Chemical & Mining Co of Chile (SQM) 6-K Current report (foreign)

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, 2021. 

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 31, 2021.- Sociedad Química y Minera de Chile S.A. (SQM) (NYSE: SQM; Santiago Stock Exchange: SQM-B, SQM-A) reports the translation of its financial statements for the three months ended June 30, 2021, the Spanish version of which was filed with the Chilean Commission for the Financial Market (Comisión para el Mercado Financiero or “CMF”) on August 18, 2021.

 

CONSOLIDATED UNAUDITED INTERIM FINANCIAL STATEMENTS

As of June 30, 2021, and for the
periods ended June 30, 2021 and 2020

Sociedad Química y Minera de Chile S.A. and Subsidiaries

In Thousands of United States Dollars

This document includes:

- Consolidated Unaudited Interim Statements of Financial Position

- Consolidated Unaudited Interim Statements of Income

- Consolidated Unaudited Interim Statements of Comprehensive Income

- Consolidated Unaudited Interim Statements of Cash Flows

- Consolidated Unaudited Interim Statements of Changes in Equity

- Notes to the Consolidated Unaudited Interim Financial Statements

Notes to the Consolidated Unaudited Interim Financial Statements 
June 30, 2021  

Table of Contents –Consolidated Unaudited Interim Financial Statements

Consolidated Unaudited Interim Classified Statements of Financial Position	1
Consolidated Unaudited Interim Classified Statements of Financial Position	2
Consolidated Unaudited Statements of Income (Unaudited)	3
Consolidated Unaudited Statements of Comprehensive Income (Unaudited)	4
Consolidated Unaudited Interim Statements of Cash Flows (Unaudited)	5
Consolidated Unaudited Statements of Changes in Equity (Unaudited)	7

Note 1 Identification and Activities of the Company and Subsidiaries 10

1.1	Historical background	10
1.2	Main domicile where the Company performs its production activities	10
1.3	Codes of main activities	10
1.4	Description of the nature of operations and main activities	10
1.5	Other background	12
1.6	Covid-19	13
1.7	Capital stock increase	14
1.8	Approval of investment in Mount Holland	14

Note 2	Basis of presentation for the consolidated financial statements	15
2.1	Accounting period	15
2.2	Consolidated financial statements	15
2.3	Basis of measurement	16
2.4	Accounting pronouncements	16
2.5	Basis of consolidation	18
2.6	Investments in associates and joint ventures	19
Note 3	Significant accounting policies	20
3.1	Classification of balances as current and non-current	20
3.2	Functional and presentation currency	20
3.3	Accounting policy for foreign currency translation	20
3.4	Consolidated statement of cash flows	22
3.5	Financial assets	22
3.6	Financial assets impairment	23
3.7	Financial liabilities	23
3.8	Reclassification of financial instruments	23
3.9	Financial instruments derecognition	23
3.10	Derivative and hedging financial instruments	24
3.11	Derivative financial instruments not considered as hedges	25
3.12	Deferred acquisition costs from insurance contracts	25
3.13	Leases	25

Notes to the Consolidated Unaudited Interim Financial Statements 
June 30, 2021  

3.14	Inventory measurement	26
3.15	Non-controlling interests	27
3.16	Related party transactions	27
3.17	Property, plant and equipment	27
3.18	Depreciation of property, plant and equipment	28
3.19	Goodwill	28
3.20	Intangible assets other than goodwill	29
3.21	Research and development expenses	30
3.22	Exploration and evaluation expenses	30
3.23	Impairment of non-financial assets	31
3.24	Minimum dividend	31
3.25	Earnings per share	31
3.26	Capitalization of interest expenses	31
3.27	Other provisions	32
3.28	Obligations related to employee termination benefits and pension commitments	32
3.29	Compensation plans	32
3.30	Revenue recognition	33
3.31	Finance income and finance costs	33
3.32	Current income tax and deferred	33
3.33	Operating segment reporting	34
3.34	Primary accounting criteria, estimates and assumptions	34
3.35	Environment	35
Note 4	Financial risk management	36
4.1	Financial risk management policy	36
4.2	Risk Factors	36
4.3	Risk measurement	40
Note 5	Separate information on the main office, parent entity and joint action agreements	41
5.1	Parent’s stand-alone assets and liabilities	41
5.2	Parent entity	41
Note 6	Board of Directors, Senior Management and Key management personnel	42
6.1	Remuneration of the Board of Directors and Senior Management	42
6.2	Key management personnel compensation	44
Note 7	Background on companies included in consolidation and non-controlling interests	45
7.1	Background on companies included in consolidation	45
7.2	Assets, liabilities, results of consolidated subsidiaries as of June 30, 2021 and for the period then ended.	47
7.3	Background on non-controlling interests	51
Note 8	Equity-accounted investees	52
8.1	Investments in associates recognized according to the equity method of accounting	52
8.2	Assets, liabilities, revenue and expenses of associates	54
8.3	Other information	55
Note 9	Joint Ventures	56
9.1	Investment in joint ventures accounted for under the equity method of accounting.	56
9.2	Assets, liabilities, revenue and expenses from joint ventures	59

Notes to the Consolidated Unaudited Interim Financial Statements 
June 30, 2021  

9.3	Other Joint Venture disclosures	60
9.4	Disclosure of interests in joint ventures	61
9.5	Joint Ventures	61
Note 10	Cash and cash equivalents	62
10.1	Types of cash and cash equivalents	62
10.2	Short-term investments, classified as cash equivalents	62
10.3	Information on cash and cash equivalents by currency	63
10.4	Amount restricted cash balances	63
10.5	Short-term deposits, classified as cash equivalents	64
10.6	Net Debt reconciliation	66
Note 11	Inventories	67
Note 12	Related party disclosures	69
12.1	Related party disclosures	69
12.2	Relationships between the parent and the entity	69
12.3	Detailed identification of related parties and subsidiaries	70
12.4	Detail of related parties and related party transactions	73
12.5	Trade receivables due from related parties, current:	74
12.6	Trade payables due to related parties, current:	74
12.7	Other disclosures:	74
Note 13	Financial instruments	75
13.1	Types of other current and non-current financial assets	75
13.2	Trade and other receivables	76
13.3	Hedging assets and liabilities	79
13.4	Financial liabilities	80
13.5	Trade and other payables	91
13.6	Financial asset and liability categories	92
13.7	Fair value measurement of finance assets and liabilities	94
13.8	Estimated fair value of financial instruments	97
Nota 14	Right-of-use assets and Lease liabilities	98
14.1	Right-of-use assets	98
14.2	Lease liabilities	99
Note 15	Intangible assets and goodwill	106
15.1	Balances	106
Note 16	Property, plant and equipment	113
16.1	Types of property, plant and equipment	113
16.2	Conciliation of changes in property, plant and equipment by type:	115
16.3	Detail of property, plant and equipment pledged as guarantee	119
16.4	Cost of capitalized interest, property, plant and equipment	119
Note 17	Other current and non-current non-financial assets	120
Note 18	Employee benefits	122
18.1	Provisions for employee benefits	122
18.2	Policies on defined benefit plan	122
18.3	Other long-term benefits	123

Notes to the Consolidated Unaudited Interim Financial Statements 
June 30, 2021  

18.4	Post-employment benefit obligations	123
18.5	Staff severance indemnities	124
18.6	Executive compensation plan	125
Note 19	Provisions and other non-financial liabilities	126
19.1	Types of provisions	126
19.2	Description of other provisions	127
19.3	Other non-financial liabilities, Current	128
19.4	Changes in provisions	129
Note 20	Disclosures on equity	130
20.1	Capital management	130
20.2	Operational restrictions and financial limits	130
20.3	Disclosures on preferred share capital	132
20.4	Disclosures on reserves in Equity	133
20.5	Dividend policies	135
20.6	Interim and provisional dividends	136
20.7	Potential and provisional dividends	137
Note 21	Contingencies and restrictions	138
21.1	Lawsuits and other relevant events	138
21.2	Environmental contingencies	140
21.3	Tax Contingencies	140
21.4	Contingencies regarding to the Contracts with Corfo	141
21.5	Contingencies associated with conflicts between shareholders of the Abu Dhabi Fertilizer Industries Company	141
21.6	Restricted or pledged cash	141
21.7	Securities obtained from third parties	141
21.8	Indirect guarantees	141
Note 22	Gains (losses) from operating activities in the statement of income of expenses, included according to their nature	142
22.1	Revenue from operating activities customer activities	142
22.2	Cost of sales	144
22.3	Other income	145
22.4	Administrative expenses	145
22.5	Other expenses	146
22.6	Other losses	146
22.7	(Impairment) /reversion of value of financial assets impairment losses	147
22.8	Summary of expenses by nature	147
22.9	Finance expenses	148
22.10	Finance income	148
Note 23	Reportable segments	149
23.1	Reportable segments	149
23.2	Reportable segment disclosures:	151
23.3	Statement of comprehensive income classified by reportable segments based on groups of products	153
23.4	Disclosures on geographical areas	155

Notes to the Consolidated Unaudited Interim Financial Statements 
June 30, 2021  

23.5	Disclosures on main customers	155
23.6	Segments by geographical areas	156
Note 24	Effect of fluctuations in foreign currency exchange rates	157
Note 25	Disclosures on the effects of fluctuations in foreign currency exchange rates	159
Note 26	Income tax and deferred taxes	165
26.1	Current and non-current tax assets	165
26.2	Current tax liabilities	166
26.3	Income tax and deferred taxes	167
Note 27	Events occurred after the reporting date	175
27.1	Authorization of the financial statements	175
27.2	Disclosures on events occurring after the reporting date	175

Notes to the Consolidated Unaudited Interim Financial Statements 
June 30, 2021  

Consolidated Unaudited Interim Classified Statements of Financial Position

			As of
			June 30,		As of
			2021		December 31,
			(Unaudited)		2020
ASSETS	Note N°		ThUS$		ThUS$
Current Assets
Cash and cash equivalents		10.1		1,242,853		509,102
Other current financial assets		13.1		709,453		348,069
Other current non-financial assets		17		53,655		57,399
Trade and other receivables, current		13.2		453,203		365,206
Trade receivables due from related parties, current		12.5		54,538		62,601
Current inventories		11		1,095,626		1,093,028
Current tax assets		26.1		149,971		132,224
Total current assets other than those classified as held for sale or disposal				3,759,299		2,567,629
Non-current assets or groups of assets classified as held for sale				637		1,629
Total non-current assets held for sale				637		1,629
Total current assets				3,759,936		2,569,258
Non-current assets
Other non-current financial assets		13.1		26,147		51,925
Other non-current non-financial assets		17		76,339		22,042
Non-current trade receivables,		13.2		11,425		11,165
Investments classified using the equity method of accounting		8.1-9.1		53,880		85,993
Intangible assets other than goodwill		15.1		176,172		178,407
Goodwill		15.1		41,966		41,966
Property, plant and equipment net		16.1		1,743,091		1,737,319
Right-of-use assets		14.1		37,917		30,024
Non-current tax assets		26.1		90,364		90,364
Total non-current assets				2,257,301		2,249,205
Total assets				6,017,237		4,818,463

The accompanying notes form an integral part of these consolidated interim financial statements.

1 

Notes to the Consolidated Unaudited Interim Financial Statements 
June 30, 2021  

Consolidated Unaudited Interim Classified Statements of Financial Position

			As of			As of
			June 30,			December 31,
			2021			2020
Liabilities and Equity	Note N°		ThUS$			ThUS$
Current liabilities
Other current financial liabilities		13.4		42,137			68,955
Lease liabilities, current		14.2		7,770			5,528
Trade and other payables, current		13.5		227,289			203,933
Trade payables due to related parties, current		12.6		-			606
Other current provisions		19.1		116,436			104,166
Current tax liabilities		26.2		12,302			22,643
Provisions for employee benefits, current		18.1		10,181			9,096
Other current non-financial liabilities		19.3		165,203			60,955
Total current liabilities				581,318			475,882
Non-current liabilities
Other non-current financial liabilities		13.4		1,898,493			1,899,513
Non-current lease liabilities		14.2		31,448			25,546
Non-current trade and other payables		13.5		11,767			4,027
Other non-current provisions		19.1		58,449			62,617
Deferred tax liabilities		26.3		167,304			156,101
Non-current provisions for employee benefits		18.1		28,496			32,199
Total non-current liabilities				2,195,957			2,180,003
Total liabilities				2,777,275			2,655,885
Equity
Equity attributable to owners of the Parent		20
Share capital				1,578,024			477,386
Retained earnings				1,648,137			1,638,267
Other reserves				(24,219	)		7,432
Equity attributable to owners of the Parent				3,201,942			2,123,085
Non-controlling interests				38,020			39,493
Total equity				3,239,962			2,162,578
Total liabilities and equity				6,017,237			4,818,463

The accompanying notes form an integral part of these consolidated interim financial statements.

