UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 6-K
REPORT OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE
SECURITIES EXCHANGE ACT OF 1934
For the month of August, 2018.
Commission File Number 33-65728
CHEMICAL AND MINING COMPANY OF CHILE INC.
(Translation of registrant’s name into English)
El Trovador 4285, Santiago, Chile (562) 2425-2000
(Address of principal executive office)
Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.
Form 20-F:_X_ Form 40-F
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ____
Note: Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual report to security holders.
Indicate by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ____
Note: Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.
Santiago, Chile. August 8, 2018.- Sociedad Química y Minera de Chile S.A. (SQM) (NYSE: SQM; Santiago Stock Exchange: SQM-B, SQM-A) informs that today the following material is presented at the Lithium Forum in Santiago, Chile by Daniel Jimenez, SQM´s VP of Sales Iodine, Lithium and Industrial Chemicals.
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About SQM
SQM´s business strategy is to be a global company, with people committed to excellence, dedicated to the extraction of minerals and selectively integrated in the production and sale of products for the industries essential for human development (e.g. food, health, technology). This strategy was built on the following five principles:
• | ensure availability of key resources required to support current goals and medium and long-term growth of the business; |
• | consolidate a culture of lean operations (M1 excellence) through the entire organization, including operations, sales and support areas; |
• | significantly increase nitrate sales in all its applications and ensure consistency with iodine commercial strategy; |
• | maximize the margins of each business line through appropriate pricing strategy; |
• | successfully develop and implement all lithium expansion projects of the Company, acquire more lithium and potassium assets to generate a competitive portfolio. |
These principles are based on the following key concepts:
• | strengthen the organizational structure to supports the development of the Company's strategic plan, focusing on the development of critical capabilities and the application of the corporate values of Excellence, Integrity and Safety; |
• | develop a robust risk control and mitigation process to actively manage business risk; |
• | improve our stakeholder management to establish links with the community and communicate to Chile and worldwide our contribution to industries essential for human development. |
For further information, contact:
Gerardo Illanes 56-2-24252022 / gerardo.illanes@sqm.com
Kelly O’Brien 56-2-24252074 / kelly.obrien@sqm.com
Irina Axenova 56-2-24252280 / irina.axenova@sqm.com
For media inquiries, contact:
Carolina García Huidobro / carolina.g.huidobro@sqm.com
Alvaro Cifuentes / alvaro.cifuentes@sqm.com
Tamara Rebolledo / tamara.rebolledo@sqm.com (Northern Region)
Cautionary Note Regarding Forward-Looking Statements
This news release contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements can be identified by words such as: “anticipate,” “plan,” “believe,” “estimate,” “expect,” “strategy,” “should,” “will” and similar references to future periods. Examples of forward-looking statements include, among others, statements we make concerning the Company’s business outlook, future economic performance, anticipated profitability, revenues, expenses, or other financial items, anticipated cost synergies and product or service line growth.
Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are estimates that reflect the best judgment of SQM management based on currently available information. Because forward-looking statements relate to the future, they involve a number of risks, uncertainties and other factors that are outside of our control and could cause actual results to differ materially from those stated in such statements. Therefore, you should not rely on any of these forward-looking statements. Readers are referred to the documents filed by SQM with the United States Securities and Exchange Commission, specifically the most recent annual report on Form 20-F, which identifies important risk factors that could cause actual results to differ from those contained in the forward-looking statements. All forward-looking statements are based on information available to SQM on the date hereof and SQM assumes no obligation to update such statements, whether as a result of new information, future developments or otherwise.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
CHEMICAL AND MINING COMPANY OF CHILE INC. | |
(Registrant) | |
Date: August 8, 2018 | /s/ Ricardo Ramos |
By: Ricardo Ramos | |
CFO & Vice-President of Development |
Persons who are to respond to the collection of information contained SEC 1815 (04-09) in this form are not required to respond unless the form displays currently valid OMB control number.
