SQM

Phase A — Understand the business

Company Overview

SQM operates six business lines, all rooted in two Chilean geological endowments: the brine of the Salar de Atacama (lithium + potassium) and the caliche ore of the northern nitrate fields (iodine + nitrates + specialty plant nutrients). FY2025 revenue split:

The revenue line is flat 2024→2025 (+1.0%) but that masks a violent mix rotation: lithium fell from 69% of revenue (2023) to 50%, while iodine and SPN roughly held in dollars and rose in mix. In 2023 lithium was 69% of a $7.5B top line; today it's half of a $4.6B one.

Customers. In 2025 SQM sold lithium in 38 countries to ~165 customers; 95% of lithium sales went to Asia; two customers accounted for ~25% of lithium & derivatives sales (~24% of lithium revenue), and the top-10 customers ~63% of that business line's revenue. Contracts are a mix of spot purchase orders and supply contracts with min/max annual volumes and index-linked pricing — SQM is a price-taker on a globally-cleared commodity, not a contract-locked utility.

The key "supplier" is the state. One "supplier" — Corfo, the Chilean production-development agency that owns the Atacama concessions and leases them to SQM — accounts for ~25% of the lithium business line's cost of sales. This is the defining feature of the whole company: SQM does not own its best orebody. It leases it, and the lease rate is a progressive royalty that reaches 40% of the sale price above $10,000/t lithium carbonate. Corfo payments were $302.9M (2025), $397M (2024), and $1,868.9M (2023) — the take scales brutally with price.

Supply Chain

Named, end-to-end:

Upstream / inputs → SQM:

• Corfo (Chilean state) — owns the Atacama mining concessions; leases to SQM's subsidiary (now Nova Andino Litio) under the "Corfo Agreements" running to 2060. The single most important stakeholder.
• Codelco (Chilean state copper co.) — as of 27 Dec 2025, SQM's 51/49 majority partner in the Atacama operating entity (see Lens 3).
• Brine is self-sourced (pumped from 15–150m depth in the Salar); nitrate/iodine self-mined from caliche at Nueva Victoria, Pampa Blanca, María Elena, Pedro de Valdivia. Key external inputs: energy, reagents (soda ash), a planned seawater pipeline (in the 2025-27 capexCapital expenditureMoney spent on long-lived things — buildings, machines, servers — rather than on running costs. plan), and Chilean-peso labour (~87% of employees in Chile, 82% unionised across 22 unions ).

SQM → downstream:

• Lithium carbonate produced at the Lithium Chemical Plant near Antofagasta (~210,000 t/yr carbonate capacity, 40,000 t/yr hydroxide → expanding to 100,000 t/yr by end-2026).
• International lithium: China refinery (20,000 t/yr design), toll-manufacturing (30,000 t/yr), and the Mt Holland / Covalent JV in Western Australia with Wesfarmers — the Kwinana hydroxide refinery (50,000 t/yr nameplate, 50% SQM share) began ramp-up July 2025, full commissioning targeted 2027. Australian spodumene sold via a new auction channel (first auction Nov 2024).
• End buyers: cathode makers and battery cell producers, overwhelmingly in China/Korea/Japan. ~95% of lithium demand is batteries; within that, EVs ~65% and BESS ~26% of 2025 demand.
• Iodine buyers: X-ray contrast-media makers (GE HealthCare signed a multi-year supply deal with SQM in Oct 2022 ), LCD-polariser film, pharma, biocides.

Chokepoints: (1) the Atacama concession itself — single asset, state-owned, now state-controlled; (2) Chilean regulatory/permitting and community consent (Atacameños Indigenous Organization is a formal party to the 2060 extension); (3) demand concentration in Asian battery supply chains; (4) a single Chinese FX/geopolitical counterparty risk given 95% Asia exposure and a 21.9% Chinese shareholder (Tianqi).

