Good day, and thank you for joining SQM's earning conference call for the third quarter of 2025. This call is being recorded and webcast live.

Our earnings press release and accompanying results presentation are available on our website along with the link to the webcast. Today's participants include Mr.

Ricardo Ramos, Chief Executive Officer; Mr. Gerardo Illanes, Chief Financial Officer; Mr.

Carlos Díaz, CEO of the Lithium Chile Division; Mr. Pablo Altimiras, CEO of the Iodine and Plant Nutrition Division; and Mr.

Mark Fones, CEO of the International Lithium Division. Also joining us today are members of our commercial and business intelligence teams: Mr.

Felipe Smith, Commercial Vice President of the Lithium Chile Division; Mr. Pablo Hernandez, Vice President of Strategy and Development of the Lithium Chile Division; Mr.

Juan Pablo Bellolio, Commercial Vice President, Plant Nutrition and Specialty Products; and Mr. Andrés Fontana, Commercial Vice President of International Lithium Division.

Before we begin, please note that statements made during this call regarding our business outlook, future economic performance, anticipated profitability, revenues, expenses, and other financial items, along with expected cost synergies and product and service line growth, are considered forward-looking statements under US federal securities laws. These statements are not historical facts and are subject to risks and uncertainties that could cause actual results to differ materially.

We assume no obligation to update these statements except as required by law. For full discussion of forward-looking statements, please refer to our earnings press release and presentation.

With that, I will now turn the call over to our Chief Executive Officer, Mr. Ricardo Ramos.

Thank you. Good morning, everyone, and thank you for joining us today.

During the third quarter, we experienced a more favorable pricing environment for lithium compared with the previous period. Although the market remains highly volatile, we are cautiously optimistic.

Our realized average prices increased, and while we expect this positive trend to continue in the fourth quarter, we remain focused on high-quality production, being a reliable supplier, increasing volumes, and continuing to advance our cost reduction initiatives. Demand fundamentals remain strong, not only for electric vehicles, but also from energy storage systems, which already account for more than 20% of global lithium demand.

Operationally, the quarter was very strong. We delivered the highest lithium sales volumes in SQM history, supported by low costs and strong efficiencies at our Atacama operations.

Our Australian operation also continued to progress as planned. Spodumene sales increased significantly, we initiated lithium hydroxide production, and we reached record sales volumes of spodumene concentrate, an important milestone from this project.

We expect commercial activity to remain robust in the fourth quarter. Outside the lithium segment, performance was also solid.

In iodine and plant nutrition, results remain strong. Iodine prices continue at high levels with a balanced supply-demand environment.

Construction of our seawater pipeline is now more than 80% complete, giving us the ability to bring additional iodine to the market earlier than expected if required. We are also expanding our iodine production capacity through the development of a third operation in María Elena, which will add 1,500 tons of iodine capacity.

This further strengthens our long-term supply position and reinforces our reputation as a reliable supplier. In fertilizer, we continue to see healthy demand and stable prices across most key markets.

Our specialty plant nutrition business delivered discreet but sustainable growth compared with last year, both in volumes and revenues. The shift toward tailor-made solutions and higher-value blends continues to improve our product mix and supports our strategy of allocating products to the most attractive markets.

In iodine, revenues increased 5% year on year, with prices averaging close to $73 per kilogram. The X-ray contrast media segment, the largest end-use application, continues to grow steadily and remains a key driver of long-term demand.

We also completed a detailed review of our CAPEX program for the period 2025-2027. Total CAPEX is now estimated at $2.7 billion over the three-year period.

Our plan maintains a focus on increasing production capacity, preserving low costs, ensuring high product quality, and upholding strong sustainability standards. While some investment decisions have been delayed, this does not affect our ability to meet the production and sales objectives set for each of our divisions.

Finally, as announced last week by SQM and Codelco, we received approval from China's antitrust authority. We look forward to advancing this joint venture before the end of the year.

Thank you.