2 

Notes to the Consolidated Unaudited Interim Financial Statements 
June 30, 2021  

Consolidated Unaudited Statements of Income (Unaudited)

			For the period from January to June of the year						For the period from April to June of the year
			2021			2020			2021			2020
Consolidated Interim Statements of Income	Note N°		ThUS$			ThUS$			ThUS$			ThUS$
Revenue		22.1		1,116,472			850,510			587,995			458,473
Cost of sales		22.2		(793,925	)		(614,918	)		(402,091	)		(330,626	)
Gross profit				322,547			235,592			185,904			127,847
Other income		22.3		14,739			6,472			11,971			4,229
Administrative expenses		22.4		(53,883	)		(48,918	)		(29,248	)		(24,384	)
Other expenses		22.5		(14,560	)		(12,068	)		(13,462	)		(7,540	)
Impairment of financial assets and reversal of impairment losses		22.7		(644	)		1,889			(1,884	)		119
Other losses		22.6		(4,865	)		(5,820	)		(4,870	)		(6,520	)
Profit from operating activities				263,334			177,147			148,411			93,751
Finance income		22.10		1,886			10,319			1,088			3,558
Finance costs		16-23.9		(39,333	)		(44,357	)		(19,414	)		(21,291	)
Share of profit of associates and joint ventures accounted for using the equity method		8.1-9.3		5,561			6,393			3,322			4,775
Foreign currency translation differences		24		(8,743	)		(6,747	)		(6,417	)		(4,085	)
Profit before taxes				222,705			142,755			126,990			76,708
Income tax expense		26.3		(62,080	)		(46,066	)		(36,079	)		(25,473	)
Net profit				160,625			96,689			90,911			51,235
Profit attributable to:
Profit attributable to Owners of the Parent				157,773			95,821			89,801			50,835
Profit attributable to Non-controlling interests				2,852			868			1,110			400
				160,625			96,689			90,911			51,235

		For the period from January to June of the year				For the period from April to June of the year
		2021		2020		2021		2020
Earnings per share	Note N°	ThUS$		ThUS$		ThUS$		ThUS$
Common shares
Basic earnings per share (US$ per share)			0.5524		0.3641		0.3144		0.1931
Diluted common shares
Diluted earnings per share (US$ per share)			0.5524		0.3641		0.3144		0.1931

The accompanying notes form an integral part of these consolidated interim financial statements.

3 

Notes to the Consolidated Unaudited Interim Financial Statements 
June 30, 2021  

Consolidated Unaudited Statements of Comprehensive Income (Unaudited)

	For the period from January to June of the year						For the period from April to June of the year
	2021			2020			2021			2020
Consolidated Statements of Comprehensive Income	ThUS$			ThUS$			ThUS$			ThUS$
Net profit		160,625			96,689			90,911			51,235
Items of other comprehensive income that will not be reclassified to profit for the year, before taxes
Gains from measurements of defined benefit plans		4,399			143			1,168			423
(Losses) gains from financial assets measured irrevocably at fair value through other comprehensive income		(13,351	)		816			(17,163	)		2,810
Total other comprehensive income (loss) that will not be reclassified to profit for the year, before taxes		(8,952	)		959			(15,995	)		3,233
Items of other comprehensive income that will be reclassified to profit for the year, before taxes
Foreign currency exchange gains (losses)		2,130			(1,087	)		579			5,367
(Losses) from cash flow hedges		(20,444	)		(15,946	)		(23,326	)		2,494
Total other comprehensive income that will be reclassified to profit for the year		(18,314	)		(17,033	)		(22,747	)		7,861
Other items of other comprehensive income, before taxes		(27,266	)		(16,074	)		(38,742	)		11,094
Income taxes related to items of other comprehensive income that will not be reclassified to profit for the year
Income (tax) benefit relating to measurement of defined benefit pension plans through other comprehensive income		(780	)		(220	)		86			(758	)
Income benefit (tax) relating to (losses) gains on financial assets measured irrevocably at fair value through other comprehensive income		4,163			(18	)		4,634			(96	)
Total income tax relating to components of other comprehensive income that will be not reclassified to profit for the year		3,383			(238	)		4,720			(854	)
Income taxes relating to components of other comprehensive income that will be reclassified to profit for the year
Income tax benefit (expense) related to (losses) gains from cash flow hedges		5,520			4,305			6,298			(674	)
Total income tax relating to components of other comprehensive income that will be reclassified to profit for the year		5,520			4,305			6,298			(674	)
Total other comprehensive (loss) income		(18,363	)		(12,007	)		(27,724	)		9,566
Total comprehensive income		142,262			84,682			63,187			60,801
Comprehensive income attributable to
Comprehensive income attributable to owners of the parent		139,292			83,480			62,038			60,507
Comprehensive income attributable to non-controlling interest		2,970			1,202			1,149			294
		142,262			84,682			63,187			60,801

The accompanying notes form an integral part of these consolidated interim financial statements.

4 

Notes to the Consolidated Unaudited Interim Financial Statements 
June 30, 2021  

Consolidated Unaudited Interim Statements of Cash Flows (Unaudited)

		For the period from January to June of the year
		2021			2020
Consolidated Interim Statements of Cash Flows	Note N°	ThUS$			ThUS$
Cash flows from (used in) operating activities
Classes of cash receipts from operating activities
Cash receipts from sales of goods and rendering of services			1,101,159			957,104
Cash receipts from premiums and benefits, annuities and other benefits from policies entered			1,357			1,051
Cash receipts derived from sub-leases			104			105
Classes of Payments
Cash payments to suppliers for the provision of goods and services			(794,335	)		(781,212	)
Cash payments relating to variable leases			(380	)		(578	)
Other payments related to operating activities			(9,814	)		(15,056	)
Net cash generated from operating activities			298,091			161,414
Dividends received			1,403			4,310
Interest paid			(41,576	)		(36,466	)
Interest paid on lease liabilities			(720	)		(572	)
Interest received			2,375			12,043
Income taxes paid			(71,587	)		(80,601	)
Other cash inflows (1)			43,916			66,858
Net cash generated from operating activities			231,902			126,986
Cash flows from (used in) investing activities
Proceeds from the sale of equity instruments			10,123			1,148
Proceeds from the sale of property, plant and equipment			49			25
Other payments to acquire interest in joint ventures			-			(562	)
Acquisition of property, plant and equipment			(167,099	)		(156,931	)
Proceeds from sales of intangible assets			12,147			3,925
Proceeds (payments) related to futures, forward options and swap contracts			(578	)		(243	)
Purchases of intangible assets			-			(287	)
Loans to related parties			15,000			(3,500	)
Cash flows proceeds from the sale of interests in joint ventures			8,339			-
Other cash (outflows) inflows (2)			(380,440	)		492
Cash flow used in investing activities			(502,459	)		(155,933	)

(1) Other inflows of cash from operating activities include net increases (decreases) of value added tax, banking expenses, expenses associated with obtaining loans and taxes associated with interest payments.

(2) Other inflows (outflows) of cash include investments and redemptions of time deposits and other financial instruments that do not qualify as cash and cash equivalent in accordance with IAS 7, paragraph 7, since they mature in more than 90 days from the original investment date.

The accompanying notes form an integral part of these consolidated interim financial statements.

5 

Notes to the Consolidated Unaudited Interim Financial Statements 
June 30, 2021  

Consolidated Unaudited Interim Statements of Cash Flows (Unaudited)

			For the period from January to June of the year
			2021			2020
Consolidated Statements of Cash Flows	Note N°		ThUS$			ThUS$
Cash flows generated from (used in) financing activities
Repayment of lease liabilities				(3,967	)		(3,467	)
Proceeds from long-term loans				-			400,000
Repayment of borrowings				(7,055	)		(257,506	)
Paidd dividends				(77,285	)		(116,121	)
Capital stock increase				1,100,639			-
Net cash generated from  financing activities				1,012,332			22,906
Net Increase in cash and cash equivalents before the effect of changes in the exchange rate				741,775			(6,041	)
Effects of exchange rate fluctuations on cash and cash equivalents				(8,024	)		(858	)
Increase (decrease) in cash and cash equivalents				733,751			(6,899	)
Cash and cash equivalents at beginning of period				509,102			588,530
Cash and cash equivalents at end of period		10		1,242,853			581,631

The accompanying notes form an integral part of these consolidated interim financial statements.

6 

Notes to the Consolidated Unaudited Interim Financial Statements 
June 30, 2021  

Consolidated Unaudited Statements of Changes in Equity (Unaudited)

	Share capital	Foreign currency translation reserves		Hedge reserves		Gains and losses from financial assets reserve		Actuarial gains and losses from defined benefit plans reserve		Other miscellaneous reserves		Total reserves		Retained earnings		Equity attributable to owners of the Parent		Non- controlling interests		Total Equity
Consolidated Statements of Changes in Equity	ThUS$	ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$
Equity at January 1, 2021	477,386	(11,569	)	4,491		6,872		(8,680	)	16,318		7,432		1,638,267		2,123,085		39,493		2,162,578
Net profit	-	-		-		-		-		-		-		157,773		157,773		2,852		160,625
Other comprehensive income	-	2,045		(14,924	)	(9,188	)	3,586		-		(18,481	)	-		(18,481	)	118		(18,363	)
Comprehensive income	-	2,045		(14,924	)	(9,188	)	3,586		-		(18,481	)	157,773		139,292		2,970		142,262
Sale of equity instruments irrevocably recognized in OCI	-	-		-		(9,764	)	-		-		(9,764	)	9,764		-		-		-
Dividends (1)	-	-		-		-		-		-		-		(157,773	)	(157,773	)	(4,443	)	(162,216	)
Capital stock increase	1,100,638	-		-		-		-		-		-		-		1,100,638		-		1,100,638
Other (decrease) increase in equity	-	-		-		-		-		(3,406	)	(31,651	)	106		(3,300	)	-		(3,300	)
Total changes in equity	1,100,638	2,045		(14,924	)	(18,952	)	3,586		(3,406	)	(3,406	)	9,870		1,078,857		(1,473	)	1,077,384
Equity as of June 30, 2021	1,578,024	(9,524	)	(10,433	)	(12,080	)	(5,094	)	12,912		(24,219	)	1,648,137		3,201,942		38,020		3,239,962

	Share capital	Foreign currency translation reserves		Hedge reserves		Gains and losses from financial assets reserve		Actuarial gains and losses from defined benefit plans reserve		Other miscellaneous reserves	Total reserves		Retained earnings		Equity attributable to owners of the Parent		Non- controlling interests		Total Equity
Consolidated Statements of Changes in Equity	ThUS$	ThUS$		ThUS$		ThUS$		ThUS$		ThUS$	ThUS$		ThUS$		ThUS$		ThUS$		ThUS$
Equity at January 1, 2020	477,386	(25,745	)	7,196		(270	)	(9,490	)	14,086	(14,223	)	1,623,104		2,086,267		48,205		2,134,472
Net Profit	-	-		-		-		-		-	-		95,821		95,821		868		96,689
Other comprehensive income	-	(1,406	)	(11,641	)	595		111		-	(12,341	)	-		(12,341	)	334		(12,007	)
Comprehensive income	-	(1,406	)	(11,641	)	595		111		-	(12,341	)	95,821		83,480		1,202		84,682
Dividends (1)	-	-		-		-		-		-	-		(95,821	)	(95,821	)	(2,756	)	(98,577	)
Other increase (decrease) in equity	-	-		-		-		-		1,368	1,368		-		1,368		(2,279	)	(911	)
Total changes in equity	-	(1,406	)	(11,641	)	595		111		1,368	(10,973	)	-		(10,973	)	(3,833	)	(14,806	)
Equity as of June 30, 2020	477,386	(27,151	)	(4,445	)	325		(9,379	)	15,454	(25,196	)	1,623,104		2,075,294		44,372		2,119,666

(1) See Note 20.7

The accompanying notes form an integral part of these consolidated interim financial statements.