Competitive Advantages (moats) — and the moat that is being nationalized

The real moat: the Salar de Atacama is the best lithium orebody on earth. Highest lithium concentration, highest evaporation rate, co-located potassium — SQM self-describes as "one of the lowest cost producers of lithium worldwide", and the cost data backs it: even at a collapsed 2025 realized price of $9,174/t, the lithium segment still earned a 26% gross margin. Almost no hard-rock/spodumene converter is cash-generative at that price. That is a genuine, durable cost moat.

The iodine moat is arguably stronger and quieter. SQM is the world's largest iodine producer at ~37% of global sales by volume (Chile ~60% of world supply). Iodine earned a ~54% gross margin in 2025 (realized ~$71.9/kg vs cost $33.1/kg ). Demand is inelastic (X-ray contrast media ~38% of demand, growing with global CT-scan volumes), supply is geologically constrained to Chilean caliche + Japanese brine. This is a near-oligopoly with pricing power — and it is the segment the market ignores.

Bargaining power: weak upstream, weak downstream on lithium. SQM does not own its concession (Corfo does, now Codelco controls it) and sells into a globally-cleared spot market to concentrated Asian buyers. Its pricing power on lithium is essentially zero — it earns the cost curve, not a spread. On iodine, bargaining power is genuinely strong (oligopoly, inelastic medical demand).

The moat erosion is structural, not competitive. The threat is not Albemarle or Ganfeng — it is the Chilean state taking the asset. Under the Codelco Partnership Agreement (formed 27 Dec 2025 via merger of Codelco's Minera Tarar SpA into SQM's SQM Salar SpA, surviving as Nova Andino Litio SpA):

• Ownership: "Codelco holds one share more than 50% of the outstanding shares of Nova Andino Litio, and SQM holds one share less than 50%". SQM's crown-jewel asset is now a minority-owned associate/JV, no longer a controlled subsidiary.
• First Term (2025–2030): SQM controls management and holds the operational-decision majority (subject to Codelco veto/supermajority items). But Codelco already gets "preferential economic benefits" retroactive to 1 Jan 2025 — the state's share of the upside started 18 months before it takes control.
• Second Term (2031–2060): Codelco nominates the board majority and controls management and shareholder-level decisions; SQM drops to a passive minority with veto rights.
• The lease now runs to 2060 (vs the old 2030 cliff) — SQM bought duration by ceding control.

So the moat is real but the equity claim on it is shrinking on a known schedule. From 2031 SQM is a ~49% financial partner in the mine it built, run by a state copper company. This is the single most important fact in the file and the reason the multiple should carry a permanent Chile/state discount.

Segments (revenue, margin, geography)

Segment gross margins, FY2025:

Geography (revenue by destination, 2025): Asia & others 95%, North America 3%, Europe 3%, Chile 0%. This is an almost pure Asia-facing exporter (96.5% of net revenues are exports). Volume trends 2025 vs 2024:

• Lithium: volumes +24% to 257.9 kt LCE, price −16% ($10,936 → $9,174/t) → revenue +2.1%. Volume growth is fully offsetting price collapse — this is a share-gaining, low-cost operator running flat out.
• Iodine: volumes flat (+0.2%, 14.5 kt), price +7.4% → revenue +7.7%. Steady compounder.
• SPN: volumes +3%, price +1.2% → revenue +4.3%. Recovering to ~2020 demand levels.
• Potassium: −53% volumes by deliberate choice — SQM is walking away from potash to redirect Atacama brine to lithium. Guided down another ~20% in 2026.

Read: The company is rotating the Salar de Atacama toward maximum lithium output, monetising the trough on volume, and letting iodine + SPN carry the earnings. The mix is now defensively balanced in a way it was not in 2022-23 (when lithium was 69% of revenue).

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Phase B — Measure performance

Earnings Result — the trough (FY2025) and the inflection (Q1 2026)

FY2025 (the 20-F, the trough):

• Revenue $4,576.2M (+1.0% YoY).
• Gross profit $1,352.6M (29.6% margin, up 30bps).
• Income before tax $960.7M (−1.4%).
• Net income $640.6M ($588.1M to controlling interests), down 7.4% — dragged by the specific mining tax (EIAM) that SQM began expensing from Apr-2024, pushing tax expense to $320.1M.
• EBITDA $1,576.0M (vs $1,514.3M in 2024; vs $3,226.3M in 2023 — the peak).
• Operating cash flow $1,314.4M (+3%); capex-driven investing outflow $771.8M (36% lower than 2024).