Good morning, I'll ask my questions one by one. Thanks for the update.

Can you talk about what you're seeing right now in lithium demand? Particularly, I wanted to maybe investigate, it seems like inside China, the demand forecasts for lithium are a lot higher, per forecasts that are coming from Chinese forecasters as opposed to people outside China in the Western world seem to have lower demand forecasts.

Do you see this disconnect? Is it around energy storage in China?

Can you talk about that? Thanks.

Hey Joel, Pablo Hernandez here. Regarding 2025 demand expectations, we have recently improved since our last earnings call.

Driven by stronger-than-expected EV sales, particularly in Europe and the sharp increase as you mentioned BESS shipments, we expect demand to reach over 1.5 million metric tons this year, representing an over 25% growth. In terms of China, it continues to maintain a significant lead in the EV markets with an expected 30% year-on-year growth, representing more than 60% of the global EV sales.

Regarding the other significant EV markets, Europe this year had a very strong first three quarters with more than 30% year-over-year growth. On the US, they still had slower growth of 10% year over year, while the rest of the world of course had strong numbers reaching 40% year-over-year growth.

Okay. You on your last quarter talked about Chilean production for lithium be up about 10% for you, and then you'd have about 20,000 tons for your share at Mt.

Holland. Are you still maintaining that 10% year over year out of Atacama?

Then should we now expect something closer to 24,000, 25,000 tons for the year out of Mt. Holland in spodumene?

Joel, this is Gerardo. Just to be clear, are you asking about production or sales?

You gave guidance last quarter that Atacama production or sales, I have to look, would be up 10% this year, and then you'd have 20,000 tons out of Mt. Holland.

In this particular quarter release, you said Q4 volumes would be similar to Q3 out of Mt. Holland, which would imply more than 20,000 tons out of Mt.

Holland. What do you expect out of Atacama?

What production do you expect in Chile this year? What production do you expect in Australia this year?

Let's just do it like that.

Hello Joel, this is Carlos Díaz. According to schedule, we expect to produce this year close to 230,000, that is lithium coming from the Salar de Atacama.

180 of those is processed in Chile and 50 is going to be processed in China, started for our lithium sulfate production that we have been very successful with that. We'll continue working with next expansion for next year and we expect to grow next year.

We still don't have the final figure, but we'll continue working in increasing the production. That is regarding to the lithium production in Chile.

Hi Joel, this is Mark Fones. To answer the second part of your question, yes, we maintain our production estimation and forecast for this year, which you may recall it was between 150,000 to 170,000 tons of spodumene concentrate at 5.5%.

That still holds. Regarding the sales projection, which you were referring to, of 20,000 tons LCE for this year, that you are also right, we are increasing that to a range between 23,000 and 24,000 tons.

That's perfect. Then my last question would be, when we look at the average selling price for lithium that you get between Chile and international, it's about a $3,000 to $4,000 a ton discount.

Should we think of that as that's the conversion costs that are basically embedded because you have to pay a toller for spodumene on an LCE basis? Then would we expect that international price discount versus the Chilean price realized to decrease across 2026 as you ramp up the Kwinana hydroxide conversion plant?

Hey Joel, this is Andrés Fontannaz. Regarding prices for the SQM international lithium division, please keep in mind that most of our sales are concentrated on spodumene, more than 90% of our third quarter sales were explained by spodumene.

Right now we are reporting all of our sales as lithium carbonate equivalent, in order to compare those prices with the prices that we are getting in the Chilean operation, you need to take into consideration the conversion factors and also the refining costs. That would make a more fair comparison.

Right. My question is then, across 2026, as Kwinana ramps up, shouldn't the international realized price on LCE basis rise closer to the Chilean price as Kwinana ramps up next year?

Hey Joel, this is Gerardo. Don't worry.

Next year or starting from next quarter, we're going to report the numbers from Australia as the product is sold. If it's spodumene or lithium hydroxide, you will see the breakdown, you will not have this confusion of prices without conversion costs or not.

