MOSCOW (MRC) -- SQM (Santiago, Chile) has announced a USD1.3-billion capital expenditure (capex) program in Chile during 2021–24. 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.
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