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SQM Announces Details of Capex Plan for 2008-2010

2008-07-24 12:32:00

SQM Announces Details of Capex Plan for 2008-2010

    SANTIAGO, Chile, July 24 /EMWNews/ -- Sociedad Quimica y

Minera de Chile S.A. (SQM) (NYSE: SQM; Santiago Stock Exchange: SQM-B,

SQM-A) announced its Capex Plan for the three-year period between 2008 and

2010. The plan includes projected capital expenditures of approximately

US$1 billion over the period, including approximately US$350 million for

the year 2008.

    Patricio Contesse, Chief Executive Officer of SQM, stated, "We are

making significant investments that will enable SQM to achieve further

growth in its core businesses. Our Capex Plan aims to increase production

capacity across our business lines, and especially in potassium-based

products, which have become a key contributor to the Company's margins.

Furthermore, we are modernizing our production processes, in order to

increase SQM's operating efficiency."

    The primary investments considered in SQM's three-year Capex Plan


    Capacity increases for potassium-based products at the Salar de

Atacama. The most significant project is the increase in production

capacity for potassium-based products. Current combined capacity for

potassium chloride and potassium sulfate is around 820,000 metric tons, and

SQM expects to increase the total capacity for these products by

approximately 250,000 metric tons over the next three years.

    Iodine and nitrates capacity increases. The Company will invest in

capacity increases for iodine and nitrates at its Nueva Victoria and Pampa

Blanca facilities over the next four years. Both of these sectors possess

vast, high-quality reserves. Currently, Nueva Victoria -- located in the

Tarapaca Region of Chile -- is SQM's primary iodine production facility.

Pampa Blanca is located in the Antofagasta Region of Chile, near the

Company's Maria Elena and Pedro de Valdivia facilities, and is the natural

extension of SQM's operations at these facilities. These investments

represent the first stage of the Company's long-term development plan for

the Nueva Victoria and Pampa Blanca sectors and should yield an increase in

SQM's installed capacity for iodine and nitrates on the order of 25% by the

end of 2012.

    In addition, today SQM presented an environmental impact assessment

study for its Nueva Victoria operations, which included both this initial

phase of capacity expansions and future capacity expansions. The study

covers a period of approximately 30 years and considers investments of

approximately US$1,033 million during that period.

    New potassium nitrate plant at Coya Sur. The Company is increasing its

potassium nitrate production capacity by 300,000 metric tons per year,

which is estimated to be operational by 3Q10. The new plant, which will be

located at the Company's Coya Sur operations, will use nitrate salts

extracted at SQM's Nueva Victoria and Pampa Blanca operations.

    Completion of lithium carbonate capacity expansion. The Company is

increasing its lithium carbonate production capacity from approximately

30,000 metric tons per year to approximately 40,000 metric tons per year.

SQM expects to complete this project during 3Q08.

    Finally, the Company will undertake a number of other investments aimed

at improving productivity and infrastructure, such as improvements to the

Company's own railway system, construction of a new mining camp at Maria

Elena, and various investments at its production facilities, including

maintenance capex for the period. In addition, during this period SQM will

explore its mining properties in order to search for potential metallic

mineral resources.

    These investments will be financed primarily through SQM's

internally-generated cash flow.

    The three-year Capex Plan SQM has announced could undergo significant

variations. The Company's future development plans may change to include

new projects and suspend or cancel existing ones. These plans may also be

revised in response to changes in the market conditions affecting the

Company's products. In addition, the rising costs of raw materials and

spare parts could affect the amounts of the investments necessary for the

projects the Company currently plans to undertake. The amounts in the Capex

Plan do not include any potential future acquisitions or joint ventures.

    SQM is an integrated producer and distributor of specialty plant

nutrients, iodine and lithium. Its products are based on the development of

high quality natural resources that allow the Company to be a leader in

costs, supported by a specialized international network with sales in over

100 countries. SQM's development strategy aims to maintain and strengthen

the Company's world leadership in its three core businesses: Specialty

Plant Nutrition, Iodine and Lithium.

    For further information, please visit our Web site,, or


    Patricio Vargas, 56-2-4252274 / [email protected]

    Carolyn McKenzie, 56-2-4252074 / [email protected]

    Statements in this press release concerning the Company's business

outlook, future economic performances, anticipated profitability, revenues,

expenses, or other financial items, anticipated cost synergies and product

or service line growth, together with other statements that are not

historical facts, are "forward-looking statements" as that term is defined

under Federal Securities Laws.

    Any forward-looking statements are estimates, reflecting the best

judgment of SQM based on currently available information and involve a

number of risks, uncertainties and other factors that could cause actual

results to differ materially from those stated in such statements. Risks,

uncertainties, and factors that could affect the accuracy of such

forward-looking statements are identified in the public filing made with

the Securities and Exchange Commission, and forward-looking statements

should be considered in light of those factors.

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