This article first appeared on GuruFocus.

• Revenue: Not explicitly quantified in the provided transcript excerpt.
• Earnings: Not explicitly quantified in the provided transcript excerpt.
• Lithium Sales Volume: Record quarterly sales volumes of more than 84,000 metric tons of lithium carbonate equivalent from operations in Chile and Australia.
• Lithium Production Guidance (Chile): Expects Novandino and Dinolithio to produce between 280,000 and 290,000 metric tons of lithium carbonate equivalent in 2026.
• Lithium Production Capacity (Chile): Approximately 300,000 metric tons of production capacity expected by next year.
• Lithium Market Demand: Global lithium demand expected to exceed 2.1 million metric tons in 2026.
• Iodine Production: Total iodine production expected to reach approximately 15,500 metric tons this year.
• Specialty Plant Nutrition Sales Volume: Full-year sales volumes expected to increase by approximately 10% compared to 2025.
• Capital Expenditures: Approximately $3 billion expected over the 2026-2028 period.
• Payments to Chilean Government: More than $1.6 billion accrued in the first half of the year, including taxes, contributions to local governments, and payments to Corfu.

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Release Date: August 19, 2026

For the complete transcript of the earnings call, please refer to the full earnings call transcript.

Positive Points

• Record quarterly lithium sales volumes of over 84,000 metric tons LCE, driven by strong demand and higher prices.
• Raised 2026 global lithium demand forecast to exceed 2.1 million metric tons, reflecting robust market fundamentals.
• Successful submission of environmental and technical documentation for the Salar Futuro project, a key milestone for future growth.
• Strong performance in iodine and specialty plant nutrition, with SPN sales volumes expected to grow ~10% year-over-year.
• Continued cost improvements in lithium production, with Q3 costs expected to remain in line with Q2 and lower than last year.

Negative Points

• Lithium prices remain volatile and difficult to predict, with Q3 prices expected to be roughly flat versus the first half.
• International lithium sales prices lagged the spodumene price increase due to shipment timing, creating a temporary gap.
• Iodine sales volumes are expected to remain flat year-over-year as new supply from a Chilean project enters the market.
• Potential slowdown in battery storage deployment could cap lithium demand growth in the near term.
• Mount Holland expansion first production is not expected until 2030, with construction starting only in mid-2027.

Q & A Highlights

Q: Can you talk about Q3 for the lithium segment? You're guiding to prices about flat and volumes about flat, and costs kept down a lot in Q2. Should we expect Q3 lithium earnings gross margin to be about the same as Q2?A: Felipe Smith (Commercial Vice President of Lithium Chile Division) confirmed that Q3 2026 sales volumes are expected to remain strong and in line with Q2. Regarding pricing, he noted that based on index-linked contracts, the average price for Q3 should be more or less in line with the first semester average, though he cautioned that the market remains volatile and difficult to predict. Carlos Diaz (CEO of the SQM Lithium Division, Chile) added that costs in Q3 are expected to be similar to Q2, benefiting from continued efficiency improvements and economies of scale, with full-year 2026 costs expected to be lower than 2025.

Q: You raised your lithium demand expectations for the full year by 200,000 tons. Where is the extra 200,000 tons of supply coming from this year to meet the growing demand?A: Pablo Hernandez (Vice President of Strategy and Development of the Lithium Chile Division) stated that the increased supply is expected to come mainly from China, both from spodumene and brine operations, as well as ramp-up projects in Africa and Argentina. He also noted that due to the current price scenario, there are some restarts in Australia coming into the market as well.

Q: You're ramping up production in Novandino faster than initially expected. You mentioned about 300,000 tons next year, but beyond that, what could be a feasible production level when the new concession starts?A: Carlos Diaz (CEO of the SQM Lithium Division, Chile) explained that this year production is expected to be between 280,000 and 290,000 metric tons, with production close to 300,000 expected next year. For the coming years, he noted that growth will initially be more moderated as the company continues reducing brine extraction. He stated that they are still studying different initiatives to keep and slightly increase production, but they are not ready to share specifics yet, potentially providing an update in the next conference call.

Q: Can you break down the expected production capacity increase to 300,000 in 2027? How much is coming from Chile, given that you're converting the hydroxide plant, and how much is coming from tolling contracts?A: Carlos Diaz (CEO of the SQM Lithium Division, Chile) clarified that production comes from the Salar de Atacama in two ways: lithium chloride refined in Chile and lithium sulfate refined in China. For next year's expected 300,000 tons, approximately 80,000 tons will come from lithium sulfate, with the remaining 220,000 tons from lithium chloride at the Antofagasta chemical plant. He also noted that only about 10% of total production (20,000-30,000 tons) will be hydroxide, with the remainder being carbonate.

Q: On Mount Holland, you recently approved the expansion of the mine and concentrator. Are you planning a potential extension in the refinery? How are you thinking about the mix between hydroxide and spodumene sales going into 2027?A: Mark Fones (CEO of the SQM International Lithium Division) stated that the decision on expanding the refinery remains open and will be subject to continued analysis by Covalent and with Wesfarmers as partner, depending on reaching full ramp-up by the second semester of next year. He noted that next year is expected to have higher hydroxide production than this year based on the ramp-up curve, which means spodumene concentrate sales should probably be lower than this year.

Q: Regarding the tolling process in China for sulfate production, how long are these tolling contracts? Do you see any risk of having to give some away or find new partners at different costs?A: Carlos Diaz (CEO of the SQM Lithium Division, Chile) confirmed that they have been increasing sulfate production very strongly over the last three to four years, expecting to produce 80,000 to 90,000 tons LCE equivalent next year. He noted that their own plant in China (Qin plant) will produce close to 24,000-25,000 tons, expanding to reach 30,000 tons. The difference is done through tolling with different suppliers, and while they don't disclose the contract details, they are very happy with the current contracts and expect to continue working with those suppliers in the coming years.

Q: The Mount Holland expansion has first production expected in 2030, which seems like an extended period for a brownfield project. What are the next big milestones and main challenges?A: Mark Fones (CEO of the SQM International Lithium Division) explained that the timeline reflects normal sequencing for a project of this scale, with the goal of de-risking rather than rushing. The next relevant milestone is the start of construction in mid-next year, with construction taking 18-24 months, followed by commissioning in 2029 to reach first product by early 2030. He noted there are opportunities to compress the schedule that Covalent and technical teams are actively analyzing, but emphasized that as a brownfield expansion, there are both opportunities and increased challenges that require careful management of mining and safety considerations.

Q: You said Q3 volumes will be in line with Q2. How do we think about Q4? Normally Q4 is your highest quarter on seasonality. Do you expect Q4 to be high 70 to 80 kilotons LCE, or a strong Q3 followed by a softer Q4?A: Felipe Smith (Commercial Vice President of Lithium Chile Division) said Q4 is too far away to predict, but expressed hope that they can at least maintain the volume of Q2 and Q3 levels, with a minimum expectation of similar volumes in Q4 and hope for more. Andres Fontannaz (Commercial Vice President of International Lithium Division) added that international sales are expected to be around 27,000 to 30,000 tons LCE for the full year.

Q: Can you talk about what happens after 2030-2031? We know Codelco will probably be much more in charge. How should we think about strategic decisions and CapEx?A: Ricardo Ramos (CEO) stated that while it's difficult to predict that far out, the agreement with Codelco has been working better than expected in terms of coordination and cooperation. He noted that the Salar Futuro project submission was made in July

For the complete transcript of the earnings call, please refer to the full earnings call transcript.