7 

Notes to the Consolidated Interim Financial Statements
June 30, 2021   

Glossary

The Following capitalized terms un these notes will have the following meaning:

“ADS’’ American Depositary Shares;

“CAM’’ Arbitration and Mediation Center of the Santiago Chamber of Commerce;

“CCHEN’’ Chilean Nuclear Energy Commission;

“CCS’’ cross currency swap;

“CINIIF’’ International Financial Reporting Interpretations Committee;

“CMF’’ Financial Market Commission;

“Directors’ Committee” The Company’s Directors’ Committee;

“Corporate Governance Committee’’ The Company’s Corporate Governance Committee;

“Health, Safety and Environment Committee’’ The Company’s Health, Safety and Environment Committee;

“Lease Agreement’’ the mining concessions lease agreement signed by SQM Salar and Corfo in 1993, as subsequently amended;

“Project Contract” project contract for Salar de Atacama undersigned by Corfo and SQM Salar in 1993, as subsequently amended”;

“Corfo” Chilean Economic Development Agency;

“DCV’’ Central Securities Depository;

“DGA’’ General Directorate of Water Resources;

“Board” The Company’s Board of Directors;

“Dollar’’ o “US$’’ Dollars of the United States of America;

“DPA’’ Deferred Prosecution Agreement;

“EIEP’’ Passive foreign investment company;

“United States” United States of America;

“FNE’’ Chilean National Economic Prosecutor's Office;

“Management’’ the Company’s management;

"SQM Group’’ The corporate group composed of the Company and its subsidiaries

“Pampa Group’’ Jointly the Sociedad de Inversiones Pampa Calichera S.A., Potasios de Chile S.A. and Inversiones Global Mining (Chile) Limitada;

“IASB’’ International Accounting Standards Board;

“SSI’’ Staff severance indemnities;

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Notes to the Consolidated Interim Financial Statements
June 30, 2021   

“IFRIC’’ International Financial Reporting Interpretations Committee;

“IPC” Consumer Price Index;

“IRS” interest rate swap;

“Securities Market Law” Securities Market Law No. 18,045;

“Corporate Law'' Ley 18,046 on corporations;

“ThUS$'' thousands of Dollars;

“MUS$'' millions of Dollars;

“IAS” International Accounting Standard;

“IFRS” International Financial Reporting Standard;

“ILO” International Labour Organization;

“WHO” World Health Organization;

“Pesos’’ or “Ch$” Chilean pesos, legal tender in Chile;

“SEC’’ Securities and Exchange Commission;

“Sernageomin’’ National Geology and Mining Service;

“SIC’’ Standard Interpretations Committee;

“SII” Chilean Internal Revenue Service;

“SMA” Environmental Superintendent’s Office;

“Company” Sociedad Química y Minera de Chile S.A.;

“SQM Industrial’’ SQM Industrial S.A.;

“SQM NA’’ SQM North America Corporation;

“SQM Nitratos’’ SQM Nitratos S.A.;

“SQM Potasio’’ SQM Potasio S.A.;

“SQM Salar’’ SQM Salar S.A.;

“Tianqi’’ Tianqi Lithium Corporation; and

“UF’’ Unidad de Fomento (a Chilean Peso based inflation indexed currency unit);

“WACC’’ Weighted Average Cost of Capital.

9 

Notes to the Consolidated Interim Financial Statements
June 30, 2021   

Note 1   Identification and Activities of the Company and Subsidiaries

1.1 Historical background

Sociedad Química y Minera de Chile S.A. is an open stock corporation founded under the laws of the Republic of Chile and its Chilean Tax Identification Number is 93.007.000-9.

The Company was incorporated through a public deed dated June 17, 1968 by the public notary of Santiago Mr. Sergio Rodríguez Garcés. Its existence was approved by Decree No. 1,164 of June 22, 1968 of the Ministry of Finance, and it was registered on June 29, 1968 in the Registry of Commerce of Santiago, on page 4,537 No. 1,992. SQM’s headquarters are located at El Trovador 4285, Floor 6, Las Condes, Santiago, Chile, The Company's telephone number is +(56 2) 2425-2000.

The Company is registered in the CMF under number 184 of March 18, 1983 and is therefore subject to oversight by that entity.

1.2 Main domicile where the Company performs its production activities

The Company’s main domiciles are: Calle Dos Sur plot No. 5 - Antofagasta; Arturo Prat 1060 - Tocopilla; Administration Building w/n - Maria Elena; Administration Building w/n Pedro de Valdivia - María Elena, Anibal Pinto 3228 - Antofagasta, Kilometer 1378 Ruta 5 Norte Highway - Antofagasta, Coya Sur Plant w/n - Maria Elena, kilometer 1760 Ruta 5 Norte Highway - Pozo Almonte, Salar de Atacama (Atacama Saltpeter deposit) potassium chloride plant w/n - San Pedro de Atacama, potassium sulfate plant at Salar de Atacama w/n – San Pedro de Atacama, Minsal Mining Camp w/n CL Plant CL, Potassium– San Pedro de Atacama, formerly the Iris Saltpeter office w/n, Commune of Pozo Almonte, Iquique.

1.3 Codes of main activities

The codes of the main activities as established by the CMF, as follows:

-      1700 (Mining)

-      2200 (Chemical products)

-      1300 (Investment)

1.4 Description of the nature of operations and main activities

The products of the Company are mainly derived from mineral deposits found in northern Chile where mining takes place and caliche and brine deposits are processed.

(a) Specialty plant nutrition: Four main types of specialty plant nutrients are produced: potassium nitrate, sodium nitrate, sodium potassium nitrate and specialty blends. In addition, other specialty fertilizers are sold including third party products.

(b) Iodine: The Company produces iodine and iodine derivatives, which are used in a wide range of medical, pharmaceutical, agricultural and industrial applications, including x-ray contrast media, polarizing films for LCD and LED, antiseptics, biocides and disinfectants, in the synthesis of pharmaceuticals, electronics, pigments and dye components.

(c) Lithium: The Company produces lithium carbonate, which is used in a variety of applications, including electrochemical materials for batteries, frits for the ceramic and enamel industries, heat-resistant glass (ceramic glass), air conditioning chemicals, continuous casting powder for steel extrusion, primary aluminum smelting process, pharmaceuticals and lithium derivatives. We are also a leading supplier of lithium hydroxide, which is primarily used as an input for the lubricating greases industry and for certain cathodes for batteries.

10 

Notes to the Consolidated Interim Financial Statements
June 30, 2021   

(d) Industrial chemicals: The Company produces three industrial chemicals: sodium nitrate, potassium nitrate and potassium chloride. Sodium nitrate is used primarily in the production of glass, explosives, and metal treatment. Potassium nitrate is used in the manufacturing of specialty glass, and it is also an important raw material to produce of frits for the ceramics and enamel industries. Solar salts, a combination of potassium nitrate and sodium nitrate, are used as a thermal storage medium in concentrated solar power plants. Potassium chloride is a basic chemical used to produce potassium hydroxide, and it is also used oil drilling, and to produce carrageenan.

(e) Potassium: The Company produces potassium chloride and potassium sulfate from brines extracted from the Salar de Atacama. Potassium chloride is a commodity fertilizer used to fertilize a variety of crops including corn, rice, sugar, soybean and wheat. Potassium sulfate is a specialty fertilizer used mainly in crops such as vegetables, fruits and industrial crops.

(f) Other products and services: The Company also sells other fertilizers and blends, some of which we do not produce. Mainly potassium nitrate, potassium sulfate and potassium chloride. This business line also includes revenue from commodities, services, interests, royalties and dividends.

11 

Notes to the Consolidated Interim Financial Statements
June 30, 2021   

1.5 Other background

(a) Employees

As of June 30, 2021and December 31, 2020, the workforce was as follows:

	As of June 30, 2021			As of December 31, 2020
Employees	SQM S.A.	other subsidiaries	Total	SQM S.A.	other subsidiaries	Total
Executives	31	94	125	30	85	115
Professionals	108	1,230	1,338	94	1,156	1,250
Technicians and operators	266	3,440	3,706	267	3,310	3,577
Foreign employees (1)	16	462	478	17	548	565
Overall total	421	5,226	5,647	408	5,099	5,507

(1) Of foreign employees, 10 are directors.

(b) Main shareholders

As of June 30, 2021, there were 1,605 shareholders.

Following table shows information about the main shareholders of the Company’s Series A or Series B shares in circulation as of June 30, 2021 and 2020, in line with information provided by the DCV, with respect to each shareholder that, to our knowledge, owns more than 5% of the outstanding Series A or Series B shares. The following information is derived from our registry and reports managed by the DCV and informed to the CMF and the Chilean Stock Exchange:

Shareholders as of June 30, 2021	No. of Series A	% of Series A shares			No. of Series B	% of Series B shares		% of total shares
Inversiones TLC SpA (1)	62,556,568		43.80	%	-	-		21.90	%
The Bank of New York Mellon, ADRs	-		-		62,192,010	43.55	%	21.77	%
Sociedad de Inversiones Pampa Calichera S.A. (2)	44,989,231		31.50	%	1,450,970	1.02	%	16.26	%
Potasios de Chile S.A.	18,179,147		12.73	%	-	-		6.36	%
Inversiones Global Mining (Chile) Limitada	8,798,539		6.16	%	-	-		3.08	%
Banco de Chile via State Street	1,290		0.00	%	8,345,921	5.84	%	2.92	%
Banco Santander via foreign investor accounts	-		-		7,902,375	5.53	%	2.77	%
Banco de Chile non-resident third party accounts	-		-		7,128,357	4.99	%	2.50	%
Euroamerica C De B S.A.	-		-		5,358,199	3.75	%	1.88	%
Inversiones la Esperanza de Chile Limitada	4,147,263		2.90	%	-	-		1.45	%
Banco de Chile via Citi NA New York Clients	87,463		0.06	%	3,927,882	2.75	%	1.41	%
AFP Habitat S.A. for Pension Fund C	-		-		3,300,991	2.31	%	1.16	%

12 

Notes to the Consolidated Interim Financial Statements
June 30, 2021   

Shareholders as of December 31, 2020	No. of Series A	% of Series A shares		No. of Series B	% of Series B shares		% of total shares
Inversiones TLC SpA (1)	62,556,568	43.80	%	-	-		23.77	%
The Bank of New York Mellon, ADRs	-	-		50,792,452	42.19	%	19.30	%
Sociedad de Inversiones Pampa Calichera S.A. (2)	44,894,152	31.43	%	922,971	0.77	%	17.41	%
Potasios de Chile S.A.	18,179,147	12.73	%	-	-		6.91	%
Inversiones Global Mining (Chile) Limitada	8,798,539	6.16	%	-	-		3.34	%
Euroamerica C de B S. A.	1,418	-		8,788,517	7.30	%	3.34	%
Banco Santander via foreign investor accounts	-	-		7,294,827	6.06	%	2.77	%
Banco de Chile via State Street	-	-		6,971,782	5.79	%	2.65	%
Banco de Chile non-resident third party accounts	-	-		6,129,339	5.09	%	2.33	%
Inversiones la Esperanza de Chile Limitada	4,147,263	2.90	%	46,500	0.04	%	1.59	%
Banchile Corredora de Bolsa S. A.	459,202	0.32	%	2,426,758	2.02	%	1.10	%
Banco de Chile on behalf of Citibank NA New York customers	177,463	0.12	%	1,732,249	1.44	%	0.73	%

(1) As reported by DCV, which records the Company's shareholders' register as of June 30, 2021 and December 31, 2020, Inversiones TLC SpA, a subsidiary wholly owned Tianqi Lithium Corporation, is the direct owner of 62,556,568 shares of The Company equivalent to 21.90% of SQM’s shares. Tianqi Lithium Corporation it owns 5,275,318 Series B SQM shares as reported by Inversiones TLC Spa. So as of June 30, 2021, Tianqi Lithium Corporation owns 23.75% of SQM's total Series A shares and ADS holders of Series B shares.

(2) as of June 30, 2021 Sociedad de Inversiones Pampa Calichera S.A. has 53,698,875 Series A and B shares; 7,258,674 Series B shares are held by different brokers. As of December 31, 2020 Sociedad de Inversiones Pampa Calichera S.A. has 57,235,201 Series A and B shares; 11,418,078 Series B shares are held by different brokers.

As of December 31, 2020, Tianqui Lithium Corporation holds 25.86% of all SQM shares through Series A and B shares.

1.6 Covid-19

In January 2020, the WHO deemed COVID-19 a global pandemic. In March 2020, the Chilean Ministry of Health declared a nationwide State of Emergency. As a precaution, our management has implemented several measures to help reduce the speed at which the coronavirus spreads, including measures to mitigate the spread in the workplace, significant reductions in employee travel and a mandatory quarantine for people who have arrived from high risk destinations, in consultation with governmental and international health organization guidelines, and will continue to implement measures consistent with evolving coronavirus situation.

The Company reports on the following points in relation to the outbreak of the COVID-19 virus and its being declared to be a global pandemic by the WHO:

(1) Regarding the financial and operational effects that this situation could mean for the Company, it is worth noting that the Company sells its products worldwide, with Asia, Europe and North America being its main markets. Border closures, decrease in commercial activity and difficulties and disruptions in the supply chains in the markets in which we sell have impacted our ability to fulfill our previous sales volume estimates, the impact on our sales volumes and average prices will depend on the duration of the virus in different markets, the efficiency of the measures implemented to contain the spread of the virus in each country and fiscal incentives that may be implemented in different jurisdictions to promote economic recovery.

13 

Notes to the Consolidated Interim Financial Statements
June 30, 2021   

For now, our operations have not seen any material impacts related to the outbreak of COVID-19 virus.

We have taken measures to mitigate the impacts of this health emergency on our employees and limit the impact it could have on our operations (described below in point 2).

(2) Regarding the measures that management has adopted or intends to adopt to mitigate possible financial and/or operational effects, we inform that the Company has implemented a series of measures in its operations in Chile and abroad that seek to protect its workers and reduce the speed at which the virus spreads. The measures adopted by the Company are:

(a) The flexibility of the working day, arrival and departure times, together with the incentive to work from home in those cases where this is possible.

(b) Avoidance of crowds, seminars and large meetings in the Company´s offices and operating facilities.

(c) Strengthening personal hygiene protocols (use of alcohol-based gel, masks, etc.) and sanitation in plants, cafeterias and offices.

(d) Significant reduction in domestic and international travel, along with obligatory quarantine for people who have arrived from high risk destinations.