Thank you. I'll pass it on.

Hi guys, hope you can hear me well. My first question is just to make sure I understand the part about China production.

Are you already running 50,000 tons there? Because I remember the capacity was something around 30,000 tons with potential tolling of another 20,000.

I was wondering if there is more capacity to be used in China next year if the market remains good as it is right now in terms of prices. Is China already full capacity?

The other question I have is also follow up on the JV with Codelco. If imagining the signing like Ricardo mentioned now at the end of the year, if there is any sort of a retroactive payment that SQM has to do for the year 2025 given that it took long to sign the contract.

In other words, when you look at the free cash flow of the company, even though you most likely consolidate the full thing, is there any sort of adjustment effect or cash transfers that we should be aware of when the contract is fully signed? Thank you.

Lucas, Ricardo speaking here. First, you're right in terms that we have to pay a dividends to Codelco during next year.

This dividend will be in relation of the tonnage of volume that belongs to Codelco according to the joint venture agreement. We will put in our accounting this value as soon as we finish the agreement.

That has been stated very clearly in our financial statements that we have to do it as soon as we have the agreement with Codelco. It is reflected and you can calculate the number because it's quite clear in the agreement with SQM and Codelco.

That is public agreement.

Hello Lucas, Carlos Díaz again. Respect to your first question, our production in China, let me tell you first that we expect to produce this year 100,000 metric tons of lithium sulfate.

When you compare to lithium carbonate or hydroxide, you have to divide by 2, it's equivalent to 50,000 around that. And 20 of those is going to be produced in our Dexin plant in China, and 30 is going to be produced with third parties.

For the coming year, we expect to keep increasing the production in lithium sulfate, and we're studying and evaluating to expand our capacity in China in our own plants. That is our plan.

Perfect. Thank you very much.

Hi, this is Lucy on for Ben, and I have three questions. We saw CAPEX plans lowered, and lithium prices start to rise.

How should we think about the need to raise capital in 2026? Is it fair to say that the base case scenario is no capital raise?

Thank you.

Hi Lucy, this is Gerardo. You can see our balance sheet.

We have a very strong balance sheet, and we have had always a strong balance sheet. On these days, even at the current pricing environment, some of our main KPIs are improving.

We are deeply committed to maintaining a strong investment grade, and there are several levers, we believe, can be pulled before pulling the last one, which is raising capital. We're working on several initiatives, and as long as we keep on having a strong balance sheet, it may not be needed.

Thank you. For my second question, earlier this year earlier this week, Ganfeng suggested 30% to 40% lithium demand growth next year.

Do you have any preliminary thoughts on demand growth next year and in particular how do you see demand for ESS developing next year? Thank you.

Hey Lucy, Pablo Hernandez here. Regarding Ganfeng, of course we would need to look into their assumptions, but of course this looks like a good and optimistic projection for next year.

In our case, regarding 2026, we're still assessing demand growth expectations and we remain relatively conservative, with the expectation to reach more than 1.7 million metric tons. The main driver will continue to be the EVs and of course, as you mentioned, the very strong demand that we've seen on BESS side.

Perfect. Finally, how much of iodine production growth do you expect to see in 2026 that is not from SQM, and is it all Chile based?

Thank you.

Hello, Pablo Altimiras is speaking. Regarding to the third parties' production, with the public information that we have, we believe that most of that will come from Chile, from caliche ore.

We don't have the exact figure, but our expectation is that that amount will not surpass the growth of the total demand.

Hey, thank you very much. Can you please update us on the progress to closing the deal with Codelco, and remind us what the milestones are pending?

What happens if it doesn't close by 2025? Is there a long-stop close there?

What will happen?

Sorry, Ricardo speaking. First is as we announced, we closed with an agreement with the antitrust authority in China that was the last remaining external authorization we needed.

Now everything is under the review, especially the agreements between CORFO and Codelco, under the review of Contraloría in Chile. Contraloría is like an internal auditing body of the government that needs to review this kind of contracts.

