamond drilling are in the order of 95-100%. Recoveries diminish where shear zones or
other structural disturbances have been crossed. The orientation of the boreholes is at relatively sharp
angles (less than 90º) and, therefore, the intersected length is not considered as a representation of the
true thickness of the pegmatite; its real thickness is determined through geological models.
Resource drilling was initially conducted on broad exploration grids to determine the extent of
mineralization. This was followed by a drill program on a 50 by 50 meter grid to support the resource
estimate. Through the development of the Project in 2020, the first stages of the open pit were defined
and the drilling program was designed for grade control based on higher density and geostatistical
criteria. This information provides the design of the mine during the initial years of commissioning and
supports the current definition of resources and reserves.
Reserves and Resources
Mt. Holland—Summary of Mineral Reserves at the End of the Fiscal Year Ended December 31,
20221
Amount
Grades/Qualities
Cut-off
Grade
Metallurgical Recovery
Total MT
SQM
Attributable MT
Li2O%
Li2O%
%
Proven mineral
reserves
Probable mineral
reserves
21.5
10.8
62.4
31.2
Total mineral reserves
83.9
42.0
________________
1.48
1.60
1.57
0.5
0.5
0.5
75% Concentrator: 85%
Refinery
75% Concentrator: 85%
Refinery
75% Concentrator: 85%
Refinery
1. Mineral reserve tonnage and grade have been rounded to reflect the accuracy of the estimate, and numbers may not
add due to rounding. Metallurgical processes are designed for a nominal 2Mpta ore feed. Process recovery to
concentrate is estimated at 75% for lithium oxide for predominantly spodumene mineralization and 0% for other
mineralization types. Refinery process recovery is estimated at 85%. Tantalum recovery is estimated at 0%. A total
operating cost of US$4,979 for LiOH production was considered in the reserve evaluation. The price, cost, and mass
yield parameters, along with the internal constraints of the current operations, result in mineral reserves cut-off grade
of 0.5% lithium oxide based on a selling lithium hydroxide price of US$ 11,000 per ton. David Billington is the QP
responsible for the mineral reserves estimate with an effective date: December 15, 2021. No material changes since
that date
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Mt. Holland—Summary of Mineral Resources Exclusive of Mineral Reserves at the End of the
Fiscal Year Ended December 31, 20221
Resources
Amount
Grades/Qualities
Cut-off
Grade
Metallurgical
Recovery
Total
MT
SQM
Attributable MT
Li2O %
Li2O %
Measured Mineral Resources
Indicated Mineral Resources
Measured + Indicated Mineral
Resources
27.0
61.0
88.0
Inferred Mineral Resources
7.0
________________
13.5
30.5
44.0
3.5
1.58
1.45
1.49
1.38
0.5
0.5
0.5
0.5
%
75%
75%
75%
75%
1. Mineral resource tonnage and contained metal have been rounded to reflect the accuracy of the estimate, and numbers
may not add due to rounding. Mineral resources are reported exclusive of mineral reserves. Mineral resources are not
mineral reserves and do not have demonstrated economic viability. Resources have been reported as in situ (hard rock
within optimized pit shell). Pit optimization and economics for derivation of cut-off grade include mine gate pricing of
US$ 800 per ton of 6% Li2O concentrate, AU$19 per bcm mining cost (LoM average cost-variable by depth), AU$65
processing cost per ton. Mining dilution set at 5% and recovery at 95%. Royalty fees 5%. The optimization considered
for the concentrator is 75%. Costs estimated in Australian Dollars were converted to US Dollars based on an exchange
rate of 0.75AU$:1.00US$. These economics define a cut-off grade of 0.50% lithium oxide. Kerry Griffin is the QP
responsible for the mineral resource estimate with an effective date: October 6, 2021. No material changes since that date.
Mt. Holland—Summary of Mineral Resources Inclusive of Mineral Reserves at the End of the
Fiscal Year Ended December 31, 20221
Resources
Amount
Grades/Qualities
Cut-off
Grade
Metallurgical
Recovery
Total MT
SQM
Attributable MT
Li2O%
Li2O%
Measured Mineral Resources
71.0
Indicated Mineral Resources
107.0
Measured + Indicated Mineral
Resources
178.0
Inferred Mineral Resources
8.0
________________
35.5
53.5
89.0
4.0
1.57
1.51
1.54
1.44
0.5
0.5
0.5
0.5
%
75%
75%
75%
75%
1. Mineral resource tonnage and contained metal have been rounded to reflect the accuracy of the estimate, and numbers
may not add due to rounding. Mineral resources are reported inclusive of mineral reserves. Mineral resources are not
mineral reserves and do not have demonstrated economic viability. Resources have been reported as in situ (hard rock
within optimized pit shell). Pit optimization and economics for derivation of cut-off grade include mine gate pricing of
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US$ 800 per ton of 6% Li2O concentrate, AU$19 per bcm mining cost (LoM average cost-variable by depth), AU$65
processing cost per ton. Mining dilution set at 5% and recovery at 95%. Royalty fees 5%. The optimization considered
for the concentrator is 75%. Costs estimated in Australian Dollars were converted to US Dollars based on an exchange
rate of 0.75AU$:1.00US$. These economics define a cut-off grade of 0.50% Li2O. Kerry Griffin is the QP responsible
for the mineral resource estimate with an effective date: October 6, 2021. No material changes since that date.
Mining Rights
The Mt. Holland lithium project development envelope for the Mine and Concentrator is spread across
three core mining tenements (M77/1065, M77/1066 and M77/1080), as well as exploration licenses,
general purpose licenses and miscellaneous licenses (Project Tenements), covering an approximate area
of 4,606 hectares.
The majority of the project properties are currently registered in equal parts to MH Gold, an affiliate of
Wesfarmers Limited, and SQM Australia, an affiliate of SQM. Other exploration rights in the Mt.
Holland project are held by MH Gold Pty Ltd or Montague Resources Australia Pty Ltd, both of which
are ultimately controlled by Wesfarmers Chemicals, Energy and Fertilizers (WesCEF). The project is a
joint venture, in which SQM owns 50% and Wesfarmers Limited owns the remaining 50% (the “Mt.
Holland Joint Venture”), and is managed by Covalent Lithium Pty Ltd (“Covalent”), a entity owned 50%
by SQM and 50% by Wesfarmers. Covalent is neither the registered owner nor the applicant of the
project properties under the Mining Act 1978 (WA) (Mining Act).
The information presented in the following table (Mt. Holland project) has been validated by the
following Qualified Persons:
Mr. David Billington is a mining engineer with a BE in Mining, he has over 35 years of experience in
mine planning, mine operations and management and project evaluation and consulting, for different
commodities (Li, Ta, Sn, Fe2O3, Au, Cu, REE). As a mining engineer, he has worked at pegmatite
projects producing Lithium for 10 years and evaluated multiple lithium pegmatite projects. He is a
member of the Australasian Institute of Mining and Metallurgy (AUSIMM), 109676. He meets the
experience criteria as competent person for Ore Reserves is style of mineralization as set out by the
AUSIMM’s Joint Ore Reserve Committee (JORC). He is a Qualified Person as defined by subpart 1300
of Regulation S-K. Mr. Billington is an employee of Covalent Lithium, a joint venture between SQM
and Wesfarmers Ltd. He is responsible for the reserve estimation for the Mt. Holland lithium project.
Mr. Kerry Griffin is a qualified Geologist and has over 28 years of extensive hands-on experience in
mine geology, mine development and management, designing and managing large scale exploration and
resource drilling programs, resource modelling and estimation, the management and training of
geological/technical teams in Australia, Africa, South/Central America, Central and SE Asia including
more than 22 years in senior or management positions. His experience in lithium pegmatites includes
exploration, resource development and mining in Australia, Southern Africa, and South America and as
such, Mr. Griffin meets the experience criteria as a competent person for Ore Resources in this style of
mineralization as set out by the AUSIMM’s Joint Ore Reserve Committee (JORC). He is a Qualified
Person as defined by subpart 1300 of Regulation S-K. He is a current member of the Australian Institute
of Geoscientists (3521) and the Society of Economic Geology. Mr. Griffin was employed by Mining
Plus Ltd when the resource estimates were calculated. He is currently employed by Global Commodity
Solutions. He is responsible for the resource estimation for the Mt. Holland Lithium Project.
Mr. Andrés Fock is a Geologist and MSC in Geology, with 18 years of experience in project evaluation,
resource estimation, exploration and geostatistics, for different commodities such as lithium, potassium,
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nitrates, copper and rare earth elements. Since 2019, he is a Qualified Person as defined in subpart 1300
of Regulation S-K and is registered with No. 0388 in the Public Registry of Qualified Persons in Mining
Resources and Reserves, in accordance with the Law for Qualified Persons and its current regulation in
Chile. As a geologist, he has evaluated multiple lithium brine and lithium bearing pegmatite projects.
Mr. Fock acted as project manager during preparation of the Technical Report Summary for the Mt.
Holland Project. Mr. Fock is an employee of SQM.
Transportation and Storage Facilities in Chile
The transportation of our products is carried out by trucks that are operated by dedicated third parties
through long-term contracts. Furthermore, we own port and storage facilities for the transportation and
management of finished products and consumable materials.
Our main centers for the production and storage of raw materials are the Nueva Victoria, Coya Sur and
Salar de Atacama facilities. Other facilities include chemical plants for the finished products of lithium
carbonate and lithium hydroxide at the Carmen Lithium facility. The Port of Tocopilla terminal, which
we own, is the principal facility for the storage and shipment of our bulk products and packaged
potassium chloride (MOP), nitrates and lithium carbonate.
The Port of Tocopilla terminal facilities cover approximately 22 hectares and are located approximately
186 kilometers north of Antofagasta, approximately 124 kilometers west of María Elena and Coya Sur
and 372 kilometers to the west of Salar de Atacama. Our affiliate, Servicios Integrales de Tránsitos y
Transferencias S.A. (SIT), operates facilities for the shipment of products and the delivery of certain raw
materials based on renewable concessions granted by Chilean regulatory authorities, provided that the
facilities are used in accordance with the authorization granted and we pay an annual concession fee.
The terminal facilities of the Port of Tocopilla have a weighted average age of 13.8 years and a gross
book value of approximately US$148.9 million. The facilities include a truck weighing machine that
confirms product entry into the port and transfers the product to distinct storage zones, a piezometer
within the shipping system to carry out bulk product loaded onto ships, a crane with a 40 ton capacity
for the loading of sealed product onto ships and a nitrate mixing facility.
The storage facilities consist of a system of six silos, with a total storage capacity of 55,000 metric tons,
and a mixed storage area of open and covered storehouses with a total storage capacity of approximately
250,000 metric tons. In addition, to fulfill future storage needs, we will continue to make investments in
accordance with the investment plan outlined by management. The products are also put into bags at the
Port of Tocopilla terminal facilities where the bagging capacity is established by two bag packaging
machines, one for sacks and polypropylene FIBC big bags and one for FFS polyethylene. The products
that are packaged in Tocopilla may be subsequently shipped at the same port or may also be consolidated
into trucks or containers for its subsequent dispatch to clients by land or sea through containers from
other ports, principally located in Antofagasta, Mejillones and Iquique.
For the transportation of bulk product, the transportation belt system extends across the coastline to
deliver products directly to the hatches of bulk cargo ships. The nominal load capacity of this shipping
system is 1,200 tons per hour. The transportation of packaged product is carried out utilizing the same
bulk cargo ships using barges without motors located in the dock and loaded by a crane with a 40 ton
capacity from the Port of Tocopilla terminal. Thereafter, they are towed and unloaded using ship cranes
to the respective warehouses.
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We normally contract bulk cargo ships to transfer the product from the Port of Tocopilla terminal to our
hubs around the world or to clients directly, who, in certain instances, use their own contracted vessels
for delivery.
Tocopilla processes related to the reception, handling, storage and shipment of bulk/packaged nitrates
produced at Coya Sur are certified by the third-party organization TÜV-Rheinland under the quality
standard ISO 9001:2015.
6.5 SUBSIDIARIES AND ASSOCIATES
Information on SQM's main subsidiaries and associates is presented in detail in Annex 2.
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126
7. SUPPLIERS MANAGEMENT
7.1 PAYMENT TO SUPPLIERS
There are corporate procedures in place that address the payment of suppliers; for example, with respect
to the payment of purchase orders, they state that payment must be made within 30 days, unless a
different period is expressly established. In any case, our policy is to guarantee timely payment to our
suppliers of goods and services. On average, payment is made 45 days after the supplier submits its
invoice and it is received by SQM.
Payment dates are calculated from the date on which the invoice arrives at SQM, duly drawn up and with
the requested attachments. In the event of omission or error of any information in the invoice,
modifications and the issue of a credit note for the total amount of the invoice to be corrected will be
required, and partial credit notes will not be accepted. As a result, time limits are interrupted until the
new, correctly prepared invoice is submitted.
This is counted from the date of receipt of the invoice or the date of receipt of the goods by SQM,
whichever is later. Invoices include the payment conditions stipulated in the respective agreements and
purchase orders, as well as any early payment discounts in effect at the date of issuance.
Currently, payment dates do not distinguish between critical and non-critical suppliers. Besides, we do
not categorize them in this way; however, we have a list of strategic suppliers, based on which we are
preparing an action plan to mitigate risks according to their critical variables, where we could review,
according to their criticality, whether it makes sense to set special deadlines for any of these suppliers.
In view of the above, we are working on an internal definition to segregate critical and non-critical
suppliers.
For foreign suppliers, a condition is generally used that establishes that payment will be made within the
terms agreed with the supplier, which, depending on the particular case, may be more or less than the
term specified in the procedure. By process, import purchases are supported by an advance payment and
then the outstanding balance is paid against the bill of lading, which takes an average of 15 days.
For those national or international suppliers with whom SQM has a stronger commercial relationship,
payments are allowed once the goods are received at our warehouses or points of destination.
At the company level, we do not have a calendar day target; however, we promote good practices for
timely payments, respecting good faith negotiations between both parties based on corporate procedure.
For this reason, our operations in northern Chile have set a medium-term target that, in general, all
payments should be made no later than 30 days from the submission of the invoice.
As a good practice, to encourage the development of local suppliers (Tarapacá Region and Antofagasta
Region), we have defined cash payments for them. This same criterion has been applied to those service
providers that we have preliminarily categorized as critical, regardless of their place of residence.
To achieve these goals and in line with our Sustainability policy, we request and control that our service
providers keep updated and certify compliance with their labor obligations through an external certifying
company, validated for this purpose.
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127
It should be noted that in November 2022 we implemented and informed all our suppliers that the
ARTIKOS "Supplier Portal Service" (https://art-p-ptk.artikos.cl/SIAS/web_SQM/HomeProv.asp#) is
available at no cost, so that they can check the status of their invoices and consistently monitor the status
of each Electronic Tax Document (ETD) online.
We have no interest amounts in arrears nor do we have any agreements registered in the Registry of
Agreements with Exceptional Payment Periods of the Ministry of Economy.
Payment to Suppliers 2022
Type of Supplier
N° of Paid Invoices
Total amount in MM$
N° of Suppliers
Nacional
Foreign
Total
Nacional
Foreign
Total
Nacional
Foreign
Total
7.2 EVALUATION OF SUPPLIERS
Tramo de Días Calendario
Hasta 30 días
95,248
31,061
126,309
1,542,595
794,052
2,336,647
2,953
2,372
5,325
Entre 31 y 60 días Más de 60 días
91
243
369
1,933
460
2,176
418
1,165
11,858
38,949
12,276
40,114
27
12
203
452
215
479
At SQM we are aware that, as a multinational company with operations around the world, we have the
responsibility to respect human rights and our commitments established in the Company's Sustainability,
Ethics, and Human Rights Policy, even beyond what the law requires us to do, which is the minimum
standard for our actions.
Throughout our history, we have worked to improve (i) the quality of our production, (ii) fair treatment,
(iii) environmental protection, and (iv) unrestricted respect for human rights, adhering to the highest
international standards. We have formally adhered to the UN Guiding Principles on Business and Human
Rights and the "protect, respect, and remedy" framework they enshrine, adopting them as our own. We
seek to extend this commitment to human rights throughout our supply chain to ensure responsible
sourcing.
Therefore, in April 2022 we introduced our Responsible Sourcing Policy, which is based on the
Sustainability, Ethics, and Human Rights Policy and provides a framework for application in our supply
chain.
We expect all suppliers with whom we engage to comply with applicable laws and regulations and to
share our sustainability commitments in their own businesses. We urge all suppliers that provide services
to SQM, including for inputs, services, consultancies, intermediaries, among others, to:
• Respect the human rights of their workers
• Care for the environment
• Protect health and safety
• Prioritize ethics and integrity in their businesses
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• Promote fair treatment of their own employees
To this end, in concrete terms we seek to ensure at least that they:
• Enforce compliance with our Code of Ethics.
• Know and understand our policies
• Conduct a sustainability self-assessment on an annual basis.
• Commit to provide further information if requested and/or participate in additional validation.
• Apply corrective actions if necessary.
In our Responsible Sourcing Policy we have defined that there are certain risks along the supply chain
which, if they occur, imply a substantial breach of the Policy, but also of SQM's other corporate policies.
A substantial breach is defined as incurring in a serious violation of human rights or engaging in
intolerable conduct that represents a threat to the rule of law or human rights. In these situations, SQM
may suspend or terminate the commercial relationship with the supplier that has incurred in such conduct.
We are aware that, throughout the mining supply chain, as well as in the transportation and trade of
minerals, there is a greater susceptibility to certain abuses that constitute serious human rights violations,
which companies must avoid and commit to eradicate. In this sense, the following are considered a
serious violation of human rights:
•
Incurring in any form of child labor as defined in Convention No. 182 of the International Labor
Organization (ILO), ratified by Chile in 2000.
• Adopting or tolerating practices of forced labor or any other type of modern slavery, including
work under threat and any work for which the individual has not volunteered.
• Any form of torture or cruel, inhuman, or degrading treatment.
• Other abusive treatment, such as widespread sexual violence and other serious human rights
violations.
• Committing or participating in the commission of war crimes or other serious violations of
international humanitarian law, crimes against humanity, or genocide.
Likewise, understanding that mining activities such as those carried out by SQM present risks of possible
involvement of non-state armed groups along the supply chain, which represent a threat to the rule of
law and human rights, SQM will not tolerate any kind of direct or indirect support to these non-state
armed groups. Direct or indirect support may include, but is not limited to, obtaining minerals, making
payments, providing logistical assistance or equipment, performing acts or contracts on their behalf,
among others.
In this sense, the following are considered intolerable behaviors:
• Directly or indirectly supporting non-state armed groups that illegally control work sites and
operations, or that in any other way exercise control over transportation routes or mineral
commercialization points.
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• Directly or indirectly supporting non-state armed groups that illegally collect taxes or extort at
access points to work sites or operations along transport routes or at points where minerals are
commercialized.
• Directly or indirectly supporting non-state armed groups that extort money from intermediaries,
exporters, or international traders.
In turn, in order to verify what is set forth in our policies, we have developed a supplier evaluation
mechanism that considers 6 categories:
Human
Rights
Corporate
Social
Responsability
Businness
Ethics
Quality
Management
Occupational
Safety and
Health
Environment
During the first evaluation, 18 suppliers considered to be strategic for our operations were invited to
evaluate the dynamics of the self-evaluation, suppliers' response time and levels, as well as SQM's
response dynamics and certificate delivery deadlines, in order to adjust the tool to reality.
Supplier Evaluation
N° of Prospective Suppliers to Analyze1
N° of Evaluated Suppliers
% of Evaluated Suppliers
Total Purchases from Suppliers (MM$)
Total Purchases from Evaluated Suppliers (MM$)
% of Purchases from Evaluated Suppliers
1 N° of suppliers that had been analyzed during the period
Tipo de
Proveedor
National
Foreign
Total
National
Foreign
Total
National
Foreign
Total
National
Foreign
Total
National
Foreign
Total
National
Foreign
Total
2022
10
8
18
10
8
18
100%
100%
100%
1,544,178
844,859
2.389.037
161.151
74.935
236.086
10%
9%
10%
In our evaluation methodology, we classified our suppliers into 5 categories depending on their
compliance with the abovementioned criteria. Thus, an "A" rating corresponds to compliance with over
80% of SQM's expectations, "B" between 60–80%, "C" between 40–60%, "D" between 20–40%, and
"E" between 0–20%.
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The results show that the global average corresponds to a score of 83.7%, with the highest category
corresponding to business ethics, while the lowest was environment and corporate social responsibility,
in which 14 of the 18 suppliers were rated A, while 4 were rated B.
This gives us a baseline to continue advancing in sustainability by working directly with our suppliers
to further align our criteria as established in the program.
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8. INDICATORS
8.1 LEGAL AND REGULATORY COMPLIANCE
Relating to customers
Law 19.496 on the Protection of the Rights of Consumers does not apply to the lines of business of SQM
and its subsidiaries in Chile, provided that products are not sold to final consumers. Notwithstanding the
above, the Company has procedures to ensure that the products it makes and sells meet all current
regulatory provisions in the countries it operates in, and respects each of the aspects described in Chapter
6.1, Legal and Regulatory Framework.
In this context, in 2022 the Company received no fines related to customers in any of its lines of business.
Relating to employees
To prevent and detect regulatory infractions related to employee rights, SQM has the following
procedures in place:
•
Internal Order, Health and Safety Rules
• Procedure for the “Identification, merging and verification of the SGIGC regulatory framework”
• Procedure for the “Identification of legal requirements applicable to occupational health and safety"
• Legal notifications on regulatory changes reported by the Vice President of Legal Affairs to company
divisions;
• Procedures for the prevention, detection, reporting and follow up on workplace and sexual harassment
• Procedure for handling complaints related to inequity and/or discrimination.
In 2022, SQM’s companies were subject to six administrative penalties (fines) issued by the Labor
Bureau (Dirección del Trabajo), two of which were lodged in 2021 and 2019, but paid in 2022. The total
amount of these fines was $23,219,352 Chilean pesos.
Also in 2022, SQM companies were named in 40 lawsuits regarding tutela de derechos (seeking
protection of basic rights), 19 of which were brought by direct employees of SQM and 21 from
subcontracted workers; 25 of the suits were terminated and 15 are still in process.
Relating to the environment
Environmental protection, respect for human rights and overall impact on sustainability are ongoing
concerns of the Company, both in its productive processes and throughout the supply chain. This
commitment is backed by the principles the Company has set out in its Policy on Sustainable
Development, Ethics and Human Rights.
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The Company operates under an Environmental Management System (SGA in Spanish), enabling it to
continuously improve its environmental performance by effectively applying its Sustainable
Development Policy. To do so, different divisions have individuals responsible for environmental
management, including managers, assistant managers, superintendents, supervisors and environmental
analysts. These individuals are responsible for day-to-day environmental management in the different
operations where we are present. SQM also has two programs focused on compliance with current
environmental legislation, one for Nueva Victoria and the other for Salar de Atacama, and we also
manage our environmental risk matrices, continuously monitoring and managing the risks described in
them.
In all of its operations, the Company has developed environmental monitoring and follow up plans based
on expert scientific studies. Following up on relevant variables defined for each project enables the
Company to verify, for example, the status of vegetation, flora, fauna and aquatic life in ecosystems
under protection. These follow-up plans are supported by a broad control network that includes
monitoring points such as meteorological stations and wells, satellite images, plots for recording the
status of vegetation and fauna and others. The activities carried out under these plans are reported
regularly to the authorities, in accordance with the Company’s commitments under the resolutions
approving SQM’s different projects. For the specific case of the Salar de Atacama operation, the
Company has implemented an online platform (www.sqmsenlinea.com) that provides public access to
all environmental information compiled by the Company in keeping with its commitments.
SQM’s environmental monitoring of the ecosystems where the company has its facilities is supported by
numerous studies that encompass a range of scientific findings from prestigious Chilean and international
research centers, such as the National Research Council of Spain (CSIC) and the Universidad Católica
del Norte.
Among the environmental studies conducted by the Company for its new projects, major efforts are
being made to register pre-Hispanic and historic cultural heritage and to protect heritage sites, in line
with current legislation. These actions have been undertaken especially near the locality of María Elena
(ME) and around the Nueva Victoria (NV) operation. This work is accompanied by community outreach
activities and the development of sites of interest.
Environmentally significant aspects of each project are identified and evaluated for their potential
impacts, which requires in-depth knowledge of how ecosystems in the area of influence of our projects
function. Knowing this allows us to manage and respond to any potential impact in advance. Each of our
projects must be submitted to Chile’s Environmental Impact Assessment System. As of December 2022,
we have environmental authorization for a total of 69 projects, 14 of which were approved with an
Environmental Impact Study (EIA in Spanish) and 50 with an Environmental Impact Statement (DIA in
Spanish).
In 2022, the Superintendency of the Environment inspected our Nueva Victoria operation due to an
incident involving an iodine leak, and the agency made a legal request for information on roadway
permits, our Compliance Program and our Early Warning Plan.
At our Orcoma operation, the same Superintendency made a legal request as to the status of the project,
the implementation of mitigation and offset measures and the construction stage follow up plan. The
authority also requested details about the type of closure used in protected areas (Caleta Buena, Estación
Central and Estación del Carmen), and requested information on the preventive/corrective measures
carried out and/or being implemented to prevent incidents.
