SQM - SQM Albemarle hold talks with Chile agency on lithium nationalization plan

2023-04-25 17:54:46 ET

SQM ( NYSE: SQM ) said Tuesday it expects to reach an agreement to continue producing lithium under the Chilean government’s new public-private model for the industry.

The company said it believes its technology and experience "will make it possible to reach reasonable agreements in the interest of the Chilean state as well as our diverse shareholders," after executives met with officials at state development agency Corfo.

SQM ( SQM ) operates the world's biggest and most profitable brine operation in Chile's Atacama salt flat with a contract that expires in 2030, but now it risks losing it under the government’s new policy.

CEO Ricardo Ramos said the company would require $2B to enact the government's plans.

SQM ( SQM ) shares plunged by a record 18.5% on Friday after the new development model was announced , before regaining some ground Monday .

Corfo met Tuesday with officials from Albemarle ( NYSE: ALB ), whose contract to operate at Atacama lasts until 2043.

Following the meeting , Albemarle's ( ALB ) Chile manager, Ignacio Mehech, said Chilean President Boric's statement about respecting contracts is an "unequivocal sign to the market that lets us maximize our commitment in Chile."

More on SQM:

• See financial and valuation comparisons to sector peers
• SA analysis: My Best Lithium Pick as Chile's President 'Plans' to Nationalize Lithium
• Stock price return: 13.5% loss YTD, 11% loss in the past 12 months

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