Q1 2026 (the inflection):

• Revenue $1,760.1M, +69.8% YoY (from $1,036.6M).
• Net income $364.7M ($1.28/sh), +165% (from $137.5M / $0.48).
• Gross profit $778.6M at 44.2% margin — vs 29.4% in Q1 2025. A ~15-point gross-margin jump in one year.
• Adjusted EBITDA ~$837M, more than double YoY.
• Lithium volumes ~69,000 t LCE in Q1; full-year 2026 lithium volume-growth guidance raised from +10% to +15%, citing global lithium demand possibly exceeding 1.9M t LCE in 2026.
• Running "at full capacity"; expects Q2 to beat Q1 by >10% (a record quarter); >270,000 t of Atacama production guided for 2026.

Why the violent turn: the lithium price doubled. Battery-grade carbonate ran to ~$26,278/t in Q1 2026 vs SQM's FY2025 realized $9,174/t — roughly 2.9x. Because SQM's cost base is the lowest on the curve, essentially all of that price move drops through to gross profit (partially clawed back by the progressive Corfo royalty, which climbs to 40% at high prices — a built-in state-owned "profit share" that flattens SQM's upside on the way up just as it cushioned the downside on the way down).

Balance-sheet flags: clean. Net financial debt $1,944.8M, NFD/adj. EBITDA 1.3x, current ratio 3.27, cash + time deposits $2.5B, ~$1.74B undrawn credit. Shareholders' equity jumped to $8,053.9M (from $5,198.1M) — largely the accounting gain on the Codelco JV intangible recognition (flagged as a critical audit matter by the auditor, see Lens 10). Debt is long-dated (bulk maturing 2030+), all USD or USD-hedged.

Market reaction: stock rose on the Q1 print; SQM is +97.9% over the trailing twelve months — the tape has already voted that the trough is over.

Earnings Calls (sentiment trend)

No transcripts on the research-layer shelf (transcripts/ empty). From:

• Tone has flipped from defensive to confident over the last ~3-4 calls. Through 2024–early-2025 management messaging was about volume growth offsetting price, cost discipline, and cutting potash/dividends to preserve cash. On the Q1 2026 call, CEO Ricardo Ramos framed the quarter as "an important milestone," raised volume guidance, and leaned into "strong customer demand" and a market moving toward deficit.
• New recurring phrases (2026): "operating at full capacity," "record quarter," "Salar Futuro" (the next-generation direct-lithium-extraction project now entering environmental permitting), "first full quarter alongside Codelco," and the state-contribution talking point (Nova Andino Litio contributed >$530M to the Chilean state in Q1 2026 alone via Corfo payments, taxes, and local transfers) — a deliberate "we are a good national partner" narrative post-JV.
• Things they stopped saying: the 2024 refrain about dividend cuts and price weakness. The pivot is real and price-driven.

Comps

SQM current: price $73.52, market capMarket capitalisationThe share price multiplied by the number of shares. What the market says the equity is worth. $21.0B, EVEnterprise valueWhat it would cost to buy the whole company: its market value plus its debt, minus the cash you would get with it. Often very different from market cap. $22.35B, 285.6M shares, trailing P/E 25.8, forward P/E 8.6, EV/EBITDA 11.4, EV/Sales 4.2, P/B 3.6, dividend yield 0.9%.

Market shares in lithium chemicals, 2025: SQM ~14% (233.1 kt from Novandino), Albemarle 12%, Ganfeng 6%, Tianqi 5%, Rio Tinto 4%. By this measure SQM is #1 by chemicals share (the "world #2" label reflects total lithium including hard-rock miners' spodumene, or prior-year rankings).