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In 2022, Salar de Atacama received a visit from regional Health Ministry officials, who inspected the
facility’s wastewater treatment plants (PTAS), the Cañón del Diablo non-hazardous industrial waste
depots, the hazardous waste storage site, the osmosis plants, the maintenance area and restrooms.
Our Coya Sur and María Elena operations were also visited by the officials from the Environment
Superintendency, SERNAGEOMIN (National Geological and Mining Service) and the Health
Ministry’s Antofagasta regional office. These inspections focused on the Emissions Declaration covered
by the SD 138 decree, monitoring stations under SD 61, water and sanitation/PTAS plants, hazardous
substance storage, hazardous waste management, the María Elena and Tocopilla decontamination plans
and closure plans.
In 2022, Puerto Tocopilla was inspected by the Environment Superintendency regarding the facility’s
Pollution Control Plan, and information on its compliance with articles 10 and 13 of the SD 70 Pollution
Control Plan was also legally requested.
The former SQM site of Pampa Blanca was visited by the General Directorate of Water Resources
(DGA) in 2022 to verify pond A9.
In February 2019, the Superintendency of the Environment approved a compliance program for our
Nueva Victoria operations. The plan is currently operational, and the sanction process initiated in 2016
has been suspended. This decision was confirmed by the Antofagasta Environmental Court in October
2020. To fulfill commitments made, in July 2020 we submitted the Environmental Impact Study for the
project “Partial Modification of the Puquios de Llamara Reinjection System”, which is currently under
evaluation (in 2022 a complementary addendum was submitted).
In our Salar de Atacama operations, the compliance program previously approved by the
Superintendency of the Environment was rendered null and void by the Environmental Court in
December 2019. In November 2020, SQM filed a new version of the compliance program that addressed
the observations made by the Superintendency. The Compliance Program was finally approved through
Exempt Resolution N°38/F-041-2016 of August 29, 2022, thereby terminating the provisional measures
imposed as well as the sanction process. As of December 31, 2022, the Company had completed 15%
of the actions indicated in the program and reached 77% completion of the actions in progress.
The commitments made under the Salar de Atacama Compliance Program include implementing a
participatory monitoring program for the Hydrogeological Environmental Monitoring Plan, designing
and implementing a community training program for environmental monitoring, gradually reducing the
maximum brine extraction limit to 822 l/s by 2027, just under 50% of the authorized extraction rate; and
reducing the total flow of industrial water to 120 l/s, equal to a 50% cut in the authorized flow rate.
Lastly, all SQM production facilities have closure plans in place that have been approved by the
respective authorities. These plans are based on criteria and measures that meet current regulations.
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Sanctions, Fines, Programs and Environmental Remediation Plans 2022
Enforceable Sanctions
Total Environmental Fines
Approved Environmental Compliance Programs
Satisfactorily Executed Environmental
Compliance Programs1
Submitted Environmental Remediation Plans
Satisfactorily Executed Environmental
Remediation Plans2
N°
0
0
2
N/A
0
N/A
N/A: not applicable
1 The environmental compliance plans are in execution, therefore, it is not possible to know yet if they were satisfactorily
executed.
2 The environmental compliance plans are in execution, therefore, it is not possible to know yet if they were satisfactorily
executed.
Fair Competition
The Company has a Fair Competition Policy as well as a Protocol for the provision and use of sensitive
information related to the lithium business. The framework set out in SQM’s Code of Ethics establishes
the company’s commitment to respecting fair competition, and thus the respective policy sets out
guidelines and expected conduct for employees to ensure fair competition laws around the world are
respected.
In this regard, all SQM board members, executives and workers are expected to understand and respect
the laws of fair competition and to always keep in mind that failing to respect them could result in
considerable penalties for SQM in the form of lawsuits and, in some countries, fines and criminal
sanctions for board members, executives and/or employees involved in said behavior. Infringement of
fair competition laws could also result in trade agreements being unenforceable and cause significant
damage to personal and corporate reputations.
For each case, the Company’s Fair Competition Policy sets out rules for conduct that should always be
avoided, and other matters that must first be discussed with SQM’s Ethics and Compliance Division.
That policy also contains best compliance practices that, when properly adhered to, will substantially
reduce the likelihood that fair competition laws will be violated. This Policy is based on two central
golden rules: i) never enter into anti-competitive contracts or agreements, and ii) never abuse a dominant
market position.
In 2022, the Company incurred no penalties in connection with this issue.
Others
SQM has a Crime Prevention Model that has been certified up to September 2023 and sets out
mechanisms to prevent, detect, and respond to situations in which the Company could be found
criminally liable. In terms of prevention, the Company has a Code of Ethics that establishes a standard
of expected conduct for all of its collaborators.
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To foster a control environment, the Company has different corporate policies and procedures that
reinforce its adherence to a culture of integrity. Furthermore, the Company has a robust training and
communication program that educates its collaborators about the compliance program and raises
awareness about the need to follow and implement it to the fullest. To detect infringements, the Company
has a Complaints Channel that allows workers and third parties to report possible violations of Company
policies and guidelines. (Details of these guidelines can be found in the chapter on Corporate
Governance.)
In 2022, no sanctions were issued in connection with this concern
8.2 SUSTAINABILITY INDICATORS BY INDUSTRY
According to the Sustainable Industry Classification System (SICS), SASB/VRF, which provides a
series of metrics to measure company performance in different industries, SQM is classified as a
chemical industry.
Considering the scope and nature of SQM’s business activities, this section will report on indicators from
the “Chemical Industry Standard”.
Relevant themes for the chemical industry SASB/VRF classification that will be reported on in this
section, are: greenhouse gas emissions; air quality; energy management; water management; hazardous
waste management; community relations; workforce health and safety; product design for use-phase
efficiency; safety and environmental stewardship of chemicals; genetically modified organisms;
management of the legal and regulatory environment; operational safety, emergency preparedness and
response and activity parameters.
Greenhouse gas emissions
Indicators
1.- RT-CH-110a.1. Gross
emissions-limiting regulations.
2.- RT-CH-110a.2. Discussion of long-term and short-term strategy or plan to manage
Scope 1 emissions, emissions reduction targets, and an analysis of performance against those targets.
global Scope
covered under
percentage
emissions,
1
Our products are used in industries that are fundamental for human development and people’s wellbeing.
This leads us to set very ambitious goals for GHG emissions reduction (Scopes 1 and 2) and incorporate
some Scope 3 emissions categories. These goals are reflected in our Sustainability Plan, where we have
set greenhouse gas emissions reduction goals, which include being carbon neutral for lithium, potassium
chloride and iodine products by 2030 and for all of our products by 2040, taking 2019 as the base year.
This involves a 90% reduction and 10% offset of emissions by 2040.
The core work areas related to emissions are:
• Mitigation through the quantification of our GHG emissions based on international
methodologies that are verified periodically, in order to internally manage emissions at each of
our production sites, allowing us to meet the reduction goals committed to in our sustainability
strategy. These efforts include identifying, assessing and implementing opportunities to reduce
energy consumption and GHG emissions and follow up on these measures.
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• Adaptation of our operations, production processes and logistics to the needs and specific risks
of each project, incorporating climate change as one of their periodic evaluation factors. This is
done to identify, assess and successfully manage possible impacts of the growing effects of
climate change on these areas.
• Management of emissions generated by their quantification, characterization, treatment and
reduction, as per current environmental regulations.
• Continuously seeking out alternatives to minimize emissions generated.
We continuously monitor air emissions at all facilities. These efforts include preparing detailed
projections of expected environmental effects, installing and implementing emissions abatement
equipment and effectively monitoring emissions.
We have meteorological stations that are crucial for monitoring solar evaporation processes at our
operations. In addition to these measures, as part of its existing environmental monitoring plans, SQM
conducts isokinetic measurements on smokestacks that are linked to the production process, along with
dryers and boilers.
During this period, we have focused on decreasing our per product emissions.
Reducing Scope 1, 2 and 3 emissions (all of our emissions):
• General: We decreased our emissions by 70% compared to 2020 sales (tCO2eq+/MUSD).
• We decreased our LiOH emissions per ton produced by 7%.
SQM estimates its total aggregate carbon footprint for its entire production chain and individual carbon
footprints for different products. Emissions are estimated using the standards of the IPCC Guidelines for
National Greenhouse Gas Inventories (2006), the GHG Protocol, ISO 14064 on Greenhouse Gases and
ISO 14040 on Life Cycle Assessment. The factors used for electricity correspond to those published on
the website of the National Energy Commission. These factors are for the power grid from which we
contract energy.
GHG estimates consider all stages, from mineral extraction processes to the finished product at the port.
In regard to Scope 3 emissions, 4 of the 15 categories defined by the GHG Protocol--purchased goods
and services, upstream transportation and distribution, business travel, and downstream transportation
and distribution--are estimated.
The emissions reported are under financial oversight. The gases included are CO2, CH4, N2O. It should
be noted that our emissions are not subject to a tax or cap & trade; however, in Chile we do have a tax
of US$5/tCO2 and are seeing changes, such as the modification of the tax threshold, which currently
affects only facilities with an installed capacity greater than 50 MW thermal. Under this criterion, in
2022, SQM paid approximately US$ 326,000 for emissions released by boilers in Coya Sur. There is,
however, a potential risk that all our emissions will be subject to this tax in the future. In calculating
emissions, the following gases are not included: hydrofluorocarbons (HFC), perfluorocarbons (PFC),
sulfur hexafluoride (SF6) and nitrogen trifluoride (NF3).
For 2022, GHG emissions totaled 1,481,487 tons of CO2 eq, which can be broken down into 300,298
tons of CO2 eq (Scope 1), 508,076 tons of CO2 eq (Scope 2), and 673,113 tons of CO2 eq (Scope 3). The
current 12.5% rise in emissions is the result of Company expansions to increase capacity.
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Greenhouse Gas Emissions
Scope
Metric
Gases Included
2022
2021
2020
Direct GHG Emissions (Scope 1)
Tons CO2 eq
CO2, CH4, N2O
300,298
286,562
271,008
Indirect GHG emissions (Scope 2)
Tons CO2 eq
CO2, CH4, N2O
508,076
509,108
476,552
Other Indirect GHG Emissions (Scope 3)
Tons CO2 eq
CO2, CH4, N2O
673,113
521,065
415,291
Total emissions (1, 2 and 3)
Tons CO2 eq CO2, CH4, N2O
1,481,487
1,316,735
1,162,851
Note: CO2 – carbon dioxide, CH4 – methane, N2O - nitrogen oxide.
How is it used?
The internal price of emissions is used as a
criterion in assessing different types of projects
implemented each calendar year, to encourage
and strengthen more sustainable alternatives,
meaning those that have less impact in terms of
emissions, and those that would ultimately be
more costly without the inclusion of this internal
“tax”.
Price of Carbon
How is it set?
SQM has established an internal price for
carbon dioxide emissions of US$ 15 per ton
released.
The price was determined by analyzing
emission reduction alternatives on a marginal
abatement curve, with the cost per unit abated
for our operations coming in around US$ 10-15
per ton.
The current green tax system (in Spanish, SIV)
and future changes
its criteria from
technology-based (boilers and turbines) to
emissions-based (with a threshold of 25 kCO2e).
to
The pricing also considered the price in other
international regulations, such as the European
Union’s Carbon Border Adjustment Mechanism
(CBAM), which will impose a duty on certain
imported goods produced outside of the UE,
including fertilizers. Analyzing the projected
emissions potentially subject to this tax in each
SQM operation, in addition to the company’s
sustainability objectives.
In 2022, the Company implemented some initiatives to support our greenhouse gas emission reduction
goals. These are described below:
• SQM’s Ground Transportation Area implemented various pilot programs designed to test new
technologies that help improve transport efficiency. The main projects executed to date are the
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truck aerodynamics improvement pilot; reduced wait times and increased productivity (idle
reduction); installation of a telemetry system and the construction of a fuel consumption
monitoring platform; and training programs to improve driver performance. Thanks to these
initiatives and the certification of our ground transportation partners, we have obtained the Giro
Limpio certification, a new achievement that reaffirms the Company’s commitment to
sustainability.
• We are also incorporating electric forklifts and are using them in both the Carmen lithium
carbonate chemical plant and in our shipping area. The advantages of these new forklifts include
high availability owing to quick charging time (50% charge in 45 minutes); cost savings, based
on a longer useful life; low maintenance compared to lead-acid battery-powered machines; the
ability to deactivate hydraulic functions when the seat of the forklift is not occupied; the
inclusion of an automatic parking brake to prevent movement on ramps and slopes; the use of
“Curve Control” to reduce automatic speed during turns; and the implementation of “Local
Safe”, a Radio Frequency Identification (RFID) technology that uses detection tags that can
calculate proximity to people and other machines to an accuracy of 0.1 meter. This equipment
has a zero-carbon footprint.
• The Company also launched 34 entirely electric vehicles that are now being used in our
operations. This new fleet included passenger buses, minibuses, mobile workshops, mobile
checkpoints, the first mining-standard electric pickup truck and the country’s first high tonnage
mining truck. In Tocopilla, we introduced the first 100% electric high tonnage truck in South
America, which entered service in the Chilean mining industry after a successful trial in SQM
operations. This truck will eliminate 4-5 tons of CO2 eq, equal to 20 medium-sized trees a month
over a 50-year lifespan. Six new 100% electric buses were also added to the bus fleet and are
now making trips within the Coya Sur, Maria Elena and Pedro de Valdivia sites. The vehicles
are equipped with the latest technology available on the market and meet all legal safety
standards. They also have a range of 200 km and capacity to transport 42 passengers. These
vehicles operate just like conventional buses, with the same comforts and features. They are also
quieter and do not vibrate, making the journey more pleasant. They are also safer, with four
cameras that give the driver a greater range of vision.
Together these initiatives have taken the company’s Sustainability Plan even further, and above all are
bringing us closer to fulfilling SQM’s commitment to become carbon neutral in our products by 2040.
As yet another facet of our commitment to sustainability, SQM reports to different programs such as
CDP, the Dow Jones Sustainability Index, SASB and Huella Chile. We report our emissions inventory,
product carbon footprint, corporate carbon footprint and our consumption and energy use, among other
indicators. In an exercise in transparency, in 2022 SQM had its 2021 product carbon footprint verified
by KPMG Auditores Consultores SpA.
Air quality
Indicator
1.- RT-CH-120a.1. Air emissions of the following pollutants: (1) NOX (excluding N2O), (2) SOX, (3)
volatile organic compounds (VOCs), and (4) hazardous air pollutants (HAPs)
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We work hard to manage and monitor emissions of PM10 particulate matter and to that end have a vast
air quality monitoring network in the town of María Elena and participate in the air quality monitoring
network in Tocopilla.
In regard to PM10 Air Pollution Control Plans, the Company has implemented a wide range of measures
to meet its commitments to control and reduce these atmospheric emissions, including the following:
• Since 2007, we have reduced PM10 emissions substantially in María Elena. This reduction can
be attributed to operational changes implemented by SQM and has resulted in significantly
improved local air quality and compliance with daily and annual PM10 standards. The stations
-including the Air Quality Monitoring Network associated with the María Elena Pollution
Control Plan- met the Annual Air Quality Standard for PM10 (50µg/m 3N) beginning with the
2010-2012 period at Estación Hospital and with the 2012-2014 period at Estación Iglesia.
•
In the case of Tocopilla, PM10 emissions generated by SQM's port operations are minor
compared to other sources in the city. As part of the Tocopilla Pollution Control Plan, the
commitments have been fulfilled and all measures necessary to mitigate emissions have been
taken. In 2022, SQM's port operations reported PM10 emissions of 3.77 tons, marking a major
reduction since 2007. In comparison to 2021 levels, this reduction remains lower than our
commitment in the pollution control plan.
Other Atmospheric Emissions
Other Emissions
Metric
2022
2021
2020
Volatile Organic Compounds (VOCs)
Hazardous Air Pollutants (HAPs)
PM
PM10
PM2.5
NOx
Tons
Tons
Tons
Tons
Tons
Tons
4,913.8
5,753.1
7,370.9
442.3
403.7
412.4
2,334.4
2,122.9
2,582.1
102.1
96.8
88.2
83.5
89.5
84.6
1,273.2
1,072.6
1,086.8
SOx
Note: PM – particulate matter, NOx – nitrogen oxides, SOx – sulfur oxides.
Tons
1,448.8
1,390.1
1,469.2
The drop in VOCs in 2022 is mainly the result of the 1000 cubic meter reduction in kerosene
consumption at Nueva Victoria. Meanwhile, the rise in SOx is primarily due to the 2,400-ton increase in
sulfur consumed at Nueva Victoria. Regarding HAPs and total PM (2.5 and 10), the rise in these figures
is proportionate to increased consumption of diesel, fuel oil and LNG, as applicable.
In 2022, we launched an initiative to control particulate matter in the Port of Tocopilla, beginning with
Pier 1, then moving to the south checkpoint and the control tower. The plan is to install a fourth sensor
in the area around the mechanical arm. We have three sensors installed, forming a sort of boundary at
the port. The internal control of product movements is very important for air quality, which is currently
monitored in real time.
The sensors are installed in strategic locations close to the community and consider the usual wind
currents found in Tocopilla. This enables the internal control of air quality, which provides support for
situations in which decisions need to be made quickly.
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PurpleAir sensors are instruments that measure the real time concentrations of particulate matter (PM)
from 2.5 to 10 microns. A wifi connection transmits air quality data, which is then stored and can be
viewed from any mobile device. Using a fan, an air sample is drawn across a laser beam, which reflects
some of its light onto a detection plate. Just like dust shines in the sunlight, the detection plate measures
this reflection as a pulse, and its length determines the size of the particles; meanwhile, the number of
pulses determines the particle count, and the mass concentration (PM1.0, PM2.5 and PM10) is calculated
using an algorithm.
We currently focus on calculating PM10, as per the port’s particulate monitoring plan. This is just one
of the sustainability projects that the Tocopilla Port is undertaking to make its operations more
community- and environmentally friendly.
Energy Management
Indicator
1.- RT-CH-130a.1.
percentage renewable, (4) total self-generated energy
(1) Total energy consumed,
(2) percentage grid electricity,
(3)
In our processes, we use a high percentage of solar energy, which is crucial to the solar evaporation pond
productive operations at our facilities in Salar de Atacama, Nueva Victoria and Coya Sur.
This method offers an advantage over other processes and is only possible because the Atacama Desert,
where our operations are located, has extremely high levels of solar radiation, resulting in high
evaporation rates that facilitate the processes used to concentrate salts in ponds year-round. SQM has
approximately 3,000 hectares of solar evaporation ponds, allowing us to harness significant amounts of
solar energy.
Our operations are also powered by electricity obtained under special contract from the National Electric
System (SEN) and from fuels, with cleaner alternatives always prioritized. SQM does not have self-
generation capacity.
Energy Consumption and Intensity
Type of Energy
Unit
2022
2021
2020
Consumption within the organization
Non-renewable fuel consumption
Renewable fuel consumption
Electricity consumption
Energy consumption outside of the
organization
Diesel
Gasoline
Total energy consumed
external)
% energy from the electrical grid
% energy from renewable sources
(internal and
GJ
GJ
GJ
GJ
GJ
GJ
%
%
4,503,011
0
2,124,364
4,334,316
0
2,156,219
4,358,865
0
2,082,022
855,491
0.04
7,482,866
28.4%
0%
770,715
0.03
7,261,250
29.7%
0%
722,712
0.04
7,163,599
29.1%
0%
The upward trend in the consumption of fuel from non-renewable sources both within and outside of our
organization is mainly owing to an increase in diesel fuel consumption. Within our organization, more
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than 9,600 m3 were consumed, while externally, more than 2,200 m3 was consumed by our
subcontractors.
In 2022, the Administration and Services Division, in collaboration with the Executive Vice President
of Lithium, implemented the “Eco-Sustainable Camps and Checkpoints” initiative to install photovoltaic
solar panels on these structures.
In the initial stage, solar panel banks were installed on the Phase V sector of the Andino Camp, which
represents 15% of all on-site residences. Thanks to these panels, we were able to reduce our carbon
footprint and considerably decrease noise emissions in these facilities, as the residential complex had
previously been operating 24-7 with diesel powered generators. Ten mini plants with 24x500W panels
have been installed to date, generating 12 KW/H of power. That energy is stored in 10 lithium batteries
that produce 30 KV of storage per plant, which means that each plant provides enough energy to power
10 rooms. The remaining stages (V to VII) are expected to have solar plants by the end of the first quarter
of 2023, which will represent 25% of all rooms at Andino Camp and a 40% overall increase in
photovoltaic panels in that sector.
Water management
Indicators
1.- RT-CH-140a.1. (1) Total water extracted, (2) total water consumed, percentage of each in regions
with high or extremely high baseline water stress.
2.- RT-CH-140a.2. Number of incidents of non-compliance associated with water quality permits,
standards, and regulations.
3.- RT-CH-140a.3. Description of water management risks and discussion of strategies
and practices to mitigate those risks
Responsible use of water is an important aspect of SQM’s production processes, as this resource is scarce
in some of the locations where our operations are located. We hold duly authorized water usage rights
for all operations and meet all related requirements and commitments. We also ensure that we use water
efficiently and correctly manage water in the ecosystems of origin, always favoring recirculation and
optimization in our processes. Along these same lines, we have implemented environmental monitoring
and early warning plans to ensure these ecosystems are cared for. Our Sustainability Plan includes
specific commitments to reduce water use and extraction.
In an effort to fulfill our water management criteria, we have developed the following work areas:
Gestión del agua
Indicadores
1.- RT-CH-140a.1. (1) Total de agua extraída, (2) total de agua consumida, porcentaje de cada una
en regiones con un estrés hídrico inicial alto o extremadamente alto.
2.- RT-CH-140a.2. Número de incidentes de no conformidad relacionados con permisos, estándares
y reglamentos de calidad del agua.
3.- RT-CH-140a.3. Descripción de los riesgos de la gestión del agua y análisis de las estrategias y las
prácticas para mitigarlos.
Para SQM, el uso responsable del agua es un aspecto relevante de sus procesos productivos, dada la
escasez de este recurso en algunos lugares en donde se emplazan sus operaciones. Poseemos derechos
de aprovechamiento de agua debidamente autorizados para nuestras operaciones, por lo que cumplimos
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con todas las exigencias y compromisos asociados. Asimismo, velamos de forma permanente por el
manejo eficiente del agua que ocupamos, y la correcta gestión hídrica de los ecosistemas de origen,
favoreciendo siempre la recirculación y optimización en los procesos. En la misma línea, implementamos
monitoreos ambientales y planes de alerta temprana para asegurar el cuidado de estos ecosistemas, y en
nuestro Plan de Sostenibilidad adquirimos compromisos específicos para la reducción del consumo y
extracción de agua.
Con miras a dar cumplimiento a nuestra gestión hídrica, hemos desarrollado los siguientes ejes de
trabajo:
Quantification of and reporting
on fresh water use by operation
and product.
Care and optimization of water
resource use, including the
implementation of industry
best practices.
Identification of possible
impacts on surrounding
ecosystems from surface water
use.
Monitoring and
implementation of measures to
ensure that water use in our
operations does not adversely
affect neighboring ecosystems
and communities.
Important 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. Those facilities
have environmental permits to extract surface water at the following flow rates:
. Maria Elena = 62.1 l/s; Coya Sur = 90.0 l/s and Pedro de Valdivia = 94.4 l/s.
The water for our Nueva Victoria and Salar de Atacama facilities is obtained from wells near the
production facilities. Salar de Atacama has an environmental permit to extract groundwater at a rate of
240 l/s. Under our Sustainability Plan and other commitments, we have limited that extraction to a
maximum of 120 l/s. That reduction to 120 l/s was incorporated into the Environmental Impact Study,
"Salar de Atacama Extraction Reduction Plan" which was published in January 2022 and is currently in
the approval process.
https://seia.sea.gob.cl/expediente/ficha/fichaPrincipal.php?modo=normal&id_expediente=2154490427.
The water for our Carmen Lithium Plant comes from third parties, mainly from wastewater from
Antofagasta, desalinated water and surface water (FCAB).
We have had no significant issues obtaining the water needed for our operations.
SQM regularly reports water consumed in production processes to the water authorities. We have had
no non-compliance incidents related to water permits or water quality standards and regulations. Studies
are also conducted to identify more ways to use water efficiently, and we evaluate each facility’s water
management indicators on a yearly basis.
Some of our measures to support efficient water use are:
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• Reincorporation of all water treated in SQM sewage treatment plants into its production
processes. This water is reused in our processes at María Elena, Pedro de Valdivia, Coya Sur,
Nueva Victoria and Salar de Atacama.
• Reuse of process solutions to reduce freshwater consumption.
• The industrial water used at the Carmen Chemical Plant comes from wastewater treated by the
city of Antofagasta. The company has used this source to supply almost 73% of the industrial
water needed for production processes. The rest of the consumption requirements are met with
purchased, desalinated seawater.
The extraction of fresh water for production purposes is subject to strict environmental assessment,
which helps prevent damage to environmental receptors (vegetation, flora and fauna) associated with
aquifers and surface water sources for which the Company has water extraction rights.
In conjunction with these studies, extensive hydrogeological modeling is designed and validated under
the supervision of national and international experts, and these models are used to regularly monitor the
expected behavior of the relevant systems.