Exhibit 99.1
LITHIUM MARKET OUTLOOK F oro del Litio August 2018 D aniel Jimenez SV P Iodine, Lithium and Industrial Chemicals
Agenda 2 4 Lithium at SQM 2 Demand 3 Supply 2 .1 Global 1 Lithium Market 2 .2 Li - ion Batteries and Electric Vehicles
• Lithium is widely spread in nature (1) . • Lithium is found in: – Continental brines ( 100 - 2,700 ppm) » Dried out “ Salares ” (e.g. Atacama in Chile, Hombre Muerto in Argentina, Uyuni in Bolivia and Silver Peak in the US). » Salt lakes (e.g. Zhabuye and Qinghai in China). – Minerals ( 2,300 - 18,000 ppm) » About 145 mineralogical species, however only a few are commercial sources of Lithium (e.g. spodumene , petalite and lepidolite ). – Other resources » Oil field brines (e.g. Smackover, Texas, USA) (60 - 500 ppm) » Geothermal brines (e.g. Imperial Valley, California, USA) (50 - 400 ppm ) » Sedimentary clays (e.g. hectorites in USA y jaderites in Serbia) ( 2,000 - 3,000 ppm) » Sea water (0.17 ppm) 3 3 Brines Minerals (1) 20 ppm, similar in abundance as other common elements (Nickel: 84 ppm, Zinc: 70 ppm, Copper: 60 ppm, Cobalt: 25 ppm, Lead: 14 ppm, Tin: 1,3 ppm, Beryllium: 2,8 ppm, Molybdenum: 1,2 ppm. Lithium Market Background
• SQM Reserves (20F Report 18): 8.130.000 MT - Li Enough to supply 200 years of world ´ s 2017 lithium demand . 4 Source : USGS Lithium Market World resources Source : SQM USGS Lithium Reserves 2017 Country Reserves (MT) Argentina 2.000.000 Australia 2.700.000 Brazil 48.000 Chile 7.500.000 China 3.200.000 Portugal 60.000 US 35.000 Zimbawe 23.000 Total (Li) 15.566.000 Total (LCE) 82.811.000
5 Active Brine SQM Projects Active Mineral Potential Mineral Lithium Market Global resources Producing [2017] 17 Brownfield [2018 - 2022] 8 Greenfield [2018 - 2022] 10 Total Projects 35 Existing and New Projects Potential Brine
Agenda 6 4 Lithium at SQM 2 Demand 3 Supply 2 .1 Global 1 Lithium Market 2 .2 Li - ion Batteries and Electric Vehicles
Demand: global End use 7 Energy storage market share in 2017: 59% Others 17% Aluminium 1% Cement and Adhesives 1% CC Powder 2% Air Conditioning 3% Greases 8% Frits 4% Glass 5% Energy Storage 59% Lithium Chemicals Demand 2017 212 kMT - LCE
Demand: global End use 8 Source: SQM Others 17% Aluminium 1% Cement and Adhesives 1% CC Powder 2% Air Conditioning 3% Greases 8% Frits 4% Glass 5% Energy Storage 59% 2017 212 kMT - LCE Others 30% Aluminium 4% Cement and Adhesives 3% CC Powder 3% Air Conditioning 6% Greases 14% Frits 9% Glass 7% Energy Storage 24% 2007 89 kMT - LCE Lithium Chemicals Demand 10 - year comparison 21 ( kMT - LCE) 119 ( kMT - LCE)
Inorganic derivatives • Glass • Frits • Metallurgy • Battery Materials • Glass • Frits • Aluminum • CC Powder • Construction Lithium Carbonate • Molecular Sieves • Air treatment • Construction Lithium Chloride • Greases • Battery Materials • Dyes Lithium Hydroxide • Batteries (Primary) • Al - Li alloys • Pharmaceutical • Chemicals Lithium Metal Lithium Carbonate: • Lithium Bromide • Lithium Fluoride • Lithium Nitrate Lithium Hydroxide: • Lithium Carbonate HP • Lithium Peroxide • Butiylilithium • Lithium Diisopropylamide • Lithium Hydride • Others Organic derivatives Lithium Concentrates Lithium Chemicals Minerals Brines Natural Resources SQM entering each market 1997 2000 Demand: global Overview of Lithium production (2017) 127 kMT - LCE 115 kMT - LCE Source: SQM 30 kMT - LCE 85 kMT LCE Concentrate 2 003 212 kMT - LCE 9
10 Demand: global Lithium products 10 2017 Lithium Hydroxide : Lithium Carbonate ratio = 2:5 Source: SQM Li2CO3 60% LiOH 23% LiCl 3% LiM 5% Buli 4% Other Deriv 5% Lithium Chemicals 2017 (%) 212 kMT - LCE Li2CO3 = Lithium Carbonate LiOH = Lithium Hydroxide LiCl = Lithium Chloride LiM = Lithium Metal Buli = Butiylilithium Other Deriv = Inorganic and Organic Derivatives
11 Demand: global Evolution Required investment: USD 10 - 12 Billion over the next 10 years. Typical greenfield Capex: KUSD/MT - LCE capacity 13 - 20 212 475 257 693 877
