Sociedad Quimica y Minera (NYSE:SQM) said its second-quarter performance was supported by strong results across its principal businesses, including record lithium sales volumes, favorable iodine pricing and increased specialty plant nutrition sales.
Chief Executive Officer Ricardo Ramos said the company sold more than 84,000 metric tons of lithium carbonate equivalent, or LCE, during the quarter from its Chilean operations through Novandino Litio and its Australian operations through Covalent Lithium. Lithium prices increased during the second quarter as demand proved stronger than expected, he said.
Lithium Expansion Plans
In July, Novandino Litio, SQM’s association with Chilean state-owned Codelco, submitted environmental and technical documentation for the Salar Futuro project. Subject to approvals, the project would represent the next stage of SQM’s operations at the Salar de Atacama.
Ramos said Salar Futuro contemplates about $3 billion of investment over seven years. The project is intended to increase production while reducing the environmental footprint of the company’s operations. He emphasized during the question-and-answer session that the investment should not be viewed solely as spending for an incremental 30,000 metric tons of capacity.
“The Salar Futuro project is not only increasing capacity, it is changing technology,” Ramos said. “You have to analyze the Salar Futuro project as a whole in terms of having a new beginning of the Salar de Atacama for the next 60 years’ operation.”
The company expects Novandino Litio to produce between 280,000 and 290,000 metric tons of LCE in 2026 and to have roughly 300,000 metric tons of production capacity next year. Carlos Díaz, CEO of Novandino, said the company expects about 80,000 metric tons of next year’s production to come from lithium sulfate, with the remaining approximately 220,000 metric tons coming from lithium chloride processing or the Antofagasta chemical plant.
Díaz said SQM’s Chinese Xing plant currently produces roughly 24,000 to 25,000 metric tons of LCE and is being expanded toward about 30,000 metric tons. The company also uses tolling arrangements with undisclosed third-party suppliers in China and expects to continue working with those suppliers in coming years.
For the third quarter, Felipe Smith, commercial vice president of Novandino, said sales volumes are expected to remain strong and broadly in line with the second quarter. He said third-quarter average lithium prices, based on published indexes used in company contracts, are expected to be generally in line with the first-half average, while noting the market remains volatile.
Díaz said lithium costs in the third quarter are expected to be similar to the second quarter, reflecting ongoing efficiency initiatives and production scale. He added that 2026 costs should be lower than in 2025.
Australia Growth Project
In Australia, SQM and its Covalent Lithium partner Wesfarmers recently approved an expansion of the Mt Holland mine and concentrator. The project is expected to double spodumene concentrate capacity to approximately 350,000 metric tons annually attributable to SQM’s share, with first production expected in the first half of 2030.
Mark Fones, CEO of the International Lithium Division, said the timeline reflects the scale of the expansion and an effort to reduce execution risks rather than rush development. Construction is expected to begin in the middle of next year, following procurement of long-lead items and site preparation. Construction is expected to take 18 to 24 months, followed by commissioning in 2029.
Fones said Covalent and Wesfarmers have not decided whether to expand the refinery. SQM expects higher lithium hydroxide production next year as the existing operation continues its ramp-up, which could reduce direct spodumene concentrate sales compared with this year.
Iodine and Plant Nutrition
SQM said iodine demand and pricing remained favorable in the quarter. The company is commissioning a seawater pipeline that Ramos said will provide added flexibility to optimize production in response to market conditions. SQM is producing iodine from four operations and expects total iodine production of about 15,500 metric tons in 2026.
Pablo Altimiras, CEO of the Iodine and Plant Nutrition Division, said SQM expects iodine demand to grow by about 3% this year. The company anticipates new capacity, including from a Chilean project associated with Caliche Oro, will broadly offset that demand growth. As a result, SQM expects its iodine sales volumes this year to be similar to recent years, though volumes could rise if supply conditions differ from expectations.
In specialty plant nutrition, Ramos said the company reported higher sales, prices and volumes. SQM continues to expect full-year sales volumes to increase by approximately 10% from 2025. Market conditions have benefited from supply constraints in certain markets, although the company expects those constraints to gradually normalize toward year-end.
Capital Spending and Chile Contributions
SQM updated its capital expenditure outlook to include 2028 and now expects total capital spending of about $3 billion during the 2026-to-2028 period. Ramos said the spending is focused primarily on future growth and improving competitiveness through lower production costs.
The company also said SQM and its subsidiaries accrued more than $1.6 billion in payments to the Chilean government during the first half of 2026. Those payments included taxes, contributions to local governments and payments to Corfo.
Looking further ahead, Ramos said SQM is working closely with Codelco under the Novandino arrangement and is preparing for investment in Salar Futuro. He said the company plans to provide an initial view of expected volumes for the following year during its next conference call.
About Sociedad Quimica y Minera (NYSE:SQM)
Sociedad Química y Minera de Chile SA (NYSE: SQM) is a leading global producer of specialty chemicals and minerals headquartered in Santiago, Chile. The company focuses on the extraction and processing of key inputs for the agricultural, industrial and high‐tech sectors. Its core business activities include the mining of lithium, potassium and iodine, as well as the manufacture of value‐added products derived from these raw materials.
SQM’s product portfolio spans lithium carbonate and lithium hydroxide used in electric vehicle batteries and energy storage systems; potassium chloride and potassium nitrate fertilizers designed for precision agriculture; and iodine and its derivatives for pharmaceutical, food and electronics applications.