Of the total groundwater resources extracted for Nueva Victoria in 2022, 895,908 m3 were re-injected as
part of the mitigation measures for the Pampa Hermosa project in Salar de Llamara, Tarapacá Region.
Sustainability and Water Resource Plan
• We have committed to reducing our continental water consumption by 40% by 2030 and 65%
by 2040. Water consumption at the Salar de Atacama operation has dropped by 50% since 2021
and will remain at half of the environmentally approved volume until 2030.
• We have reduced our brine extraction by 23% since November 2020 and are moving towards
decreasing brine extraction by 50% by 2028 in accordance with the commitments made in the
Environmental Impact Study, “Salar de Atacama Extraction Reduction Plan”, which was
submitted in early 2022.
• Reduction of 0.1% in direct water consumption per ton of lithium carbonate produced and 20.9%
reduction per ton of lithium hydroxide.
• Reduction of 2.2% in water consumed for potassium chloride production and 5.6% reduction for
potassium sulfate.
• Reduction of 10.9% in water consumed in Iodine production.
Our web portalhttps://www.sqmsenlinea.com/ the Salar de Atacama Online Monitoring portal, provides
environmental information on our Salar de Atacama operation to communities and other interested
parties. We have designed and implemented a system that allows us to provide information about water
extracted and net brine extracted. This system also serves as a verification system for authorities and
stakeholders wishing to verify our compliance with extraction limits, in keeping with current operating
regulations. It also provides historical environmental monitoring data to assess and prevent potential
impacts that our operation, other entities and natural phenomena such as climate change may have on
protected areas.
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We are expecting to launch a similar process that will allow us to report on these variables for our Nueva
Victoria operation soon.
Water Extraction and Consumption
Average
TDS quality
(mg/l)
>1000
>1000
<1000
Extraction
Location
Loa River, Salvador
River
Pampa del
Tamarugal /
Salar de Atacama
Aquifer
Produced by third
parties
Classification
Type Metric
Surface water
Groundwater
Third party
water
Salt
water
Salt
water
Fresh
water
Total water extracted
Total water consumed
m3
m3
m3
Water extracted from areas with High or Extremely
High-Water Stress
Water consumed from areas of High or Extremely
High-Water Stress
m3
m3
%
%
2022
2021
2020
6,311,835
6,525,669
6,280,144
21,961,378 23,749,455 23,758,474
2,000,340
1,610,488
1,438,821
30,273,553 31,885,612 31,477,439
29,377,645 31,007,776 30,619,358
100%
100%
100%
97%
99%
98%
In order to optimize water consumption, we take all treated wastewater from SQM’s sewage treatment
plants and recirculate it in our production processes. Approximately 1,252,021 m3 of water was reused
in 2022 (operational estimate).
The initiative “Optimization of Industrial Water Consumption” at our Salar de Atacama operation is an
example of the actions we are undertaking to develop more sustainable and environmentally friendly
operations. The third Fundamental Sustainability Regulation addresses efficient water use. As such, we
must ensure that we install processes that allow us to use the resource more efficiently. With this in mind,
in 2020 we began to implement a system that seeks to instill more respect for industrial water use and
highlight imbalances reflected in the records in order to make our water extraction and consumption
more sustainable. As a result, we have significantly reduced the volume extracted and optimized the use
of industrial water through actions such as:
• Analyzing water consumption in different production areas.
• Creating an “Industrial Water Supply Report” for each area of Salar de Atacama in order monitor
and control processes and operations that use this resource.
• Moving from “Static Supply” to “Daily Industrial Water Supply” for day and night shifts in
order to adjust to operational variations.
• Creating the “Plant Stoppage Standard”, which involves reporting the stoppage time and release
of cubic meters of water so that it can be used, and industrial water can be offered to critical
areas such as Ponds and Services.
•
Implementing the “Daily Industrial Water Consumption Report”. This tool uses an automated
dashboard to monitor daily extraction, the levels of industrial water ponds, daily consumption
compared to water supply, a daily and weekly outline of consumption by area, and a comparison
of water extraction versus actual consumption over the course of a given day.
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Among the risks associated with our water resources, we have identified the following:
Changes in water rights laws and other legal provisions may affect our business, financial position
and operational results.
We hold water rights that are crucial to our operations. We obtained those rights from the General Water
Directorate of Chile (DGA) to ensure a water supply from rivers and wells near our production facilities,
and we believe these are sufficient for meeting our current operational needs.
In January 2022, Chile’s National Congress approved a legislative bill that will modify the country’s
Water Code, introducing several changes. One very pertinent one is the change in the duration of water
rights. Under this new legislation, water rights: (i) will be temporary and granted for a maximum of 30
years (the specific duration will depend on the nature of the waterway and the availability of water in it);
(ii) will be subject - entirely or partially - to expiration when not used; (iii) must adjust to human
consumption and sanitation requirements, which shall take priority in regard to water use; and (iv) will
be subject to a minimum ecological flow rate to ensure conservation of nature and the protection of the
environment, as determined by the DGA. It is noteworthy that water regulation and distribution is one
of the most important aspects addressed by the Constitutional Convention, and so new changes may also
be enacted.
Our water supply may be affected by geological changes and/or climate change.
SQM’s access to water may be affected by geological changes, climate change, and/or other natural
factors, such as wells drying up and/or reductions in water available in the wells or rivers we obtain our
water from. These factors are beyond our control. The use of seawater for present and future operations
could increase our operating costs. Any changes of this kind may have a material adverse effect on our
business, financial position and operational results.
To mitigate the risks associated with water, we have rigorous environmental monitoring plans that allow
us to identify any potential unexpected deviations; these plans include the use of water from pump shafts
to ensure our operational continuity.
SQM is also constantly reviewing and evaluating risks in order to define strategies to mitigate them. We
also have a Sustainability Division whose staff is responsible for defining company goals for reducing
our water consumption.
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Hazardous Waste Management
Indicator
1.- RT-CH-150a.1. Amount of hazardous waste generated, percentage recycled
At SQM, we understand that one way to mitigate impacts on our environment is through efficient waste
management. We manage waste in accordance with Chilean legislation, the environmental commitments
we have made, and industry best practices.
We focus on proper management, minimizing waste generated, repurposing waste and seeking new uses
or the appropriate final disposal solution, thus reducing risk to human health, the environment and
communities. The core areas of this work are:
Continuously seeking
alternatives to minimize waste
generated..
Managing waste generated, by
using criteria for quantifying,
describing, treating and
reducing waste and emissions,
in line with current
environmental regulations.
Quantifying, separating, reusing
and recycling solid waste in
order to minimize its impact
and promote a circular
economy.
We generate different kinds of waste, including:
• Domestic and similar waste: from offices, cafeterias, restrooms and other such spaces.
• Non-hazardous industrial waste: wood, HDPE, scrap metal, debris and plastics, among other
waste.
• Hazardous industrial waste: waste from inputs with hazardous properties and waste and other
material contaminated by such waste, that have the characteristics described in Art. 11 of
Supreme Decree D.S. 148/04.
Waste management is one of the Company’s core responsibilities, and as such we take all necessary
measures to ensure that it is done safely. The waste declarations we submit to the government’s Single
Window reporting platform correspond to:
• SINADER, a monthly declaration for non-hazardous waste in which we report to the
environmental authorities the volume of waste removed from our industrial properties and
validated by the waste disposal entity.
• The SIDREP declares hazardous waste and is submitted as necessary, meaning each time a truck
leaves a facility with this kind of waste, this document, generated through the Single Window
reporting portal, is given to the transport driver. In this case, the driver and the final disposal
facility validate the information we have included on the form.
All of the companies that transport waste to final disposal sites have the appropriate authorization.
SQM has developed plans and procedures to manage both hazardous and non-hazardous waste. We have
eight temporary storage sites for hazardous waste authorized by the Regional Health Agency (Seremi de
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Salud), six authorized temporary storage sites for non-hazardous industrial waste and an area for
disposing of domestic waste generated at our operations.
Internal control of waste is carried out by both the operational area where the waste is removed from and
the environmental compliance area. To verify that the waste reaches its final destination, tickets are
requested from the receiving party and the process is then followed up through the Single Window
reporting platform until it is closed. Internal audits are also conducted to verify that our projects are in
compliance with all applicable environmental regulations.
In 2022, 93.6% of hazardous and non-hazardous industrial waste, domestic and similar waste and other
waste generated in our operations was sent off-site for final disposal using authorized transport. The
remaining 6.4% was recycled or used for energy recovery. Hazardous waste is transported in accordance
with regulations currently in force in Chile.
SQM manages solid domestic waste at all facilities and camp accommodations and disposes of this waste
in authorized landfills. In 2022, SQM did not generate hazardous waste that was disposed of or treated
internationally. It should be noted that there was a significant rise in waste generated compared to the
previous period, because of a declaration of debris by the Carmen Chemical Plant.
We prioritize recycling and reusing inputs, opting to eliminate waste only as a last resort, and when we
do, we work with authorized waste management companies.
Waste Generation
Type of Waste
Unit
Destination
(inside or outside
of the facility)
2022
2021
2020
Tons
Tons
Mining Waste
Spent ore
Discarded Salts
Industrial Waste
Hazardous
Non-Hazardous
Domestic and/or similar
Others
Note: ‘Others’ corresponds to mixed construction waste and debris declared by the Carmen Lithium Plant.
Outside
Outside
Outside
Outside
1,702
3,718
6,560
118
2,565
3,856
5,254
8,502
28,203,001
11,621,008
33,170,650
8,106,420
Tons
Tons
Tons
Tons
Inside
Inside
38,730,152
7,417,533
3,141
1,682
4,810
190
The drop in spent ore between 2021 and 2022 occurred mainly because 48 heaps were closed in 2021
and only 40 in 2022.
The rise in discarded salts in 2022 was mainly owing to the 48%+ increase in Halite/Bischofite harvested
at the Salar operation. In hazardous waste, waste oil generated at Nueva Victoria and Salar de Atacama
rose by more than 300 tons. There was also an increase of more than 570 tons of other waste generated
at Nueva Victoria, Salar de Atacama and the Carmen Lithium Plant.
SQM has implemented a range of initiatives focused on improving waste management.
In 2022 at our corporate offices in Santiago, we began the first stage of a recycling program that currently
accepts paper, tins, Tetra Paks, plastics and glass. A “Sustainable Cafe” was also held in the building’s
entry hall to explain the correct way to recycle and how to use the dispensers installed on each floor. In
this way, we are incorporating best practices into our daily work that are in line with our sustainability
8 INDICATORS
148
aspirations, seeking to reduce waste generated in both our operations and offices. A second stage is
currently under study to add other waste products efficiently to our recycling program.
All recyclables at SQM headquarters are taken to the Kyklos comprehensive recycling center, where
they undergo a pretreatment process consisting of separating, compacting and preparing different types
of recyclables, which are then sent to waste recovery plants, where they will be transformed into new
products and materials.
In 2022, nine waste removals were conducted at the building’s recycling depot, enabling us to recover
1,099 kg of waste.
Cardboard
664 kg
Plastics
211 kg
Glass
182 kg
Metal
6 kg
Tetra Paks
36 kg
The following savings were achieved through waste recycling:
Energy (kWh)
4,020
Trees (#)
11
CO2 eq (kg)
1,017
Water (l)
17,587
Equal to:
23 months of average
household
consumption in Chile
188 reams of paper
80 days of average car
usage (not including
trips)
88 average showers
At Nueva Victoria, in addition to the domestic waste management and recycling process, which includes
six ReciPampa “green points” for collecting this material, awareness has also been raised among
employees through informative booklets. The Environmental Projects Subdivision, in collaboration with
the recycling firm Recynor, also organized three informative talks with facility staff about the correct
use of the recycling facilities and proper waste separation. These efforts sought to raise awareness of the
optimal use of the six “punto verde” collection depots, which are located at different points around the
facility and at Iris camp and accept PET plastics, cardboard and paper, glass and aluminum tins, which
are then transformed into other materials through recycling.
SQM’s ReciPampa program recycled the following volumes of waste in 2022:
• Cardboard and paper: 3,184 kg
• PET: 1,549 kg
• Glass: 30 kg
• Metal: 46 kg
This program had a positive impact on the environment, as the following indicators show:
• 30,707 KWh of energy saved
• 925,654 l of water saved
• 15,358 kg of CO2 emissions prevented
• 55 trees saved
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149
Community Relations
Indicator
1.- RT-CH-210a.1. Discussion
opportunities associated with community interests
of
engagement
processes
to manage
risks
and
The towns located near SQM operations are small communities whose economies are usually based on
agriculture and/or tourism. Tocopilla has a port, while María Elena is a mining town that is home to a
nitrate “office” that dates back to 1926. Over the years, the town has grown into a mining service provider
and has a future as a tourist attraction.
In 2022, SQM continued the pre-construction process for the Orcoma iodine and nitrate-rich salt plant
project, located in Huara Municipality in Tarapacá Region. In preparation, the Company began advance
work with the communities of Huara, the largest town in the district, the farming communities of Bajo
Soga and Colonos Rurales and the fishing village of Pisagua.
Work in Huara district increased over the year, and our company believes forming early relations are the
ideal way to engage with local communities, as it allows us to communicate with each other and make
plans together before SQM starts up its operations in the area.
In Tarapacá Region, the areas around our operations are predominantly inhabited by Aymara and
Quechua indigenous communities and groups.
SQM’s Salar de Atacama operations in the municipality of San Pedro de Atacama cover territory also
inhabited by indigenous communities. The five closest are located to the south of San Pedro, namely
Peine, Socaire, Talabre, Camar and Toconao, where Atacameña and Lickanantay ethnic groups are
prevalent.
The local government is led by the municipality of San Pedro de Atacama, which was created in 1980.
Ethnic and territorial organization is led by the Council of Atacameña Peoples, which represents 18 of
the area's 21 communities.
Characterization of the Communities
Tarapacá Region
Facility
Localities
Characterization
Population
Education
Nueva Victoria
Iquique
- Chanavayita
- Caramucho
- Cáñamo
Pozo Almonte
- La Tirana
- Pintados
- Victoria
- Huatacondo
- Tamentica
Regional Capital, Capital
of the Province of Iquique,
Commune:
Population: 191,468
Households: 66,986
Men: 94,897
Women: 96,571
Regional Capital, Capital
of the Province of Iquique,
Commune:
Population: 15,711
Households: 8,926
Men: 8,987
Women: 6,724
Population Density: 83.70
Male Index: 98.3
Average Age: 34.3
Indigenous communities: 18%
Population Density: 1.14
Male Index: 133.7
Average Age: 32.2
Indigenous communities: 43%
8 INDICATORS
Head of household education
(years): 12,3
School attendance: 95%
Preschool attendance: 53%
High school attendance: 75%
University/college entrance: 38%
Finished university studies: 74%
Indigenous people education
(years): 10,3
Head of household education
(years): 10,0
School attendance: 86%
Preschool attendance: 55%
High school attendance: 56%
University/college entrance: 20%
Finished university studies: 78%
150
Alto Hospicio
Commune:
Population: 108,375
Households: 33,178
Men: 54,206
Women: 54,169
Population Density:188.86
Male Index: 100.1
Average Age: 28.8
Indigenous communities: 31%
Orcoma Project
Huara
- Bajo Soga
- Colonos
Rurales
- Pisagua
Commune:
Population: 2,730
Households: 2,871
Men: 1,501
Women: 1,229
Population Density: 0.26
Male Index: 122.1
Average Age: 36.7
Indigenous communities: 63%
Indigenous people education
(years): 8,6
Head of household education
(years): 10,4
School attendance: 95%
Preschool attendance: 56%
High school attendance: 71%
University/college entrance: 16%
Finished university studies: 65%
Indigenous people’s education
(years): 8,6
Head of household education
(years): 8,5
School attendance: 94%
Preschool attendance: 48%
High school attendance: 65%
University/college entrance: 13%
Finished university studies: 84%
Indigenous people’s education
(years): 7,5
Note: Demographic data of this table was obtained by the information from the 2017 census done by the Chilean Statistical Institute (Instituto
Nacional de Estadística de Chile)- Source: www.censo2017.cl
Antofagasta Region
Facility
Localities
Characterization
Population
Education
Tocopilla Port/
María Elena/
Coya
Sur/ Salar de
Atacama/
Planta Carmen
Antofagasta
Tocopilla Port
Tocopilla:
- Urco
María Elena/
Coya Sur
María Elena:
- Quillagua
Regional Capital,
Capital Province of
Antofagasta, Commune:
Population: 361,873
Households: 112,451
Men: 181,846
Women: 180,027
Capital Province of
Tocopilla, Commune:
Population: 25,186
Households: 10,670
Men: 12,481
Women: 12,705
Comunne:
Population: 6,457
Households: 1,959
Men: 4,092
Women: 2,365
Population Density: 11.79
Male Index: 101.0
Average Age: 33.3
Indigenous communities: 8%
Population Density: 6.25
Male Index: 98.2
Average Age: 34.5
Indigenous communities: 8%
Population Density: 0.52
Male Index: 173.0
Average Age: 35.4
Indigenous communities: 13%
Head of household education (years): 12,1
School attendance: 96%
Preschool attendance: 49%
High school attendance: 74%
University/college entrance: 36%
Finished university studies: 73%
Indigenous people’s education (years): 10,6
Head of household education (years): 11,2
School attendance: 95%
Preschool attendance: 46%
High school attendance: 79%
University/college entrance: 27%
Finished university studies:81%
Indigenous people’s education (years): 10,5
Head of household education (years): 11,2
School attendance: 95%
Preschool attendance: 46%
High school attendance: 79%
University/college entrance: 27%
Finished university studies: 81%
Indigenous people’s education (years): 10,5
Salar de Atacama
San Pedro de
Atacama:
- Río Grande
- Solor
- Toconao
- Talabre
- Camar
- Socaire
- Peine
- Machuca
- Catarpe
- Quitor
- Larache
- Yaye
- Sequitor
Comuna:
Población:10,996
Viviendas: 4,144
Hombres: 6,161
Mujeres: 4,835
Population Density: 0,47
Male Index: 127,4
Average Age: 34,3
Indigenous communities: 52%
Head of household education (years): 11,1
School attendance: 93%
Preschool attendance: 53%
High school attendance: 73%
University/college entrance: 35%
Finished university studies: 82%
Indigenous people’s education (years): 9,1
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151
- Cucuter
- Coyo
- Guatin
- Tulor
- Beter
- Rio Vilama
- Solcor
- Puna de
Tocol
- Alis
- Celeste
- Puques
Note: Demographic data of this table was obtained by the information from the 2017 census done by the Chilean Statistical Institute (Instituto
Nacional de Estadística de Chile)- Source: www.censo2017.cl
SQM’s work aligns with our commitments to these communities, to our neighbors and the environment,
as set out in the SQM Sustainability, Ethics and Human Rights Policy. This document outlines a
commitment to the sustainable development of our business and affirms our desire to maintain close ties
with communities located near our production facilities and to actively participate in their development.
We engage in an open, ongoing and transparent manner with our neighbors through programs and
initiatives developed with their participation, by mutual agreement, in which we share a common goal.
Understading that social dynamics and other aspects are constantly changing in today’s world, we are
always open to reviewing our policy for relating to and coexisting with indigenous and non-indigenous
communities, taking into account key aspects such as:
•
Including a human rights approach, specifically those rights relevant to the community’s
ethnicity.
• Ongoing dialog, approachability, transparency, good faith and delivering on promises.
• Respecting the decisions and structures of local assemblies and their representatives.
• Creating shared value.
• Working together to develop projects and formal agreements.
• Accepting and keeping in mind that developing community relations is a process that unfolds in
stages.
• Taking into account the specific cultural, social and territorial characteristics of indigenous
communities.
• Being willing to look at complex issues that are of interest to the communities, especially
because they are part of their world view. An example of this is environmental issues and their
impact on indigenous peoples.
• Strengthening the community engagement and relations area by employing local professionals
and offices and using multiple communication channels.
• Establishing formal agreements that incorporate a human rights lens, sustainability as a value,
good faith, clear dispute resolution mechanisms and permanent working groups.
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Community Relations Team
To meet the needs of local communities, rather than hiring external consultants, SQM has a team of in-
house professionals who work directly with communities, engaging in dialog, establishing working
groups, drafting agreements and designing programs with shared social value.
The work of engagement is organized through our offices in each territory, to ensure we are in personal
contact with our neighbors. We also use other communications channels such as meetings, phone calls,
emails, the SQM community portal portaldecomunidades.sqm.com and apps such as WhatsApp.
To establish this direct relationship with communities, we have formed a solid community engagement
team, which is divided into two divisions: Nitrate and Iodine Communities and Public Affairs North
Division, and the Sustainability and Communities Salar Division, both of which report to the Senior Vice
President of Corporate Services.
Community Engagement Strategy
Our projects seek to create shared social value with communities present in the zones where we operate.
Using the United Nations Guiding Principles on Business and Human Rights, the United Nations
Sustainable Development Goals and the International Labour Organisation’s Convention 169 on
Indigenous and Tribal Peoples as a guide, SQM promotes local sustainable development and respect for
community autonomy through an ongoing process of participation and dialog that is aimed at forging
mutually beneficial agreements and creating plans and programs with community benefits in priority
areas such as education, health, social inclusion, entrepreneurship, historic heritage preservation and
sustainable development.
Furthermore, to generate informed assessments of the potential impacts of our projects, we provide
ongoing, transparent information and promote participation and consultation in all circumstances
required by current legislation, especially in regard to indigenous communities. We orient our work
according to the standards of ILO Convention 169 and the United Nations Declaration on the Rights of
Indigenous Peoples. As such, we are committed to:
• Promoting citizen participation, providing timely, transparent information about our projects and
reporting regularly on environmental matters, in accordance with current legal provisions.
• Promoting the participation of indigenous communities and prior, free, informed and good faith
consultation with communities that may be impacted by our projects in accordance with current
legislation.
• Respecting the autonomy and traditional values of the communities where our operation are
located.
• Promoting and supporting the sustainable economic development of communities and creating
projects with shared value between our operations and neighboring communities.
•
Implementing communications channels that allow for ongoing dialog with the community and
developing effective due diligence mechanisms for human rights.
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SQM has two main focal areas for our community engagement: indigenous communities and local
development.
Indigenous Communities
Some of SQM’s projects operate in areas with a significant presence of indigenous communities.
According to the standards of ILO Convention 169, the United Nations Sustainable Development Goals
and its Declaration on the Rights of Indigenous Peoples—all of which our policy adheres to—and
attending to best practices for mining industry relations with indigenous communities, SQM engages
with indigenous communities and groups that are potentially affected by its projects in a spirit of good
faith, participation, respect for indigenous cultures and autonomy and the search for shared value.
In this regard, at SQM we strive to make our projects not only environmentally and socially sustainable,
but also—and especially—conducive to fostering the development of indigenous communities and
groups that are present in our areas of influence, with full respect for their rights, culture and territories
and in adherence to the definition of indigenous peoples found in Convention 169.
In summary, SQM’s approach to indigenous communities is based on the following work areas:
-
Informed, transparent, culturally appropriate participation.
- Supporting the development of indigenous communities.
Society and Local Development
At SQM, we understand how important our presence can be for the communities situated near our
productive operations and facilities, and for this reason a core aspect of how we manage our business is
maintaining good relations with those communities, adapted to the specific needs and character of each
territory, in order to have a positive, substantial impact on the lives of those living nearby. At SQM, our
engagement with local communities includes a robust program of shared social value and best practices
in regard to human, environmental and labor rights and in our production chain, among other aspects.
We also understand the strategic role we play in providing structural support in some of the territories
we operate in, and we accept that as a day-to-day responsibility as we work with the inhabitants of these
localities.
Community Action Areas:
Attendant to the needs of the territories where we operate and based on the experience we have gained
in working with communities, we have established four pillars of work for SQM’s Shared Social Value
Program. These pillars have evolved over time, taking into account that human relationships and needs
in the surrounding communities change and the programs themselves evolve as they achieve the
objectives defined in partnership with our stakeholders.
Action Areas:
Social
Development
Education and
Culture
Community
Wellbeing, Health
and Safety
Cultural and
Historical Heritage
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154
Focusing on these areas has allowed us to build our experience and enhance our work over time. This
has resulted in long-term initiatives in which we collaboratively co-construct social development
programs that give communities the tools they need to drive their own development.
This approach also has met with approval by our communities.
Social Development: SQM has done noteworthy work with farmers to develop projects that incorporate
technology and innovation into production, as well as others that protect the legacy of more traditional
practices, depending on the community. Added to this are projects that support new and existing
businesses among more urban populations through training opportunities and access to funding. We have
strengthened this last aspect especially in the past two years, with interesting results.
Education and Culture: SQM has developed programs focused on themes complementary to the public
education system, especially for schools in remote areas with multi-grade classrooms, thereby helping
improve the quality of education. In 2021 and 2022, the introduction of programs based on technology,
robotics and experiential learning have been pivotal.
Community Wellbeing, Health and Safety: This line of work came out of communities’ requests for
sports and other programs to meet needs that local residents identified. The Company organized women’s
soccer and other initiatives designed to include individuals with disabilities, complementing its efforts
with the support of institutions that promote inclusive sports.
This pillar also includes health care programs such as the mobile dental clinic, professional support
services and the provision of supplies that have been in high demand due to the pandemic. We have kept
these programs going because of the evident need for health services in remote areas.