Demand: global Lithium market relative to Copper market Cu L i Source: Cochilco , SQM N ote : Assuming a US$2.8/ lb as long - term Cu price bUS$34 bUS$1 ~ bUS$4 bUS$126 bUS$3 Cu L i Global Chile 2017 2027 ~ bUS$146 ~ bUS$9 ~ bUS$39 x 17 (6%) x 11 (9%) 12
Agenda 13 4 Lithium at SQM 2 Demand 3 Supply 2 .1 Global 1 Lithium Market 2 .2 Li - ion Batteries and Electric Vehicles
NCM cathodes: Lithium (Li) mixed with Nickel (Ni), Cobalt (Co) and Manganese (Mn) OEM target: higher energy density (High Ni) and lower cost (Low Co) 14 Demand: Li - ion Batteries Cathode types Source: SQM Higher Nickel content More Lithium Hydroxide use High capacity Stability + Co Mn Ni LCO LMO NCA Reversability Safety Capacity NCM 1 - 1 - 1 NCM 6 - 2 - 2 NCM 8 - 1 - 1 NCM 4 - 2 - 4 NCM 5 - 2 - 3 Low cost region High stability region
Demand: Li - ion Batteries Expected battery technology commercialization timeline Source: International Energy Agency 2018 NCM: Lithium Nickel Manganese Cobalt Oxide 15 Higher LiOH Demand Multiple Lithium Metal Variable [2016 - 2022] [2021 - 2027] [2026 - ?] Deployed [?] Higher Lithium Hydroxide demand compared to Lithium Carbonate
Demand: Li - ion Batteries Li - ion vs Lithium Metal Source: MIT 16 Liquid Electrolyte Solid Electrolyte (Lithium source: Li2CO3 / LiOH ) Increasing density Trend: higher energy density
Demand: Li - ion Batteries Li - ion battery cost breakdown 17 Source: UBS LIB cost does not include depreciation not labor (only materials) 7% of cost 6% of cost 7% of cost 8% of cost Lithium cost is ~ 7% of Li - ion battery materials 70% 81% 77% 73%
Demand: Electric Vehicles Lithium content today Source: Deutsche Bank OEM: Original Equipment Manufacturer 18 Lithium content in each device, kg - LCE (Lithium Carbonate Equivalent)
19 EU Q 1 - 18 Sales : 8 , 947 units Range : 241 Km Battery Pack: 41 kWh Li used : 31 Kg LCE MSRP : US$ 23,000 Demand: Electric Vehicles Best selling Battery Electric Vehicles (BEV) US Q 1 - 18 Sales : 8 , 180 units Range : 354 Km Battery Pack : 50 kWh Li used : 38 Kg LCE MSRP : US $ 35 , 000 China Q 1 - 18 Sales : 19 , 808 units Range : 156 Km Battery Pack : 20 kWh Li used : 15 Kg LCE MSRP : US $ 24 , 000 Renault Zoe Tesla Model 3* BAIC EC - SERIES ** Several sources *Base Model ** Features for BAIC EC - 180 EV Performance between 6 - 8 Km/kWh Performance: 6 - 8 Km/kWh
Demand: Electric Vehicles OEMs announcements Several Sources O EM: Original Equipment Manufacturer 20 Region OEM Year Investment xEV Target Ford 2022 $11 billion 40 xEV including 16 BEV GM 2022 >20 BEV Tesla 2024 Sales of Model 3 around 274 kunits xEVs to account for 15-25% of sales 25 electrified models (12 BEV) € 12 billion xEVs for 15-25% of sales >10 BEV models 40 hybrid models Volvo 2025 50% of sales to be electric 2025 Over € 20 billion 80 xEV models 2030 $40 billion Electrified versions of all +300 global models 2/3 of total car sales to be electrified 2020 Launching 10 EVs 2030 Selling 5.5 million electrified vehicles (including hybrids and hydrogen fuel cells) 8 new EV models Sales of 1 million units Dongfeng 2022 xEV sales accounting for 30% of total sales BYD 2020 Sales of 600 kunits BAIC 2020 Production of 800 kunits NAFTA Toyota Daimler Nissan BMW Honda VW EMEA 2025 2025 ASIA Announcements 2022 2030 Car manufacturers committed to Electric Vehicles
Demand: Electric Vehicles Penetration by OEM 2020 and 2025 Source: Citi Research 2018 Most dramatic change in sales during 2020 - 2025 21 Car manufacturers committed to Electric Vehicles
Demand: Electric Vehicles Government CO2 regulation Source: International Council of Clean Transportation (ICCT) More stringent government regulations 2017 22 Government push - 35% compared to 2000 levels - 50% compared to 2000 levels 2025
Demand: Electric Vehicles ICE announced sales bans and access restrictions Source: International Energy Agency 2018 23 Internal Combustion Engines (ICE) bans
