Chilean miner SQM reports tenfold profit jumps as lithium prices rise

Chilean mining and chemical company SQM, the world’s second-largest lithium producer, posted a tenfold increase in third-quarter net profit on Wednesday, amid rising prices and strong sales of the metal, a key battery component.

The company reported a net income of $1.1 billion for the three months that ended in September. Quarterly revenue more than quadrupled year-over-year to $2.95 billion, with lithium revenue up more than 12-fold.

Lithium and derivatives sales volumes were 41000 tonnes, the highest quarterly volume ever reported by the company, according to SQM data.

“Our positive results in the lithium market were driven by sales volumes and prices well above average,” the company said in a statement. SQM also sells industrial chemicals.

Average lithium prices jumped to their highest level during the quarter, exceeding $56000 per tonne, the company said.

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With stringent environmental regulations and standards, major automakers want to phase out internal combustion engines over the next ten years, changing consumer tastes along the way, sparking a scramble for lithium, which is extracted from brine in South America’s vast salt marshes.

SQM predicts that global lithium demand will rise by at least 40% this year due to a surge in electric vehicle sales in China, where it is estimated that sales of these vehicles will exceed 6.5 million units, doubling from last year.

Also, according to the company, revenues from sales of iodine and its derivatives doubled to $215 million, while sales increased by 9%.

Albemarle, the world’s largest lithium producer, also reported sales growth earlier this month.

Both companies are involved in major projects in the Atacama salt marshes in Chile.