Cultural and Historical Heritage: This pillar includes projects aimed at restoring and increasing
appreciation of heritage sites of Pampa and indigenous cultural legacies, depending on the locality, with
special focus on areas where such initiatives are not supported by other companies or the Government
and/or where cultural traditions or sites are at risk.
Community engagement, working groups and multi-sector coordination among neighboring towns
Over the years, we have learned that the best way to engage in effective dialog is through working groups,
which develop their own dynamic in line with the territory and issue being addressed.
However, all agree that the makeup of these groups should be approved by the community. In the past,
participants have included representatives of different indigenous and ethnic groups, unions, associations
and other local groups, all validated by their base. Some groups have expert community advisors who
serve as counterparts for company professionals.
All these groups meet regularly and have signed memos of understanding, work agreements and/or
operational bylaws, depending on their nature. These structures are intended to help guide collective
community-company actions.
One outstanding example of this way of working is the working groups in the Huara Municipality, in
Tarapacá Region, where SQM will soon begin construction of an Iodine and Nitrate Plant. More than a
year ago, well before the startup of this new operation, the Company established working groups with
communities in each locality and launched shared social value programs, with tangible results.
8 INDICATORS
155
Current Working groups in 2022
Presented by Commune from North to South
Mesa/ Instancia/ Tarea
Localidad/ Comuna
Faena
Huara Working group
Bajo Soga Working group
Pisagua Working group
Huara, Huara
Bajo Soga, Huara
Pisagua, Huara
Working group Rurales Colonos
Sector Colonos Rurales, Huara
Orcoma
Orcoma
Orcoma
Orcoma
Working group Agrupación Sindicatos Costeros
Caramucho y Cañamo, Iquique
Nueva Victoria
Working group STI N°1 Chanavayita
Chanavayita, Iquique
Working group STI N°2 Y N°4 Chanavayita
Chanavayita, Iquique
Working group STI N°3 Chanavayita
Working group STI N°3 Caramucho
Working group Youth Chanavayita
Chanavayita, Iquique
Caramucho, Iquique
Chanavayita, Iquique
Nueva Victoria
Nueva Victoria
Nueva Victoria
Nueva Victoria
Nueva Victoria
Working group Jehovah's Land Multicultural
Indigenous Association
Working group Desert Youth Aymara Indigenous
Association
Working group Aymara Peasant Indigenous
Association of the Pampa del Tamarugal
Victoria Working group
Huatacondo Working group
Tamentica Working group
Sector Bellavista Working group
Colonia Pintados, Pozo Almonte
Nueva Victoria
Colonia Pintados, Pozo Amonte
Nueva Victoria
Pampa del Tamarugal, Pozo Almonte Nueva Victoria
Victoria, Pozo Almonte
Huatacondo, Pozo Almonte
Tamentica, Pozo Almonte
Sector Bellavista, Pampa del
Tamarugal, Pozo Almonte
Nueva Victoria
Nueva Victoria
Nueva Victoria
Nueva Victoria
Working group with the fishermen union of Tocopilla Tocopilla
Puerto Tocopilla
Safety advisory consultancy in ground transportation Tocopilla
Advisory board El Puerto Cowork
Tocopilla
Puerto Tocopilla
Puerto Tocopilla
Safety advisory consultancy in ground transportation María Elena/María Elena
Commune safety advisory
Tourism Working group
Working group
with the indigenous community Quillagua Aymara
María Elena/María Elena
María Elena/María Elena
Quillagua/María Elena
Working group Quillagua Rural Drinking Water
Quillagua/María Elena
Working group Hydroponic Cooperative of Quillagua Quillagua/María Elena
Technical Working group with the Atacameña de
Camar Indigenous Community
Working group con la Comunidad Atacameña de
Toconao
Camar
Toconao
Coya Sur
Coya Sur
Coya Sur
Coya Sur
Coya Sur
Coya Sur
Salar de Atacama
Salar de Atacama
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156
Working group with the Atacameño Indigenous
Community of Talabre
Working group with the Atacameño Indigenous
Community of Socaire
Río Grande Working group
Viticulture Working group
Women and Mining Working group (jointly with the
Mining Secretary, Women and Gender Equality
Secretary and Mining companies)
Talabre
Socaire
Rio Grande
Toconao
Salar de Atacama
Salar de Atacama
SQM Salar
SQM Salar
Antofagasta
Corporate Offices
Women and Mining Working group (jointly with the
Mining Secretary, Women and Gender Equality
Secretary and Mining companies)
Santiago
Headquarters
Evaluating Our Performance
As part of the controls and commitments in place at SQM, all of our operations and expansion projects
are subject to environmental assessments based on current regulations. This includes measuring the
impact of our operations on neighboring communities and conducting public consultations, indigenous
consultations and other community outreach. We use our own staff for this purpose and create permanent
ties with the community, which sets our Corporate Social Responsibility program apart from others that
outsource this work.
We continue to use the M-Risk software program to manage our community engagement program, as it
enables us to standardize information and record and control the company’s work with its neighbors,
thereby creating uniform records of each interaction.
Each year, we evaluate our programs and impacts prior to making new commitments. We assess
initiatives in progress, including their performance and approval rating, in direct conversations with
community members. We also apply perception and assessment studies in the territories, including the
SQM Perception and Image Survey in Tarapacá and Antofagasta regions, which was conducted for the
second year in a row in June and August 2022, respectively, by the firm Feedback.
In 2022, the Compliance area used the Bow Tie methodology to conduct a survey of risks and conflicts
in communities, in order to provide advance warning of high-risk scenarios and their causes. The results
of this diagnostic tool are being shared with the areas involved and will be published internally in 2023.
Shared Social Value Programs
The following are some of the programs SQM implemented in 2022.
Social Development
Programs in this sphere focused on agricultural development and included work with the Atacama Tierra
Fértil Program and other social development initiatives and/or programs.
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157
The following initiatives were carried out as part of the Atacama Tierra Fértil Program:
Program / Initiative
Place
Huara
Pozo Almonte
Pozo Almonte
Working dialogue with farmers from Bajo Soga
Desarrollo Unidad Productiva Ganaderos de la Pampa del
Tamarugal
Agricultural Research and Development Center
Meeting of Innovation and Agricultural Entrepreneurship in the
Tarapacá Region
Agricultural development in Pintados
Water Use Management and Hydroponics
Ayllu Wine Production Program
Soilless Crop Program
Garlic Recovery Crop Program
Fodder Enabling
Support to the Association of Irrigators and Farmers of Soncor Soncor, en San Pedro de Atacama
Catarpe, en San Pedro de Atacama
Ayllu Catarpe Demonstration Plots
Alto Jama, en San Pedro de Atacama
Neighborhood Orchard Club of Alto Jama
Pozo Almonte
Quillagua
San Pedro de Atacama
San Pedro de Atacama
San Pedro de Atacama
San Pedro de Atacama
Región de Tarapacá
List of main programs with a focus on Social Development:
Program / Initiative
Place
“Activate yourself” Huara
“Pisagua Active” program
Support to entrepreneurs from Laguna Verde
Photovoltaic System – Farmers from Pintados
Emprendepalooza (entrepreneurs’ festival) Tamarugal 2022
“Sabores y Saberes”
Sustainable María Elena program
Recycling program
Drinking water plant of Camar
Photovoltaic plant for Camar
Rural Cooperative / Agricultural training
Support of water managament
Cowork in the port
Nobody stop us! Tournament
Crazy for Recycling
Alianza Mujer Atacameño: Individual Support Fund
Education and Culture
Huara
Pisagua
Iquique
Farmers from Pintados, in Pozo
Almonte
Pozo Almonte
Quillagua
María Elena Sostenible
María Elena y Quillagua
Camar, en San Pedro de Atacama
Camar, en San Pedro de Atacama
San Pedro de Atacama
San Pedro de Atacama
Quillagua, María Elena, Tocopilla y
Pozo Almonte
Iquique, Alto Hospicio, Pozo
Almonte, Huara, Tocopilla, María
Elena, Antofagasta y San Pedro de
Atacama
Tocopilla, Quillagua y María Elena
San Pedro de Atamaca
SQM supports programs that provide skills development tools for students and teachers, for the purpose
of reducing learning gaps in schools located far from major urban centers.
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158
We support educational initiatives that focus on closing the learning gaps that exist in schools near our
operational sites. These proposals are intended to complement teachers’ knowledge, providing classroom
resources and building a bridge between schools and the company. SQM staff serve as volunteers in
some training courses, especially technical and vocational ones.
SQM’s projects in this area respond to needs in the regions where we are present, with the understanding
that in the future, many students will remain in the region to work, some even joining the company.
Some of the programs implemented in 2022 are:
Program / Initiative
“I learn with you” program
“ViLTI SeMANN” program
Enhancing Education in the North of Chile
Apprentices’ program
Technical Training Program for Communities
From Pisagua to Huara
Environment care with Verdical
Support to programs of “Enseña Chile” Foundation
Elaboration and edition of Kunza guide to 5th y 6th grade
students
Study Leveling Program Year 2022
Leadership and School Coexistence Workshop
Support to América B-10 school
Support to Don Bosco school
Innovation carnaval
Alternance program
Propaedeutic
Lecture “A place only for us”
Diploma “Learning Processes in Early Childhood”
Girls in STEM Camp
Community Wellbeing, Health and Safety
Place
Pozo
Almonte,
Antofagasta,
Tocopilla and María Elena
Antofagasta, Tocopilla, María Elena,
Quillagua, Colonia de Pintados, La
Huayca and La Tirana
Pozo Almonte, Alto Hospicio,
Antofagasta, María Elena
and
Tocopilla
Huara, Pozo Almonte, Pisagua, Pica,
Alto Hospicio, Colonia de Pintados,
María Elena, Calama, San Pedro de
Atacama, Toconao, Camar, Socaire,
Peine and Antofagasta
Pozo Almonte, Huara, Tocopilla,
María Elena, San Pedro de Atacama,
Antofagasta and Santiago
Huara
Tocopilla
San Pedro de Atacama
San Pedro de Atacama
San Pedro de Atacama
San Pedro de Atacama
Calama
Calama
Antofagasta, Tocopilla and Calama
Antofagasta and Calama
María Elena and Tocopilla
María Elena
María Elena
Antofagasta
In 2022, we continued to promote and support sports in the communities near our operations.
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Every year we receive requests from institutions and associations asking us to donate to and host events
to promote and finance sports events in their communities.
We understand how valuable sports are to people and how they teach young people valuable lessons
about teamwork, consistency, healthy competition, respect and other skills.
As for health and wellbeing, health and other high quality care programs have become priorities for
communities far removed from urban centers and are important to the Company as well, because of their
positive impact.
Some of our programs developed in the period are:
Program / Initiative
Place
Smiles’ Route Project
Expansion of Colonia Agrícola rural hospital in Pintados
Medical program
Therapeutic greenhouse
Mobile Dental Care Program
Community Pharmacy
Collaborative work programs with the community of Cucuter
AMA: Cancer Preventive Operation
Support to Sports Organizations in Tarapacá and Antofagasta
Sportswear delivery in Bajo Soga
Support to Tocopilla Sports Club
Mini worlcup tournament
Extracurricular football Academy
Celebration of the World Day of Physical Activity
Toconao football academy
Celebration of the First Alto Jama Family Union Baby Soccer
Championship
Program of Activities with Older Adults
Support to Bodyboard diving Club
E-Karts racing circuits
Safer routes
Safe summer
Safety guardians
Cultural and Historical Heritage
Huara
Pintados, Pozo Almonte
Tocopilla
María Elena
San Pedro de Atacama
San Pedro de Atacama
Cucuter, in San Pedro de Atacama
San Pedro de Atacama
Tarapacá and Antofagasta regions
Huara
Tocopilla
Tocopilla
Tocopilla
Tocopilla
Toconao, en San Pedro de Atacama
Alto Jama, en San Pedro de Atacama
San Pedro de Atacama
Antofagasta
Pozo Almonte, Tocopilla, María
Elena and Toconao
Pozo Almonte
Quillagua
Tocopilla and María Elena
For many years, we have worked with the Humberstone and Santa Laura Nitrates Museum Foundation,
the Chacabuco Nitrates Museum Foundation, the Pedro de Valdivia Nitrates Museum Foundation and
the Huanchaca Ruins Foundation, providing resources and lending our experience, as well as having an
active presence on their boards.
As the natural heirs of the nitrates industry, for over a decade now SQM has participated in initiatives
that pay tribute to the history of this industry in Tarapacá and Antofagasta regions.
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This commitment has taken the form of donations to support the operation of the historic Santiago
Humberstone and Santa Laura nitrates “offices”, the Chacabuco Nitrates Museum Foundation and the
Huanchaca Ruins Foundation in Antofagasta, as well as complementary work to help maintain these
sites and museums. Added to this, SQM also supports new projects undertaken by these same institutions
that resonate with us.
Some of our initiatives developed in this area are:
Program/Initiative
Heritage Day Celebration
Football Film Festival
Celebration of National Holidays in Humberstone
Celebration of the 143rd Anniversary of Pisagua
Heritage Rescue Wood Workshop
Support to María Elena Foundation
2nd Version of the Photographic Contest "María Elena: We are
Life Under the Sun"
Casa Telar Program
Celebration of the Third Meeting of Lakitas "Ckoy Nisaya
Ckuri" (Voice of the Wind)
Support for the Improvement of the Niño Jesús Sequitor and
Checar Chapel, Stage 2
Reconstruction of the Church of Toconao
“Ampara Lurata” workshops
Percussion workshops
Rescue of whool handcrafts from Pampa
Place
Pozo Almonte, María Elena and
Tocopilla
Provincia de Tocopilla
Pozo Almonte
Pisagua
Quillagua
María Elena
María Elena
San Pedro de Atacama
San Pedro de Atacama
San Pedro de Atacama
Toconao
Pozo Almonte
Pozo Almonte
Quillagua
Iquique, Pisagua, Mamiña, Huara
and Pozo Almonte (La Tirana)
Florist workshop of Pampa
Local workers
Percentage of local employees
2022
53.6%
2021
53.0%
At SQM, as of December 31, 2022, we have 53.6% of our own workforce working and residing in the
Tarapacá and Antofagasta regions, regions that are considered local to us.
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Occupational Health and Safety
Indicator
1.- RT-CH-320a.1. (1) Total recordable injury rate (TRIR) and (2) Fatality rate for a) direct
employees and b) contract employees
2.- RT-CH-320a.2. Description of efforts to assess, monitor and reduce exposure of employees and
contract workers to long-term (chronic) health risks.
Some of our health and safety indicators for 2022 are shown below.
Total Recordable Incident (or Accident) Frequency (TRIF)
Type of Employee
SQM Employees*
Contractors
SQM Total
Note: Calculation factor per 200,000 hours.
2022
0.31
0.05
0.15
The main hazards that have caused injury due to accidents are: operation of equipment and vehicles,
operations involving explosives, handling of hazardous substances, high temperature processes,
intervention in energized equipment, operation of mobile equipment and machines, working at height,
hoisting and lifting operations, working in confined spaces, hot work and intersecting tasks, among
others.
The most common injuries related to workplace incidents and/or accidents are: contusions, burns,
fractures, cuts, sprains, and irritation, among others.
The primary measures adopted to minimize workplace risks and hazards, incidents and accidents are:
• Eliminating exposure to the line of fire, improving the quality of hazard identification and risk
appraisal, having established instructions and standards, and reassessing these when work
conditions change.
•
Installing safety mechanisms on connections for pressurized transfer systems to prevent
accidental disconnection.
• Strengthening controls to ensure that no safety mechanisms are left inoperable.
• Before and during driving, being alert to the presence of pedestrians and obstacles, only driving
authorized, inspected vehicles, reviewing and following the Rules for Transit and Transport, and
completing the pre-use inspection and checklist for vehicles and equipment.
• Following maximum weight limits when operating equipment.
• Respecting speed limits and always driving at a speed that is reasonable and prudent for the
conditions.
• Ensuring that hoisting equipment and accessories are certified and inspected.
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• Ensuring that all personal protective equipment suitable for working in areas and on tasks at high
temperatures is on hand.
•
Isolating all energies identified at their point of origin, ensuring that the correct equipment or
circuit is blocked, testing that energy to the circuit to be handled is at zero and that there is no
residual energy.
• Learning about the risks and proper conditions for handling and storing hazardous substances.
•
Isolating sectors for height work from lower levels, using toolbelts to prevent tools from falling,
carrying out a pre-use checklist of systems and equipment for working at height, using certified
work platforms (scaffolding, ladders, ramps, etc.).
• Moving through authorized spaces only.
More than 80% of the measures defined and implemented to manage hazards and minimize risks are
associated with management, redesign and elimination controls, while the remaining percentage is
associated with personal protective equipment, segregation and substitution.
Individuals who work in this industry may be exposed to possible contaminants and potential health risks
and the Company strives to address these concerns in order to protect all SQM workers. We conduct
ongoing risk assessments, which allows us to design measures to ensure that our workers are in good
physical and mental health. We have plans for monitoring, controlling and reducing exposure to all of
the agents to which our workers may be exposed.
Occupational illnesses among contractors are managed through the Risk Prevention Program in our
Operations (established by contract), which is aligned with SQM’s Comprehensive Occupational Health
and Safety Management Program. Furthermore, we conduct controls to ensure that our contractor
companies are notifying their employees of workplace risks and making sure they use personal protective
equipment and other safety practices.
In regard to SQM worker and contractor exposure to occupational illness and pollutants (the latter under
OSHA), at our Salar de Atacama, Carmen Chemical Plant, Nueva Victoria, Coya Sur and Pedro de
Valdivia operations we have identified corrosives, hepatotoxins, nephrotoxins, neurotoxins, sensitizing
agents, carcinogens, mutagens and reprotoxins.
The control measures implemented to prevent occupational illnesses and exposure to different
contaminants are carried out jointly with the official agency responsible, the Chilean Safety Association
(ACHS) in our case. The agency and SQM coordinate on the environmental assessment of substances to
which workers may be exposed, defining groups with similar exposure levels, performing qualitative
and quantitative assessments where necessary and implementing surveillance programs where
applicable, based on exposure levels found in ACHS reports. We also have prioritized engineering
measures such as the introduction of forced extraction hoods in laboratories. At our plants, these
substances are handled in open, well-ventilated areas and employees always use the personal protective
equipment appropriate to the agent in question. For respiratory protection, we follow the technical guides
distributed by the Chilean Public Health Institute and ACHS report recommendations (see above).
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Product Design for Use-phase Efficiency
Indicator
1.- RT-CH-410a.1. Revenue from products designed for use-phase resource efficiency
At SQM we have five lines of business and are a global leader in four of them:
Specialty Plant
Nutrition
Iodine and
derivatives
Lithium and
derivatives
Potassium
Industrial
Chemicals
We are a key stakeholder in the markets where we sell our products, including lithium and its derivatives,
specialty plant nutrients, iodine and its derivatives, potassium and industrial chemicals. For more
information, see Chapter 6 section 6.2.
Safety & Environmental Stewardship of Chemicals
(1) Percentage of products
Indicators
1.- RT-CH-410b.1.
contain Globally Harmonized
System of Classification and Labeling of Chemicals (GHS) Category 1 and 2 Health and
Environmental Hazardous Substances, (2) percentage of such products that have undergone a hazard
assessment
2.- RT-CH-410b.2. Discussion of strategy to (1) manage chemicals of concern and (2)
develop alternatives with less human and/or environmental impact
that
Given the nature and uses of the products that we sell, we do not have a hazardous substance management
procedure for generating alternatives with a lower human and environmental impact. However, we do
take steps to maintain up to date information on product risks and hazards and to provide updated
communications on hazards through safety data sheets and labeling.
The company presents information on hazards in accordance with international standards, usually based
on the Globally Harmonized System of Classification and Labeling of Chemicals. All of our products
have their own safety data sheet, which includes the ingredients that could impact human health and/or
the environment. This document also sets out the conditions for safe product use and disposal.
We also monitor regulatory and technical developments to identify substances of great concern based on
the criteria of Regulation (EC) 1907/2006. Each raw material used is evaluated in terms of its hazard
classification in order to assess the impact on the classification of the final product. The safety data sheet
is a hazard assessment communication tool.
Our internal customers can request safety data sheets for new products through a web platform created
exclusively for this purpose, in order to leave evidence and document the process.
Lithium and Iodine
The company has a process for updating product artwork and labels that includes labeling information
as per the regulatory requirements of destination markets:
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I.
II.
III.
Product origin, indicated on all labels.
Contents are listed voluntarily or as legally required.
Safe use instructions are mandatory and based on the regulations applicable to each
destination market.
IV.
Product disposal instructions are included only when legally required.
All lithium and iodine products are covered and assessed to ensure compliance with the procedures
described above. They are classified as hazardous to human health by the Chilean Superintendency of
the Environment (SMA) and have been subject to risk assessment under the REACH regulation
(European Union).
All of our lithium- and iodine-derived products have their respective safety data sheets, which are
regularly updated. In 2022, 12% of our lithium data sheets were updated.
In regard to chemical substance analysis, finished iodine and lithium products do not contain Substances
of Very High Concern (SVHC) according to REACH. They also do not contain chemical substances
classified as extremely or highly hazardous by the WHO, and lithium carbonate is not listed in California
Proposal 65, so no specific analysis was conducted under Proposal 65 in 2022.
For finished lithium and iodine products, no analysis is conducted of the strategy and methods to develop
alternative chemical substances and processes that reduce or avoid the use of substances that may cause
concern among consumers, customers, regulatory agencies and others interested in human health or the
environment.
Some of our iodine products contain the following environmental hazards according to the SMA
Chemical Product Classification and Labeling System: acute toxicity category 4, eye irritation category
2, skin irritation category 2, STOT SE category 3, STOT RE 1, aquatic toxicity category 1.
Specialty Plant Nutrition, Potassium and Industrial Chemicals
SQM’s specialty plant nutrition line is subject to general chemical product oversight and industry
regulations applicable to fertilizers. In Europe, fertilizers have been regulated by Regulation 2003/2003
on fertilizers, which was replaced in 2022 by Regulation (EU) 2019/1009.
In general, chemical products sold in Europe are subject to Regulation (CE) 1907/2006 governing the
registration, evaluation, authorization and restriction of chemical substances and blends and Regulation
(CE) 1272/2008 on the classification, labeling and packaging of substances and blends.
Furthermore, potassium nitrate and sodium nitrate (as well as other nitrogen compounds) and nitrogen-
based fertilizers are governed by Regulation (UE) 2019/1148 on the sale and use of explosive precursors.
In the United States, fertilizers are regulated under the laws of each state. At the federal level they are
regulated by the OSHA Hazard Communication Standard (HCS) and the Toxic Substances Control Act
(TSCA). Potassium nitrate and sodium nitrate are governed by the Chemical Facility Anti-Terrorism
Standards (CFATS). Maritime transportation of these products is regulated by the IMDG and IMSBC
codes.
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All of the products are covered and assessed for compliance with the aforementioned procedures and
regulations.
Some of our products may contain boron (in the form of boric acid) as an impurity or desired element.
Boron levels are monitored during production. When levels of impurities or intentional ingredients
exceed the limits established in the Globally Harmonized System, the products are classified and labeled
as such to communicate the hazard associated with these products.
In regard to analyzing the strategy and methods to develop alternative processes and chemical substances
that reduce or avoid the use of substances that may be of concern to consumers, customers, regulatory
agencies or others interested in human health and the environment, potential contaminants are monitored
during production. In addition, annual studies are conducted to evaluate heavy metals. The company has
developed prilled products that are less hazardous due to the oxidizing properties of nitrate-based
products, which meet the principles of green chemistry and designing safer chemicals.
Some of our products contain the following environmental hazards, according to the SMA Chemical
Product Classification and Labeling System: reproductive toxicity and eye irritation 2. It is also worth
mentioning that the products cataloged as hazardous undergo chemical safety assessments and, in some
cases, depending on the product, the assessment is conducted on their components. Products cataloged
as non-hazardous are not subject to chemical safety assessments.
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Genetically modified organisms
Indicator
1.- RT-CH-410c.1. Percentage
modified organisms (GMOs)
of
products
by
revenue
that
contain
genetically
The above indicator does not apply to SQM, as we do not make products that contain GMOs.
Management of the Legal & Regulatory Environment
Indicator
1.- RT-CH-530a.1. Discussion of corporate positions related to government regulations and/or policy
proposals that address environmental and social factors affecting the industry
This section outlines some of the risks and opportunities present in current legislation, regulations and/or
legal processes (hereafter collectively called the “legal and regulatory environment”) related to
environmental and/or social factors that could have a considerable financial impact on the Company, as
follows (see Appendix 1 for more information):
- Environmental laws and regulations could expose us to increased costs, liabilities, complaints
and failure to meet current and future production targets.
- Current and future labor laws and regulations in Chile could expose us to potential liabilities
and costs due to non-compliance.
- Outbreaks of infectious diseases or other public health pandemics, such as the recent outbreak
of COVID-19 (“coronavirus”), which is still present around the world, have impacted and may
further impact markets in which SQM, our customers and our suppliers operate or market and
sell products, and this may have a material adverse effect on our business operations, financial
position and operational results.
-
If our interest groups and other stakeholders believe that we are not adequately addressing
sustainability and other environmental, social and governance (ESG) concerns, this could have
a negative effect on our business.
- Changes in laws and other legal provisions regarding water rights may affect our business,
financial position and operational results.
- Our water supply may be affected by geological changes and/or climate change.
