Sociedad Química y Minera de Chile S.A. (NYSE: SQM / Santiago: SQM-B) produced 233,000 metric tons of lithium carbonate equivalent (LCE) from its Salar de Atacama operations in 2025, slightly above guidance, as SQM lithium Chile returned to profitability with full-year net income of $588.1 million after a $404 million loss in 2024. Record Q4 sales volumes — over 66,000 metric tons, up more than 50% year-on-year — confirmed the company’s structural advantage as the world’s largest and lowest-cost lithium brine producer.
Company Overview
Founded in 1968 and headquartered in Santiago, SQM operates across lithium, potassium, iodine, and industrial chemicals. Its primary competitive asset is the Salar de Atacama in northern Chile — the world’s largest and highest-grade lithium brine deposit. SQM is dual-listed on the New York Stock Exchange and the Santiago Stock Exchange, with a market capitalisation in the upper tier of globally listed lithium producers.
Revenue for FY2025 reached $4,576 million, up 1% year-on-year, with a gross profit margin of 29.6%. Beyond lithium, potassium nitrate and iodine contribute meaningful revenue — Chile is the world’s largest iodine producer, and SQM is a major participant in that market. Battery energy storage systems (BESS) now account for more than 20% of global lithium demand, adding a second major demand driver alongside electric vehicles.
CEO Ricardo Ramos described 2025 as an important year for the company, citing both the return to profitability and the finalisation of the Codelco partnership as defining developments. SQM’s $2.7 billion capex programme over 2025–2027 targets expanded carbonate and hydroxide capacity across Chile and Australia.
SQM Lithium Chile — Atacama Operations and Codelco Partnership
The Salar de Atacama is SQM’s flagship asset and the foundation of its cost advantage. Brine extraction from the salt flat delivers lithium at production costs structurally below hard-rock spodumene mining, giving SQM resilience through the price cycle that saw lithium fall approximately 80% from its 2021–22 peak.
SQM’s Chilean operations are now conducted through Nova Andino Litio SpA (NovAndino), a joint venture with Codelco, Chile’s state copper miner. Under the structure, Codelco holds a controlling interest in NovAndino’s assets while SQM retains operational control. The arrangement extends production rights at the Salar de Atacama to 2060, resolving a decade-long uncertainty over the contract’s long-term status. SQM’s average realised lithium price increased approximately 14% quarter-on-quarter in Q4 2025, reaching close to $10 per kilogram, as demand from BESS and EV markets tightened supply fundamentals. Nova Andino is targeting production of approximately 260,000 LCE in 2026, representing more than 10% volume growth over 2025.
NovAndino is also evaluating direct lithium extraction (DLE) technology, which could lift output further while reducing brine consumption — a response to political pressure over water usage in the Atacama Desert. A proposal to regulators is expected before the end of 2026. The longer-term Salar Futuro initiative targets $3 billion of investment in new extraction technologies and environmental improvements.
For further context on lithium price trends and how Atacama brine costs compare to spodumene benchmark pricing, see CMN’s lithium price tracker.
Australian Operations — Mount Holland and Kwinana Refinery
SQM holds a 50% interest in the Covalent Lithium joint venture with Wesfarmers (ASX: WES) in Western Australia. The venture comprises two facilities: the Mount Holland Mine, which produces spodumene concentrate, and the Kwinana Refinery near Perth, a 50,000 tonnes-per-year nameplate lithium hydroxide plant (SQM’s attributable share: 25,000 t/y).
Kwinana completed construction and produced its first lithium hydroxide in July 2025. SQM’s attributable spodumene production from Mount Holland reached approximately 160,000–190,000 tonnes in 2025. Revenue from the International Lithium Division — the new business unit covering non-Chilean output including Covalent — reached $15.5 million in Q1 2025, a figure expected to grow materially as Kwinana scales toward nameplate. The Australian operations give SQM hard-rock hydroxide exposure alongside its brine carbonate production in Chile, broadening its product and geographic mix.
SQM’s Australian production feeds into the broader global critical minerals supply chain in Oceania, where Western governments are prioritising domestic refining capacity as an alternative to Chinese processing dependency.
SQM in the Global Lithium Market
SQM ranks among the top two or three lithium producers globally by volume, alongside major peers including Albemarle and Arcadium (now part of Rio Tinto). Its Atacama brine operations are among the lowest-cost in the world by production cost per tonne, providing margin resilience that hard-rock producers cannot match at equivalent lithium prices.
