Sociedad Quimica y Minera (NYSE:SQM) used its fourth-quarter and full-year 2025 earnings call to highlight progress on its lithium partnership with Codelco, improving lithium pricing late in the year, and continued strength in iodine, while also outlining key operational and project milestones expected in 2026 and beyond.
2025 results and the Codelco association
Chief Executive Officer Ricardo Ramos said 2025 was “an important year” for the company, emphasizing that SQM finished the year by signing an association agreement with Codelco that created Nova Andino Litio and “enables long-term lithium production from the Salar de Atacama.”
Lithium: record volumes, improving prices, and 2026 outlook
Ramos said SQM delivered record quarterly lithium sales volumes across its Chilean and international operations. At Nova Andino Litio, fourth-quarter sales volumes exceeded 66,000 metric tons, up more than 50% year over year, reflecting expansion efforts executed over several years.
On pricing, Ramos said the company began to observe an “inflection point” in lithium prices toward the end of 2025, which management linked to stronger-than-expected demand from energy storage systems and supply disruptions. He said SQM’s average realized lithium price increased nearly 14% quarter over quarter to close to $10 per kilogram in the fourth quarter, and he expects the pricing environment in the first quarter of 2026 to be “significantly stronger.”
During the Q&A, Commercial Vice President Felipe Smith said the company is targeting strong first-quarter 2026 sales volumes and hopes to surpass first-quarter 2025 by more than 15%, which would be a record for a first calendar quarter. Smith said the company’s strategy remains to run at full capacity while expanding in line with expected market growth. He added that the company expects to allocate “additional production” of close to 260,000 tons this year and cited strong demand appetite for lithium units, especially in Asia-Pacific.
Carlos Díaz, CEO of Nova Andino Litio, said 2025 production ran according to schedule, reaching 234,000 (as lithium carbonate equivalent, or LCE). He said 50 of that was produced in China from lithium sourced in the Salar de Atacama. For 2026, he said the target is close to 260,000 LCE from both Chile and China. Díaz also said the business expects continued productivity improvements driven by efficiency and new technology, while reducing brine extraction in line with its sustainability strategy. He added that the company has “full flexibility” between lithium carbonate and lithium hydroxide in both Chile and China, and that operations are running at full capacity in both locations.
Mark Fones, CEO of the International Lithium Division, said the division expects sales to increase by around 10% on an LCE basis. He said the Mount Holland mine and concentrator is producing at capacity following ramp-up, while sales mix will skew toward spodumene concentrate as the Kwinana lithium hydroxide plant continues ramping up.
On costs, CFO Gerardo Illanes responded to a question about higher fourth-quarter production costs by saying the total cost per ton in the lithium and derivatives division was “quite similar” in the third and fourth quarters. He said higher average lithium prices led to a higher portion of payments to Corfo being reflected in costs, and he noted that cost of goods sold includes both Nova Andino Litio and the Lithium and Derivatives division, with the latter becoming more relevant as volumes increase.
Nova Andino dividend mechanics and minority interest
Ramos addressed questions about minority interest and dividends related to the Codelco agreement. He said the shareholder agreement is public and governs how dividends to Codelco are calculated annually. Ramos described a simplified approach: net income is allocated based on lithium volumes, noting that 33.5 thousand metric tons of lithium are allocated to Codelco and the remainder to SQM. Ramos said the company expects to pay dividends in April (or April/May) and plans to publish quarterly estimates and assumptions related to the dividend portion to be paid at year-end.
In a follow-up, Ramos said the minority interest reflects the dividend to Codelco tied to the 33.5 thousand metric tons allocation and the net income associated with that volume.
Iodine strength, pipeline project, and supply outlook
Ramos said iodine was a major contributor in 2025, representing approximately 42% of SQM’s total gross margin for the year. He said record iodine prices were observed by the end of 2025, supported by tight supply conditions and strong demand, particularly in X-ray contrast media.