We expect that this review will be positive and will be before the end of the year. There's no second plan.

We will close this year. That's for sure.

Thank you, that's great. Another question if I may, this would be asking on 2026 expected mix out of Australia.

What mix of spodumene and hydroxide you expect to get out of Australia in 2026? Thank you.

If you can indicate something about this, thank you.

Hi Andrés, this is Mark Fones. We have not yet closed our budget for next year on production for Mt.

Holland. What I can tell you is that the mine and concentrator at Mt.

Holland, we expect to be producing at capacity. Of course we will be expecting half of Mt.

Holland's capacity in terms of spodumene concentrate. What happens with the ramp-up on the refinery on the other hand is that we've announced first product this year, as you well know, and we will be ramping up production until almost reaching nameplate capacity by the end of 2026.

What's the exact amount of that lithium hydroxide considering all the good work that has been performing Covalent with Wesfarmers and SQM at the refinery, in addition to all the challenges as any ramp-up in a complex project will happen next year, still remains to be seen. We will let the market inform in due time.

Very clear. Thank you.

Hey, good morning. Thank you for taking my question.

The first question, I would like to get more colors on the CAPEX reduction. You reduced it by about 22% versus what we had last year.

I think in the press release you stated that you will not have an impact on any capacity or project. I'm not sure how to think about it.

Maybe if you can help us understand the reduction of CAPEX, and for which business or segment division it comes through, and maybe any project that has been pushed out of the 2027 range, that would be helpful.

Hi Corinne, this is Gerardo. Let me give you a breakdown of what we announced.

Yesterday we announced that our CAPEX program for the years 2025-2027 will be somewhere around $2.7 billion. The breakdown, it's going to be somewhere around $1.3 billion for the lithium Chilean division, the main project that they have is to finish the expansion of lithium hydroxide to reach 100,000 metric tons, that should be ready at the beginning of next year.

Then the expansion to reach 260,000 metric tons of lithium carbonate capacity in Chile, while we keep on working on initiatives to keep on producing lithium sulfate that is quite relevant as Carlos was mentioning before. Then for the international lithium division, the total CAPEX that is included within this $2.7 billion is approximately $700 million, which includes approximately $400 million between the expansion of Mt.

Holland and the first steps of Andover. Of course, both projects are subject to approval with our partners.

That's what is included in this timeframe. Finally, in the iodine and plant nutrition business line, the total CAPEX is approximately $800 million that includes the seawater pipeline that should be ready next year, that is going to be critical to give us flexibility to produce more iodine, and also the María Elena iodine production site that should let us bring additional capacity of iodine as of this moment.

Thank you. Maybe the second question coming back to the Codelco agreement.

Are you still waiting for the local group to be consulted? If so, can you provide an update of where you stand with them?

Thank you.

No, no, no. Sorry.

Regarding the communities, we had the agreement with the communities. That was, I think, a couple of months ago.

It was publicly released that we had the final agreement in order to move forward. The only one that, as already explained to you, is the internal auditing body of the government that is reviewing the agreements between CORFO and Codelco.

After they finished their review and their approval, we will continue with the joint venture startup. Thank you.

Hi everyone, thank you. A quick follow-ups on my side.

Please, you mentioned the demand expectations. I think you mentioned 25% growth to 1.5 million tons.

I wasn't sure if that was related to 2025 or 2026, because in the presentation you mentioned 20% expectations for the demand growth for '25. If you can also detail how you're seeing demand for 2026, and also maybe provide some more details around ESS demand, which has been calling the market attention for the last few weeks, would be great.

Then I'll have a few follow-ups as well. Thank you.

Hi Marcio, this is Gerardo. Give me one second before answering your question, and just to clarify something over the previous answer I gave.

I mentioned 260,000 metric tons of lithium carbonate production capacity in Chile, but it refers to 260,000 metric tons of lithium production overall coming from Chile from lithium chloride or tolled in China from lithium sulfate.