- Ratification of the International Labour Organisation’s Convention 169 on Indigenous and
Tribal Peoples may impact our development plans.
- Quality standards in the markets where we sell our products may also become stricter over time.
Operational Safety, Emergency Preparedness & Response
Indicator
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1.- RT-CH-540a.1. Process Safety Incidents Count (PSIC), Process Safety Total Incident Rate
(PSTIR), and Process Safety Incident Severity Rate (PSISR)
2.- RT-CH-540a.2. Number of transport incidents.
At SQM, we conduct investigations and establish control measures for incidents that occur at our
facilities. We also inform the respective authorities in accordance with their specific regulations. To do
this, we use an accident investigation procedure to record:
Internal reporting of accidents and external reports to authorities.
• Responsibility for the investigation process.
•
• Description of the process, steps of the investigation.
• Establishment of corrective measures using the control hierarchy.
• Creation of investigative teams depending on the potential of the accident.
Every incident—including accidents with or without lost time, material damages and/or operational
failures—is recorded and investigated according to the respective procedure. These are presented and
discussed at Board meetings and Executive Operations Committee meetings in order to identify lessons
learned and improve processes.
We have a tool called Zyght to record all types of incidents, findings, dangerous situations and other
issues related to occupational health and safety.
Process Safety Incidents in 2022
No. of Incidents
Total severity score
Process Safety Total Incident Rate (PSTIR)
Process Safety Incident Severity Rate (PSISR)
Note: Calculation factor per 200,000 hours.
Transport Incidents
4
4
0.03
0.03
In 2022, 11 transport incidents were registered, mainly related to ground transportation of our products
between operations and from our operations to the port of Mejillones.
These incidents are outlined below:
Description
Causes
Results /
consequences
Corrective action taken
Driver for a subcontractor,
bringing a load to the Port of
Mejillones, overturned on
Route B-262 Km 5 (port
access curve).
Material damage to
1.- Reckless driving by an external
the truck structure.
bus driver.
1.- Dissemination and awareness-raising among
drivers about the incident, reinforcing defensive
driving techniques, being aware of adverse
conditions that can occur along their route.
Subcontractor’s bus hit the
rear of another company’s
truck.
1.- Driver drove across the
centerline.
2.- Distracted driving, not paying
attention to the road while driving.
Material damage to
the truck structure.
1.- Dissemination and awareness-raising among
drivers about the incident, reinforcing defensive
driving techniques, raising awareness of adverse
conditions that can occur along their routes, and
maintaining self-awareness about distracted
driving.
2.- Driver was fired for failing to perform his
duties.
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Subcontractor’s driver, while
driving along Route 5 Norte
km 1,675, struck a pedestrian
on the road. The pedestrian
died at the scene as a result of
being struck.
Driver for a subcontractor,
while driving along Roue 5
Norte, was hit on the left side
by a bus that had swerved
across the centerline.
A subcontractor’s driver,
while driving down Route B-
385 at Cuesta Domeyko,
drove across the centerline
and ended up jackknifed
beside the shoulder.
Subcontractor’s driver,
driving along Route B-24 at
Cuesta Barriles, was hit in
the lower front cabin by the
rear bumper of an acid cargo
truck, which had veered over
the centerline on a curve.
1.- Pedestrian was walking on the
roadway.
2.- Lighting was limited.
Pedestrian struck
(died at the scene).
1.- The entire fleet of drivers was engaged in a
reflection and analysis regarding the incident.
2.- Driver involved underwent a psychological
assessment before returning to work.
3.- The safety campaign, "Nadie está libre, a todos
nos puede pasar” (No one is immune, it can happen
to anyone) was implemented.
1.- Bus driver showed reckless
driving while driving around the
curve, driving into the oncoming
traffic lane.
2.- The curve’s geometric
configuration: on the western side of
the road there is a slope that limits
visibility of oncoming traffic.
1.- Overconfident and with a low
perception of risk, the driver lost
control of the rig’s stability, causing
it to go off the pavement and end up
jackknifed.
2.- Driver was fatigued, leading to
distracted driving.
1.- Unsafe action by third party
caused high risk when it veered into
oncoming traffic.
2.- The factors involving the other
driver that caused the accident are
unknown.
Minor injury to both
drivers/ material
damage to the
structure of the truck
and the bus.
1.- The entire fleet was engaged in a reflection,
awareness raising and analysis of the incident.
2.- Defensive driving campaign implemented.
3.-Controls were increased at the Quillagua
customs post.
Material damage
/driver was not
injured.
1.- All staff were told about the incident and
underwent a review of defensive driving,
respecting posted speed limits and other road signs,
and the correct use of new–way.
2.- Driver received training in defensive driving
and preventing fatigue at the wheel.
3.- Driver received a letter of reprimand.
Material damage to
the truck structure.
1.- Reflection and safety analysis was carried out in
relation to the event.
2.- The safety campaign "En un segundo” (In a
second) was implemented.
Subcontractor’s driver, while
driving on the internal road at
Nueva Victoria km 14.8, lost
control of his vehicle on a
curve, veering off onto the
right side of the road.
1.- Loss of control of the rig.
2.- Distracted driving by taking his
eyes off the road.
3.- Insufficient promotion of the
concept of self-care and defensive
driving.
Material damage to
the rig.
Subcontractor’s driver, while
driving on Route B-24
towards Coya Sur, lost
control of his Batea rig,
driving off the road onto the
right-hand shoulder and
ending up in a jackknife
position.
After the driver of a
subcontractor parked and
exited from his rig at
Baquedano, the truck moved,
crashing into the perimeter
fence.
1.- Loss of control of the rig.
2.- Use of a cell phone while driving
(video call).
Material damage to
the rig.
1.- Driver was not aware of the risk
of parking the rig without ensuring
the brake was on.
2.- Worker’s performance was
unreliable, as he had done the same
thing every day when stopping the
rig.
3.- Unsatisfactory identification and
assessment of exposure to loss upon
entering the town of Baquedano (an
area full of high tonnage trucks).
4.- The driver lacked control and
awareness of defensive driving and
failed to verify the parking position.
No material damage
to the rig/ no injury
to persons.
Subcontractor’s driver, when
driving to pick up the second
load of his shift inside the
Nueva Victoria site, drove
around a curve and tilted his
1.- Distraction (not paying attention
to the task of driving).
2.- Overconfidence.
3.- Rigs with problems are not
monitored comprehensively and DSS
No material damage
to the rig/ no injury
to persons.
1.- Implementation and monitoring of camera alerts
for misalignment.
2.- Driver was trained in defensive driving by
Xplork, and underwent risk management
onboarding through SQM Aprende.
3.- BSR training and evaluation and reinforcement
of safety standards implemented.
4.- 21-day sanction for non-compliance given, as
per the non-compliance matrix.
5.- The entire fleet was engaged in awareness
raising, analysis and reflection on the incident.
1.- Dissemination and analysis of the incident.
2.- Driver detained during the investigation.
3.- Safety campaign "No Utilizar Celular al
Conducir” (Don’t use your cell phone while
driving).
4.- Driver involved in the incident was fired.
5.- Daily control of all individuals who deviate
from the Guardian platform (cell phone use).
1.- Dissemination and analysis of the incident.
2.- Planning and designation of places for parking
trucks in Baquedano locality.
3.- Training talk on identifying risks and hazards in
the workplace (shift change).
4.- Inclusion within the risk inventory of entry into
communities, including risks present and control
measures.
5.- Repair of damage in the community and
improvements to the surroundings.
6.- Administrative action taken with the driver
involved.
7.- An informative letter with an apology and
corresponding commitment to the community of
Baquedano was sent to the mayor.
1.- Dissemination and awareness-raising among the
entire fleet of drivers regarding the incident.
2.- Reinforcement and reassessment of procedures
for the interior road at Nueva Victoria.
3.- Dissemination and evaluation of EPR-02
external control standard for distraction, focused on
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169
rig to the right-hand side,
veering off the road.
(Guardian) repairs not followed up
on.
Subcontractor’s driver, while
driving a tanker loaded with
lithium brine, lost control of
the vehicle at km 25 of Route
B385 and overturned.
1.- Incorrect decision making.
2.- Did not keep his eyes on the road.
3.- Failed attempt to save time.
4.- Employee felt in a hurry.
Material damage to
the rig / driver injury
consisted of broken
left humerus and a
cut on the head.
the risks of applying these standards.
4.- Driver signed up for the auto club defensive
driving program.
5.- Maintenance and repair of DSS equipment in
poor condition.
1.- The entire fleet of drivers was engaged in a
reflection and analysis regarding the incident.
2.- Driver underwent psychological assessment in
relation to the event.
3.- Awareness raised about the consequences of
distracted driving.
4.- Methodology developed to ensure drivers leave
the base with documentation reviewed by a
supervisor; personalized document control by
supervisors will be introduced.
5.- Ongoing Nazar-SQM review of alert
management platforms.
6.- Implementation of driver monitors at the Uribe
base (accompaniment in cab/observation of
behavior).
7.- Dissemination and evaluation of fatigue and
sleepiness procedure.
By implementing and certifying in ISO 39001:2012, the international standard for Road Traffic Safety
Management, we are striving to ensure that ground transportation of our products is safe, and that we
have minimized the risk of injury and death due to traffic accidents, for both our workers and the
community.
Production By Reportable Segment
Indicator
1.- RT-CH-000.A
Details of our production during 2022 can be found in section 6.2.
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9. ESSENTIAL OR RELEVANT FACTS
Below is a summary of the essential or relevant facts reported by the Company to the regulatory entities,
the respective stock exchanges, and corporate website, during 2022:
On March 23, 2022, the Company reported the agreement to recommend to the ordinary shareholders'
meeting of the Company - to be held on April 26, 2022 - the distribution and payment of dividends, in
accordance with the Dividend Policy reported as an essential event on November 17, 2021 (the “Policy”),
for an amount of US$0.09691 per share to complete the amount of US$2.04964 for the final dividend.
Said definitive dividend already considers the first interim dividend of US$0.23797 per share, the second
interim dividend of US$0.31439 per share and the eventual dividend of US$1.40037 per share, which
were paid during the year 2021.
Likewise, it was reported that the final dividend balance for the 2021 business year will be paid in its
equivalent in pesos, the national currency in accordance with the observed dollar value published in the
Official Gazette on April 26, 2022, in favor of those shareholders of the Company who are registered in
the respective Registry on the fifth business day prior to the one on which the same will be paid.
On April 25, 2022, the Company announced the filing with the Securities and Exchange Commission
(“SEC”) of the 20F Annual Report for the fiscal year ended December 31, 2021.
On the same date, the Company issued the summaries of technical reports for the following properties:
Salar de Atacama, the Mt. Holland Lithium Project, Pampa Orcoma and Nueva Victoria (the “Reports”).
These reports were accompanied by the respective consents from the qualified persons responsible for
their validations.
On April 26, 2022, the Company reported the holding of the 47th ordinary general meeting of
shareholders of the Company, in which the following matters were agreed upon, among others:
(a) Approval of the Company's balance sheet, memory, financial statements and external auditors'
report for the business year ended December 31, 2021;
(b) Appointment of PricewaterhouseCoopers Consultores - Auditores SpA, as external auditors of the
Company for the business year between January 1 and December 31, 2022;
(c) Distribution of a final dividend under the terms recommended by the Company's board of directors
(the “Board of Directors”), which were communicated as an essential fact on March 23, 2022;
(d) Election of the Board of Directors, which was made up of Mrs. Dang Qi and Gina Ocqueteau
Tacchini and Mr. Antonio Gil Nievas, Gonzalo Guerrero Yamamoto, Patricio Comtesse Fica,
Ashely Luke Ozols, Hernán Büchi Buc and Antonio Schneider Chaigneau, with Mrs. Ocqueteau
and Mr. Gil the quality of independent; and
(e) Approval of the remuneration structure of the directors of the Company, members of its different
committees, and their expenses.
Likewise, in an extraordinary session on the same date, the Board of Directors agreed on the appointment
of Mr. Gonzalo Guerrero Yamamoto as Chairman of the Board and Mr. Patricio Comtesse Fica as Vice
President of the Board.
In addition, it was reported that the committees of the Board of Directors were integrated as follows:
(a) Committee of Directors: Gina Ocqueteau Tacchini, Antonio Gil Nievas and Ashely Luke Ozols;
(b) Corporate Governance Committee: Patricio Comtesse Fica, Hernán Büchi Buc and Antonio
Schneider Chaigneau;
9 ESSENTIAL OR RELEVANT FACTS
171
(c) Safety, Health, and Environment Committee: Dang Qi, Patricio Comtesse Fica and Gonzalo
Guerrero Yamamoto.
On May 18, 2022, the Company reported that the Board of Directors agreed to pay an interim dividend
equivalent to US$2.78716 per share, charged to the profits for the year 2022. Said amount will be paid
in its equivalent in pesos, the national currency, according to the value of the Observed Dollar published
in the Official Gazette on June 6, 2022.
On August 17, 2022, the Company reported that the Board of Directors agreed to pay an interim dividend
equivalent to US$1.84914 per share, charged to the Company's 2022 profits. Said amount will be paid
in its equivalent in pesos, the national currency, according to the value of the Observed Dollar that
appears published in the Official Gazette on October 3, 2022.
On September 13, 2022, and after 25 years of lithium production in Chile, the Company reported on the
announcement of the Salar Futuro project that seeks, through advanced and disruptive technologies, to
increase performance and use of seawater, make extraordinary contributions, both to the hydrological
environment of the Salar de Atacama basin, and to the communities and native peoples of the area, in
order to continue offering high-quality lithium products in a responsible manner, with low production
costs and, according to our estimation, the smallest environmental footprint in the world.
During the first half of this annual cycle, SQM contributed approximately US$2,314 million to the
Treasury, including payments to Corfo for rental income, contributions to communities and regional
development, and taxes on profits.
This positive trend at SQM is the result of a fully integrated commercial activity from Chile to the end
customer, which allows it to deliver the best high-quality, value-added product directly to customers,
keeping most of the products in the country. Chilean lithium benefits. Working together and
constructively will significantly enhance the economic and social value of the lithium operation in the
Salar de Atacama, at a local, regional and national level.
The Salar Futuro Project will become Chile's main public-private cooperation project, generating an
example of long-term sustainable development.
On October 13, 2022, the Company announced a long-term agreement with GE Healthcare's
Pharmaceutical Diagnostics Business to secure the supply of iodine, a key ingredient for contrast media
products used in X-ray procedures. and computed tomography (CT), worldwide. The agreement will see
SQM increase the supply of iodine raw material year on year and is part of GE Healthcare's commitment
and investment plan to enable the annual production of an additional 30 million doses for patients
requiring iodinated contrast media per year 2025.
On November 21, 2022, the Company reported that the Board of Directors agreed to pay an interim
dividend equivalent to US$3.08056 per share, charged to the Company's 2022 profits. Said amount will
be paid in its equivalent in pesos, national currency, according to the value of the Observed Dollar that
appears published in the Official Gazette on December 12, 2022.
SQM did not identify material effects that the Essential Facts detailed above could have on the business,
the value or offer of its shares.
9 ESSENTIAL OR RELEVANT FACTS
172
10. COMMENTS FROM SHAREHOLDERS AND THE DIRECTORS'
COMMITTEE
Pursuant to the provisions of article 74, paragraph 3, of Law No. 18,046, there have been no comments
or proposals related to the progress of the Company's business made by shareholders or by the SQM
Directors' Committee.
11. FINANCIAL REPORTS
The Company's consolidated financial statements as of December 31, 2022 are available on the website
of the Chilean Financial Market Commission (Comisión para el Mercado Financiero or CMF) at the
following link:
https://www.cmfchile.cl/institucional/inc/inf_financiera/ifrs/safec_ifrs_verarchivo.php?auth=&send=&
rut=93007000&mm=12&aa=2022&archivo=pdf_93007000_202212_c_20230302010504.pdf&desc_ar
chivo=Estados%20financieros%20(PDF)&tipo_archivo=PDF
and on the Company’s website:
https://s25.q4cdn.com/757756353/files/doc_financials/2022/q4/Financial-
Statements_4Q2022_English.pdf
11 FINANCIAL STATEMENTS
173
ANNEX
ANNEX 1. RISK FACTORS
Risk Factors
Our operations are subject to certain risk factors that may affect SQM’s business, financial condition,
cash flows, or results of operations. In addition to other information contained in this Annual Report,
you should carefully consider the risks described below. These risks are not the only ones we face.
Additional risks not currently known to us or that are known but that we currently believe are not
significant may also affect our business operations. Our business, financial condition, cash flows or
results of operations could be materially affected by any of these risks.
Risks Related to our Business
Our inability to extend or renew the mineral exploitation rights relating to the Salar de Atacama
concession, upon which our business is substantially dependent, beyond their current expiration date
in December 2030 could have a material adverse effect on our business, financial condition and
results of operations.
Our subsidiary SQM Salar S.A. (“SQM Salar”), 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 government entity, and leased to SQM Salar pursuant to (i) a 1993 lease agreement over mining
exploitation concessions between SQM Salar and Corfo, as amended from time to time, and (ii) the Salar
de Atacama project agreement between Corfo and SQM Salar, as amended from time to time
(collectively, the “Corfo Agreements”). The Corfo Agreements provide for SQM Salar to (i) make
quarterly lease payments to Corfo based on product sales from the leased mining properties and annual
contributions to research and development, to local communities, to the Antofagasta Regional
Government and to the municipalities of San Pedro de Atacama, María Elena and Antofagasta, (ii)
maintain Corfo’s rights over the mining exploitation concessions and (iii) make annual payments to the
Chilean government for such concession rights. The Corfo Agreements expire on December 31, 2030.
Our business is substantially dependent on the exploitation rights under the Corfo Agreements, since all
of our products originating from the Salar de Atacama are derived from our extraction operations under
the Corfo Agreements. For the year ended December 31, 2022, revenues related to products originating
from the Salar de Atacama represented 80% of our consolidated revenues, consisting of revenues from
our potassium business line and our lithium and derivatives business line for the period. As of December
31, 2022, only 8 years remain on the term of the Corfo Agreements and we had extracted approximately
38% of the total permitted accumulated extraction and sales limit of lithium under the lithium extraction
and sales limits.
Although we expect to begin the process of discussing the extension or renewal of the mineral
exploitation rights in the Salar de Atacama under the Corfo Agreements with Corfo well in advance of
the December 2030 expiration date, we cannot assure you that we will successfully reach an agreement
with Corfo to extend or renew our mineral exploitation rights beyond 2030. Any negotiation with Corfo
for an extension or renewal could involve renegotiation of any or all of the terms and conditions of the
Corfo Agreements, including, among other things, the lithium and potassium extraction and sales limits,
the lease payment rates and calculations, or other payments to Corfo.
In the event that we are not able to extend or renew the Corfo Agreements beyond the current expiration
date in 2030, we would be unable to continue extraction of lithium and potassium under the Corfo
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Agreements, which could have a material adverse effect on our business, financial condition and results
of operations.
Volatility of world lithium, fertilizer and other chemical prices and changes in production capacities
could affect our business, financial condition and results of operations.
The prices of our products are determined principally by world prices, which, in some cases, have been
subject to substantial volatility in recent years. World lithium, fertilizer and other chemical prices
constantly vary depending upon the relationship between supply and demand at any given time. Supply
and demand dynamics for our products are tied to a certain extent to global economic cycles and have
been impacted by circumstances related to such cycles. Furthermore, the supply of lithium, certain
fertilizers, or other chemical products, including certain products that we provide, varies principally
depending on the production of the major producers, (including us) and their respective business
strategies.
We expect that prices for the products we manufacture will continue to be influenced, among other
things, by worldwide supply and demand and the business strategies of major producers. Some of the
major producers (including us) have increased or decreased production and have the ability to increase
or decrease production.
As a result of the above, the prices of our products may be subject to substantial volatility. For example,
average lithium prices increased from US$9,300 per metric ton in 2021 to an average of $52,000 per
metric ton in 2022. High volatility or a substantial decline in the prices or sales volumes of one or more
of our products could have a material adverse effect on our business, financial condition and results of
operations.
Our sales could be impacted by global shipping constraints.
We sell our products in more than 110 countries in the world. Our products are shipped in containers or
break bulk format from the port terminals in Antofagasta, Tocopilla, Mejillones and Iquique in Chile.
Current challenges in the global shipping industry have led to congestion in ports, a shortage in
containers, and a lack of space on ships. Because of this situation, we face a risk of potential supply chain
disruptions that may adversely affect our operations and ability to deliver our products to our customers.
Depending on the terms of shipments to customers, the risk of loss related to these shipping issues could
fall on us. Additionally, our revenues and collections may also be adversely affected by significant
increases in the cost of transportation, as a result of increases in fuel or labor costs, higher demand for
logistics services, or otherwise, and transportation delays that could have a negative impact on our sales
agreements and customer relationships.
Our sales to emerging markets and expansion strategy expose us to risks related to economic
conditions and trends in those countries.
We sell our products in more than 110 countries around the world. In 2022, approximately 67% of our
sales were made in emerging market countries: 58% in Asia and Oceania (excluding Australia, Japan,
New Zealand, South Korea and Singapore), 3% in Latin America (excluding Chile); 3% in Africa and
the Middle East (excluding Israel); and 3% in Chile. In Note 23.1 to our consolidated financial
statements, we reported revenues from Chile, Latin America and the Caribbean and Asia and others of
US$8.9 billion. We expect to expand our sales in these and other emerging markets in the future. In
addition, we may carry out acquisitions or joint ventures in jurisdictions in which we currently do not
operate, relating to any of our businesses or to new businesses in which we believe we may have
sustainable competitive advantages. The results of our operations and our prospects in other countries in
which we establish operations will depend, in part, on the general level of political stability, economic
activity and policies in those countries as well as the duration of the COVID-19 or other pandemics.
Future developments in the political systems or economies of these countries or the implementation of
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future governmental policies in those countries, including the imposition of withholding and other taxes,
restrictions on the payment of dividends or repatriation of capital, the imposition of import duties or
other restrictions, the imposition of new environmental regulations or price controls or changes in
relevant laws or regulations, could have a material adverse effect on our business, financial condition
and results of operations in those countries.
Our inventory levels may vary for economic or operational reasons.
In general, economic conditions or operational factors can affect our inventory levels. Higher inventories
carry a financial risk due to increased need for cash to fund working capital and could imply an increased
risk of loss of product. At the same time, lower levels of inventory can hinder the distribution network
and process, thus impacting sales volumes. There can be no assurance that inventory levels will remain
stable. These factors could have a material adverse effect on our business, financial condition and results
of operations.
New production of iodine, potassium nitrate or lithium from current or new competitors in the markets
in which we operate could adversely affect prices.
In recent years, new and existing competitors have increased the supply of iodine, potassium nitrate and
lithium, which has affected prices for those products. Further production increases could negatively
impact prices. There is limited information on the status of new iodine, potassium nitrate or lithium
production capacity expansion projects being developed by current and potential competitors and, as
such, we cannot make accurate projections regarding the capacities of possible new entrants into the
market and the dates on which they could become operational. If these potential projects are completed
in the short term, they could adversely affect market prices and our market share, which, in turn, could
have a material adverse effect on our business, financial condition and results of operations.
We have a capital expenditure program that is subject to significant risks and uncertainties.
Our business is capital intensive. Specifically, the exploration and exploitation of reserves, mining and
processing costs, the maintenance of machinery and equipment and compliance with applicable laws and
regulations require substantial capital expenditures. We must continue to invest capital to maintain or to
increase our exploitation levels and the amount of finished products we produce. For example, we have
a US$3.4 billion investment plan for the years 2023-2025. The plan will allow us to expand our
operations of lithium, iodine and nitrate by accessing natural resources both in the Salar de Atacama and
caliche ore deposits in Chile, through the 50,0000 metric ton Mt. Holland lithium hydroxide project in
Western Australia (a joint venture that we are developing with our partner Wesfarmers) and the
development of a 20,000 metric ton lithium hydroxide plant in China which will be fed with lithium
sulfate sourced from the Salar de Atacama. The plan also aims to increase our mining capacity while
protecting the environment, reduce operational costs and increase our annual production capacity of
nitrates and iodine to meet expected growth in those markets.
Mining industry development projects typically require a number of years and significant expenditures
before production can begin. Such projects could experience unexpected problems and delays during
development, construction and start-up.
Our decision to develop a project typically is based on the results of feasibility studies, which estimate
the anticipated economic returns of a project. The actual project profitability or economic feasibility may
differ from such estimates as a result of any of the following factors, among others:
•
changes in tonnage, grades and metallurgical characteristics of ore or other raw materials to be
mined and processed;
•
estimated future prices of the relevant products;
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•
•
changes in customer demand; higher construction and infrastructure costs;
the quality of the data on which engineering assumptions were made;
• higher production costs; adverse geotechnical conditions;
•
•
•
•
availability of adequate labor force; availability and cost of water and energy;
availability and cost of transportation; fluctuations in inflation and currency exchange rates;
availability and terms of financing;
and potential delays relating to social and community issues.
In addition, we require environmental permits for our new projects. Obtaining permits in certain cases
may cause significant delays in the execution and implementation of new projects and, consequently,
may require us to reassess the related risks and economic incentives.
This may require modifying our operations to incorporate the use of seawater and updating our mining
equipment and operational centers.
