SQM - SQM: Political Uncertainty Creates A Buying Opportunity
- The price of lithium is forecast to more than double by 2025 as the market's supply-demand balance tightens and capacity utilisation increases.
- Sociedad Química y Minera is the world's second largest lithium producer and plans to increase its capacity 3.7x by 2025 - faster than any other miner.
- SQM is one of the lowest cost producers of lithium in the world with cash costs of $4,200/t - 60% below the marginal producer’s cost of c. $11,000/t.
- Due to political risk concerning Chile's new constitution, SQM's shares are currently undervalued - trading 53% below intrinsic value and 70% below comps on a Fwd P/E basis.
- This is an attractive buying opportunity for long-term investors looking for exposure to lithium.
For further details see:
SQM: Political Uncertainty Creates A Buying Opportunity