SQM announcement of the formation of a Joint Venture between SQM and Kidman Resources
OREANDA-NEWS. Sociedad Química y Minera de Chile S.A. (“SQM” or the “Company”) (NYSE: SQM; Santiago Stock Exchange: SQM-A, SQM-B) is pleased to announce that following the recent announcement of the formation of a Joint Venture between SQM and Kidman Resources, SQM will consolidate three complementary lithium production plants worldwide: the Salar de Atacama in Chile, the Salar de Caucharí in Argentina, and the Mount Holland Spodumene deposit in Australia.Patricio de Solminihac, SQM’s CEO commented on the industry's perspectives: "At present, global demand is about 200,000 tons of Lithium Carbonate Equivalent (LCE) per year and growing at rates of nearly 14% per year. We believe it is highly probable that worldwide demand will exceed 500,000 tons by 2025. The use of lithium batteries in the automotive industry marks a trend that will revolutionize global demand in the coming years."
"Our experience as a leader in the industry for more than 20 years puts us in a privileged position to capture the opportunities that arise in the lithium market," added SQM’s CEO. SQM's entry into the ownership of Caucharí and Mount Holland is the result of work done by a SQM multidisciplinary team that has been studying various lithium projects around the world for many years.”
Patricio de Solminihac commented: "In lithium production, as in other industrial chemicals, leadership is achieved through the effective execution of projects with high growth potential and low total production costs. The Salar de Atacama, Caucharí, and Mount Holland far exceed our objectives: they are high quality deposits with great potential for future growth, which will allow us to continue being operators with low total production costs in all of our plants.” He added, "At SQM we have a professional team with the knowledge and experience that let us be successful in the development of our Lithium projects over the past 20 years and has led us to identify the most profitable projects worldwide."
Finally, de Solminihac closed by saying: "We want to progress as fast as possible in the execution of our new projects. With respect to Caucharí, we will begin construction this year and expect to be producing lithium carbonate by 2019. Regarding Mount Holland, we expect to accelerate the significant exploration and technical studies already undertaken by Kidman to move into production of spodumene concentrate within the next 24 months. With regard to the refining plant, we will advance that in parallel, with the objective to start the production of lithium hydroxide and lithium carbonate on as short a timetable as possible after the concentrate operation is commissioned."
SQM is an integrated producer and distributor of lithium, iodine, specialty plant nutrients, potassium-related fertilizers and industrial chemicals. Its products are based on the development of high quality natural resources that allow the Company to be a leader in costs, supported by a specialized international network with sales in over 110 countries. SQM´s business strategy is to be a mining operator that selectively integrates the production and sales of products to industries essential for human development, such as food, health and technology.
The strategy is built on the following six principles:
• strengthen internal processes to ensure access to key resources required for the sustainability of the business;
• extend lean operations (M1) to the entire organization to strengthen our cost position, increase quality and ensure safety;
• invest in the development of a specialty fertilizer market, including product differentiation, sales channel management and price optimization;
• recover the iodine market share, seek consolidation and vertical integration opportunities; invest in the development of industrial nitrate applications;
• search and invest in lithium and potassium assets outside of Chile to leverage our operational capabilities, take advantage of the current lithium market appeal and ensure access to raw materials for our potassium nitrate production; and
• seek diversification opportunities in gold, copper and zinc projects in the region to leverage our mining operating capabilities and provide business continuity to our exploration program.