OREANDA-NEWS. Sociedad Química y Minera de Chile S.A. (“SQM”) (NYSE: SQM; Santiago Stock Exchange: SQM-B, SQM-A) is pleased to announce it will subscribe a capital increase of US$20 million in Elemental Minerals Limited (“ELM”) (Australia Stock Exchange: ELM), an Australian based company whose main assets are various potassium deposits in the Republic of Congo. SQM will invest approximately US$20 million in exchange for 17% of the company, and a right of first refusal for approximately 20% of the total potash production of ELM. The State General Reserve Fund of Oman and Summit Private Equity will also subscribe US$20 million and US$10 million, respectively.

ELM has access to potassium deposits in the Republic of Congo; preliminary studies suggest these deposits boast some of the highest grade potassium available and could therefore potentially lead to some of the lowest-cost production in the market. These assets are strategically located within 18-35 kilometers of the port, which offers convenient access to Brazil, one of the most important potash markets. Additionally, we believe that Africa, with its growing population, will require more fertilizer in the future, further emphasizing the strategic location of this project. Initial capacity could be around 2 million metric tons per year, growing up to 4 million metric tons per year. Definitive feasibility studies for the projects could be delivered within 2 years, fully financed with the US$50 million capital increase.

Patricio de Solminihac, Chief Executive Officer of SQM, commented, “As part of our growth strategy, SQM is continuously looking for opportunities to develop projects related to our core businesses, where we believe we can add value at the development stage and will have sustainable competitive advantages. We are confident that adding this project to our growing portfolio offers real potential long-term growth opportunities for SQM”.

Patricio de Solminihac continued, “Initial studies suggest that these are high-quality deposits and are therefore consistent with SQM’s strategic position as a low cost producer in all of its major business lines. These projects would grant SQM access to potassium at the low end of the cost curve. We believe that our expertise in processing potassium chloride, as well as our knowledge of the market and our existing logistics infrastructure, will be fundamental in the development of the ELM project. In addition, we are confident that our partners will contribute to making this a successful venture. We look forward to working with ELM as we continue to study these deposits”.

Mr. de Solminihac concluded by saying, “Although we have seen weakness in the potash market in recent years, we believe in the long-term fundamentals of this market. And while other producers have new capacity projects in the pipeline, we believe there is space in the market for a new low-cost project.”