(e) The costs associated with the measures implemented by the company correspond primarily to increased expenses in transportation, supplies, room and board, among others.

(3) We hereby inform that we do not currently have any other information that management believes is relevant to provide.

1.7 Capital stock increase

On April 28, 2021, the Company completed a US$1.1 billion capital stock increase. The capital stock increase was approved at an extraordinary shareholders’ meeting held by the Company on January 22, 2021. It included a mandatory 30-day pre-emptive rights offering, under Chilean law, to existing holders of the Company’s Series B common stock and a corresponding pre-emptive rights offering to existing holders of American Depositary Shares (ADSs). Existing shareholders received transferable share rights to subscribe for shares of Series B common stock at a subscription price of US$50 per share and the share rights were traded in Chile on the Santiago Stock Exchange and the Electronic Stock Exchange. Existing ADS holders received transferable ADS rights to subscribe for ADSs at a subscription price of US$50 per ADS and the ADS rights were traded in the U.S. on the New York Stock Exchange. The pre-emptive rights offerings ended on April 24, 2021 with respect to the share rights in Chile and on April 19, 2021 with respect to the ADS rights in the U.S. Of the 22,441,932 new Series B shares offered in the pre-emptive rights offerings, a total of 21,687,549 Series B shares (including shares in the form of ADSs), i.e. almost 97% of the Serie B shares offered, were subscribed in the preemptive rights offerings. The remaining 754,383 Series B shares that were not subscribed for in the pre-emptive rights offerings were offered and placed in auctions (remates) conducted through the Santiago Stock Exchange to investors in Chile and outside Chile (including in the United States) on April 28, 2021, at an average price of approximately US$54 per share.

As of June 30, 2021, contributed capital is US$ 1.1 billion net of expenses and others amounting to ThUS$ 24,212.

1.8 Approval of investment in Mount Holland

On February 17, 2021, the Board of Directors approved the investment in the Mount Holland lithium project in Western Australia. SQM's share of the project investment is expected to be approximately US$700 million, between 2021 and 2025. The feasibility study confirms an expected initial production capacity of 50,000 metric tons of lithium hydroxide during the second half of 2024. See Note 9.5.

14 

Notes to the Consolidated Interim Financial Statements
June 30, 2021   

Note 2 Basis of presentation for the consolidated financial statements

2.1 Accounting period

These consolidated financial statements cover the following periods:

(a) Consolidated Interim Statements of Financial Position as of June 30, 2021 and December 31, 2020.

(b) Consolidated Interim Statements of Income for the three and six-month periods ended June 30, 2021 and 2020.

(c) Consolidated Interim Statements of Comprehensive Income for the three and six-month periods ended June 30, 2021 and 2020.

(d) Consolidated Interim Statements of Changes in Equity as of June 30, 2021 and 2020.

(e) Consolidated Interim Statements of Cash Flows as of June 30, 2021 and 2020.

2.2 Consolidated financial statements

The consolidated interim financial statements of the Company and its subsidiaries were prepared in accordance with la IAS 34 “Interim Financial Reporting”.

The consolidated interim financial statements should be read in conjunction with the annual financial statements as of December 31, 2020.

The accounting principles and criteria used in these interim financial statements were consistently applied throughout both periods and to the annual financial statements as of December 31, 2020. There have been no changes in the methods used to calculate accounting estimates during the periods reported.

15 

Notes to the Consolidated Interim Financial Statements
June 30, 2021   

2.3 Basis of measurement

The consolidated financial statements have been prepared on the historical cost basis except for the following:

(a) Inventories are recorded at the lower of cost and net realizable value.

(b) Financial derivatives measured at fair value.

(c) Certain financial investments measured at fair value with an offsetting entry in other comprehensive income.

2.4 Accounting pronouncements

New accounting pronouncements

(a) The following standards, interpretations and amendments are mandatory for the first time for annual periods beginning on January 1, 2021:

Amendments and improvements	Description	Mandatory for annual periods beginning on or after
Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 “Reform to the referential interest rate (IBOR)- Phase 2” Published in August 2020.	These amendments provide certain simplifications in relation to the reform to the referential interest rates, including the replacement of a reference rate by an alternative.	01-01-2021
Amendment to IFRS 16 “Lease Concessions” - Published in March 2021.	This amendment extends by one year the period of application of the practical case of IFRS 16 Leases (contained in the amendment to that standard published in May 2020), with the purpose of assisting lessees in accounting for COVID-19 related rental concessions. The amendment is effective for annual periods beginning on or after April 1, 2021. However, early adoption is permitted even for financial statements not authorized for issue as of March 31, 2021.	01-01-2021

Management determined that the adoption of the aforementioned standards, amendments and interpretations did not significantly impact the company’s consolidated financial statements.

16 

Notes to the Consolidated Interim Financial Statements
June 30, 2021   

(b) Standards, interpretations and amendments issued that had not become effective for financial statements beginning on January 1, 2021 and which the Company has not adopted early are as follows:

Standards and Interpretations	Description	Mandatory for annual periods beginning on or after
Amendment to IAS 1 “Presentation of financial statements” on classification of liabilities.	These amendments clarify that the liabilities will be classified as current or non-current depending on the rights that exist at the close of the reporting period. The classification is not affected by the expectations of the entity or the events subsequent to the report date (for example, the receipt of a waiver or noncompliance with the pact). The amendment also clarifies what IAS 1 means when referring to “liquidation” of a liability.  The amendment must be applied retroactively in accordance with IAS 8. In May 2020, the IASB issued an “Exposure Draft” proposing deferral of the effective application date to January 1, 2023.	01-01-2022
Reference to the Conceptual Framework - Amendments to IFRS 3.	Minor modifications were made to IFRS 3 “Definition of a Business” to update references to the conceptual framework for financial reporting without changing the requirements of business combinations.	01-01-2022
Amendment to IAS 16 “Property, plant and equipment”.	This prohibits companies from deducting from the cost of the property any revenue received from the sale of articles produced while the company is preparing the asset for its anticipated use. The company must recognize this sales revenue and associated costs in the profit or loss for the fiscal year.	01-01-2022
Amendment to IAS 37, “Provisions, contingent liabilities and contingent assets”.	This clarifies for onerous contracts which inevitable costs a company must include to assess whether a contract will result in a loss.	01-01-2022
Annual improvements to IFRS standards, 2018-2020 cycle. The following improvements were finalized in May 2020:
IFRS 9 Financial Instruments.	This clarifies which fees must be included in the 10% test for the derecognition of financial liabilities.	01-01-2022
IFRS 16 Leases.	Modification of illustrative example 13 to eliminate the illustration of lessor payments in relation to improvements to rental properties, to eliminate any confusion as to the treatment of lease incentives.	01-01-2022
Amendments to IAS 1: “Presentation of the Financial Statements” and IAS 8 “Accounting policies, changes in accounting estimates and errors”.	The amendments are intended to improve disclosures of accounting policies and to help users of financial statements distinguish between changes in accounting estimates and changes in accounting policies.	01-01-2023
Amendment to IAS 12 - Deferred taxes related to assets and liabilities that arise from a single transaction.	These amendments require companies to recognize deferred taxes on transactions that result in equal amounts in taxable and deductible temporary differences in the initial recognition.	01-01-2023
Amendment to IFRS 10 “Consolidated Financial Statements” and IAS 28 “Investments in Associates and Joint Ventures”, Published in September 2014.	These amendments address an inconsistency between the requirements in IFRS 10 and those in IAS 28 in dealing with the sale or contribution of assets between an investor and its associate or joint venture. The main consequence of the amendments is that a full gain or loss is recognized when a transaction involves a business (whether it is housed in a subsidiary or not), A partial gain or loss is recognized when a transaction involves assets that do not constitute a business, even if these assets are housed in a subsidiary.	undetermined

Management believes that the adoption of the above standards, amendments and interpretations will not have a significant impact on the Company’s financial statements.

17 

Notes to the Consolidated Interim Financial Statements
June 30, 2021   

2.5 Basis of consolidation

(a)            Subsidiaries

The Company established control as the basis of consolidation of its financial statements. The Company controls a subsidiary when it is exposed, or has rights, to variable returns from its involvement with the subsidiary and has the ability to affect those returns through its power over the subsidiary.

The consolidation of a subsidiary starts when the Group controls it and it is no longer included in the consolidation when this control is lost.

Subsidiaries are consolidated through a line by line method, adding items that represent assets, liabilities, income and expenses with a similar content, and eliminating operations between companies within the SQM Group.

Results for dependent companies acquired or disposed of during the period are included in the consolidated accounts from the date on which control is transferred to the SQM Group or until the date when this control ends, as relevant.

To account for an acquisition of a business, the Company uses the acquisition method. Under this method, the acquisition cost is the fair value of assets delivered, equity securities issued, and incurred or assumed liabilities at the date of exchange. Assets, liabilities and contingencies identifiable assumed in a business combination are measured initially at fair value at the acquisition date. For each business combination, the Company will measure the non-controlling interest of the acquiree either at fair value or as proportional share of net identifiable assets of the acquire.

The details of the consolidated companies can be found in Note 7.

18 

Notes to the Consolidated Interim Financial Statements
June 30, 2021   

2.6 Investments in associates and joint ventures

Investments in joint arrangements are classified as joint operations or joint ventures. The classification depends on the contractual rights and obligations of each investor, rather than the legal structure of the joint arrangement.

(a) Joint operations

The Company recognizes its direct right to the assets, liabilities, income and expenses of the joint arrangement.

(b) Joint ventures and investments in associates

Interests in companies over which joint control is exercised (joint ventures) or where an entity has significant influence (associates) are recognized using the equity accounting method. Significant influence is presumed when the investor owns over 20% of the investee’s share capital. The investment is recognized using this method in the statement of financial position at cost plus changes subsequent to acquisition and includes the proportional share of the associate’s equity. For these purposes, the percentage interest in the associate is used. The associated acquired goodwill is included in the investee’s book value and is not amortized. The debit or credit to the income statement reflects the proportional share of the profit or loss of the associate.

Unrealized gains from transactions with joint ventures or associates are eliminated in accordance with the Company's percentage interest in such entities. Any unrealized losses are also eliminated, unless that transaction provides evidence that the transferred asset is impaired.

Changes in associate’s or joint ventures equity are recognized proportionally with a charge or credit to "Other Reserves" and are classified according to their origin. The reporting dates of the associate or joint ventures, the Company and related policies are similar for equivalent transactions and events in similar circumstances. In the event that significant influence is lost, or the investment is sold, or held for sale, the equity method is suspended, not recognizing the proportional share of the gain or loss. If the resulting value under the equity method is negative, the share of profit or loss is reflected as zero in the consolidated financial statements, unless there is a commitment by the Company to restore the capital position of the Company, in which case the related risk provision and expense are recorded.

Dividends received by these companies are recorded by reducing the value of the investment and are shown in cash flows from operating activities, and the proportional share of the gain or loss recognized in accordance with the equity method is included in the consolidated income statement under "Share of Gains (Losses) of Associates and Joint Ventures Accounted for Using the Equity Method''.

19 

Notes to the Consolidated Interim Financial Statements
June 30, 2021   

Note 3       Significant accounting policies

3.1 Classification of balances as current and non-current

In the consolidated statement of financial position, balances are classified in consideration of their recovery (maturity) dates; i.e., those maturing within a period equal to or less than 12 months are classified as current counted from the closing date of the consolidated financial statements and those with maturity dates exceeding the aforementioned period are classified as non-current.

The exception to the foregoing relates to deferred taxes, which are classified as non-current, regardless of the maturity they have.

3.2 Functional and presentation currency

The Company’s consolidated financial statements are presented in United States dollars, without decimal places, which is the Company’s functional and presentation currency and is the currency of the main economic environment in which it operates. Consequently, the term foreign currency is defined as any currency other than the U.S. dollar.

3.3 Accounting policy for foreign currency translation

(a)            SQM group entities:

The revenue, expenses, assets and liabilities of all entities that have a functional currency other than the presentation currency are converted to the presentation currency as follows:

- Assets and liabilities are converted at the closing exchange rate prevailing on the reporting date.

- Revenues and expenses of each profit or loss account are converted at monthly average exchange rates.

- All resulting foreign currency translation gains and losses are recognized as a separate component in translation reserves.

In consolidation, foreign currency differences arising from the translation of a net investment in foreign entities are recorded in shareholder’s equity (“foreign currency translation reserve”). At the date of disposal, such foreign currency translation differences are recognized in the statement of income as part of the gain or loss from the sale.

