SQM (Sociedad Química y Minera de Chile)

What it is

SQM (Sociedad Química y Minera de Chile) is a Chilean chemical and mining company, the world's second-largest lithium producer, and the dominant extractor of lithium brine from the Salar de Atacama in northern Chile. Its five business lines are lithium and derivatives, specialty plant nutrition, iodine and derivatives, potassium, and industrial chemicals. It trades on the New York Stock Exchange (NYSE: SQM) and the Santiago Stock Exchange (SQM-A and SQM-B). The Atacama brine complex is the core asset: high-grade brine concentrated in solar evaporation ponds, then refined at nearby plants into lithium carbonate and lithium hydroxide for battery supply chains.

History

SQM traces to 1968, when the Chilean state created it to develop the Atacama Desert's mineral resources, primarily nitrates and iodine. The company was privatized in stages between 1983 and 1988; Julio Ponce Lerou, a son-in-law of President Augusto Pinochet, led that privatization and became the controlling private shareholder, a position subject to recurring legal and regulatory scrutiny across successive Chilean governments.

SQM secured its lithium extraction license from CORFO (Chile's state economic development agency) under a 1993 agreement and began commercial lithium production from the Salar de Atacama in 1997. By the early 2010s, Chile supplied more than 30% of global lithium output. In 2018, China's Tianqi Lithium paid US$4.1 billion for approximately 24% of SQM, the largest Chinese investment in a Chilean company at that time, embedding Chinese strategic equity in the world's premier lithium deposit.

The 2022 electric-vehicle demand surge drove SQM's realised lithium price to approximately US$53/kg, generating record revenues. The price fell to roughly US$10/kg by late 2025 as Australian hard-rock output and Chinese refining capacity outpaced demand growth. On April 20, 2023, President Gabriel Boric announced Chile's National Lithium Strategy, designating lithium a strategic resource and requiring state participation in all future extraction. On December 27, 2023, SQM and Codelco signed a joint-venture agreement, with SQM managing Atacama operations through 2030 and Codelco assuming full control from 2031 to 2060.

Current state

As of mid-2026, SQM operates the Atacama lithium brine complex under the Codelco-SQM joint-venture framework. In Q1 2026, total revenues reached approximately US$1.76 billion, up 69.8% year on year, as the average realised lithium price recovered to US$18/kg from US$10/kg in Q4 2025 on tightening global supply, detailed in SQM's Q1 2026 earnings. Q1 lithium volumes were approximately 69,000 metric tons of lithium carbonate equivalent (LCE). SQM raised full-year 2026 volume growth guidance to at least 15%. Under the JV revenue-sharing structure, Q1 distributions to the Chilean state via CORFO and Codelco reached US$530 million. In February 2026, Tianqi Lithium sold a 1.25% SQM stake, reducing its holding to approximately 21.35%, citing liquidity requirements. SQM targets 300,000 metric tons LCE per year from the Atacama by 2030; from 2031, the Chilean state receives approximately 85% of the operational margin.

Relationships

SQM sits at the intersection of Chilean resource sovereignty and the global battery supply chain. The Codelco JV is the operational expression of Chile's lithium nationalization model; see Chile Lithium for the broader policy context. Tianqi Lithium's approximately 21% stake ties SQM to Chinese industrial supply-chain strategy; any further stake reduction would reopen the question of Chinese state equity access to the Atacama. SQM competes with Albemarle, the other CORFO contractor in the Atacama, and with Argentine brine and Chinese hard-rock projects globally. Atacameño indigenous communities contest brine extraction on environmental grounds, and CORFO quotas impose hard ceilings on output volumes. Global lithium demand dynamics that set SQM's price and volume context are covered in 供給過剰論が崩れ、リチウム価格は2026年第1四半期にほぼ倍増.

What to watch

• Q2-Q4 2026 lithium pricing: whether SQM's US$18/kg realised price holds or corrects as Direct Lithium Extraction projects in Argentina ramp up.
• CORFO extraction quota review for 2027: whether SQM's 15%+ volume guidance runs into Atacama brine-water limits.
• Tianqi Lithium's approximately 21.35% SQM stake: further sales, potential Codelco acquisition, or strategic hold under Beijing's supply-chain calculus.
• Codelco's 2030 transition: building lithium operational capacity before assuming Atacama management, given Codelco has no prior lithium operating history.
• Whether SQM's specialty plant nutrition and iodine revenue streams provide meaningful buffer against lithium price volatility in a down-cycle.