We cannot assure you that we will be able to maintain our production levels or generate sufficient cash
flow or that we will have access to sufficient investments, loans or other financing alternatives, to
continue our activities at or above present levels, or that we will be able to implement our projects or
receive the necessary permits required for them in time. Any or all of these factors may have a material
adverse effect on our business, financial condition and results of operations.
High raw materials and energy prices could increase our production costs and cost of sales, and
energy may become unavailable at any price.
We rely on certain raw materials and various energy sources (diesel, electricity, liquefied natural gas,
fuel oil and others) to manufacture our products. Purchases of energy and raw materials we do not
produce constitute an important part of our cost of sales (excluding the payments to Corfo) was
approximately 22% in 2022. In addition, we may not be able to obtain energy at any price if supplies are
curtailed or otherwise become unavailable. To the extent we are unable to pass on increases in the prices
of energy and raw materials to our customers or we are unable to obtain energy, our business, financial
condition and results of operations could be materially adversely affected.
Our reserve estimates could be subject to significant changes, which may have a material adverse
effect on our business, financial condition and results of operations.
Our caliche ore mining reserve estimates and our Salar de Atacama brine mining reserve estimates are
prepared by qualified persons and this information is presented in our technical report summaries
prepared and filed as required by subpart 1300 of Regulation S-K. Estimation methods involve numerous
uncertainties as to the quantity and quality of the reserves, and reserve estimates could change upwards
or downwards. A downward change in our estimates and/or quality of our reserves could affect future
volumes and costs of production and therefore have a material adverse effect on our business, financial
condition and results of operations.
Chemical and physical properties of our products could adversely affect their commercialization.
Since our products are derived from natural resources, they contain inorganic impurities that may not
meet certain customer or government standards. As a result, we may not be able to sell our products if
we cannot meet such requirements. In addition, our cost of production may increase in order to meet
such standards. Failure to meet such standards could materially adversely affect our business, financial
condition and results of operations if we are unable to sell our products in one or more markets or to
important customers in such markets.
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Changes in technology or other developments could result in preferences for substitute products.
Our products, particularly iodine, lithium and their derivatives, are preferred raw materials for certain
industrial applications, such as rechargeable batteries and liquid-crystal displays (LCDs). Changes in
technology, the development of substitute products or other developments could adversely affect demand
for these and other products which we produce. In addition, other alternatives to our products may
become more economically attractive as global commodity prices shift. Any of these events could have
a material adverse effect on our business, financial condition and results of operations.
We are exposed to labor strikes and labor liabilities that could impact our production levels and costs.
We are exposed to labor strikes and labor liabilities that could impact our production levels and costs.
Over 93% of our employees are employed in Chile, of which approximately 77% were represented by
22 labor unions as of December 31, 2022. As of December 31, 2022, fifteen collective bargaining
agreements had been renegotiated in advance and the remaining seven should be negotiated during 2023.
We are exposed to labor strikes and illegal work stoppages by both our own employees and our
independent contractors’ employees that could impact our production levels in both our own plants and
our independent contractors’ plants. If a strike or illegal work stoppage occurs and continues for a
sustained period of time, we could be faced with increased costs and even disruption in our product flow
that could have a material adverse effect on our business, financial condition and results of operations.
We are and might be subject to new and upcoming labor laws and regulations in Chile and may be
exposed to liabilities and potential costs for non-compliance.
We are subject to recently enacted and might be subject to new local labor laws and regulations that
govern, among other things, the relationship between us and our employees and will be subject to new
labor bills currently under discussion in the Chilean Congress, mainly as a result of the impact of the
global COVID-19 pandemic as well as to the economic and political volatility and civil unrest in Chile
beginning in October and November 2019. There have been changes and proposed changes to various
labor laws which include, but are not limited to, modifications related to teleworking, inclusion of
workers with disabilities, minimum wage, unemployment insurance benefits, employee and employer
relationships, pensions, profit sharing, regular work hours and other matters related to COVID-19.
Additionally, the Chilean Congress is currently discussing a bill, Bulletin No. 11179-13, which proposed
a reduction of the weekly working schedule from 45 to 40 hours. The bill was approved by the Chamber
of Representatives (Camara de Diputados) and is currently being discussed by the Senate. Reducing the
working schedule may imply an increase in the labor cost of both direct employees and outsourced
personnel. Any changes to regulations to which we are subject could have a material adverse effect on
our business, financial condition and results of operations.
Lawsuits and arbitrations could adversely impact us.
We are party to a range of lawsuits and arbitrations involving different matters as described in Note 21.1
to our Consolidated Financial Statements. Although we intend to defend our positions vigorously, our
defense of these actions may not be successful and responding to such lawsuits and arbitrations diverts
our management’s attention from day-to-day operations. Adverse judgments or settlements in these
lawsuits may have a material adverse effect on our business, financial condition and results of operations.
In addition, our strategy of being a world leader includes entering into commercial and production
alliances, joint ventures and acquisitions to improve our global competitive position. As these operations
increase in complexity and are carried out in different jurisdictions, we may be subject to legal
proceedings that, if settled against us, could have a material adverse effect on our business, financial
condition and results of operations.
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We have operations in multiple jurisdictions with differing regulatory, tax and other regimes.
We operate in multiple jurisdictions with complex regulatory environments that are subject to different
interpretations by companies and respective governmental authorities. These jurisdictions may have
different tax codes, environmental regulations, labor codes and legal framework, which adds complexity
to our compliance with these regulations. Any failure to comply with such regulations could have a
material adverse effect on our business, financial condition and results of operations.
Environmental laws and regulations could expose us to higher costs, liabilities, claims and failure to
meet current and future production targets.
Our operations in Chile are subject to national and local regulations relating to environmental protection.
In accordance with such regulations, we are required to conduct environmental impact studies or
statements before we conduct any new projects or activities or significant modifications of existing
projects that could impact the environment or the health of people in the surrounding areas. We are also
required to obtain an environmental license for those projects and activities. The Chilean Environmental
Assessment Service (Servicio de Evaluación Ambiental) or “SEA” evaluates environmental impact
studies and statements submitted for its approval. The public, government agencies or local authorities
may review and challenge projects that may adversely affect the environment, either before these projects
are executed or once they are operating, if they fail to comply with applicable regulations. In order to
ensure compliance with environmental regulations, Chilean authorities may impose fines up to
approximately US$9 million per infraction, revoke environmental permits or temporarily or permanently
close facilities, among other enforcement measures.
Chilean environmental regulations have become increasingly stringent in recent years, both with respect
to the approval of new projects and in connection with the implementation and development of projects
already approved, and we believe that this trend is likely to continue. Given public interest in
environmental enforcement matters, these regulations or their application may also be subject to political
considerations that are beyond our control.
We regularly monitor the impact of our operations on the environment and on the health of people in the
surrounding areas and have, from time to time, made modifications to our facilities to minimize any
adverse impact. Future developments in the creation or implementation of environmental requirements
or their interpretation could result in substantially increased capital, operation or compliance costs or
otherwise adversely affect our business, financial condition and results of operations.
The success of our current investments at the Salar de Atacama and Nueva Victoria is dependent on the
behavior of the ecosystem variables being monitored over time. If the behavior of these variables in
future years does not meet environmental requirements, our operation may be subject to important
restrictions by the authorities on the maximum allowable amounts of brine and/or water extraction. For
example, on December 13, 2017, the Environmental Court of Antofagasta ordered a temporary and
partial closure of certain water extraction wells located in the Salar de Llamara. In October 2018, the
Environmental Court of Antofagasta accepted our claim, and dismissed the restrictions without
prejudice. It is possible that third parties could seek to reinstate these restrictions in the future. On
December 26, 2019, the same Court ruled that the environmental compliance plan presented by SQM
Salar S.A. with respect to the Salar de Atacama and approved by the Chilean Environmental Enforcement
Authority (Superintendencia del Medio Ambiente) or “SMA” in January 2019, did not comply with
certain completeness and efficiency requirements of the Chilean environmental legislation.
In September 2021, SQM Salar S.A. proposed to the SMA a new environmental compliance plan, which
was approved by the SMA and it’s currently subject to review by the Environmental Court of Antofagasta
after a claim was file by an indigenous association. We believe that the new proposed environmental
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compliance plan, safeguards the protection of the environment and is evaluating all courses of action
available under applicable law with respect to this ruling.
Our future development depends on our ability to sustain future production levels, which requires
additional investments and the submission of the corresponding environmental impact studies or
statements. If we fail to obtain approval or required environmental licenses, our ability to maintain
production at specified levels will be seriously impaired, thus having a material adverse effect on our
business, financial condition and results of operations.
In addition, our worldwide operations are subject to international and local environmental regulations.
Since environmental laws and regulations in the different jurisdictions in which we operate may change,
we cannot guarantee that future environmental laws, or changes to existing environmental laws, will not
materially adversely impact our business, financial condition and results of operations.
A significant percentage of our shares are held by two principal shareholder groups who may have
interests that are different from that of other shareholders and of each other. Any change in such
principal shareholder groups may result in a change of control of the Company or of its Board of
Directors or its management, which may have a material adverse effect on our business, financial
condition and results of operations.
As of December 31, 2022, two principal shareholder groups held in the aggregate 47.92% of our total
outstanding shares, including 94.19% of our Series A common shares, and have the power to elect six of
our eight directors. The interests of the two principal shareholder groups may in some cases differ from
those of other shareholders and of each other.
As of December 31, 2022, one principal shareholder group is Sociedad de Inversiones Pampa Calichera
S.A. and its related companies, Inversiones Global Mining Chile Limitada and Potasios de Chile S.A.
(together, the “Pampa Group”), which owned approximately 25.76% of the total outstanding shares of
SQM, and another principal shareholder is Tianqi Lithium Corporation (“Tianqi”), which directly and
indirectly owned approximately 22.16% of the total outstanding shares of SQM.
The divestiture by the Pampa Group or Tianqi, or potential changes in the circumstances that have led
to the determination of the CMF that there is currently no controlling shareholder of the Company, or a
combination thereof, may have a material adverse effect on our business, financial condition and results
of operations.
Tianqi is a significant shareholder and a competitor of the Company, which could result in risks to
free competition.
Tianqi is a competitor in the lithium business, and as a result of the number of SQM shares that it owns,
it has the right to choose up to three Board members. Under Chilean law, we are restricted in our ability
to decline to provide information about us, which may include competitively sensitive information, to a
director of our company. On August 27, 2018, Tianqi and the Chilean antitrust regulator, the Chilean
National Economic Prosecutor’s Office (Fiscalía Nacional Económica), or FNE, entered into an
extrajudicial agreement, under which certain restrictive measures were implemented in order to (i)
maintain the competitive conditions of the lithium market, (ii) mitigate the risks described in the
agreement and (iii) limit Tianqi’s access to certain information of the Company and its subsidiaries,
which is defined as “sensitive information” under the agreement.
During the approval process of the extrajudicial agreement before the FNE, we expressed our concerns
regarding the measures contained in the extrajudicial agreement since, in the Company’s opinion, the
measures (i) could not effectively resolve the risks that Tianqi and the FNE have sought to mitigate, (ii)
are not sufficient to avoid access to our “sensitive information” that, in the possession of a competitor,
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could harm us and the proper functioning of the market and (iii) could contradict the Chilean
Corporations Act.
The presence of a shareholder which is at the same time a competitor of ours and the right of this
competitor to choose Board members could generate risks to free competition and/or increase the risks
of an investigation of free competition against us, whether in Chile or in other countries, all of which
could have a material adverse effect on our business, financial condition and results of operations.
Our information technology systems may be vulnerable to disruption which could place our systems
at risk from data loss, operational failure, or compromise of confidential information.
We rely on various computer and information technology systems, and on third party developers and
contractors, in connection with our operations, including two networks that link our principal subsidiaries
to our operating and administrative facilities in Chile and other parts of the world and ERP software
systems, which are used mainly for accounting, monitoring of supplies and inventories, billing, quality
control, research activities, and production process and maintenance control. In addition, we use cloud
technologies, which allows us to support new business processes and respond quickly and at low cost to
changing conditions in our business and of the markets. Our information technology systems are
susceptible to disruption, damage or failure from a variety of sources, including errors by employees or
contractors, computer viruses, cyber-attacks, misappropriation of data by outside parties, and various
other threats. We have taken measures to identify and mitigate these risks with the object of reducing
operational risk and improving security and operational efficiency, which also includes modernization
of existing information technology infrastructure and communications systems. However, we cannot
guarantee that due to the increasing sophistication of cyber-attacks our systems will not be compromised
and because we do not maintain specialized cybersecurity insurance, our insurance coverage for
protection against cybersecurity risk may not be sufficient. Cybersecurity breaches could result in losses
of assets or production, operational delays, equipment failure, inaccurate recordkeeping, or disclosure of
confidential information, any of which could result in business interruption, reputational damage, lost
revenue, litigation, penalties or additional expenses and could have a material adverse effect on our
business, financial condition and results of operations.
International trade tensions could have a negative effect on our financial performance.
Economic conditions in China, an important market for the Company, are sensitive to global economic
conditions. The global financial markets have experienced significant disruptions in the past, including
the recent international trade disputes and tariff actions announced by the United States, China and
certain other countries. The U.S. government has imposed significant tariffs on Chinese goods, and
Chinese government has, in turn, imposed tariffs on certain goods manufactured in the United States.
There is no assurance that the list of goods impacted by additional tariffs will not be expanded or the
tariffs will not be increased materially. We are unable to predict how China or U.S. government policy,
in particular, the outbreak of a trade war between China and the United States and additional tariffs on
bilateral imports, may continue to impact global economic conditions. If the list of goods is further
expanded or the tariff is further increased, global economic conditions of both countries could be
impacted, and growth in demand for lithium or other commodities could decrease, which may have a
material adverse effect on our business, financial condition and results of operations.
Heightened tensions in international relations with China could result in political and economic
measures against Chinese-owned companies, which may adversely impact our business, financial
condition, and results of operations.
As of December 31, 2022, one of our largest shareholders is Tianqi, a Chinese company with a 22.16%
ownership interest and board representation. Recently there have been heightened tensions in
international relations between the United States and Europe, on the one hand, and China. International
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trade disputes and tariff actions announced by the United States, China and certain other countries and
other trade restrictions] have affected both diplomatic and economic ties among countries. This
environment could result in political and economic measures against Chinese-owned companies. Any
further deterioration in the relationship between China, the United States and certain other countries may
limit our ability to invest and develop projects in certain countries and adversely impact our business,
financial condition, and results of operations.
Outbreaks of communicable infections or diseases, or other public health pandemics, such as the
outbreak of COVID-19 impacted and may further impact the markets in which we, our customers and
our suppliers operate or market and sell products and could have a material adverse effect on our
operations business, financial condition and results of operations.
Disease outbreaks and other public health conditions, such as the global outbreak of COVID-19, could
have a significant negative impact on our revenues, profitability and business. During 2020 and 2021,
the Chilean government imposed several measures that affected our operations, including mandatory
quarantines for people who have been in contact with infected people, restrictions on the number of
people that could be together, and lockdowns on specific communities that suffered higher rates of
infection or death, among others.
As a precaution, our management voluntarily implemented several additional measures to help reduce
the speed at which COVID-19 spread in our company, including measures to mitigate the spread in the
workplace, significant reductions in employee travel and a mandatory quarantine for people who have
arrived from high-risk destinations. These measures were made in consultation with governmental and
international health organization guidelines.
It is difficult to predict the potential impact of another disease outbreak or public health condition on
international financial markets and the potential impact if businesses, workers, customers and others.
If our stakeholders and other constituencies believe we fail to appropriately address sustainability and
other environmental, social and governance (ESG) concerns it may adversely affect our business.
In October 2020, we announced our sustainable development plan, which includes voluntarily expanding
our monitoring systems, promoting better and more profound conversations with neighboring
communities and becoming carbon neutral and reducing water by 65% and brine extraction by 50% of
our authorized limits. We also announced a goal of obtaining international certifications and participating
in international sustainability indices which we consider essential for a sustainable future.
Since our sustainable development plan was announced, we have participated in voluntary qualifications,
such as Ecovadis, international certifications, such as Responsible Conduct from the Association of
Chemical Industries of Chile, Protect&Sustain from the International Fertilizer Association, ISO 14001,
ISO 45001 and ISO 50001, and the Standard IRMA Certification Audit, to promote responsible mining.
In 2021, the Port of Tocopilla was certified for Responsible Conduct, obtaining level 2 certification.
Likewise, during 2022, the Nueva Victoria site was recertified, obtaining level 1 certification. The
Protect&Sustain certification applies to the operations of Coya Sur, Salar de Atacama, Antofagasta,
Santiago and the Port of Tocopilla.
During 2022, the external IRMA on-site certification audit (phase 2) began in the Salar de Atacama
operation, and we expect to receive the final results during 2023.
Regarding the ISO management systems, the Port of Tocopilla was certified in January 2022 in ISO
14001. We completed phase 2 of ISO 14001 and 45001 certification process in the Salar de Atacama and
the Carmen chemical plant, and continued with the implementation process of ISO 50001 in the Salar de
Atacama and Nueva Victoria to support decarbonization goals associated with energy management
systems.
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During 2022, we participated in the Dow Jones Sustainability Indices (DJSI) assessment and were
accepted into the MILA and Chile indices for the third consecutive year and were included in the
Sustainability Yearbook 2023. We evaluated ourselves in Carbon Disclosure Project (CDP) where we
received a category B rating, which is in the management band, higher than the South American region
average (category C) and higher than the Chemicals sector average (category B-).
While we are dedicated to our efforts related to sustainability, if we fail to address appropriately all
relevant stakeholders’ concerns in connection with ESG criteria, we may face opposition, which could
negatively affect our reputation, delay operations, or lead to litigation threats or actions. If we do not
maintain our reputation with key stakeholders and constituencies and effectively manage these sensitive
issues, they could adversely affect our business, results of operations, and financial condition.
Climate change and a global transition to a low carbon economy can create physical risks and other
risks that could adversely affect our business and operations and adverse weather conditions or
significant changes in weather patterns could have a material adverse impact on our results of
operations.
The impact of climate change and climate change-driven responses, such as a global transition to a low
carbon economy on our operations and our customers’ operations, remains uncertain, but the regulatory,
market-risks associated with climate change as well as the physical effects of climate change could have
an adverse effect on us and our customers as experts believe that climate change may be associated with
more extreme weather conditions These effects could include, but may not be limited to, changes in
regional weather patterns, including drought and rainfall levels, water availability, sea levels, storm
patterns and intensities and temperature levels, including increased volatility in seasonal temperatures
via excessively hot or cold temperatures. These extreme weather conditions could vary by geographic
location.
Climate-derived threats include, among others, changes in regional weather patterns, including changes
in precipitation and evaporation parameters that, on the one hand, intensify drought phenomena, affecting
the availability of water and, on the other hand, bring intense rains in short periods of time that generate
other unwanted events that affect our operation and also our surrounding communities, such as road
closures, infrastructure, landslides, among others. Additionally, rising sea levels and storm surges,
increasing the days of port closures could impact the supply chain affecting our customers and suppliers.
Other events such as storm patterns and intensities, increased wind speed, heat waves, cold waves, among
other events considered as acute physical risks of climate change. Other effects are related to temperature
levels, including increased volatility in seasonal temperatures through excessively high or low
temperatures. These extreme weather conditions may vary by geography and location. Weather
conditions have historically caused volatility in the agricultural industry (and indirectly in our results of
operations) by causing crop failures or significantly reduced harvests, which can adversely affect
application rates, demand for our plant nutrition products and our customers’ creditworthiness. Weather
conditions can also lead to a reduction in farmable acres, flooding, drought or wildfires, which could
also adversely impact growers’ crop yields and the uptake of plant nutrients, reducing the need for
application of plant nutrition products for the next planting season which could result in lower demand
for our plant nutrition products and negatively impact the prices of our products.
Any prolonged change in weather patterns in our markets, as a result of climate change or otherwise,
could have a material adverse impact on the results of our operations.
Risks Relating to Financial Markets
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Currency fluctuations may have a negative effect on our financial performance.
We transact a significant portion of our business in U.S. dollars, and the U.S. dollar is the currency of
the primary economic environment in which we operate. In addition, the U.S. dollar is our functional
currency for financial statement reporting purposes. A significant portion of our costs, however, is related
to the Chilean peso. Therefore, an increase or decrease in the exchange rate between the Chilean peso
and the U.S. dollar would affect our costs of production. The Chilean peso has been subject to large
devaluations and revaluations in the past and may be subject to significant fluctuations in the future. As
of December 31, 2022, the Chilean peso exchange rate was Ch$855.86 per U.S. dollar, while as of
December 31, 2021 the Chilean peso exchange rate was Ch$844.69 per U.S. dollar. The Chilean peso
therefore depreciated against the U.S. dollar by 1.3% in 2022. As of March 1, 2023, the Observed
Exchange Rate was Ch$829.97 per U.S. dollar.
As an international company operating in several other countries, we also transact business and have
assets and liabilities in other non-U.S. dollar currencies, such as, among others, the Euro, the South
African rand, the Mexican peso, the Chinese yuan, the Thai baht and the Brazilian real.
As a result, fluctuations in the exchange rates of such foreign currencies to the U.S. dollar may have a
material adverse effect on our business, financial condition and results of operations.
We may be subject to risks associated with the discontinuation, reform or replacement of benchmark
indices.
Interest rate, foreign exchange rate and other types of indices which are deemed to be “benchmarks” are
the subject of increased regulatory scrutiny and may be discontinued, reformed or replaced. For example,
in 2017, the U.K. Financial Conduct Authority announced that it will no longer persuade or compel banks
to submit rates for the calculation of the London interbank offered rate (“LIBOR”) benchmark after 2021.
This reform will, and other future reforms may, cause benchmarks to be different than they have been in
the past, or to disappear entirely, or have other consequences which cannot be fully anticipated which
introduces a number of risks for our business. These risks include (i) legal risks arising from potential
changes required to document new and existing transactions; (ii) financial risks arising from any changes
in the valuation of financial instruments linked to benchmark rates; (iii) pricing risks arising from how
changes to benchmark indices could impact pricing mechanisms on some instruments; (iv) operational
risks arising from the potential requirement to adapt IT systems, trade reporting infrastructure and
operational processes; and (v) conduct risks arising from the potential impact of communication with
customers and engagement during the transition period. Various replacement benchmarks, and the timing
of and mechanisms for implementation are being considered. The transition away from LIBOR to risk-
free reference rates (RFRs) requires financial firms to make a variety of internal changes, for example
updating front-and back-office systems, retraining staff and redesigning processes, as well as potentially
modifying or renegotiating potentially thousands of LIBOR-linked contracts. All banks and other
financial market participants must eliminate their dependence on LIBOR by the end of June 2023 if they
are to avoid disruption when the publication of LIBOR ceases. Although as of December 31, 2022 we
had approximately US$70 million short- and long-term debt that use a LIBOR benchmark, it is not
currently possible to determine whether, or to what extent, any such changes would affect us. However,
the discontinuation or reformation of existing benchmark rates or the implementation of alternative
benchmark rates may have a material adverse effect on our business, financial condition and results of
operations.
In addition to the financial benchmarks, there are also market benchmarks used for the pricing of our
long-term supply contracts, which may also be subject to regulatory scrutiny, or which may be
discontinued, reformed or replaced. For example, for some of our long-term supply contracts, prices
reference to indices prepared by commodity reporting agencies such as the Shanghai Metals Market
(SMM) and Fastmarkets.
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Risks Relating to Chile
As we are a company based in Chile, we are exposed to political risks and civil unrest in Chile.
Our business, financial conditions and results of operations could be affected by changes in policies of
the Chilean government, other political developments in or affecting Chile, legal changes in the standards
or administrative practices of Chilean authorities or the interpretation of such standards and practices,
over which we have no control. The Chilean government has modified, and has the ability to modify,
monetary, fiscal, tax, social and other policies in order to influence the Chilean economy or social
conditions. We have no control over government policies and cannot predict how those policies or
government intervention will affect the Chilean economy or social conditions, or, directly and indirectly,
our business, financial conditions and results of operations. Changes in policies involving exploitation
of natural resources, taxation and other matters related to our industry may adversely affect our business,
financial conditions and results of operations.
We are exposed to economic and political volatility and civil unrest in Chile. Changes in social, political,
regulatory and economic conditions or in laws and policies governing foreign trade, manufacturing,
development and investment in Chile, as well as crises and political uncertainties in Chile, could
adversely affect economic growth in Chile. In October and November 2019, Chile experienced riots and
widespread mass demonstrations in Santiago and other major cities in Chile, triggered by an increase in
public transportation fares in the city of Santiago, which involved violence and significant property
damage and caused commercial disruptions throughout the country. As a result, on October 18, 2019 the
Chilean government declared a 15-day period state of emergency and imposed a nighttime curfew in the
greater Santiago region and other cities. The state of emergency has since been lifted and the Chilean
government has introduced several social reforms.
In December 2021, Chile elected Gabriel Boric as the new president. President Boric took office on
March 11, 2022 and his agenda is mainly focused on the elimination of private pension funds, social
security programs, increases in the minimum wage and pensions, and increases in corporate taxes.
President Boric is also a strong supporter of constitutional reforms and the drafting of a new
Constitution. While it is still very early in President Boric’s term and there is uncertainty regarding how
President Boric’s reforms may affect the political and business climate in Chile in the future, it is possible
that these reforms could lead to higher-than-expected inflation levels, unemployment, higher corporate
taxes and financial constraints on small and medium-sized companies, any of which could have an
adverse effect on our business, results of operations, and financial condition.