20 

Notes to the Consolidated Interim Financial Statements
June 30, 2021   

The main exchange rates and UF used to translate monetary assets and liabilities, expressed in foreign currency at the end and average of each period in respect to U.S. dollars, are as follows:

	Closing exchange rates				Average exchange rates
	As of June 30, 2021		As of December 31, 2020		As of June 30, 2021		As of December 31, 2020
Currencies	ThUS$		ThUS$		ThUS$		ThUS$
Brazilian real		4.99		5.18		5.03		5.14
New Peruvian sol		3.86		3.62		3.91		3.60
Japanese yen		111.10		103.30		110.20		103.81
Euro		0.84		0.81		0.83		0.82
Mexican peso		19.94		19.93		20.04		19.97
Australian dollar		1.33		1.30		1.31		1.33
Pound Sterling		0.72		0.74		0.71		0.74
South African rand		14.31		14.61		13.93		14.88
Chilean peso		727.76		710.95		726.83		731.92
Chinese yuan		6.47		6.51		6.43		6.53
Indian rupee		74.33		73.30		73.68		73.65
Thai Baht		32.02		29.94		31.47		30.08
Turkish lira		8.70		7.36		8.63		7.70
UF (*)		40.82		40.89		40.82		39.73

(*) US$ per UF

(b)       Transactions and balances

The Company’s non-monetary transactions in currencies other than the functional currency (Dollar) are translated to the respective functional currencies of Group entities at the exchange rate on the date of the transaction. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the functional currency at the exchange rate at that date. All differences are recorded in the statement of income except for all monetary items that provide an effective hedge for a net investment in a foreign operation. These items are recognized in other comprehensive income until disposal of the investment, when they are recognized in the statement of income. Charges and credits attributable to foreign currency translation differences on those hedge monetary items are also recognized in other comprehensive income.

Non-monetary assets and liabilities that are measured at historical cost in a foreign currency are retranslated to the functional currency at the historical exchange rate of the transaction. Non-monetary items that are measured based on fair value in a foreign currency are translated using the exchange rate at the date on which the fair value is determined.

21 

Notes to the Consolidated Interim Financial Statements
June 30, 2021   

3.4 Consolidated statement of cash flows

Cash equivalents correspond to highly liquid short-term investments that are easily convertible into known amounts of cash and subject to insignificant risk of changes in their value and mature in less than three months from the date of acquisition of the instrument.

For the purposes of the statement of cash flows, cash and cash equivalents comprise cash and cash equivalents as defined above.

The statement of cash flows present cash transactions performed during the period, determined using the direct method.

3.5 Financial assets

Management determines the classification of its financial assets, in accordance with the provisions of IFRS 9, at fair value (either through other comprehensive income, or through profit or loss), and at amortized cost. The classification depends on the business model of the entity to manage the financial assets and the contractual terms of the cash flows.

In the initial recognition, the Company measures its financial assets at fair value more or less, in the case of a financial asset that is not accounted for at fair value through profit or loss, the transaction costs that are directly attributable to the acquisition of the financial asset on the date when the Company commits to the purchase or sale of an asset. In the case of account receivables and other accounts receivables, the transaction price at the initial recognition is measured in accordance with the provisions of IFRS 15.

After initial recognition, the Company measures its financial assets according to the Company's business model for managing its financial assets and the contractual terms of its cash flows:

(a) Financial instruments measured at amortized cost. Financial assets that meet the following conditions are included in this category (i) the business model that supports it aims to maintain the financial assets to obtain the contractual cash flows and the contractual conditions of the financial asset give place, on specified dates, to cash flows that are only payments of the principal and interest on the outstanding principal amount. The Company’s financial assets that meet these conditions are: (ii) cash equivalents; (iii) related party receivables; (iv) trade debtors; (v) other receivables.

(b) Financial instruments at fair value. A financial asset should be measured at fair value through profit or loss or fair value through other comprehensive income, depending on the following:

(i) "Fair Value Through Other Comprehensive Income": Assets held to collect contractual cash flows and to be sold, where the asset cash flows are only capital and interest payments, are measured at fair value through other comprehensive income. Changes in book values are through other comprehensive income, except for the recognition of impairment losses, interest income and exchange gains and losses, which are recognized in the income statement. When a financial asset is derecognized, the cumulative gain or loss previously recognized in other comprehensive income is reclassified from equity to the income statement. Interest income from these financial assets is included in financial income using the effective interest method. Exchange gains and losses are presented in the income statement and impairment losses are separately presented in the income statement.

(ii) "Fair Value Through Profit and Loss": Assets that do not meet the amortized cost or "Fair Value Through Other Comprehensive Income" criteria are valued at "Fair Value Through Profit and Loss".

(c) Financial equity assets at fair value through other comprehensive income. Equity instruments that are not classified as held for trading and which the Group has irrevocably chosen to recognize in this category. Amounts presented in other comprehensive income will not be subsequently transferred to profit or loss.

22 

Notes to the Consolidated Interim Financial Statements
June 30, 2021   

3.6 Financial assets impairment

The Company evaluates expected credit losses associated with its debt instruments carried at amortized cost and fair value through other comprehensive income. The impairment method used depends on whether there has been a significant increase in credit risk.

The Company applies the IFRS 9 simplified approach to measure expected credit losses using the lifetime expected loss on all trade receivables. Expected credit losses are measured by grouping receivables by their shared credit risk characteristics and days overdue.

The Company has concluded that the expected loss rates for trade receivables are a reasonable approximation of the loss rates for contract assets. Expected loss rates are based on sales payment profiles and historical credit losses within this period. Historical loss rates are adjusted to reflect current expectations and information regarding macroeconomic factors that affect the ability of customers to meet their commitments.

Impairment losses from receivables and contract assets are shown as net impairment losses in the line “Impairment of financial assets and reversal of impairment losses,” see Note 22.7. The subsequent recovery of previously canceled amounts are credited to the same line.

3.7 Financial liabilities

Management determines the classification of its financial liabilities in accordance with the provisions of IFRS 9, at fair value or at amortized cost. The classification depends on the business model of the entity to manage the financial assets and the contractual terms of the cash flows.

At the initial recognition, the Company measures its financial liabilities by their fair value more or less, in the case of a financial liability that is not accounted for at fair value through profit or loss, the transaction costs that are directly attributable to the acquisition of the financial liability. After initial recognition, the Company measures its financial liabilities at amortized cost unless the Company, at the initial moment, irrevocably designates the financial liability as measured at fair value through profit or loss.

Financial liabilities measured at amortized cost are commercial accounts payable and other accounts payable and other financial liabilities.

Amortized cost is based using the effective interest rate method. Amortized cost is calculated by considering any premium or discount on the acquisition and includes transaction costs that are an integral part of the effective interest rate.

Financial liabilities are recorded as not current when they mature in more than 12 months and as current when they mature in less than 12 months.

3.8 Reclassification of financial instruments

When the Company changes its business model for managing financial assets, it will reclassify all its financial assets affected by the new business model. Financial liabilities cannot be reclassified.

3.9          Financial instruments derecognition

The Company derecognizes a financial asset when the contractual rights to the cash flows from the asset expire, or it transfers the rights to receive the contractual cash flows in a transaction in which substantially all the risks and rewards of ownership of the financial asset are transferred; and the control of the financial assets has not been retained.

23 

Notes to the Consolidated Interim Financial Statements
June 30, 2021   

The Company derecognizes a financial liability when its contractual obligations or a part of these are discharged, paid to the creditor or legally extinguished from the principle responsibility contained in the liability.

3.10        Derivative and hedging financial instruments

Derivatives are recognized initially at fair value as of the date on which the derivatives contract is signed and, they are subsequently assessed at fair value. The method for recognizing the resulting gain or loss depends on whether the derivative has been designated as an accounting hedge instrument and, if so, it depends on the type of hedging, which may be as follows:

a) Fair value hedge of assets and liabilities recognized (fair value hedges);

b) Hedging of a single risk associated with a recognized asset or liability or a highly probable forecast transaction (cash flow hedge).

At the beginning of the transaction, the Company documents the relationship that exists between hedging instruments and those items hedged, as well as their objectives for risk management purposes and the strategy to conduct different hedging operations.

The Company also documents its evaluation both at the beginning and at the end of each period if the derivatives used in hedging transactions are highly effective to offset changes in the fair value or in cash flows of hedged items.

The fair value of derivative instruments used for hedging purposes is shown in Note 13.3. Changes in the cash flow hedge reserve are classified as a non-current asset or liability if the remaining expiration period of the hedged item is more than 12 months, and as a current asset or liability if the remaining expiration period of the hedged item is less than 12 months.

Derivatives that are not designated or do not qualify as hedging derivatives are classified as current assets or liabilities, and changes in the fair value are directly recognized through profit or loss.

a) Fair value hedge

Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recorded in profit or loss, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk. The gain or loss relating to the effective portion of interest rate swaps that hedge fixed rate borrowings is recognized in profit or loss within finance costs, together with changes in the fair value of the hedged fixed rate borrowings attributable to interest rate risk. The gain or loss relating to the ineffective portion is recognized in profit or loss within other income or other expenses. If the hedge no longer meets the criteria for hedge accounting, the adjustment to the carrying amount of a hedged item for which the effective interest method is used is amortized to profit or loss over the period to maturity using a recalculated effective interest rate.

b) Cash flow hedges

The effective portion of the gain or loss on the hedging instrument is initially recognized with a debit or credit to other comprehensive income, while any ineffective portion is immediately recognized with a debit or credit to income, as appropriate depending on the nature of the hedged risk. The amounts accumulated in net equity are carried over to results when the hedged items are settled or when these have an impact on results.

When a hedging instrument no longer meets the criteria for hedge accounting, any cumulative deferred gain or loss and deferred costs of hedging in equity at that time remains in equity until the forecast transaction occurs.

When the forecast transaction is no longer expected to occur, the cumulative gain or loss and deferred costs of hedging that were reported in equity are immediately reclassified to profit or loss.

24 

Notes to the Consolidated Interim Financial Statements
June 30, 2021   

3.11        Derivative financial instruments not considered as hedges

Derivative financial instruments not considered as hedges are recognized at fair value with the effect in the results of the year. The Company has derivative financial instruments to hedge foreign currency risk exposure.

The Company continually evaluates the existence of embedded derivatives in both its contracts and in its financial instruments. As of June 30, 2021, and December 31, 2020, the Company does not have any embedded derivatives.

3.12        Deferred acquisition costs from insurance contracts

Acquisition costs from insurance contracts are classified as prepayments and correspond to insurance contracts in force, recognized using the straight-line method and on an accrual basis independent of payment date. These are recognized under other non-financial assets.

3.13        Leases

(a) Right-of-use assets

The Company recognizes right-of-use assets on the initial lease date (i.e., the date on which the underlying asset is available for use). Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, adjusted by any new measurement of the lease liability. The cost of right-of-use assets includes the amount of recognized lease liabilities, direct initial costs incurred and lease payments made on the start date or sooner, less the lease incentives received. Unless the Company is reasonably sure it will take ownership of the leased asset at the end of the lease period, the assets recognized through right-of-use are depreciated in a straight line during the shortest period of their estimated useful life and lease period. Right-of-use assets are subject to impairment as per “IAS 36 Impairment of Assets”.

(b) Lease liabilities

On the lease start date, the Company recognizes lease liabilities measured at present value of lease payments that will be made during the lease period. Lease payments include fixed payments (including payments that are essentially fixed), less incentives for lease receivables, variable lease payments that are dependent on an index or rate and amounts that are expected to be paid as guaranteed residual value. Lease payments also include the exercise price of a purchase option if the Company is reasonably sure it will exercise this and penalty payments for terminating a lease, if the lease period reflects that the Company will exercise the option to terminate. Variable lease payments that are not dependent on an index or rate are recognized as expenses in the period that produces the event or condition that triggers payment.

When calculating the present value of lease payments, the Company uses the incremental borrowing rate on the initial lease date if the interest rate implicit in the lease cannot be determined easily. After the start date, the lease liability balance will increase to reflect the accumulation of interest and will diminish as lease payments are made. Furthermore, the book value of lease liabilities is remeasured in the event of an amendment, a change in the lease period, a change in the fixed lease payments in substance or a change in the assessment to buy the underlying asset.

Payments made that affect lease liabilities are presented as part of the financing activities in the cash flow statement.

(c) Short-term leases and low-value asset leases

The Company applies the short-term lease recognition exemption to leases with a lease term of 12 months or less starting on the start date and that don’t have a purchase option. It also applies the low-value asset lease recognition exemptions. Lease payments in short-term leases and low-value asset leases are recognized as lineal expenses during the lease term.

25 

Notes to the Consolidated Interim Financial Statements
June 30, 2021   

(d)   Significant judgments in the determination of the lease term for contracts with renewal options.

The Company determines the lease term as the non-cancellable period of the lease, together with periods covered by an option to extend the lease if it is reasonably certain that this will be exercised, or any period covered by an option to terminate the lease, if it is reasonably certain that this will not be exercised.

The Company has the option, under some of its leases, to lease assets for additional terms. The Company applies its judgment when assessing whether it is reasonably certain that it will exercise the option to renovate. In other words, it considers all the relevant factors that create an economic incentive for it to exercise the option to renovate. After the start date, the Company reevaluates the lease term if there is a significant event or change in the circumstances that are under its control and affect its capacity to exercise (or not exercise) the option to renovate.

3.14        Inventory measurement

The method used to determine the cost of inventories is the weighted average monthly cost of warehouse storage. In determining production costs for own products, the company includes the costs of labor, raw materials, materials and supplies used in production, depreciation and maintenance of the goods that participate in the production process, the costs of product movement necessary to maintain stock on location and in the condition in which they are found, and also includes the indirect costs of each task such as laboratories, process and planning areas, and personnel expenses related to production, among others.