Hey Marcio, this is Pablo Hernandez. On your question, the information that I previously provided on the 1.5 million metric tons over 1.5 million metric tons and the 25% year-over-year growth, that was related to 2025.

As I also mentioned, our expectations for 2026 is that this number is going to be reaching over 1.7 million metric tons. Specifically to BESS, as you well mentioned and has been mentioned during the call, there's been a strong growth in demand from BESS, which we estimate over between 40% and 50% year-over-year growth this year, and we expect those numbers to remain stable for next year as well.

That's great, thank you. Maybe another follow-up on the Codelco deal.

Can you provide us what are the expectations in terms of you probably need a revision of your license if you go ahead with the plan to produce nearly 260,000 tons overall with Chilean assets. Obviously, in theory, it would be ideal that you defer as much CAPEX as possible for when the JV becomes effective in 2030.

I'm just thinking if there is any CAPEX related to Salar Futuro that we can expect to be spent before 2030, or can you defer that to beyond 2030 when the JV becomes effective? That would be great.

Thank you.

First, the agreement will go into effect the same day we signed the agreement, that it's going to happen in the next few weeks. I hope so.

After we signed the agreement, we sign with Codelco, the agreement is starting. We don't need to wait until 2030.

You are right in terms that Salar Futuro is a great, great project, and we are working very hard on it. We expect to submit the environmental study to the authorities and communities during next year.

It's going to be a complex project, and probably we will reach the final agreement during 2029, 2030. It means that the initial investment in Salar Futuro, that is a big project and very interesting one, will be 2030 or 2031 starting investment.

It means that it will not affect the CAPEX in the next 3 or 4 years. It will not affect 2026, '27, '28.

We will continue with our today plan of projects in the Salar de Atacama as usual. That's why this project will have a significant impact, yes, and a very positive one, starting I hope 2030, if not 2031.

That's great. Thank you.

Maybe one last one on iodine. Obviously, market's been strong for a couple of years now.

I think you're going to be adding about 5,000 tons of capacity once the new pipeline and María Elena is ready. Can you talk a little bit about the overall supply and demand conditions on iodine, if you expect these prices above $70 per ton or $70 per kilo to remain sustainable?

Where are the other areas of supply growth that could put some pressure on prices, if at all, in the next couple of years? Thank you.

Hi, Pablo speak, Pablo Altimiras is speaking. As we have been said before, supply and demand for this year is tight because we this year we are not seeing additional supply.

Actually, the demand of this year is not growing because of the lack of supply. We believe that demand for the next year next year will grow in a range of 3%.

Why the demand will grow? Because we see more capacity arriving to the market next year.

As I said before, it's coming from caliche ore mainly. We believe that we'll have more supply next year.

Perfect.

Thank you, Pablo.

Thank you for taking my questions. My first question is, if we assume that lithium hydroxide and spodumene prices stay kind of at the same level as they are today for 2026, would you expect the standalone profitability of Kwinana conversion to be positive?

Hi Mazahir, this is Mark Fones. Yes, as we've said before, we continue to see the long-term profitability of Kwinana and the Mt.

Holland project to be positive. We still see ourselves committed with our partners.

We will continue to develop this project, and that's the reason also we announced that we expect a final investment decision on the expansion for the mine and concentrator for somewhere next year.

Thank you. Maybe a follow-up on the Codelco deal.

The 201 kilotons of lithium that's attributable to Codelco, do I understand that correctly, that will be paid as sort of revenue that's attributable to that amount of lithium, or is it gross profit, or is it some other metric?

Hi Mazahir, this is Gerardo. The amount that is to be paid to Codelco is paid as a function of a certain amount of tonnage per year, which is 33.5, and is paid as a dividend.

I just want to clarify, is it going to be the revenue that's derived from 33 and a half kilotons, or gross profit that's derived from that amount of lithium?

It's the profitability that we get from this tonnage, but the exact calculation and the exact way of how you can get to the number, it's described in the contracts that are publicly available on our website.

Thank you.