Stock-Price Catalysts (>5% moves, ~5 years)

Pattern from:

• Apr 2023 — "Boric nationalization" announcement: President Boric orders a state-controlled public-private model for Atacama lithium via Codelco. SQM ADRs −6.2% intraday. Origin of the entire JV saga.
• 2022 peak → 2024 trough — the lithium price collapse: carbonate fell ~80% from the 2022 high; SQM's realized price fell 70% over three years to 2025. The stock de-rated hard alongside earnings.
• May 2024 — Codelco Partnership Agreement signed: removed the worst-case (outright expropriation) but confirmed loss of control → an overhang that capped the multiple rather than a single-day crash.
• Late 2025 / Q1 2026 — lithium price reversal + JV closes + Tianqi appeal rejected: carbonate doubles; JV consummated 27 Dec 2025; Supreme Court rejects Inversiones TLC (Tianqi) appeal 26 Jan 2026 removing the legal cloud. Stock +97.9% TTM; +6.9% on a single sentiment day.
• What the market actually reacts to for SQM: (1) the lithium spot price above all else (it's a price-taker, so the stock is a leveraged bet on the commodity), and (2) Chilean state/regulatory headlines (nationalization, JV terms, tax). Iodine and SPN — the stable, high-margin businesses — move the stock almost not at all. Earnings beats matter less than the price tape and the political tape.

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Phase C — Judge people & books

Management

CEO — Ricardo Ramos (industrial engineer, PUC Chile), CEO since 2018 (previously CFO), led the SQM negotiating team in the Codelco deal, described in coverage as "highly professional". Career SQM insider; a competent operator who navigated a nationalization threat into a 40-year lease extension while retaining First-Term control — a defensible outcome given the alternative was expropriation.

The controller — the Ponce/Pampa story (the governance red flag). SQM is controlled not by management but by the Pampa Group — Inversiones Oro Blanco / Global Mining / Potasios de Chile, historically linked to Julio Ponce Lerou, Pinochet's former son-in-law and Chile's "lithium king," who built control of SQM via a leveraged "cascade" of holding companies. The controller groups held 47.38% of total shares and 94.19% of Series A shares, electing six of eight directors as of 2026. Ponce left the board in 2015 amid the "Caso SQM" political-financing scandal (fines and settlements followed). In June 2025 he announced he would pass control to his daughter Francisca Ponce, collapsing the cascade from six companies to two (Oro Blanco + Potasios), effective 2026. Board leadership also turned over in 2025 (Gina Ocqueteau became Chair; Gonzalo Guerrero and Patricio Contesse — another scandal-linked surname — stepped down from Chair/Vice-Chair).

Second major shareholder — Tianqi (China, 21.9%) with board representation, subject to a 2018 FNE (Chilean antitrust) governance/information-firewall agreement. Tianqi's subsidiary Inversiones TLC is the party that legally challenged the Codelco JV (lost at the Supreme Court Jan 2026), and Tianqi has been selling down (fully exited its Series B shares by the 20-F date). A large, activist, conflicted Chinese holder that is both a competitor (~5% lithium share) and a seller.

Capital allocation: Historically disciplined on the operating side (lowest-cost expansions, the Mt Holland/Wesfarmers and Azure/Hancock JVs, the China refinery). Dividends are formulaic — Chilean law mandates min 30% of net income; SQM paid $2.11/sh in 2023 ($1.5B total) then cut to near-zero ($67.2M in 2024, $4.3M in 2025) as earnings fell. New hybrid bonds (Series S, Jan-2026 $600M subordinated notes) carry dividend-stopper provisions. So dividends will rebuild with 2026 earnings but the yield is not the reason to own this.

Archetype: professional-manager operator (Ramos) under a founder-family controlling shareholder with a scandal history and a conflicted foreign co-owner. The governance is the classic emerging-market controlled-company setup — minority ADR holders ride behind the Pampa Group and the Chilean state. Skin in the game is high but not aligned with the ADR.