For finished and in-process products, the company has four types of provisions, which are reviewed quarterly:

(a) Provision associated with the lower value of stock: The provision is directly identified with the product that generates it and involves three types: (i) provision of lower realizable value, which corresponds to the difference between the inventory cost of intermediary or finished products, and the sale price minus the necessary costs to bring them to the same conditions and location as the product with which they are compared; (ii) provision for future uncertain use that corresponds to the value of those products in process that are likely not going to be used in sales based on the company’s long-term plans; (iii) reprocessing costs of products that are unfeasible for sale due to current specifications.

(b) Provision associated with physical differences in inventory: A provision is made for differences that exceed the tolerance considered in the respective inventory process (physical and annual inventories are taken for the productive units in Chile and the port of Tocopilla, the business subsidiaries depend on the last zero ground obtained, but in general it is at least once a year), these differences are recognized immediately.

(c) Potential errors in the determination of stock: The company has an algorithm that is reviewed at least once a year and corresponds to diverse percentages assigned to each inventory based on the product, location, complexity involved in the associated measurement, rotation and control mechanisms.

(d) Provisions undertaken by business subsidiaries: these are historical percentages that are adjusted as zero ground is attained based on normal inventory management.

Inventories of raw materials, materials and supplies for production are recorded at acquisition cost. Cyclical inventories are performed in warehouses, as well as general inventories every three years. Differences are recognized at the moment they are detected. The company has a provision that makes quarterly calculations from percentages associated with each type of material (classification by warehouse and rotation), these percentages use the lower value resulting from deterioration or obsolescence as well as potential losses. This provision is reviewed at least annually, and considers the historical profit and loss obtained in the inventory processes.

26 

Notes to the Consolidated Interim Financial Statements
June 30, 2021   

3.15        Non-controlling interests

Non-controlling interests are recorded in the consolidated statement of financial position within equity but separate from equity attributable to the owners of the Parent.

3.16        Related party transactions

Transactions between the Company and its subsidiaries are part of the Company’s normal operations within its scope of business activities. Conditions for such transactions are those normally effective for those types of operations with regard to terms and market prices. The maturity conditions vary according to the originating transaction.

3.17        Property, plant and equipment

Property, plant and equipment are stated at acquisition cost, net of the related accumulated depreciation, amortization and impairment losses that they might have experienced.

In addition to the price paid for the acquisition of tangible property, plant and equipment, the Company has considered the following concepts as part of the acquisition cost, as applicable:

(a) Accrued interest expenses during the construction period that are directly attributable to the acquisition, construction or production of qualifying assets, which are those that require a substantial period prior to being ready for use. The interest rate used is that related to the project’s specific financing or, should this not exist, the average financing rate of the investor company.

(b) The future costs that the Company will have to experience, related to the closure of its facilities at the end of their useful life, are included at the present value of disbursements expected to be required to settle the and its subsequent variation is recorded directly in results.

Having initially recognized provisions for closure and refurbishment, the corresponding cost is capitalized as an asset in “Property, plant and equipment” and amortized in line with the amortization criteria for the associated assets.

Construction-in-progress is transferred to property, plant and equipment in operation once the assets are available for use and the related depreciation and amortization begins on that date.

Extension, modernization or improvement costs that represent an increase in productivity, ability or efficiency or an extension of the useful lives of property, plant and equipment are capitalized as a higher cost of the related assets. All the remaining maintenance, preservation and repair expenses are charged to expense as they are incurred.

The replacement of assets, which increase the asset’s useful life or its economic capacity, are recorded as a higher value of property, plant and equipment with the related derecognition of replaced or renewed elements.

Gains or losses which are generated from the sale or disposal of property, plant and equipment are recognized as income (or loss) in the period and calculated as the difference between the asset’s sales value and its net carrying value.

Costs derived from the daily maintenance of property, plant and equipment are recognized when incurred.

27 

Notes to the Consolidated Interim Financial Statements
June 30, 2021   

3.18        Depreciation of property, plant and equipment

Property, plant and equipment are depreciated through the straight-line distribution of cost over the estimated technical useful life of the asset, which is the period in which the Company expects to use the asset. When components of one item of property, plant and equipment have different useful lives, they are recorded as separate assets. Useful lives are reviewed on an annual basis.

Fixed assets located in Salar de Atacama consider useful life to be the lesser value between the technical useful life and the years remaining until 2030.

In the case of certain mobile equipment, depreciation is performed depending on the hours of operation.

The useful lives used for the depreciation and amortization of assets included in property, plant and equipment in years are presented below:

Classes of property, plant and equipment	Minimum life or rate (years)		Maximum life or rate (years)		life or average rate in years
Mining assets		3		10		7
Energy generating assets		3		16		9
Buildings		3		25		14
Supplies and accessories		2		10		8
Office equipment		5		10		9
Transport equipment		5		9		7
Network and communication equipment		4		10		6
IT equipment		5		11		7
Machinery, plant and equipment		3		25		13
Other property, plant and equipment		3		15		10

3.19        Goodwill

Goodwill acquired represents the excess in acquisition cost on the fair value of the Company's ownership of the net identifiable assets of the subsidiary on the acquisition date. Goodwill acquired related to the acquisition of subsidiaries is included in the line item goodwill, which is subject to impairment tests annually or more frequently if events or changes in circumstances indicate that it might be impaired and is stated at cost less accumulated impairment losses. Gains and losses related to the sale of an entity include the carrying value of goodwill related to the entity sold.

This intangible asset is assigned to cash-generating units with the purpose of testing impairment losses. It is allocated based on cash-generating units expected to obtain benefits from the business combination from which the aforementioned goodwill acquired arose.

28 

Notes to the Consolidated Interim Financial Statements
June 30, 2021   

3.20        Intangible assets other than goodwill

Intangible assets other than goodwill mainly relate to water rights, emission rights, commercial brands, costs for rights of way for electricity lines, license costs and the development of computer software and mining property and concession rights, client portfolio and commercial agent.

(a)       Water rights

Water rights acquired by the Company relate to water from natural sources and are recorded at acquisition cost. The Company separates water rights into:

i) Finite rights with amortization using the straight-line method, and

ii) Indefinite rights, which are not amortized, given that these assets represent rights granted in perpetuity to the Company, which are subject to an annual impairment assessment.

(b) Rights of way for electric lines

As required for the operation of industrial plants, the Company has paid rights of way in order to install wires for the different electric lines on third party land. These rights are presented under intangible asset. Amounts paid are capitalized at the date of the agreement and amortized in the statement of income, according to the life of the right of way.

(c) Computer software

Licenses for IT programs acquired are capitalized based on their acquisition and customization costs. These costs are amortized over their estimated useful lives.

Expenses related to the development or maintenance of IT programs are recognized as an expense as and when incurred. Costs directly related to the production of unique and identifiable IT programs controlled by the Group, and which will probably generate economic benefits that are higher than its costs during more than a year, are recognized as intangible assets. Direct costs include the expenses of employees who develop information technology software and general expenses in accordance with corporate charges received.

The costs of development for IT programs are recognized as assets are amortized over their estimated useful lives.

(d) Mining property and concession rights

The Company holds mining property and concession rights from the Chilean and Western Australian Governments. Property rights from the State of Chile are usually obtained at no initial cost (other than the payment of mining patents and minor recording expenses) and once the rights on these concessions have been obtained, they are retained by the Company while annual patents are paid. Such patents, which are paid annually, are recorded as prepaid assets and amortized over the following twelve months. Amounts attributable to mining concessions acquired from third parties that are not from the Chilean Government are recorded at acquisition cost within intangible assets.

(e)       Estimated useful lives or amortization rates used for finite identifiable intangible assets

The finite useful life of mining properties is calculated using the productive unit method, except for the mining properties owned by Corfo, which have been leased to the Company and grant it the right to exclusively exploit them until December 31, 2030.

The estimated useful life for software which they are amortized corresponds to the periods defined by the contracts or rights from which they originate.

29 

Notes to the Consolidated Interim Financial Statements
June 30, 2021   

f) Minimum and maximum amortization lives or rates of intangible assets:

Estimated useful life or amortization rate	Minimum Life or Rate	Maximum Life or Rate
Water rights	5 years	Indefinite
Rights of way	Indefinite	Indefinite
Corfo Mining properties (1)	9 years	9 years
Mining rights	Unit-production method
IT programs	2 years	8 years

(1) Mining properties owned by CORFO and leased to the Company, which grant it the exclusive right to exploit them until December 31, 2030.

3.21        Research and development expenses

Research and development expenses are charged to profit or loss in the period in which the expenditure was incurred.

3.22        Exploration and evaluation expenses

The Company holds mining concessions for exploration and exploitation of ore, the Company gives the following treatment to expenses associated with exploration and assessment of these resources:

(a) Caliche

Once the rights have been obtained, the Company records the disbursements directly associated with the exploration and assessment of the deposit as an at cost asset. These disbursements include the following items: geological surveys, drilling, borehole extraction and sampling, activities related to the technical assessment and commercial viability of the extraction, and in general, any disbursement directly related to specific projects where the objective is to find ore resources.

If the technical studies determine that the ore grade is not economically viable, the asset is directly charged to profit and loss. If determined otherwise, the asset described above is associated with the extractable ore tonnage which is amortized as it is used. These assets are presented in the “other non-current non-financial assets” category, reclassifying the portion related to the area to be extracted that year as inventories.

(b) Metal exploration

Expenses related to metal exploration are charged to profit or loss in the period in which they are recognized if the project assessed doesn't qualify for consideration as advanced exploration, otherwise these are amortized during the development stage.

(c) Salar de Atacama exploration

Salar de Atacama exploration expenses are presented as non-current assets as the property, plant and equipment category and correspond mainly to wells that can also be used in the extraction of the deposit and/or monitoring, these are amortized over 10 years.

(d) Mount Holland exploration

Mount Holland exploration expenses are presented into “Property, Plant and Equipment”, specifically in Constructions in progress and primarily consider exploration boreholes and complementary studies for the lithium ore study of the area of Western Australia, Australia. These expenses will begin to be amortized in the development stage.

30 

Notes to the Consolidated Interim Financial Statements
June 30, 2021   

3.23        Impairment of non-financial assets

Assets subject to depreciation and amortization are also subject to impairment testing, provided that an event or change in the circumstances indicates that the amounts in the accounting records may not be recoverable, an impairment loss is recognized for the excess of the book value of the asset over its recoverable amount.

For assets other than goodwill, the Group annually assesses whether there is any indication that a previously recognized impairment loss may no longer exist or may have decreased. Should such indications exist, the recoverable amount is estimated.

The recoverable amount of an asset is the higher between the fair value of an asset or cash generating unit less costs of sales and its value in use, and is determined for an individual asset unless the asset does not generate any cash inflows that are clearly independent from other assets or groups of assets

In evaluating value in use, estimated future cash flows are discounted using a pre-tax discount rate that reflects current market assessment, the value of money over time and the specific asset risks.

Impairment losses from continuing operations are recognized with a debit to profit or loss in the categories of expenses associated with the impaired asset function.

For assets other than goodwill, a previously recognized impairment loss is only reversed if there have been changes in the estimates used to determine the asset’s recoverable amount since the last time an impairment loss was recognized. If this is the case, the carrying value of the asset is increased to its recoverable amount. This increased amount cannot exceed the carrying value that would have been determined, net of depreciation, if an asset impairment loss had not been recognized in prior years. This reversal is recognized with a credit to profit or loss.

Assets with indefinite lives are assessed for impairment annually.

The current value of future cash flows generated by these assets has been estimated given the variation in sales volumes, market prices and costs, discounted with a WACC rate. For June 30, 2021, the WACC rate was 10.09%.

3.24        Minimum dividend

As required by Chilean law and regulations, our dividend policy is decided upon from time to time by our Board of Directors and is announced at the Annual Ordinary Shareholders’ Meeting, which is generally held in April of each year. Shareholder approval of the dividend policy is not required. However, each year the Board must submit the declaration of the final dividend or dividends in respect of the preceding year, consistent with the then-established dividend policy, to the Annual Ordinary Shareholders’ Meeting for approval. As required by the Chilean Companies Act, unless otherwise decided by unanimous vote of the holders of issued shares, we must distribute a cash dividend in an amount equal to at least 30% of our consolidated net income for that year (determined in accordance with CMF regulations), unless and to the extent the Company has a deficit in retained earnings. (See Note 20.5).

3.25        Earnings per share

The basic earnings per share amounts are calculated by dividing the profit for the year attributable to the ordinary owners of the parent by the weighted average number of ordinary shares outstanding during the year.

The Company has not conducted any type of operation of potential dilutive effect that would entail the disclosure of diluted earnings per share.

3.26        Capitalization of interest expenses

The cost of interest is recognized as an expense in the year in which it is incurred, except for interest that is directly related to the acquisition and construction of tangible property, plant and equipment assets and that complies with the requirements of IAS 23.

31 

Notes to the Consolidated Interim Financial Statements
June 30, 2021   

The Company capitalizes all interest costs directly related to the construction or to the acquisition of property, plant and equipment, which require a substantial time to be suitable for use.