Demand: Electric Vehicles Lithium - ion battery cost forecast Source: D. Howell - EERE Annual merit Review Washington (2017) 24 0 100 200 300 400 500 600 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 System Cost (US$/kWh Year 4V, NCM 4.2V, 10% Si 4.7V 4.7V, 30% Si 5x excess Li, 10% S US$320/ kWh US$256/ kWh US$235 kWh Graphite /High Voltage NCM Silicon/High Voltage NCM Lithium - Metal or Lithium / Sulfur Li - Metal Battery projection assumes cycle life , cell scale - up, and catastrophic failure issues have been resolved 1.5x excess Li, 75% S ~US$80/ kWh Li - ion battery cost today: barrier for adoption
The decision of buying an electric is not only economics Demand: Electric Vehicles Qualitative aspects S everal Sources High Tech, forefront design & environmentally friendly 25 Consumer Preferences
Agenda 26 4 Lithium at SQM 2 Demand 3 Supply 2 .1 Global 1 Lithium Market 2 .2 Li - ion Batteries and Electric Vehicles
Supply Capacity by player and country 2017 - 2022 27 Note: Raw material for direct use not included. Lithium Chemicals Supply and Announced Capacity Chile 37% Argentina 14% China 9% Australia 38% US - Canada 2% Other 0% 212 kMT - LCE Chile 30% Argentina 11% China 9% Australia 46% US - Canada 2% Other 2% 735 kMT - LCE Australia 2022: 46% SQM 23% ALB 29% TQL 14% FMC 9% ORE 5% GXY 3% Others 17% 2017 212 kMT - LCE SQM 28% ALB 16% TQL 8% FMC 4% ORE 3% GXY 2% Others 39% 2022F 735 kMT - LCE
Supply Competitors Australia 28 Source: ACBR
Agenda 29 4 Lithium at SQM 2 Demand 3 Supply 2 .1 Global 1 Lithium Market 2 .2 Li - ion Batteries and Electric Vehicles
Lithium at SQM Immediate Lithium capacity - Chile – Current capacity 6,000 MT/year – Expansion to 13,500 MT/year (end 2018) 30 – Current capacity: 48 kMT /year – Expansion to 70 kMT /year (end 2018) – Expansion to 120 kMT /year (end 2019) – Expansion to 180 kMT /year (end 2021) Lithium Carbonate Lithium Hydroxide
Lithium at SQM Lithium projects - Argentina Project description: • Salar de Cauchari - Olaroz • JV 50/50 with Lithium Americas Corp. • Resource: brine • Similar technology as in Salar de Atacama • Capacity: 25 KMT - LCE/year (Li2CO3) • Startup: 2021 31
Lithium at SQM Lithium projects - Australia Project description: • Mt. Holland • JV 50/50 with Kidman Resources • Resource: spodumene • Capacity: 40 KMT - LCE/year (Li2CO3/ LiOH ) • Startup: – Spodumene concentrate: 2020 – Li2CO3/LiOH: 2021 32
Lithium at SQM Challenges for brine producers 33 • Chemical: ‒ Higher purity ‒ Customized contaminants profile ‒ Magnetic metallic particles • Physical: ‒ Micronization : Customized particle size distribution Lithium Carbonate Lithium Hydroxide • Chemical: ‒ Higher purity ‒ Customized contaminants profile ‒ Magnetic metallic particles • Physical: ‒ Micronization : customized particle size distribution ‒ Caking • Process Development: ‒ Brine to Lithium Hydroxide Source: SQM Continuous quality improvement Lithium Metal • Chemical: ‒ TBD • Process Development: ‒ Efficiency ‒ Low cost
Lithium Market Outlook Final Remarks Lithium is abundant and well spread geographically Lithium demand growing at high rates: CAGR 15% (2017 - 2027) Main driver: energy storage (particularly Electric Vehicles) • OEM commitment + Environmental regulations + Consumer preferences + Mass production / Cost reduction Lithium - ion battery the predominant technology for Electric Vehicles (10 - 15 years) • High Nickel Lithium - ion: Lithium Carbonate / Lithium Hydroxide New battery technologies will continue requiring lithium • Solid - State: Lithium Metal Lithium represents a small portion of Li - ion battery total cost Many new lithium projects, Australia to become the leading Lithium producer SQM to take back the # 1 global lithium producer: • Technical know - how and deep commercial knowledge • Diversified resource base • Ready to face the future industry challenges (e.g. quality, product) 34
Thank You…
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