SQM, the world's second-largest lithium producer, reported a 6% drop in first quarter net profit to $750 million compared to the year-ago period. Revenue for the miner landed at $2.26 billion during the January-to-March period, up from the $2.02 billion during last year's first quarter.
The company posted quarterly revenue of $1.65 billion for lithium and its derivatives, a jump of nearly 14% from the year-earlier period. Average lithium sales prices increased by more than a third (34%) during this three-month span; however, sales volumes saw a decrease by approximately the same rate.
"The weaker demand was offset by higher prices," said Julia Fernandez, SQM spokesperson. "We expect sales volumes to recover in this year's second quarter."
Last month, Chilean President Gabriel Boric announced a proposal for Chile to pursue a state-led development model for coveted battery metals like lithium. This plan allows partnerships with private sector entities but only if the government holds majority stakes in new lithium ventures.
In response to President Boric's announcement, SQM stated it would need an additional investment of around $2 billion under this new strategy.
"We are prepared to work with both public and private sectors as long as we can maintain our competitive edge," said Marcelo Alvarado, CEO of SQM.
Chile is one of the largest reserves and producers of lithium globally – essential for electric vehicles' batteries – which puts them at an advantage amidst increasing global demand due to climate change concerns.
"This shift towards state-led development will ensure that Chile benefits fully from its vast natural resources while maintaining sustainable practices within its mining industry," commented environmental economist Dr.Carlos Moreno on Boric’s proposal,
As partakers in global efforts towards sustainability and clean energy transition continue expanding, long-term demand for lithium is expected to grow. SQM's commitment to adapt and invest in this new landscape highlights the company's dedication towards securing its position in the market while cooperating with Chilean authorities.
"We believe that our partnership with the government will reinforce our position as a reliable supplier of lithium and contribute to Chile's sustainable development," added Alvarado.