The financial expenses accrued during the construction period that are directly attributable to the acquisition, construction or production of assets that qualify for this, use the corresponding interest rate for the financing specific to the project; where this does not exist, the mean financing rate of the subsidiary that makes the investment is used.

3.27        Other provisions

Provisions are recognized when:

· The Company has a present, legal or constructive obligation as the result of a past event.

· It is more likely than not that certain resources must be used, to settle the obligation.

· A reliable estimate can be made of the amount of the obligation.

In the event that the provision or a portion of it is reimbursed, the reimbursement is recognized as a separate asset solely if there is certainty of income.

In the consolidated statement of income, the expense for any provision is presented net of any reimbursement.

Should the effect of the value of money over time be significant, provisions are discounted using a discount rate before tax that reflects the liability’s specific risks. When a discount rate is used, the increase in the provision over time is recognized as a finance cost.

The Company’s policy is to maintain provisions to cover risks and expenses based on a better estimate to deal with possible or certain and quantifiable responsibilities from current litigation, compensations or obligations, pending expenses for which the amount has not yet been determined, collaterals and other similar guarantees for which the Company is responsible. These are recorded at the time the responsibility or the obligation that determines the compensation or payment is generated.

3.28        Obligations related to employee termination benefits and pension commitments

Obligations towards the Company’s employees comply with the provisions of the collective bargaining agreements in force, which are formalized through collective employment agreements and individual employment contracts, except for the United States, which is regulated in accordance with employment plans in force up to 2002. (See more details in Note 18.4).

These obligations are valued using actuarial calculations, according to the projected unit credit method which considers such assumptions as the mortality rate, employee turnover, interest rates, retirement dates, effects related to increases in employees’ salaries, as well as the effects on variations in services derived from variations in the inflation rate. The criteria in force contained in the revised IAS 19 are also considered.

Actuarial gains and losses that may be generated by variations in defined, pre-established obligations are directly recorded in “Other Comprehensive Income”.

Actuarial losses and gains have their origin in deviations between the estimate and the actual behavior of actuarial assumptions or in the reformulation of established actuarial assumptions.

The Company’s subsidiary SQM North America has established pension plans for its retired employees that are calculated by measuring the projected obligation using a net salary progressive rate net of adjustments for inflation, mortality and turnover assumptions, deducting the resulting amounts at present value. The net balance of this obligation is presented under the “Non-Current Provisions for Employee Benefits” (refer to Note 18.4).

3.29 Compensation plans

Compensation plans implemented through benefits provided in share-based payments settled in cash are recognized in the financial statements at their fair value, in accordance with IFRS 2. Changes in the fair value of options granted are recognized with a charge to payroll in the results for the period (see Note 18.6).

32 

Notes to the Consolidated Interim Financial Statements
June 30, 2021   

3.30 Revenue recognition

Revenue includes the fair value of considerations received or receivable for the sale of goods and services during the performance of the Company's activities. Revenue is presented net of value added tax, estimated returns, rebates and discounts and after the elimination of sales among subsidiaries.

Revenues are recognized when the specific conditions for each income stream are met, as follows:

(a)       Sale of goods

The sale of goods is recognized when the Company has delivered products to the customer, and there is no obligation pending compliance that could affect the acceptance of products by the customer. The delivery does not occur until products have been shipped to the customer or confirmed as received by the customer, and the related risks of obsolescence and loss have been transferred to the customer and the customer has accepted the products in accordance with the conditions established in the sale, when the acceptance period has ended, or when there is objective evidence that those criteria required for acceptance have been met.

Sales are recognized in consideration of the price set in the sales agreement, net of volume discounts and estimated returns at the date of the sale. Volume discounts are evaluated in consideration of annual foreseen purchases and in accordance with the criteria defined in agreements.

(b)       Sale of services

Revenue associated with the rendering of services is recognized considering the degree of completion of the service as of the date of presentation of the consolidated classified statement of financial position, provided that the result from the transaction can be estimated reliably.

(c)        Income from dividends

Income from dividends is recognized when the right to receive the payment is established.

3.31        Finance income and finance costs

Finance income is mainly composed of interest income from financial instruments such as term deposits and mutual fund deposits. Interest income is recognized in profit or loss at amortized cost, using the effective interest rate method.

Finance costs are mainly composed of interest on bank borrowing expenses, interest on bonds issued and interest capitalized for borrowing costs for the acquisition, construction or production or qualifying assets. Borrowing costs and bonds issued are also recognized in profit or loss using the effective interest rate method.

3.32        Current income tax and deferred

Corporate income tax for the year is determined as the sum of current and deferred income taxes from the different consolidated companies.

Current taxes are based on the application of the various types of taxes attributable to taxable income for the period. The Company periodically assesses the positions taken in the determination of taxes with respect to situations in which the applicable tax regulation is subject to interpretation and considers whether it is probable that a tax authority will accept an uncertain tax treatment. The Company measures its tax balances based on the most probable amount or expected value, depending on which method provides a better prediction of the resolution of uncertainty.

Differences between the book value of assets and liabilities and their tax basis generate the balance of deferred tax assets or liabilities, which are calculated using the tax rates expected to be applicable when the assets and liabilities are realized.

In conformity with current tax regulations, the provision for corporate income tax and taxes on mining activity is recognized on an accrual basis, presenting the net balances of accumulated monthly tax provisional payments for the fiscal period and associated credits. The balances of these accounts are presented in current income taxes recoverable or current taxes payable, as applicable.

33 

Notes to the Consolidated Interim Financial Statements
June 30, 2021   

Income tax and variations in deferred tax assets or liabilities that are not the result of business combinations are recorded in income or equity, considering the origin of the gains or losses which have generated them.

At each reporting period, the carrying amount of deferred tax assets is reviewed and recognized only if it is probable that future taxable amounts will be available to allow the recovery of all or a portion of the deferred tax assets.

With respect to deductible temporary differences associated with investments in subsidiaries, associated companies and interest in joint ventures, deferred tax assets are recognized solely provided that it is more likely than not that the temporary differences will be reversed in the near future and that there will be taxable income with which they may be used. The deferred taxes related to items directly recognized in equity is registered with effect on other comprehensive income and not with effect on income.

Deferred tax assets and liabilities are offset if there is a legally receivable right of offsetting tax assets against tax liabilities and the deferred tax is related to the same tax entity and authority.

The recognized deferred tax assets refer to the amount of income tax to recover in future periods, related to:

a) deductible temporary differences;

b) compensation for losses obtained in prior periods, which have not yet been subject to tax deduction; and

c) compensation for unused credits from prior periods.

The Company recognizes deferred tax assets when it has the certainty that they can be offset with tax income from subsequent periods, unused tax losses or credits to date, but only when this availability of future tax income is probable and can be used for offsetting these unused tax losses or credits.

The recognized deferred tax liabilities refer to the amount of income tax to pay in a future period, related to taxable temporary differences.

3.33       Operating segment reporting

IFRS 8 requires that companies adopt a management approach to disclose information on the operations generated by its operating segments. In general, this is the information that management uses internally for the evaluation of segment performance and making the decision on how to allocate resources for this purpose.

An operating segment is a group of assets and operations responsible for providing products or services subject to risks and performance that are different from those of other business segments. A geographical segment is responsible for providing products or services in a given economic environment subject to risks and performance that are different from those of other segments operating in other economic environments.

Allocation of assets and liabilities, to each segment is not possible given that these are associated with more than one segment, except for depreciation, amortization and impairment of assets, which are directly allocated in accordance with the criteria established in the costing process for product inventories to the corresponding segments.

3.34        Primary accounting criteria, estimates and assumptions

Management is responsible for the information contained in these consolidated financial statements, which expressly indicate that all the principles and criteria included in IFRS, as issued by the IASB, have been applied in full.

In preparing the consolidated financial statements of the Company and its subsidiaries, management has made judgments and estimates to quantify certain assets, liabilities, revenues, expenses and commitments included therein. Basically, these estimates refer to:

· Estimated useful lives are determined based on current facts and past experience and take into consideration the expected physical life of the asset, the potential for technological obsolescence, and regulations. (See Notes 3.20, 15 and 16).

34 

Notes to the Consolidated Interim Financial Statements
June 30, 2021   

· Impairment losses of certain assets - Goodwill and intangible assets that have an indefinite useful life are not amortized and are assessed for impairment on an annual basis, or more frequently if the events or changes in circumstances indicate that these may have deteriorated Other assets, including property, plant and equipment, exploration assets, goodwill and intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that their carrying amounts exceed their recoverable amounts. If an impairment assessment is required, the assessment of fair value or value in use often requires estimates and assumptions such as discount rates, exchange rates, commodity prices, future capital requirements and future operating performance. Changes in such estimates could impact the recoverable values of these assets. Estimates are reviewed regularly by management (See Notes 15 and 16).

· Assumptions used in calculating the actuarial amount of pension-related and severance indemnity payment benefit commitments (See Note 18).

· Contingencies – The amount recognized as a provision, including legal, contractual, constructive and other exposures or obligations, is the best estimate of the consideration required to settle the related liability, including any related interest charges, considering the risks and uncertainties surrounding the obligation. In addition, contingencies will only be resolved when one or more future events occur or fail to occur. Therefore, the assessment of contingencies inherently involves the exercise of significant judgment and estimates of the outcome of future events. The Company assesses its liabilities and contingencies based upon the best information available, relevant tax laws and other appropriate requirements (See Note 21). ). If the Company is unable to rationally estimate the obligation or concluded no loss is probable but it is reasonably possible that a loss may be incurred, no provision is recorded but disclosed in the notes to the consolidated financial statements.

· Volume determination for certain in-process and finished products is based on topographical measurements and technical studies that cover the different variables (density for bulk inventories and density and porosity for the remaining stock, among others), and related allowance.

· Estimates for obsolescence provisions to ensure that the carrying value of inventory is not in excess of the net realizable inventory valuation. (See Note 11).

Despite the fact that these estimates have been made on the basis of the best information available on the date of preparation of these consolidated financial statements, certain events may occur in the future and oblige their amendment (upwards or downwards) over the next few years, which would be made prospectively.

3.

35 

Notes to the Consolidated Interim Financial Statements
June 30, 2021   

Note 4    Financial risk management

4.1          Financial risk management policy

The Company’s financial risk management policy is focused on safeguarding the stability and sustainability of the Company and its subsidiaries with regard to all such relevant financial uncertainty components.

The Company’s operations are subject to certain financial risk factors that may affect its financial position or results. The most significant risk exposures are market risk, liquidity risk, currency risk, credit risk, and interest rate risk, among others.

There could also be additional risks, which are either unknown or known but not currently deemed to be significant, which could also affect the Company’s business operations, its business, financial position, or profit or loss.

The financial risk management structure includes identifying, determining, analyzing, quantifying, measuring and controlling these events. Management and in particular, Finance Management, is responsible for constantly assessing the financial risk.

4.2 Risk Factors

(a) Credit risk

A global economic contraction may have potentially negative effects on the financial assets of the Company, which are primarily made up of financial investments and trade receivables, and the impact on of our customers could extend the payment terms of the Company's receivables by increasing its exposure to credit risk. Although measures are taken to minimize the risk, this global economic situation could mean losses with adverse material effects on the business, financial position or profit and loss of the Company's operations.

Trade receivables: to mitigate credit risk, the Company maintains active control of collection and requires the use of credit insurance. Credit insurance covers the risk of insolvency and unpaid invoices corresponding to 80% of all receivables with third parties. The credit risk associated with receivables is analyzed in Note 13.2 b) and the related accounting policy can be found in Note 3.6.

The concentration of credit risk with respect to sales debtors is reduced, due to the large number of companies that comprise the Company's customer base and their distribution throughout the world.

No significant modifications have been made during the period to risk models or parameters used in comparison to December 31, 2020, and no modifications have been made to contractual cash flows that have been significant during this period.

Financial investments: correspond to time deposits whose maturity date is greater than 90 days and less than 360 days from the date of investment, so they are not exposed to excessive market risks. The counterparty risk in implementation of financial operations is assessed on an ongoing basis for all financial institutions in which the Company holds financial investments.