Tianqi Lithium, a Chinese lithium major, holds approximately 23.77% of SQM — the largest single Chinese ownership position in a Western-listed lithium producer. This creates governance complexity and has been a point of scrutiny for Western buyers and governments focused on supply chain security. The Codelco partnership does not change Tianqi’s equity position but introduces Chilean state oversight into the operational structure.
SQM is projecting approximately 25% growth in global lithium demand in 2026, driven by EV adoption in China and Europe and rapidly expanding BESS deployment. Its long-term contract exposure and spot-price invoicing mean revenue tracks lithium price movements directly — a source of both upside leverage and earnings volatility.
Risks and Outlook
Lithium price volatility remains the primary earnings risk. SQM’s revenue is highly leveraged to spot prices, and the 2021–24 price collapse — from above $80,000 per tonne to below $10,000 per tonne for battery-grade carbonate — demonstrated the severity of that exposure. The recovery observed in late 2025 and into 2026 has improved near-term fundamentals, but the market remains subject to oversupply risk if new projects ramp faster than demand.
Chilean political and regulatory risk is structural. The Codelco partnership resolves the contract question to 2060 but introduces state oversight into operational decisions and profit allocation. Water usage at the Salar de Atacama remains politically sensitive — environmental opposition to brine extraction has grown, and DLE technology is partly a response to this pressure rather than a purely economic optimisation. Kwinana’s ramp-up trajectory in Australia carries execution risk, as first product was only achieved in July 2025 and full-rate production has not yet been demonstrated.
Tianqi Lithium’s stake continues to attract scrutiny from Western procurement managers and policymakers assessing supply chain concentration risk. No forced divestment mechanism currently exists, but the stake is a factor in SQM’s positioning relative to competitors without Chinese strategic shareholders.
Company Snapshot
| Detail | Data |
|---|---|
| Founded | 1968 |
| Headquarters | Santiago, Chile |
| Listing | NYSE: SQM / Santiago: SQM-B |
| CEO | Ricardo Ramos |
| Primary minerals | Lithium, potassium, iodine, industrial chemicals |
| Flagship asset | Salar de Atacama, Nova Andino Litio (with Codelco) |
| FY2025 revenue | $4,576 million |
| FY2025 net income | $588 million |
| 2025 LCE production (Atacama) | 233,000 metric tonnes (Nova Andino Litio) |
| Key shareholders | Tianqi Lithium ~23.77%; Codelco (operating partner via Nova Andino Litio) |
| Capex programme | $2.7 billion, 2025–2027 |
Production data sourced from SQM’s FY2025 earnings release and USGS Lithium Statistics and Information. Financial data from SQM Investor Relations.
What does SQM produce?
SQM is primarily a lithium producer, with operations in Chile and Australia. Its product range also includes potassium nitrate, potassium chloride, iodine, sodium nitrate, and industrial chemicals. Lithium and derivatives account for the largest share of revenue.
Where is SQM’s main lithium operation?
SQM’s primary lithium operation is at the Salar de Atacama in northern Chile, operated through Nova Andino Litio SpA, a joint venture with Chilean state miner Codelco. The Atacama salt flat holds the world’s largest and highest-grade lithium brine resources. SQM also holds a 50% stake in the Covalent Lithium joint venture in Western Australia, which includes the Mount Holland Mine and Kwinana Refinery
What is SQM’s relationship with Codelco?
SQM and Codelco formed Nova Andino Litio SpA to operate the Salar de Atacama lithium assets. Codelco holds a controlling interest in Nova Andino’s assets, while SQM retains operational control. The structure extends SQM’s production rights at the Atacama to 2060, replacing the previous contract arrangement. This was the first earnings release in which the Atacama division was reported under the Nova Andino name.
Who are SQM’s main shareholders?
SQM is publicly listed on NYSE and the Santiago Stock Exchange. Tianqi Lithium, a Chinese lithium producer, holds approximately 23.77% — the largest single Chinese stake in a Western-listed lithium major. Codelco, the Chilean state copper miner, is an operating partner through Nova Andino Litio but holds its interest at the joint venture level rather than directly in SQM’s listed equity.
How does SQM compare to Albemarle in lithium production?
SQM and Albemarle (NYSE: ALB) are the two largest lithium producers globally by volume. Both operate at the Salar de Atacama — Albemarle through a separate concession area. SQM produced approximately 233,000 metric tonnes LCE from Nova Andino Litio in 2025; Albemarle’s Atacama operations have faced greater curtailment pressure during the price downcycle. SQM’s brine cost structure and the Codelco partnership securing rights to 2060 are structural advantages in a multi-decade competition for low-cost supply.