Future adverse developments in Chile, including political events, financial or other crises, changes to
policies regarding foreign exchange controls, regulations, and taxation, may impair our ability to execute
our business plan and could adversely affect our growth, results of operations, and financial condition.
Inflation, devaluation, social instability, and other political, economic, or diplomatic developments could
also reduce our profitability. Economic and market conditions in Chilean financial and capital markets
may be affected by international events, which could unfavorably affect the value of our securities.
Changes to the Chilean Constitution could impact a wide range of rights, including mining rights and
water rights, and could affect our business, financial conditions and results of operations.
On July 4, 2021, a Constitutional Convention was installed with the purpose of drafting a proposal of
new Constitution within one year. The proposal drafted by the Constitutional Convention was submitted
to a national compulsory plebiscite on September 4, 2022. This plebiscite resulted into the rejection of
such proposal with 61.86% of voters rejecting the proposal drafted by the Constitutional Convention,
and 37.14% of them approving it. Consequently, the 1980 Constitution remains in force.
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However, on December 12, 2022, almost all political parties represented at the National Congress agreed
upon the basis for the drafting and the approval of a new Constitution. This agreement led to the approval
of Law No. 21,533, which was published in the Official Gazette on January 17, 2023. Law No. 21,533
creates the following institutions: (i) a Commission of Experts; (ii) a Constitutional Council; and (iii) an
Admissibility Technical Committee. The Commission of Experts will be responsible for writing a
preliminary draft, which will be used by the Constitutional Council as basis for the discussion and
composition of a proposal of new Constitution. Both, the Commission of Experts and the Constitutional
Council, must respect certain minimal contents, called “essential institutional principles”. For example,
(i) Chile is a democratic republic; (ii) the Chilean State is unitary and decentralized; (iii) the Chilean
national is only one and indivisible; (iv) Chile is a social and democratic State governed by the rule of
law, that promotes the progressive development of social rights in accordance with the principle of fiscal
responsibility, and through State and private institutions; (v) the Chilean State is divided into three
separate and independent branches, i.e. the Executive, Legislative and Judicial Powers; (vi) the head of
the Government will have exclusive initiative of the bills of law that involve public expenditure; (vii)
the Legislative Power will be composed of a Chamber of Representatives and a Senate; and (viii) the
recognition of the right to property and its different manifestations, amongst other rights.
In order to ensure that the essential institutional principles are respected and included in the new
constitutional proposal, the Admissibility Technical Committee will be in charge of: (i) determining,
upon request of the members of the Constitutional Council or Commission of Experts, whether an
approved provision should be declared inadmissible on the ground that it contradicts the essential
institutional principles; or (ii) instructing the Commission of Experts to draft a proposal of provision in
case one or more of the referred principles have been omitted.
The final proposal of a new Constitution must be approved by 3/5 of the seats in the Constitutional
Council. This proposal will then be submitted to a national plebiscite with mandatory vote in which
citizens will decide whether to approve or reject the proposal.
Please note that the constitutional process has not yet started. The installation of the Commission of
Experts and the Admissibility Technical Committee is expected to take place on March 6, 2023, and the
investiture of the Constitutional Council is scheduled for June 7, 2023.
As a result of the new constituent process, a wide range of rights could potentially be under consideration
for reform, including mining rights and water rights. There can be no assurance that the Constitutional
Council will agree on a proposal of new Constitution that will be approved by the Chilean citizens on
December 17, 2023. It can be neither affirmed that the Chilean citizens will approve any kind of proposal
of new Constitution to replace the current one. Any changes to rights under a new Chilean Constitution
could change the political situation of Chile and affect the Chilean economy and the business outlook
for the country generally and our business, results of operations, and financial conditions.
If the proposal of new Constitution is rejected, the existing Chilean Constitution, which has been in place
since 1980, will remain in effect.
Changes in regulations regarding, or any revocation or suspension of mining, port or other
concessions could affect our business, financial condition and results of operations.
We conduct our mining operations, including brine extraction, under exploitation and exploration
concessions granted in accordance with provisions of the Chilean Constitution and related laws and
statutes. Our exploitation concessions essentially grant a perpetual right (with the exception of the rights
granted to SQM Salar with respect to the Salar de Atacama concessions under the Corfo Agreements
described above, which expires in 2030) to conduct mining operations in the areas covered by the
concessions, provided that we pay annual concession fees. Our exploration concessions permit us to
explore for mineral resources on the land covered thereby for a specified period of time and to
subsequently request a corresponding exploitation concession. Any changes to the Chilean Constitution
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with respect to the exploitation and exploration of natural resources and concessions granted as a result
of the constitutional convention could materially adversely affect our existing exploitation and
exploration concessions or our ability to obtain future concessions and could have a material adverse
effect on our business, financial condition and results of operations.
We also operate port facilities at Tocopilla, Chile, for the shipment of products and the delivery of raw
materials pursuant to maritime concessions, which have been granted under applicable Chilean laws and
are normally renewable on application, provided that such facilities are used as authorized and annual
concession fees are paid.
Any significant adverse changes to any of these concessions, any changes to regulations to which we are
subject or adverse changes to our other concession rights, or a revocation or suspension of any of our
concessions, could have a material adverse effect on our business, financial condition and results of
operations.
Changes in water rights laws and other regulations could affect our business, financial condition and
results of operations.
We hold water use rights that are key to our operations. These rights were obtained from the Chilean
Water Authority (Dirección General de Aguas) for supply of water from rivers and wells near our
production facilities, which we believe are sufficient to meet current operating requirements.
In January 2022, the Chilean Congress approved a bill that amends the Chilean Water Code (Código de
Agua), which was published on April, 6, 2022, becoming an applicable Chilean law. This modification
introduces several changes to the Water Code. A significant amendment is the change in the time periods
for which the water rights were granted. According to this new legislation, water rights: (1) will have a
temporary nature being granted for a maximum of 30 years (the specific period will depend on the
characteristic of the riverbed and its water availability); (2) will be subject, in whole or in part, to
expiration for its non-use; (3) will have to give human consumption and sanitation priority in the use of
water (establishing priority orders and possible limitations in the granting and use of water depending
on its destination); (4) will be subject to a minimum ecological flow to ensure nature conservation and
environmental protection, as determined by the Chilean Water Authority; and (5) will be subject to the
obligation of registration in the respective Real Estate Registry and in the Public Water Cadaster of the
Chilean Water Authority, and to sanctions of expiration and fines in case of non-compliance. It shall be
noted that the water regulation and its distribution will probably be one of the most important focuses of
the new constitutional process, and therefore, new changes may come into effect.
The Chilean Congress is considering a draft bill that declares lithium mining to be in the national
interest, which if passed in its current form, could enable the expropriation of our lithium assets.
The Chilean Congress is currently discussing a bill, Bulletin No. 10,638-08, which “Declares the
exploitation and commercialization of lithium and Sociedad Química y Minera de Chile S.A. to be of
national interest.” The purpose of this bill is to enable the potential expropriation of our assets, or our
lithium operations in general. The bill is subject to further discussion in the Chilean Congress, which
includes several possible changes to its current wording. We cannot guarantee that the bill will not
eventually be approved by the Chilean Congress, or that its final wording will not refer to us or our
lithium operations. If the bill is approved as currently drafted, it could have a material adverse effect on
our business, financial condition and results of operations.
The Chilean government could levy additional taxes on mining companies, which may include lithium
exploitation companies, operating in Chile.
The Chilean Internal Revenue Service (“SII” in its Spanish acronym) has sought to broaden the
application of the specific tax on mining activities in Chile to the extraction of lithium, a substance that
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is not concessionable by law, and has levied taxes in the amount of US$ 127.1 million on SQM Salar for
the tax years 2012 to 2018 (business years 2011 to 2017) on that basis. SQM Salar paid the tax
assessments and filed three tax claims against the SII challenging these taxes and in two of the cases,
covering the 2012-2014 and 2015-2016 tax years, the Santiago Court of Appeal ruled invalid the first
instance ruling handed down by the Tax and Customs Court, in each ruling, ordering the case reopened
with the competent judge hearing evidence in the case. In the third case covering the 2017-2018 tax
years, the Tax and Customs Court upheld SQM Salar’s claim and ordered that these tax assessments be
annulled. In 2022, the SII assessed SQM Salar US$ 36.8 million for the 2019 tax year with respect to the
specific mining tax and other adjustments, which SQM Salar intends to appeal within the one-year appeal
period. While the SII has not issued an assessment for the specific mining tax for the 2020 and later tax
years, if the SII uses criteria similar to that used in previous years, it may issue an assessment in the
future for these tax periods, which we estimate could result in a potential assessment by the SII of
approximately US$ 745.3 million (after deduction of the corporate income tax), exclusive of interests
and fines. To date, we have not recorded any effect corresponding to the 2019 tax assessment or any
potential assessments for later tax periods in our profit and loss statements. If the SII ultimately prevails
in the pending legal proceedings or continues to assess additional taxes based on its interpretation of the
application of the specific mining tax to lithium extraction, it could have a material adverse effect on our
business, financial condition and results of operations.
Since 2006, a specific mining tax has applied to copper mining activities in Chile. The Chilean Congress
is currently discussing a bill (Bulletin No. 12,093 08), which proposes to institute a royalty tax to replace
the mining tax. In the bill currently under consideration, the royalty tax would have an ad valorem
component based on a fixed percentage of annual sales of copper applicable to mining operators with
sales above a specified threshold level and a variable component based on a variable rate applied to the
mining operator’s adjusted taxable mining operating income. While the bill in its current form would not
apply to the lithium mining industry, the bill is subject to further discussion and amendment by the
Chilean Congress. We cannot assure you whether the bill will be approved by the Chilean Congress in
its current form or if additional changes may be incorporated, including to extend its application to the
lithium industry in Chile. If the final bill adopted imposes a new tax on the lithium exploitation, it could
have a material adverse effect on our business, financial condition and results of operations.]
New legislation affecting mining licenses could materially adversely affect our mining licenses and
mining concessions.
Law No. 21,420, published in the Official Gazette on February 4, 2022, reduces or eliminates certain tax
exemptions in order to finance a new social security program called “Universal Guaranteed Pension”.
Among other changes, this law contemplates amendments to the Chilean Mining Code, such as: (i) the
increase in the value of the mining licenses related to the mining concessions (an increase of at least 4
times the previous value); (ii) the modification of the term on which the mining exploration concessions
are granted and the prohibition on the holder to obtain a new mining exploration concession in the same
area once the previous concession has expired; and (iii) amendments to the mining concessions award
process.
Law 21,536, published in the Official Gazette on January 26, 2023, established that the amendments to
the Chilean Mining Code will become effective on January 1, 2024.
Ratification of the International Labor Organization’s Convention 169 concerning indigenous and
tribal peoples might affect our development plans.
Chile, a member of the International Labor Organization (“ILO”), has ratified the ILO’s Convention 169
(the “Indigenous Rights Convention”) concerning indigenous and tribal people. The Indigenous Rights
Convention established several rights for indigenous people and communities. Among other rights, the
Indigenous Rights Convention states that (i) indigenous groups should be notified and consulted prior to
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the development of any project on land deemed indigenous, although veto rights are not mentioned, and
(ii) indigenous groups have, to the extent possible, a stake in benefits resulting from the exploitation of
natural resources in indigenous land. The extent of these benefits has not been defined by the Chilean
government. The Chilean government has addressed item (i) above through Supreme Decree No. 66,
issued by the Social Development Ministry. This decree requires government entities to consult
indigenous groups that may be directly affected by the adoption of legislative or administrative measures,
and it also defines criteria for the projects or activities that must be reviewed through the environmental
evaluation system that also require such consultation. To the extent that the new rights outlined in the
Indigenous Rights Convention become laws or regulations in Chile, judicial interpretations of the
convention of those laws or regulations could affect the development of our investment projects in lands
that have been defined as indigenous, which could have a material adverse effect on our business,
financial condition and results of operations. The Chilean Supreme Court has consistently held that
consultation processes must be carried out in the manner prescribed by the Indigenous Rights
Convention.
The consultation process may cause delays in obtaining regulatory approvals, including environmental
permits, as well as public opposition by local and/or international political, environmental and ethnic
groups, particularly in environmentally sensitive areas or in areas inhabited by indigenous populations.
Furthermore, the omission of the consultation process when required by law may result in the revocation
or annulment of regulatory approvals, including environmental permits already granted.
Consequently, operating projects may be affected since the omission of the consultation process, when
required by law, could lead to public law annulment actions pursuing the annulment of the environmental
permits granted.
However, this risk frequently arises during the environmental assessment phase when the environmental
permits are to be obtained. In such scenario, affected parties may take several legal actions to declare
null or void the environmental permits that omitted the consultation process, and in some cases, courts
have overturned environmental approvals in which consultation was not made as prescribed in the
Indigenous Rights Convention.
If the Indigenous Rights Convention affects our development plans, it could have a material adverse
effect on our business, financial condition and results of operations.
Chile has different corporate disclosure and accounting standards than those you may be familiar
with in the United States.
Accounting, financial reporting and securities disclosure requirements in Chile differ in certain
significant respects from those required in the United States. Accordingly, the information about us
available to you will not be the same as the information available to holders of securities issued by a U.S.
company. In addition, although Chilean law imposes restrictions on insider trading and price
manipulation, applicable Chilean laws are different from those in the United States, and the Chilean
securities markets are not as highly regulated and supervised as the U.S. securities markets.
Chile is located in a seismically active region.
Chile is prone to earthquakes because it is located along major fault lines. During 2017-2022, Chile has
experienced several earthquakes which had a magnitude of over 6.0 on the Richter scale. There were
also earthquakes in the past decade that caused substantial damage to some areas of the country. Chile
has also experienced volcanic activity. A major earthquake or a volcanic eruption could have significant
negative consequences for our operations and for the general infrastructure, such as roads, rail, and access
to goods, in Chile. Although we maintain industry standard insurance policies that include earthquake
coverage, we cannot assure you that a future seismic or volcanic event will not have a material adverse
effect on our business, financial condition and results of operations.
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Risks Relating to our Shares and to our ADSs
The price of our ADSs and the U.S. dollar value of any dividends will be affected by fluctuations in
the U.S. dollar/Chilean peso exchange rate.
Chilean trading in the shares underlying our ADSs is conducted in Chilean pesos. The depositary for our
ADSs will receive cash distributions that we make with respect to the shares in Chilean pesos. The
depositary will convert such Chilean pesos to U.S. dollars at the then prevailing exchange rate to make
dividend and other distribution payments in respect of ADSs. If the value of the Chilean peso falls
relative to the U.S. dollar, the value of the ADSs and any distributions to be received from the depositary
will decrease.
Developments in other emerging markets could materially affect the value of our ADSs and our
shares.
The Chilean financial and securities markets are, to varying degrees, influenced by economic and market
conditions in other emerging market countries or regions of the world. Although economic conditions
are different in each country or region, investor reaction to developments in one country or region can
have significant effects on the securities of issuers in other countries and regions, including Chile and
Latin America. Events in other parts of the world may have a material effect on Chilean financial and
securities markets and on the value of our ADSs and our shares.
The prices of securities issued by Chilean companies, including banks, are influenced to varying degrees
by economic and market considerations in other countries. We cannot assure you that future
developments in or affecting the Chilean economy, including consequences of economic difficulties in
other markets, will not materially and adversely affect our business, financial condition or results of
operations.
We are exposed to risks related to the weakness and volatility of the economic and political situation in
Asia, the United States, Europe, other parts of Latin America and other nations. Although economic
conditions in Europe and the United States may differ significantly from economic conditions in Chile,
investors’ reactions to developments in these other countries may have an adverse effect on the market
value of securities of Chilean issuers.
If these, or other nations’ economic conditions deteriorate, the economy in Chile, as both a neighboring
country and a trading partner, could also be affected and could experience slower growth than in recent
years, with possible adverse impact on our borrowers and counterparties.
The volatility and low liquidity of the Chilean securities markets could affect the ability of our
shareholders to sell our ADSs.
The Chilean securities markets are substantially smaller, less liquid and more volatile than the major
securities markets in the United States. The volatility and low liquidity of the Chilean markets could
increase the price volatility of our ADSs and may impair the ability of a holder to sell our ADSs or to
sell the shares underlying our ADSs into the Chilean market in the amount and at the price and time the
holder wishes to do so.
ANNEX
190
Our share or ADS price may react negatively to future acquisitions, divestitures, capital increases and
investments.
As world leaders in our core businesses, part of our strategy is to look for opportunities that will allow
us to consolidate and strengthen our competitive position in jurisdictions in which we currently do not
operate. Pursuant to this strategy, we may carry out acquisitions or joint ventures relating to any of our
businesses or to new businesses in which we believe we may have sustainable competitive advantages.
We may also seek to strengthen our leadership position in our core businesses through divestitures of
certain assets or stakes in subsidiaries that we believe will allow us to concentrate our efforts on our core
businesses. Depending on our capital structure at the time of any acquisitions or joint ventures, we may
need to raise significant debt and/or equity which will affect our financial condition and future cash
flows. We may also carry out capital increases, such as the one undertaken in 2021, in order to raise
capital for our capital plan. In addition, any divestitures we effect may not result in strengthening our
position in our core businesses as anticipated. Any change in our financial condition could affect our
results of operations and negatively impact our share or ADS price.
ADS holders may be unable to enforce rights under U.S. securities laws.
Because we are a Chilean company subject to Chilean law, the rights of our shareholders may differ from
the rights of shareholders in companies incorporated in the United States, and ADS holders may not be
able to enforce or may have difficulty enforcing rights currently in effect under U.S. federal or state
securities laws.
Our company is an open stock corporation incorporated under the laws of the Republic of Chile. Most
of our directors and officers reside outside the United States, principally in Chile. All or a substantial
portion of the assets of these persons are located outside the United States. As a result, if any of our
shareholders, including holders of our ADSs, were to bring a lawsuit against our officers or directors in
the United States, it may be difficult for them to effect service of legal process within the United States
upon these persons. Likewise, it may be difficult for them to enforce judgments obtained in United States
courts based upon the civil liability provisions of the federal securities laws in the United States against
them in the United States.
In addition, there is no treaty between the United States and Chile providing for the reciprocal
enforcement of foreign judgments. However, Chilean courts have enforced judgments rendered in the
United States, provided that the Chilean court finds that the United States court respected basic principles
of due process and public policy. Nevertheless, there is doubt as to whether an action could be brought
successfully in Chile in the first instance on the basis of liability based solely upon the civil liability
provisions of the United States federal securities laws.
As preemptive rights may be unavailable for our ADS holders, they have the risk of their holdings
being diluted if we issue new stock.
Chilean laws require companies to offer their shareholders preemptive rights whenever issuing new
shares of capital stock so shareholders can maintain their existing ownership percentage in a company.
If we increase our capital by issuing new shares, a holder may subscribe for up to the number of shares
that would prevent dilution of the holder’s ownership interest.
If we issue preemptive rights, United States holders of ADSs would not be able to exercise their rights
unless a registration statement under the Securities Act were effective with respect to such rights and the
shares issuable upon exercise of such rights or an exemption from registration were available. We cannot
assure holders of ADSs that we will file a registration statement or that an exemption from registration
will be available. Although in connection with the 2021 capital increase, we filed a registration statement
ANNEX
191
that permitted holders of ADSs to exercise preemptive rights, we may, in our absolute discretion, decide
not to prepare and file such a registration statement in a future capital increase. If our ADS holders were
unable to exercise their preemptive rights in a future capital increase because we do not file a registration
statement, the ADS depositary would attempt to sell their rights and distribute the net proceeds from the
sale to them, after deducting the depositary’s fees and expenses. If the ADS depositary is not able sell
the rights, the rights would expire and have no further value and holders of ADSs would not realize any
value from them. In either case, ADS holders’ equity interests in us would be diluted in proportion to the
increase in our capital stock.
If we were classified as a Passive Foreign Investment Company by the U.S. Internal Revenue Service,
there could be adverse consequences for U.S. investors.
We believe that we were not classified as a Passive Foreign Investment Company (“PFIC”) for 2022.
Characterization as a PFIC could result in adverse U.S. tax consequences to a U.S. investor in our shares
or ADSs. For example, if we (or any of our subsidiaries) are a PFIC, our U.S. investors may become
subject to increased tax liabilities under U.S. tax laws and regulations and will become subject to
burdensome reporting requirements. The determination of whether or not we (or any of our subsidiaries
or portfolio companies) are a PFIC is made on an annual basis and will depend on the composition of
our (or their) income and assets from time to time. See “Item 10.E. Taxation—Material United States
Tax Considerations.”
Receipt of dividends and distributions by ADS holders may be limited by practical considerations and
legal limitations, which may delay the payment and receipt of dividends and distributions by ADS
holders.
Holders of ADSs generally have the right to receive dividends and other distributions we make on Series B
common shares held by the ADS custodian under the terms of the deposit agreement in proportion to the
number of ADSs held as of the specified record date, after deduction of the applicable fees, taxes and
expenses. Receipt of these dividends and distributions may be limited by practical considerations and legal
limitations, which may delay the payment and receipt of dividends and distributions by ADS holders.
Changes in Chilean tax regulations could have adverse consequences for U.S. investors.
Cash dividends paid by the Company with respect to the shares, including the shares represented by
ADSs, will be subject to a Chilean withholding tax at a rate of 35%, less the credit available for corporate
tax, which must be withheld and paid by the Company (the “Withholding Tax”). The effective rate of
Withholding Tax imposed on dividends attributed to earnings in 2022 of the Company and distributed
during the same period was 23.90411%.
Changes in Chilean tax regulations could have adverse consequences for U.S. investors. For example,
the changes introduced by Law No. 21,420 published in the Official Gazette on February 4, 2022 and
effective on September 1, 2022, by which the highest value or gain obtained in the sale on the stock
exchange or in a public offering process of shares of corporations with a high stock market presence will
be affected by a single tax with a rate of 10%, except for certain institutional investors, could have
adverse tax consequences for investors resident in the United States.
General Risk Factors
ANNEX
192
Our measures to minimize our exposure to bad debt may not be effective and a significant increase in
our accounts receivable coupled with the financial condition of customers may result in losses that
could have a material adverse effect on our business, financial condition and results of operations.
Potentially negative effects of global economic conditions on the financial condition of our customers
may include the extension of the payment terms of our accounts receivable and may increase our
exposure to bad debt. While we have implemented certain safeguards, such as using credit insurance,
letters of credit and prepayment for a portion of sales, to minimize the risk, we cannot assure you that
such safeguards will be effective and a significant increase in our accounts receivable coupled with the
financial condition of customers may result in losses that could have a material adverse effect on our
business, financial condition and results of operations.
Quality standards in markets in which we sell our products could become stricter over time.
In the markets in which we do business, customers may impose quality standards on our products and/or
governments may enact stricter regulations for the distribution and/or use of our products. As a result, if
we cannot meet such new standards or regulations, we may not be able to sell our products. In addition,
our cost of production may increase in order to meet any such newly imposed or enacted standards or
regulations. Failure to sell our products in one or more markets or to important customers could
materially adversely affect our business, financial condition and results of operations.
Our business is subject to many operating and other risks for which we may not be fully covered under
our insurance policies.
Our facilities and business operations in Chile and abroad are insured against losses, damage or other
risks by insurance policies that are standard for the industry and that would reasonably be expected to be
sufficient by prudent and experienced persons engaged in businesses similar to ours.
We may be subject to certain events that may not be covered under our insurance policies, which could
have a material adverse effect on our business, financial condition and results of operations. Additionally,
as a result of major earthquakes and unexpected rains and flooding in Chile, as well as other natural
disasters worldwide, conditions in the insurance market have changed and may continue to change in the
future, and as a result, we may face higher premiums and reduced coverage, which could have a material
adverse effect on our business, financial condition and results of operations.
Our water supply could be affected by geological changes or climate change.
Our access to water may be impacted by changes in geology, climate change or other natural factors,
such as wells drying up or reductions in the amount of water available in the wells or rivers from which
we obtain water, that we cannot control. The use of seawater for future or current operations could
increase our operating costs. In addition, seawater projects could face timing issues and permits
uncertainty which make them difficult to develop and construct. Any such change may have a material
adverse effect on our business, financial condition and results of operations.
Any loss of key personnel may materially and adversely affect our business.
Our success depends in large part on the skills, experience and efforts of our senior management team
and other key personnel. The loss of the services of key members of our senior management or employees
with critical skills could have a negative effect on our business, financial condition and results of
operations. If we are not able to attract or retain highly skilled, talented and qualified senior managers or
other key personnel, our ability to fully implement our business objectives may be materially and
adversely affected.
ANNEX
193
We are subject to Chilean and international anti-corruption, anti-bribery, anti-money laundering and
international trade laws. Failure to comply with these laws could adversely impact our business,
financial condition and results of operations.
We are required to be in compliance with all applicable laws and regulations in Chile and internationally
with respect to anti-corruption, anti-money laundering and other regulatory matters, including the FCPA.
Although we and our subsidiaries maintain policies and processes intended to comply with these laws,
we cannot ensure that these compliance policies and processes will prevent intentional, reckless or
negligent acts committed by our officers or employees.
