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SQM announces USD1.3-billion capex program

November 25/2020

MOSCOW (MRC) -- SQM (Santiago, Chile) has announced a USD1.3-billion capital expenditure (capex) program in Chile during 2021Ц24. The program includes projects to expand the company's lithium, nitrates, and iodine capacity, said Chemweek.

The plan includes projects costing a combined $240 million that are under way at Salar del Carmen near Antofagasta to expand lithium carbonate capacity from 70,000 metric tons/year to 120,000 metric tons/year and lithium hydroxide capacity from 13,500 metric tons/year to 21,500 metric tons/year. The projects are due to be completed in the second half of 2021. SQM's board recently approved an additional USD150-million investment to hike lithium carbonate and lithium hydroxide capacity to 180,000 metric tons/year and 30,000 metric tons/year, respectively, in 2023.

SQM intends to expand nitrates capacity by 250,000 metric tons/year and iodine capacity by 3,000 metric tons/year. The plan involves a USD270-million investment to increase caliche ore mining capacity, build a pipeline to transport seawater for use in the mines, install mining equipment, and upgrade operational centers. A further USD170 million will be spent to add the nitrate and iodine capacity.

The rest of the USD1.3-billion investment will pay for maintenance, estimated at USD120 million/year during the period of the program. Separately, SQM expects to make a final investment decision in January 2021 on the previously announced Mount Holland, Australia, lithium hydroxide project, a 50/50 joint venture with Wesfarmers (Perth, Australia). The companies delayed the decision at the beginning of this year.

SQM announced the capex plans recently with its third-quarter financial results. The company's net profit collapsed to USD1.7 million in the third quarter from USD60.5 million in the year-earlier period due to a settlement fee related to a class action lawsuit against the company in the US, which had a one-time pretax effect of USD62.5 million. SQM's third-quarter adjusted EBITDA fell 6% year-on-year to USD146 million on sales down 4.3% to USD452.9 million owing to impacts from COVID-19.

The company says its lithium sales volumes increased sequentially, jumping 40% to 17,600 metric tons in the third quarter compared with the second quarter. SQM expects even higher lithium volumes in the fourth quarter. Iodine prices were stable with the company seeing a recovery in demand, which it expects to be back at 2019 levels next year.

As MRC informed before, approximately 220 million tons (MT) of plastic waste is generated globally each year. Of this, around 90MT is mismanaged and leaking into the natural environment, 70MT is landfilled, 30MT is incinerated and another 30MT is recycled. If the plastics value chain is to become more sustainable, the industry must focus on reducing the amount of mismanaged waste and recapturing as much of its value as possible. To do this, more investment must be allocated to chemical recycling technologies.

According to MRC's ScanPlast report, Russia's estimated PE consumption totalled 1,594,510 tonnes in the first nine months of 2020, up by 1% year on year. Only high denstiy polyethylene (HDPE) shipments increased. At the same time, PP shipments to the Russian market reached 880,130 tonnes in the nine months of 2020 (calculated using the formula: production minus exports plus imports, exluding producers" inventories as of 1 January, 2020). Supply increased exclusively of PP random copolymer.
Author:Anna Larionova
Tags:petroleum products, crude oil, PP, PE, neftegaz, petrochemistry.
Category:General News
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