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, reflecting a nearly 14% increase from the same period last year. This growth was driven by an impressive jump of more than a third (34%) in average lithium sales prices over the three-month span.
Despite softer demand - with sales volumes declining by roughly 34% - higher prices helped offset losses, and SQM anticipates that sales volumes will rebound in Q2.
"The improvement in our financial results is primarily due to increased pricing across all our business lines," stated Ricardo Ramos Rodriguez, CEO of SQM.
Last month, Chilean President Gabriel Boric announced plans for a state-led development model aimed at capitalizing on lithium resources – a crucial component used in electric vehicle batteries. The proposal allows partnerships with private-sector companies only if the government retains majority ownership of new lithium ventures.
In response to Boric's announcement, SQM highlighted that it would require an additional investment of approximately $2 billion under this new strategy. "We understand that proper regulation is essential for sustainable development; however, we believe collaboration between public and private sectors can yield better outcomes," said Maria Ignacia Barros Varas, Executive Vice-President of Business Development at SQM.
As global demand for electric vehicles continues to surge amid climate change concerns and shifting consumer preferences towards greener transportation options, securing stable access to critical minerals like lithium has become increasingly vital worldwide.