Forensic Red Flags

Accounting risks:

• Critical audit matter (auditor-flagged): the Codelco Partnership accounting. The auditor identified the accounting treatment of the Codelco deal — specifically the assessment of control over Nova Andino Litio SpA and the initial recognition of the intangible asset — as a critical audit matter requiring significant judgment. SQM's equity jumped ~$2.86B (to $8.05B) in the year the JV closed, driven substantially by this intangible/remeasurement. This is a large, judgment-heavy, non-cash accounting event that flatters the balance sheet — scrutinise how the "gain" and the intangible amortise. Watch: does SQM deconsolidate Atacama (it now owns <50%) or continue consolidating under the First-Term control argument? The control assessment is contested enough that the auditor called it out.
• Corfo lease in cost of sales: the progressive royalty (up to 40%) sits inside COGS, so reported gross margin is already net of the state's take — but it makes gross margin highly price-sensitive and not comparable to peers who own their orebodies.
• Depreciation ramp: D&A rose to $422.6M (2025) from $342.4M (2024) and $280.8M (2023) as capex builds — a growing non-cash charge as the expansion assets come online.
• FX/hedging complexity: large cross-currency swap book (UF-denominated bonds fully hedged to USD; sizeable CNY, AUD, EUR, ZAR, CLP forward positions). Cash flow can diverge from earnings via hedge marks.
• Cash flow supports earnings (OCF $1,314M > net income $641M in 2025) — no receivables/inventory blow-out flagged; current ratio strong. This is not a low-quality-earnings situation on the operating side; the risk is concentrated in the JV accounting judgment.

Regulatory findings:

• SEC: No SEC Litigation Releases and no AAERs naming SQM found via EDGAR EFTS for 2021-07-07 → 2026-07-07 (0 findings).
• Chilean tax litigation (material, from 20-F Item 8.A.7): The Chilean IRS (SII) has sought to extend the specific mining tax to lithium. SQM/Novandino paid amounts under protest while litigating — including $59.5M in over-assessed amounts and $818.0M in disputed taxes (net of corporate tax) for the claims at issue, with a Santiago Court of Appeals ruling on 2017–2018 tax years prompting a review of the tax-claim accounting. SQM began expensing the specific mining tax (EIAM) from Apr-2024. If the SII ultimately prevails or keeps assessing, further liability is possible. This is the live legal exposure, not a securities-fraud issue.
• Historical: the Caso SQM political-financing scandal (mid-2010s) drove Ponce off the board and produced fines/settlements — governance-reputational, now largely historical but structurally informative.
• Verdict: No material securities-enforcement findings (verified via SEC EDGAR EFTS LR/AAER + 20-F Item 3/8 as of 2026-07-07). The real legal risk is Chilean tax and the JV control-accounting judgment, both disclosed.

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Phase D — Project & stress-test

Forward Projection (EPS, next three fiscal years — FY2026/27/28)

Bottom-up from FY2025 actuals ($640.6M net income to all holders; $588.1M to controlling; 285.6M ADR-equiv shares → ~$2.06 controlling EPS FY2025) and the Q1 2026 run-rate. All outputs; inputs labelled.

Anchors: Q1 2026 net income $364.7M ($1.28/sh); management guides lithium volume +15% and Q2 > Q1; lithium price the dominant swing; Corfo royalty claws back ~40% of high-price upside; iodine + SPN ~$700M+ combined stable gross profit; Codelco takes "preferential economics" on Atacama lithium retroactive to Jan-2025 (SQM's share of lithium profit is now <50% economically in substance, even in the First Term — this is the key haircut).

Base-case logic: Q1 2026 alone did $1.28; annualising the first quarter naively gives ~$5.12, but (a) Q1 caught the sharpest part of the price spike, (b) the Corfo progressive royalty escalates as price rises (mechanically transferring upside to the state), and (c) supply will respond to $25k lithium within 12-18 months (Pilbara P1000 mid-2026, converter overcapacity, African/Chinese restarts). So I fade FY26 to ~$4.30 and decline FY27-28 as price normalises — SQM's EPS peaks FY26 on this recovery leg, not FY28. This is the critical, non-consensus call: because SQM is a price-taker into a supply-elastic commodity with a state royalty that rises with price, its earnings are near-peak now, not troughing. The forward P/E of ~8.6 looks cheap only if you believe FY26 EPS persists; on a normalised ~$3.50-4.00 mid-cycle EPS the multiple is ~18-21x — not cheap.