If we or our subsidiaries fail to comply with any applicable anti-corruption, anti-bribery, anti-money
laundering or other similar laws, we and our officers and employees may be subject to criminal,
administrative or civil penalties and other remedial measures, which could have material adverse effects
on our and our subsidiaries’ business, financial condition and results of operations. Any investigation of
potential violations of anti-corruption, anti-bribery or anti-money laundering laws by governmental
authorities in Chile or other jurisdictions could result in an inability to prepare our consolidated financial
statements in a timely manner. This could adversely impact our reputation, ability to access the financial
markets and ability to obtain contracts, assignments, permits and other government authorizations
necessary to participate in our and our subsidiaries’ industry, which, in turn, could have adverse effects
on our and our subsidiaries’ business, financial condition and results of operations.
We are subject to risks related to the ongoing military conflict between Ukraine and Russia and it may
have a material adverse effect on our business, financial condition and results of operations
On February 24, 2022, Russia launched a military invasion of Ukraine. The ongoing military conflict
between Russia and Ukraine has provoked strong reactions from the United States, the UK, the European
Union and various other countries around the world, including the imposition of broad financial and
economic sanctions against Russia. While the precise effects of the ongoing military conflict and these
sanctions on the Russian and global economies remain uncertain, they have already resulted in significant
volatility in financial markets as well as in an increase in energy and commodity prices globally. Should
the conflict continue or escalate, markets may face various economic and security consequences
including, but not limited to, supply shortages of different kinds, further increases in prices of
commodities, including natural gas, oil, fertilizers and agricultural goods, significant disruptions in
logistics infrastructure, telecommunications services, the risk of unavailability of information technology
systems and infrastructure, among others, given that Russia and Ukraine are significant exporters of
commodities. The resulting impacts on financial markets, inflation, interest rates, unemployment and
other matters could disrupt the global economy. Other potential consequences include, but are not limited
to, growth in the number of popular uprisings in the region, increased political discontent, especially in
the regions most affected by the conflict or economic sanctions, increase in cyberterrorism activities and
attacks, displacement of persons to regions close to the areas of conflict and an increase in the number
of refugees fleeing across Europe, among other unforeseen social and humanitarian effects.
ANNEX
194
ANNEX 2. SUBSIDIARIES AND ASSOCIATES
Subsidiaries in Chile
Name of Company
Type of
Company
Capital
Ownership
Investment as % of
SQM S.A.’s
individual assets
AGRORAMA S.A.
Corporation
US$118,400
99.999%
SQMC S.A.
0.001% SQM Industrial
S.A.
-0.07754%
Corporate Purpose Board of Directors
Sales and distribution
of fertilizers, pesticides
and agricultural inputs
Rodrigo Millán Riffo
Rodrigo Real Ibaceta
Enrique Olivares Carlini
CEO / Legal
Representative
Relation /
Contracts with
parent company
Rodrigo Real Ibaceta Distribution
AJAY-SQM CHILE
S.A.
Corporation
US$5,313,794
ALMACENES Y
DEPOSITOS LTDA.
Limited liability
corporation
US$919,796
COMERCIAL
AGRORAMA LTDA
Limited liability
corporation
US$947,200
51%
SQM S.A.
49% Otros no
relacionados
99%
SQM Potasio S.A.
1%
SQM S.A.
70%
SQMC S.A.
30%
Others non related
0.14567%
Iodine derivatives
production, sales and
marketing
Alec Poitevint
Matt Webb
Trinidad Reyes
Daniel Pizarro
Carlos Grez
Production and
distribution /
Commercial
agreement
0.00440%
General deposit
activities
No tiene
Ricardo Ramos R.*
Support
-0.02322%
Sales and distribution
of fertilizers, pesticides
and agricultural inputs
No tiene
Rodrigo Real Ibaceta Distribution
COMERCIAL
HYDRO S.A.
Corporation
US$4,818,186
99.9999% SQMC S.A.
0.0001% Agrorama
S.A.
0.08053%
Import and marketing
of fertilizers
Carlos Ríos M.
Roberto Campusano B.
Rodrigo Real Ibaceta
Rodrigo Real Ibaceta Support
* Director, CEO, or Principal Executive of SQM S.A.
ANNEX
195
Name of Company
Type of
Company
Capital
Ownership
Investment as % of
SQM S.A.’s
individual assets
Corporate Purpose Board of Directors
CEO / Legal
Representative
Relation /
Contracts with
parent company
EXPLORACIONES
MINERAS S.A.
Corporation
US$30,100,000
0.269103%
SQM S.A.
99.730897%
SQM Potasio S.A.
0.50615%
Explotation of other
mines and quarries
José Miguel Berguño C.*
Ricardo Ramos R.*
Gerardo Illanes G. *
Ricardo Ramos R.*
Support
INSTITUCION DE
SALUD
PREVISIONAL
NORTE GRANDE
LTDA.
Limited Liability
Corporation
US$59,200
99% SQM Industrial
S.A.
1% SQM S.A.
0.01154%
Administration of
health matters for SQM
S.A.
Not applicable
Humberto Riquelme Support
ORCOMA ESTUDIOS
SPA
Joint stock
company
US$4,631,507
100% SQM S.A.
0.07687%
ORCOMA SPA
Joint stock
company
US$2,357,731
100% SQM S.A.
0.03858%
Open Stock
Corporation
US$9,873,573
99.99966% SQM
Industrial S.A.
0.00034% SQM S.A.
0.23737%
SERVICIOS
INTEGRALES DE
TRANSITOS Y
TRANSFERENCIAS
S.A.
ANNEX
Exploration,
measurement,
prospection and
research of mineral
deposits for extraction,
production and mineral
processing
Exploration,
measurement,
prospection, research,
development and
operation of mineral
deposits for extraction,
production and
processing
Transport and storage
of merchandise
None
Rodrigo Vera D.
Not applicable /
None as of date
None
Rodrigo Vera D.
Not applicable /
None as of date
José Miguel Berguño B.*
Ricardo Ramos R.*
Pablo Altimiras C.*
Gerardo Illanes G.*
Carlos Diaz O. *
Ricardo Ramos R.* Distribution
196
Name of Company
Type of
Company
Capital
Ownership
Investment as % of
SQM S.A.’s
individual assets
Corporate Purpose Board of Directors
CEO / Legal
Representative
Relation /
Contracts with
parent company
SOCIEDAD
PRESTADORA DE
SERVICIOS DE
SALUD CRUZ DEL
NORTE S.A.
Corporation
US$59,200
99% SQM Industrial
S.A.
1% SQM Potasio S.A.
0.00229%
Provision of health-
related services
Mauricio Guerra Oliveros
Sergio Figueroa Rodriguez
Raquel Ahumada Cabrera
Sergio Figueroa
Rodríguez
Support
SOQUIMICH
COMERCIAL S.A.
Open Stock
Corporation
US$61,745,898
60.6383212% SQM
Industrial S.A.
0.0000004% SQM
S.A.
39.3616784% Otros no
relacionados
0.68593%
SQM INDUSTRIAL
S.A.
Corporation
US$715,066,287
99.047043% SQM
S.A.
0.952957% SQM
Potasio S.A.
18.11220%
Production and
marketing of fertilizers Bogdan Borkowski S.
Pablo Altimiras C.*
Macarena Briseño
Francisco Javier Fontaine S.
Gerardo Illanes G.*
Christian Lüders M.
Eugenio Ponce L.
Operation of extraction
plants, holdings and
transfer of mineral
substances and raw
materials
José Miguel Berguño C.*
Carlos Diaz O.*
Ricardo Ramos R.*
Mining exploration and
exploitation
Rodrigo Real Ibaceta Distribution/Supply
Ricardo Ramos R.*
Production
SQM MAG SPA
Joint stock
company
US$10,000
100% SQM Potasio
S.A.
0.01864%
No tiene
Claudia Diaz A.
Production
SQM NITRATOS S.A. Corporation
US$30,349,981
99.99999782% SQM
S.A.
0.00000218% SQM
Potasio S.A.
2.00401%
Production and sale of
fertilizers
Pablo Altimiras C.*
José Miguel Berguño C.*
Carlos Diaz O.*
Gerardo Illanes G.*
Ricardo Ramos R.*
Ricardo Ramos R.*
Production
ANNEX
197
Name of Company
Type of
Company
Capital
Ownership
Investment as % of
SQM S.A.’s
individual assets
SQM POTASIO S.A.
Corporation
US$257,010,492
99.999999% SQM
S.A.
0.000001% Otros no
relacionados
31.43612%
SQM SALAR S.A.
Corporation
US$38,000,000
81.82% SQM Potasio
S.A.
18.18% SQM S.A.
27.46872%
Corporate Purpose Board of Directors
Extraction of minerals
for fertilizer and
chemical production
Pablo Altimiras C.*
José Miguel Berguño C.*
Carlos Diaz O.*
Gerardo Illanes G.*
Ricardo Ramos R.*
Exploitation and
marketing of
potassium, lithium and
other products
Gina Ocqueteau Tacchini*
Constanza Valbuena F.
Patricio Contesse F.*
Gonzalo Guerrero Y.*
Ricardo Ramos R.*
CEO / Legal
Representative
Relation /
Contracts with
parent company
Ricardo Ramos R.*
Production
Alberto Salas M.
Production
SOCIEDAD
CONTRACTUAL
MINERA BÚFALO
Sociedad
Contractual Minera
US$22,949
99.9% SQM S.A.
0.1% SQM Potasio S.A. 0.00041%
Export recognize
prosper investigate and
explore deposits
None
Ricardo Ramos R.*
Production
Variable capital
corporation
US$6,612
99.998% SQM
Industrial S.A.
0.002% SQM North
America Corporation
-0.00285%
Services
Mario Berrios U.
Ignacio Fernández G.
Ricardo Ramos R.*
Gonzalo Aguirre T.*
Gerardo Illanes G.*
Christian Lüders M.
Pablo Altimiras C.*
Ignacio Majluf C.
Mario Berrios U.
Ignacio Fernández G.
Support
Corporation
US$1,000
100%
SQM Investment
Corporation N.V.
-0.01033%
Marketing, importing
and exporting
Christian Lüders M.
Matías Murillo G.
Andrés Yaksic B.
Christian Lüders M.
Support
ADMINISTRACION
Y SERVICIOS
SANTIAGO S.A. DE
C.V.
COMERCIAL
CAIMÁN
INTERNACIONAL
S.A.
ANNEX
198
International
Subsidiaries
Name of the company
Type of Company Capital
Ownership
Investment
as % of SQM
S.A.’s
individual
assets
Corporate Purpose Board of Directors
CEO / Legal
Representative
Relation /
Contracts with
parent company
NITRATOS NATURAIS
DO CHILE SERVICIOS
LTDA.
Limited liability
corporation
US$774,294
29.18% SQM
Industrial S.A.
70,82% SQM Brasil
Ltda.
-0.03796%
Marketing advisory
services, representation
of other foreign and
local companies,
administrative support in
general
None
Martim de Almeida
Sampaio
Support
Corporation
Investment company
NORTH AMERICAN
TRADING COMPANY
US$338,124
100% SQM North
American Corporation
0.00355%
Pablo Altimiras C.*
Gerardo Illanes G.*
Matías Prieto
Support
Limited liability
corporation
Limited liability
corporation
ROYAL SEED TRADING
A.V.V.
RS AGRO CHEMICAL
TRADING CORP. A.V.V.
US$6,000
1.67% SQM S.A.
98.33% SQM Potasio
S.A.
-0.22412%
Investment and
marketing of moveable
property and real estate
IMC International
Management & Trust
Company N.V.
IMC International
Management & Trust
Company N.V.
Support
US$6,000
98.3333% SQM S.A.
1.6667% SQM Potasio
S.A.
0.05965%
Investment and
marketing of moveable
property and real estate
IMC International
Management & Trust
Company N.V.
IMC International
Management & Trust
Company N.V.
Support
ANEXOS
199
Name of the Company
Type of Company Capital
SOQUIMICH
EUROPEAN HOLDINGS
B.V.
US$49,265,296
Limited liability
corporation
Limited liability
corporation
SQM AFRICA PTY LTD
US$70,699
Investment
as % of SQM
S.A.’s
individual
assets
5.12562%
Ownership
25.23%
SQM Corporation
N.V.
74.77% SQM
Investment
Corporation N.V.
Corporate Purpose Board of Directors
CEO / Legal
Representative
Investment company
Relation /
Contracts with
parent company
Investment
Kris Van den Bruel
Patrick Vanbeneden
Paul van Duuren
Paul Zwagerman
No tiene
100%
Soquimich European
Holdings B.V.
0.18520%
Marketing of specialty
plant nutrients and
industrial products
Christian Luders M.
Patrick Vanbeneden
Emmanuel de Marez
Ettienne Strydom
SQM AUSTRALIA PTY
LTD
Limited liability
corporation
US$344,866,483
100%
SQM Potasio S.A.
4.93225%
Mining – Specifically
lithium
Jay Leary,
Carlos Diaz O.*
Gonzalo Aguirre T.*
Gerardo Illanes G.*
Jay Leary
SQM (BEIJING)
COMMERCIAL CO.
LTDA.
SQM BRASIL SERVIÇOS
LTDA.
Limited liability
corporation
Limited liability
corporation
US$1,600,000
100%
SQM Industrial S.A.
0.02515%
US$3,040,000
99.42% SQM
Industrial S.A
0.58% SQM S.A
-0.02713%
Commission agent and
marketing of chemical
products
Marketing advisory
services, representation
of other foreign and
domestic companies,
administrative support in
general
Patricio de Solminihac T.
Frank Biot
Ricardo Ramos R.*
Victor Larrondo G.
No tiene
Martim de Almeida
Sampaio
Support
Distribution
Investment and
exploration
activities
Not applicable
ANEXOS
200
Name of the Company
Type of Company Capital
Ownership
Investment
as % of SQM
S.A.’s
individual
assets
Corporate Purpose Board of Directors
CEO / Legal
Representative
Relation /
Contracts with
parent company
SQM COLOMBIA LTDA. Join stock company
US$1,291,915
100%
SQM Industrial S.A.
0.01412%
Variable capital
corporation
Variable capital
corporation
Import, export and
marketing of fertilizers
SQM COMERCIAL DE
MEXICO S.A. de C.V.
US$22,044,533
99.94% SQM
Industrial S.A.
0.05% SQM Potasio
S.A.
0.01% SQM S.A.
0.99729%
Diego Monteros Arregui
Ignacio Fernández G.
Ignacio Majluf
Ricardo Ramos R.*
Gerardo Illanes G.*
Christian Lüders M.
Milton René Galan
Rodolfo Hernandez G.
Gonzalo Aguirre T.*
Mario Berrios U.
Ignacio Fernández G.
Ricardo Ramos R.*
Gonzalo Aguirre T.*
Gerardo Illanes G.*
Christian Lüders M.
Pablo Altimiras C.*
Ignacio Majluf C.
Diego Monteros
Arregui
Ignacio Fernández G.
Support
Mario Berrios U.
Ignacio Fernandez G
Distribution
SQM CORPORATION
N.V.
Corporation
Corporation
US$12,939,718
99.9998% SQM
Industrial S.A.
0.0002% SQM S.A.
0.62927%
Investment in moveable
goods and real estate
TMF Group
TMF Group
Support
SQM ECUADOR S.A.
US$416,900
99.996% SQM
Industrial S.A.
0.004% SQM S.A.
0.10101%
Wholesale fertilizer
sales
No tiene
Diego Monteros
Arregui
Distribution
ANEXOS
201
Name of the Company
Type of Company Capital
Ownership
Investment
as % of SQM
S.A.’s
individual
assets
SQM EUROPE N.V.
Corporation
US$18,656,745
99.42% Soquimich
European Holdings
B.V.
0.58% SQM S.A.
3.52786%
Corporate Purpose Board of Directors
Distribution and
marketing of specialty
plant nutrients and
industrial products in
Europe, Northern Africa
and the Middle and Far
East
Ricardo Ramos R.*
Gonzalo Aguirre T.*
Pablo Altimiras C.*
Gerardo Illanes G.*
Erik Borghijs
Kris Van den Bruel
CEO / Legal
Representative
Relation /
Contracts with
parent company
Not applicable
Support and
distribution
Corporation
Distribution
SQM FRANCE S.A.
US$204,061
100% Soquimich
European Holdings
NV
0.00281%
None
Oliver Lecaplain
Support
Corporation
SQM HOLLAND B.V.
US$19,550,205
100% Soquimich
European Holdings
NV
0.01303%
Plant for the production
and distribution of
specialty plant nutrients
soluble in water
Erik Borghijs
Patrick Vanbeneden
Kris Van den Bruel
Marc Goetschalckx
None
Production and
distribution
Corporation
SQM IBERIAN S.A.
US$9,933,128
100% Soquimich
European Holdings
NV
0.35024%
Distribution and
marketing of specialty
plant nutrients and
technical products in
Spain
Gerardo Illanes G.*
Erik Borghys
Christian Lüders M.
José Andrés Cayuela
Enrique Torras
Erik Lütken R.
Distribution
Corporation
SQM INDONESIA S.A.
US$31,448
80% Soquimich
European Holding
B.V.
20% Interés
Minoritario
0.00003%
Import trading and
distribution services
Frank Biot
Patrick Vanbeneden
Rudy Ismanto
Not applicable
Not applicable
ANEXOS
202
Name of the Company
Type of Company Capital
Ownership
Investment
as % of SQM
S.A.’s
individual
assets
SQM INTERNATIONAL
N.V.
Corporation
US$3,079,827
99.42% Soquimich
European Holdings
B.V.
0.58% SQM S.A.
0.24401%
Corporate Purpose Board of Directors
Distribution and sales of
specialty plant nutrients
and industrial products
in Europe, North Africa
and the Middle and Far
East
Ricardo Ramos R.*
Gonzalo Aguirre T.*
Pablo Altimiras C.*
Gerardo Illanes G.*
Erik Borghijs
Kris Van den Bruel
CEO / Legal
Representative
Relation /
Contracts with
parent company
Not applicable
Support and
distribution
SQM INVESTMENT
CORPORATION N.V.
Corporation
US$50,000
99.00% SQM Potasio
S.A.
1.00% SQM S.A.
3.91710%
Investment and
marketing of moveable
goods and real estate
TMF Group
TMF Group
Support
SQM JAPAN CO. LTD.
Limited Liability
Corporation
US$87,413
15.8147% SQM
Potasio S.A.
84.0256% Soquimich
European Holdings
B.V.
0.1597% SQM S.A.
Marketing of products
in Asia/Oceania and
marketing assistance
0.03584%
Pablo Altimiras C.*
Gerardo Illanes G.*
Andrés Stocker
Andrés Stocker
Distribution and
marketing /
Commercial
agency agreement
SQM KOREA LLC
US$700,000
100% SQM Industrial
S.A.
0.25788%
Limited Liability
Corporation
Sales, import and
export of chemical
products
Pablo Altimiras C.*
Gerardo Illanes G.*
Pablo Altimiras C.*
Distribution
SQM LITHIUM
SPECIALTIES LIMITED
PARTNERSHIP, L.L.P
Limited Liability
Corporation
US$33,712,430
99% SQM Virginia
LLC
1% North American
Trading Co.
0.17181%
Production and
marketing of lithium
derivatives
No tiene
Matías Prieto
Support
ANEXOS
203
Name of the Company
Type of Company Capital
Ownership
Investment
as % of SQM
S.A.’s
individual
assets
Corporate Purpose Board of Directors
CEO / Legal
Representative
Relation /
Contracts with
parent company
SQM NITRATOS
MEXICO S.A. de C.V.
Variable Capital
Corporation
US$5,636
99.998% SQM
Industrial S.A.
0.002% SQM North
America Corporation
0.00108%
Services
SQM NORTH AMERICA
CORPORATION
Corporate
US$79,576,550
51% SQM Industrial
S.A.
40% SQM S.A.
9% Soquimich
European Holdings
B.V.
0.51493%
Marketing of nitrates,
fertilizers, iodine and
lithium in North
America
US$1
100% SQM Soquimich
European Holdings
B.V.
0.02831%
Import, export and
distribution of fertilizers
and industrial products
US$3,364,341
99.998% SQM
European Holdings
NV
0.002% Interés
Minoritario
0.03558%
Marketing of fertilizers
and industrial chemicals
Mario Berrios U.
Ignacio Fernández G.
Ricardo Ramos R.*
Gonzalo Aguirre T.*
Gerardo Illanes G.*
Christian Lüders M.
Pablo Altimiras C.*
Ignacio Majluf C.
Gonzalo Aguirre T.*
Pablo Altimiras C. *
Beatriz Oelckers
Gerardo Illanes G.*
Ricardo Ramos R.*
Gerardo Illanes G.*
Andrés Stocker
Pablo Altimiras C.*
Felipe Smith
David Masters
Patrick Vanbeneden
Andrés Stocker
Pattamakan Suparp
Christian Lüders M.
No aplica
Matias Prieto
Distribución
No tiene
Distribución
No tiene
No aplica
US$2,499,995
100% SQM Industrial
S.A.
4.63593%
Sales, import and export,
marketing of chemical
products
Gonzalo Aguirre T.*
Gerardo Illanes G.*
Pablo Altimiras C.*
Felipe Smith
Distribución
204
Corporate
Corporate
Corporate
SQM OCEANIA PTY
LIMITED
SQM (THAILAND)
LIMITED
SQM (SHANGHAI)
CHEMICALS
CORPORATION
ANEXOS
Name of the Company
Type of Company Capital
Ownership
Investment
as % of SQM
S.A.’s
individual
assets
Corporate Purpose Board of Directors
CEO / Legal
Representative
Relation /
Contracts with
parent company
SQM VIRGINIA L.L.C.
Corporation
US$33,375,305
100% SQM North
America Corporation
0.17008%
Investment company
Pablo Altimiras C.*
Gerardo Illanes G.*
Matias Prieto
Soporte
SQMC HOLDING
CORPORATION
Corporation
US$3,000,000
99.9% SQM Potasio
S.A.
0.1% SQM S.A.
0.62927%
Investment company
Carlos Diaz O.*
Felipe Smith de A.
Matias Prieto
Soporte
Internacional Associates
Name of the Company
Type of Company Capital
Ownership
Investment
as % of SQM
S.A.’s
individual
assets
Corporate Purpose Board of Directors
CEO / Legal
Representative
Relation /
Contracts with
parent company
AJAY EUROPE SARL
Corporation
US$4,065,738
AJAY NORTH
AMERICA L.L.C.
Corporation
US$10,383,786
50% Soquimich
European Holdings
B.V.
50% Otros no
relacionados
Production and
distribution of iodine
derivatives
0.2046%
49% SQMC Holding
Corporation L.L.P.
51% Otros no
relacionados
0.4274%
Production, sales and
marketing of iodine
derivatives
Daniel Pizarro
Trinidad Reyes
Alec Poitevint
Matt Webb
Daniel Pizarro
Trinidad Reyes
Alec Poitevint
Matt Webb
Michel Pichon
Producción y
distribución /
Acuerdo comercial
Matt Webb
Producción y
distribución /
Acuerdo comercial
ANEXOS
205
Joint Ventures or Joint Control
Name of the Company
Type of Company
Capital
Ownership
Investment as
% of SQM
S.A.’s
individual
assets
Corporate Purpose
Board of Directors
CEO / Legal
Representative
COVALENT LITHIUM
PTY LTD
Limited liability
corporation
US$7
50% SQM Australia
Pty Ltd
50% Otros no
relacionados
-0.0291%
Administration, design,
execution, construction
and operation of projects
Limited liability
corporation
PAVONI & C. SPA
US$1,478,946
50% Soquimich
European Holdings
B.V.
50% Otros no
relacionados
0.0487%
Production, distribution,
sales and marketing of
specialty fertilizers
Ian Hansen
Aaron Hood
Carlos Díaz O.*
Eugenio Ponce L.
Patrick Vanbeneden
Marc Goetschalckx
Giuseppe Casubolo
Aldo Bonaccorsi
Riccardo Carbone
Sara Pavoni
Ryan Hair
Sara Pavoni
Limited liability
corporation
SQM VITAS BRASIL
US$2,556,211
99.99% SQM Vitas
FZCO
0.01% Otros no
relacionados
0.1972%
Production, distribution,
sales and marketing of
specialty fertilizers
Patrick Vanbeneden
Karina Kuzmak-Bourdet
Christian Luders
Leandro Ries
SQM VITAS FZCO
Sociedad de zona franca US$1,413,043
48.0769231% SQM
Industrial S.A.
1.92307692% SQM
S.A.
0.0568%
Production, distribution,
sales and marketing of
specialty fertilizers
Patrick Vanbeneden
Karina Kuzmak-Bourdet
Patrick Vanbeneden
SQM VITAS PERÚ S.A.C.
Sociedad anónima
cerrada
US$5,162,956
99.99999% SQM
Vitas FZCO
0.00001% SQM
Industrial S.A.
0.0994%
Production, distribution,
sales and marketing of
specialty fertilizers
Patrick Vanbeneden
Karina Kuzmak-Bourdet
Christian Luders
Mauricio Abarca
ANEXOS
Relation /
Contracts with
parent company
Servicios de
administración,
diseño, ejecución,
construcción y
operación de
proyectos
Producción y
distribución /
Acuerdo
comercial
Producción y
distribución /
Acuerdo
comercial
Producción y
distribución /
Acuerdo
comercial
Producción y
distribución /
Acuerdo
comercial
206
ANEXOS
207