Looking ahead, Ramos estimated the iodine market could grow by around 3% in 2026, and he said SQM’s sales volumes are expected to remain stable or increase slightly depending on market conditions. He also said the company expects to complete a seawater pipeline project in the Tarapacá region, which management believes will provide operational flexibility and enable incremental production capacity.
In the Q&A, Iodine and Nitrates Division CEO Pablo Altimiras said fourth-quarter iodine sales exceeded expectations largely because capacity expected from third parties did not materialize. He said iodine demand growth in 2025 was about 0.6%, above expectations of roughly flat demand. For 2026, he said expansion projects in Chile are progressing, but timing has shifted: a project previously expected in the first half may now occur in the second half, contributing to the company’s expectation of roughly flat sales volumes. Altimiras reiterated that SQM’s strategy is to build capacity so it can respond to market needs.
Altimiras also said SQM plans to produce more than 15,000 metric tons of iodine this year and, after the seawater pipeline project, expects capacity to exceed 17,000 metric tons per year.
International projects: Kwinana ramp-up, expansion planning, and exploration
Fones said the company celebrated the first shipment of lithium hydroxide from the Kwinana refinery in Australia earlier in the year, calling it a milestone for SQM’s international lithium strategy.
In response to questions on Kwinana and Mount Holland, the International Lithium team said Mount Holland is producing at capacity and expects to sustain that through 2026. Mark Folz said SQM’s 50% share equates to approximately 170,000 to 180,000 tons of 6% spodumene concentrate in 2026. On Kwinana, Folz said the ramp-up has been affected by intermittent odor issues (while noting emissions have remained within approved limits). He said a solution is expected by mid-year, but management now expects ramp-up to extend into 2027, keeping 2026 sales weighted toward spodumene concentrate.
On expansion, Folz said the final investment decision expected this year relates only to the Mount Holland mine and concentrator expansion, with a target to bring it to the boards of Wesfarmers and SQM by mid-year. He said engineering studies and environmental approvals are progressing. While the company has not finalized a CapEx number, he said SQM has allocated around $200 million in its 2025–2027 CapEx projection for the concentrator expansion in 2027.
Folz also provided an update on exploration activities, saying SQM is focused on three regions: Australia, Namibia, and Canada. In Australia, he said SQM has four early exploration agreements across Western Australia and the Northern Territory, with some projects in surface exploration and others undergoing drilling programs. In Namibia, he said a stage 1 drilling program with Andrada Mining has confirmed good grades at surface and multiple spodumene-bearing pegmatite bodies at depth, with a second stage of exploration expected in 2026. In Canada, he said SQM established SQM Canada last year and is exploring its own land.
Other topics included management’s view on sodium-ion batteries. Strategy and Development Vice President Pablo Hernández said SQM continues to believe lithium will remain the dominant technology, while acknowledging a “small potential market space” for sodium-ion batteries.
Finally, responding to a question on supply disruptions cited in SQM’s comments on lithium market tightening, Hernández said disruptions were mainly related to some lepidolite producers in the second half of 2025 facing government restrictions in China that led to production stoppages. Díaz added that SQM expects to submit an environmental approval application for its Salar Futuro project by mid-year.
About Sociedad Quimica y Minera (NYSE:SQM)
Sociedad Química y Minera de Chile SA (NYSE: SQM) is a leading global producer of specialty chemicals and minerals headquartered in Santiago, Chile. The company focuses on the extraction and processing of key inputs for the agricultural, industrial and high‐tech sectors. Its core business activities include the mining of lithium, potassium and iodine, as well as the manufacture of value‐added products derived from these raw materials.
SQM’s product portfolio spans lithium carbonate and lithium hydroxide used in electric vehicle batteries and energy storage systems; potassium chloride and potassium nitrate fertilizers designed for precision agriculture; and iodine and its derivatives for pharmaceutical, food and electronics applications.
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