(No our model create — unattended watchlist run; base case not committed. Suggested Brier forecast when actioned: "SQM FY2026 diluted EPS ≥ $4.00", p≈0.55, resolves 2027-04-30.)

Bull vs Bear

Bull case. SQM owns the lowest-cost lithium orebody on earth and is running it flat out into a market that just flipped from surplus to (arguably) deficit — carbonate doubled to ~$26k and management raised volume guidance to +15% with a record Q2 coming. It earns a 26% gross margin on lithium at the bottom and 44% consolidated in Q1 2026. On top of that sits a near-monopoly iodine business (37% world share, 54% gross margin, inelastic medical demand) that the market values at roughly zero inside the lithium story — a hidden compounder worth arguably $6-9B standalone. Balance sheet is fortress-grade (1.3x net leverage, $2.5B cash). The existential overhang (nationalization) has resolved into a 40-year lease and First-Term control, and the Supreme Court cleared the legal cloud in Jan 2026. Forward P/E ~8.6, +98% TTM and still below where lithium bulls think it goes.

Bear case (2-3 permanent-impairment risks). (1) The asset is being handed to the state. From 2031 Codelco owns >50% and controls the mine; even in the First Term Codelco takes "preferential economics" retroactive to Jan-2025. You are buying a company whose best business converts, on a known schedule, from a controlled subsidiary into a minority stake in a state-run entity. This is a permanent, structural cap on the equity's claim — and it should compress the terminal multiple, not expand it. (2) SQM is a price-taker at cyclical peak margins. The +98% TTM run has already priced the recovery; the Corfo royalty escalates to 40% as price rises, mechanically donating the upside to the state; and lithium supply is highly elastic at $25k (Pilbara, African, Chinese restarts) — so the price and the margin are more likely near a peak than a trough. (3) Governance: a scandal-lineage controlling family (Pampa/Ponce) transitioning control intra-family, plus a conflicted, selling Chinese 21.9% holder (Tianqi) that just litigated against the company. Minority ADR holders are third in line behind the Pampa Group and the Chilean state.

Pre-mortem (18 months out, thesis broke): Lithium carbonate round-tripped from $26k back toward $14k as Q3-Q4 2026 supply restarts (Pilbara P1000, CATL's Jiangxi mine, African tonnes) overwhelmed the deficit narrative; SQM's realized price and margin compressed; the Corfo royalty had already skimmed the peak so the downside hit clean; and the stock gave back most of its 2x as the market re-recognised that FY2026 was a cyclical peak, not a new base — with the 2031 Codelco control transfer capping any re-rating. Iodine held up but couldn't offset a 50%-of-revenue lithium reset.

Are multiples too high? On peak FY2026 earnings, ~8.6x forward looks cheap; on normalised mid-cycle EPS (~$3.50-4.00) it's ~18-21x — a full multiple for a state-minoritized, price-taking commodity producer. The market is extrapolating the recovery; the risk is it's paying a trough multiple for peak earnings.

Contrarian view (what the market refuses to see): The consensus treats the Codelco JV as a resolved overhang ("nationalization avoided, lease extended to 2060 — de-risked!"). That's backwards. The JV is not a resolution; it is a slow-motion transfer of the equity's best claim to the state, already economically live via preferential economics and total by 2031. The market is also mis-weighting the mix: it prices SQM as a leveraged lithium call and ignores that the durable value is the iodine monopoly. The correct trade structure is: own SQM for the iodine + trough-cost lithium optionality at a fair price — not chase it up 98% treating peak-cycle lithium EPS as permanent.

Devil's Advocate (short-seller)

Dismantling the bull case:

• Revenue concentration: 50% lithium (a pure price-taker), 95% of it into Asia, 24% of it to two customers. A China/Asia battery-demand air-pocket or a trade/geopolitical rupture hits half the company at once.
• The moat is being expropriated on a timer. Bulls call the Codelco deal "de-risking." It is the opposite: SQM's best orebody is now majority-owned by the Chilean state, which takes full operational control in 2031 and already draws preferential economics retroactive to 2025. What is a ~49% minority stake in a state-controlled mine worth on a 2031+ terminal multiple? Bulls are not discounting this.
• Most dangerous competitor bulls underestimate: not Albemarle — it's Chinese supply elasticity and the lepidolite/African tonnes that can flood the market at $20-25k, plus SQM's own 21.9% shareholder Tianqi (a direct competitor with a boardroom conflict). The 2026 "deficit" is a Fastmarkets/Morgan Stanley call that Wood Mackenzie and S&P dispute (S&P still models a ~109kt surplus). If the surplus camp is right, the price rolls over.
• Worst capital-allocation / governance: the Caso SQM political-financing scandal; the Ponce cascade-control structure; an intra-family control handoff in 2026; a conflicted Chinese co-owner that litigated the JV. Minority ADR holders have the weakest claim in the stack.
• Accounting flag: the auditor's critical-audit-matter on the Codelco control assessment and the ~$2.86B intangible/equity step-up — a large, judgment-driven, non-cash gain in the same year the deal closed.
• What must hold for today's price? That FY2026's ~$25k lithium and ~44% gross margin persist rather than mean-revert; that the deficit camp beats the surplus camp; and that the market keeps ignoring the 2031 state-control cliff. Knock lithium price/volume down 20-30% and base-case EPS falls to ~$2.00-2.50 and the "cheap" 8.6x becomes 30x on collapsing earnings.
• Single permanent-impairment scenario: Chile tightens the screws further (higher specific mining tax — the SII is already litigating to extend it; tighter Second-Term economics; water/community permitting constraints on Salar Futuro), while lithium normalises — a double hit that structurally lowers both SQM's share of the mine and the mine's profitability. Plausibility: medium-high over 3-5 years given it's the stated direction of Chilean policy.

Management Questions (ordered by information value)

1. Post-2031, once Codelco controls Nova Andino Litio, what is SQM's economic entitlement to Atacama lithium in precise terms — a fixed %, a formula, an offtake? Quantify what the ~49% stake actually earns.
2. In the First Term, what exactly are Codelco's "preferential economic benefits" retroactive to 1 Jan 2025, and how much of 2025-2030 lithium profit do they transfer away from SQM shareholders?
3. Do you consolidate or equity-account Nova Andino Litio going forward, and what was the precise composition of the ~$2.86B equity increase and the recognized intangible? How does it amortise?
4. What is your normalised mid-cycle assumption for lithium carbonate, and at what price does the Corfo progressive royalty make incremental Atacama volume uneconomic to SQM (vs to the JV)?
5. Given the SII's push to extend the specific mining tax to lithium and the disputed ~$818M, what is the realistic range of ultimate tax liability, and is it capped?
6. How replaceable is Atacama? What is the standalone economics and timeline of Salar Futuro (direct lithium extraction) and Mt Holland/Kwinana as a hedge against Chilean concentration?
7. What is the true, all-in cash cost per tonne LCE at Atacama today, ex-Corfo and inc-Corfo, and how does it move at $15k vs $25k realized?
8. On iodine — the 54%-margin business — what is the sustainable ceiling on volume and price given caliche constraints, and would you ever separately value/spin it?
9. With Tianqi (21.9%, a competitor) selling and litigating, and the Pampa control transferring to Francisca Ponce, what changes in governance and board control in 2026-27?
10. What is the dividend trajectory now that earnings are recovering, given the hybrid-bond dividend-stopper provisions?
11. How exposed is the 2025-27 $2.7B capex program to a lithium-price reversal — what's discretionary vs committed?
12. What share of 2026 lithium volume is contracted vs spot, and how quickly do contract prices reset to spot on the way up (and down)?
13. What is the water/brine-extraction constraint at Atacama under the reduced authorized limits (−50% brine, −65% water goals), and does it cap production before the resource does?
14. What is the strategic logic of the Ivanhoe Electric copper exploration JV — is SQM diversifying beyond lithium/iodine, and how much capital could it absorb?
15. If lithium normalises to $15k for a sustained period, what is your downside operating plan — cost-out, capex deferral, potash/SPN rebalancing?

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