36 

      Notes to the Consolidated Interim Financial Statements  June 30, 2021  

  

The credit quality of financial assets that are not past due or impaired can be evaluated by reference to external credit ratings (if they are available) or historical information on counterparty late payment rates:

		Rating			As of June 30, 2021
Financial institution	Financial assets	Moody´s	S&P	Fitch	ThUS$
Banco crédito e inversiones	Time deposits	P-1	A-2	-	10,500
Banco de Chile	Time deposits	P-1	A-1	-	8,500
Banco Estado	Time deposits	P-1	A-1	-	4,122
Banco Itaú Corpbanca	Time deposits	P-1	A-2	-	51,029
Banco Santander - Santiago	Time deposits	P-1	A-2	-	9,003
Scotiabank Sud Americano	Time deposits	-	-	F1+	54,534
JP Morgan US dollar Liquidity Fund Institutional	Investment fund	Aaa-mf	AAAm	AAAmmf	273,767
Legg Mason - Western Asset Institutional cash reserves	Investment fund	-	AAAm	AAAmmf	256,635
Total					668,090

		Rating			As of June 30, 2021
Financial institution	Financial assets	Moody´s	S&P	Fitch	ThUS$
Banco Crédito e Inversiones	90 days to 1 year	P-1	A-2	-	114,935
Banco Itaú Corpbanca	90 days to 1 year	P-1	A-2	-	89,086
Banco Santander - Santiago	90 days to 1 year	P-1	A-2	-	208,463
Scotiabank Sud Americano	90 days to 1 year	-	-	F1+	150,028
Banco de chile	90 days to 1 year	P-1	A-1	-	140,367
Total					702,879

		Rating			As of December 31, 2020
Financial institution	Financial assets	Moody´s	S&P	Fitch	ThUS$
Banco de Crédito e Inversiones	Time deposits	P-1	A-1	-	9,002
Banco de Chile	Time deposits	P-1	A-1	-	10,503
Banco Estado	Time deposits	P-1	A-1	-	1,001
Banco Itau Corpbanca	Time deposits	P-2	A-2	-	7,299
Banco Santander – Santiago	Time deposits	P-1	A-1	-	16,702
Scotiabank Sud Americano	Time deposits	-	-	F1+	7,002
JP Morgan US dollar Liquidity Fund Institutional	Investment fund	Aaa-mf	AAAm	AAAmmf	102,753
Legg Mason - Western Asset Institutional cash reserves	Investment fund	-	AAAm	AAAmmf	107,625
Other banks with lower balances	Time deposits	-	-	-	86
Total					261,973

37 

      Notes to the Consolidated Interim Financial Statements  June 30, 2021  

  

		Rating			As of December 31, 2020
Financial institution	Financial assets	Moody´s	S&P	Fitch	ThUS$
Banco de Crédito e Inversiones	90 days to 1 year	P-1	A-1	-	185,589
Banco Itaú Corpbanca	90 days to 1 year	P-2	A-2	-	49,006
Banco Santander – Santiago	90 days to 1 year	P-1	A-1	-	45,168
Banco Scotiabank Sud Americano	90 days to 1 year	-	-	F1+	31,668
JP Morgan Asset Management	90 days to 1 year	P-1	A-1	N1+	34,028
Total					345,459

(b) Currency risk

The functional currency of the company is the US dollar, due to its influence on the determination of price levels, its relation to the cost of sales and considering that a significant part of the Company’s business is conducted in this currency. However, the global nature of the Company's business generates an exposure to exchange rate variations of several currencies with the US dollar. Therefore, the Company maintains hedge contracts to mitigate the exposure generated by its main mismatches (net between assets and liabilities) in currencies other than the US dollar against the exchange rate variation, updating these contracts periodically depending on the amount of mismatching to be covered in these currencies. Occasionally, subject to the approval of the Board, the Company ensures short-term cash flows from certain specific line items in currencies other than the US dollar.

A significant portion of the Company’s costs, especially salary payments, is associated with the Peso. Therefore, an increase or decrease in its exchange rate with the US dollar would affect the Company's profit or loss. By the second quarter of 2021, approximately US$ 252 million accumulated in expenses are associated with the Peso.

As of June 30, 2021, the Company held derivative instruments classified as hedges of foreign exchange risks associated with 100% of all of the bond liabilities denominated in UF, for a liability at fair value of US$ 3.44 million. As of December 31, 2020, an asset was recognized amounting to US$ 18.41 million.

Furthermore, on June 30, 2021, the Company held derivative instruments classified as hedges of foreign exchange risks associated with 56.85% of all nominative term deposits in UF and in pesos, at a fair value of US$ 0.97 million in assets. On December 31, 2020, a liability was recognized for an amount of US$ 21 million.

The Company had the following derivative contracts as of June 30, 2021 (at the absolute value of the sum of their notional values), to hedge the difference between its assets and liabilities: US$ 63.2 Euro/US dollar derivative contracts, US$ 14.79 million in South African rand/US dollar derivative contracts, US$ 67.7 million in Chinese renminbi/US dollar derivative contracts and US$ 13.19 million in other currencies.

The Company also had US$ 88.28 million in derivative contracts to hedge its Chilean peso term deposit investments.

38 

      Notes to the Consolidated Interim Financial Statements  June 30, 2021  

  

These derivative contracts are held with domestic and foreign banks, which have the following credit ratings.

		Rating
Financial institution	Financial assets	Moody´s	S&P	Fitch
Banco crédito e inversiones	Derivative	P-1	A-2	-
Merrill Lynch International	Derivative	A	A+	AA
Banco Itau-Corpbanca	Derivative	P-1	A-2	-
JP Morgan	Derivative	A	A-	AA-
Morgan Stanley	Derivative	A+	BBB+	A
The Bank of Nova Scotia	Derivative	A	A+	AA-

Interest rate risk

Interest rate fluctuations, primarily due to the uncertain future behavior of markets, may have a material impact on the financial results of the Company. Significant increases in the rate could make it difficult to access financing at attractive rates for the Company's investment projects.

The Company maintains current and non-current financial debt at fixed rates and LIBOR rate plus spread.

As of June 30, 2021, the Company has around 4% of its financial liabilities linked to variations in the LIBOR rate. 100% of these obligations are covered by derivative instruments classified as interest rate hedging; therefore, a significant rate increase would not impact our financial condition.

Liquidity risk

Liquidity risk relates to the funds needed to comply with payment obligations. The Company’s objective is to maintain financial flexibility through a comfortable balance between fund requirements and cash flows from regular business operations, bank borrowings, bonds, short term investments, and marketable securities, among others. For this purpose, the Company keeps a high liquidity ratio¹, which enables it to cover current obligations with clearance. (As of June 30, 2021, this was 6.25).

The Company has an important capital expense program which is subject to change over time.

On the other hand, world financial markets go through periods of contraction and expansion that are unforeseeable in the long-term and may affect The Company’s access to financial resources. Such factors may have a material adverse impact on the Company’s business, financial position and results of operations.

The Company constantly monitors the matching of its obligations with its investments, taking due care of maturities of both, from a conservative perspective, as part of this financial risk management strategy. As of June 30, 2021, the Company had unused, available revolving credit facilities with banks, for a total of US$ 493 million.

¹ All current assets divided by all current liabilities.

39 

      Notes to the Consolidated Interim Financial Statements  June 30, 2021  

The position in other cash and cash equivalents are invested in highly liquid mutual funds with an AAA risk rating.

	Nature of undiscounted cash flows
As of June 30, 2021 (figures expressed in millions of US dollars)	Carrying amount	Less than 1 year	1 to 5 years	Over 5 years	Total
Bank borrowings	70.08	0.91	70.93	-	71.84
Unsecured obligations (1)	1,863.55	87.86	852.88	1,757.59	2,698.33
Sub total	1,933.63	88.77	923.81	1,757.59	2,770.17
Hedging liabilities	24.94	5.80	18.94	17.77	42.51
Derivative financial instruments	0.13	0.13	-	-	0.13
Sub total	25.07	5.93	18.94	17.77	42.64
Current and non-current lease liabilities	39.22	8.99	28.61	5.68	43.28
Trade accounts payable and other accounts payable	227.29	227.29	-	-	227.29
Total	2,225.21	330.98	971.36	1,781.04	3,083.38

	Nature of undiscounted cash flows
As of December 31, 2020 (figures expressed in millions of US dollars)	Carrying amount		Less than 1 year	1 to 5 years	Over 5 years	Total
Bank borrowings		70.08	0.94	71.40	-	72.34
Unsecured obligations (1)		1,872.09	88.22	927.17	1,727.14	2,742.53
Sub total		1,942.17	89.16	998.57	1,727.14	2,814.87
Hedging liabilities		40.21	6.06	12.34	11.07	29.47
Derivative financial instruments		5.39	5.39	-	-	5.39
Sub total		45.60	11.45	12.34	11.07	34.86
Current and non-current lease liabilities		31.07	6.40	21.04	7.17	34.61
Trade accounts payable and other accounts payable		203.93	203.93	-	-	203.93
Total		2,222.77	310.94	1,031.95	1,745.38	3,088.27

4.3 Risk measurement

The Company has methods to measure the effectiveness and efficiency of financial risk hedging strategies, both prospectively and retrospectively. These methods are consistent with the risk management profile of the SQM Group. See Note 13.8

40 

      Notes to the Consolidated Interim Financial Statements  June 30, 2021  

Note 5 Separate information on the main office, parent entity and joint action agreements

5.1 Parent’s stand-alone assets and liabilities

Parent’s stand-alone assets and liabilities	As of June 30, 2021			As of December 31, 2020
	ThUS$			ThUS$
Assets		5,391,785			4,171,768
Liabilities		(2,189,843	)		(2,048,683	)
Equity		3,201,942			2,123,085

5.2            Parent entity

Pursuant to Article 99 of the Securities Market Law, the CMF may determine that a company does not have a controlling entity in accordance with the distribution and dispersion of its ownership. On November 30, 2018, the CMF issued the ordinary letter No. 32,131 whereby it determined that the Pampa Group do not exert decisive power over the management of the Company since it does not have a predominance in the ownership that allows it to make management decisions. Therefore, the CMF has determined not to consider Pampa Group the controlling entity of the Company and that the Company does not have a controlling entity given its current ownership structure.

41 

      Notes to the Consolidated Interim Financial Statements  June 30, 2021  

  

Note 6    Board of Directors, Senior Management and Key management personnel

6.1 Remuneration of the Board of Directors and Senior Management

(a)            Board of directors

SQM S.A. is managed by a Board of Directors which is composed of 8 regular directors, who are elected for a three-year period. The Board of Directors was elected during the ordinary shareholders’ meeting held on April 25, 2019, which included the election of 2 independent directors.

As of June 30, 2021, the Company included the following committees and committee members:

- Directors’ Committee: This committee is comprised by Georges de Bourguignon, Laurence Golborne Riveros y Alberto Salas Muñoz, and fulfills the functions established in Article 50 bis of Chilean Law on publicly-held corporations. This committee takes on the role of the audit committee in accordance with the US-based Sarbanes Oxley law.

- The Company’s Health, Safety and Environment Committee: This committee is comprised of Gonzalo Guerrero Yamamoto, Patricio Contesse Fica y Robert J. Zatta.

- Corporate Governance Committee: This committee is comprised of Hernán Büchi Buc, Patricio Contesse Fica y Francisco Ugarte Larrain.

During the periods covered by these financial statements, there are no pending receivable and payable balances between the Company, its directors or members of Senior Management, other than those related to remuneration, fee allowances and profit-sharing. In addition, there were no transactions conducted between the Company, its directors or members of Senior Management.

(b) Board of Directors’ Compensation

Directors’ compensation differs according to the period during the corresponding year. Thus, from April 22, 2020 to April 23, 2021 (Period 2020), Directors’ compensation was determined by the annual general shareholders' meeting held on April 22, 2020. While for the following period (Period 2021), Directors’ compensation was determined by the annual general shareholders' meeting held on April 23, 2021. For each of these periods, Directors’ compensation is detailed as follows:

Period 2020

(i) The payment of a fixed, gross and monthly amount of UF 800 in favor of the Chairman of the Board of Directors, of UF 700 in favor of the vice-president of the board of directors and of UF 600 in favor of the remaining six directors and regardless of the number of Board of Directors’ Meetings held or not held during the related month.

(ii) A variable gross amount payable in national currency to the Chairman and Vice President of the Company equivalent to 0.09% of the net liquid income earned by the Company in 2020;

(iii) A variable gross amount payable in local currency to each Company director, excluding the Chairman and Vice President of the Company, equivalent to 0.045% of the net liquid income earned by the Company in 2020.

Period 2021:

(i) The payment of a fixed, gross and monthly amount of UF 800 in favor of the Chairman of the Board of Directors, of UF 700 in favor of the vice-president of the board of directors and of UF 600 in favor of the remaining six directors and regardless of the number of Board of Directors’ Meetings held or not held during the related month.

(ii) A variable gross amount payable in national currency to the Chairman and Vice President of the Company equivalent to 0.12% of the net liquid income that the Company effectively obtains during the 2021;

(iii) A variable gross amount payable in local currency to each Company director, excluding the Chairman and Vice President of the Company, equivalent to 0.06% of the net liquid income that the Company effectively obtains during the 2021.

42 

      Notes to the Consolidated Interim Financial Statements  June 30, 2021  

  

These fixed and variable amounts for both periods shall not be challenged and those expressed in percentage terms shall be paid immediately after the respective annual general shareholders meeting approves the financial statements, the annual report, the account inspectors report and the external auditors report for the respective year. All amounts expressed in UF shall be paid in Chilean pesos at its value on the last day of the respective calendar month, as determined by the CMF (formerly Superintendence of Banks and Financial Institutions) the Chilean Central Bank or any other relevant institution that replaces them.

Accordingly, the compensation and profit sharing paid to members of the Directors' Committee and the directors as of June 30, 2021 amounted to ThUS$ 1,682 and as of June 30, 2020 to ThUS$ 1,358.

(c)            Directors’ Committee compensation

Directors' Committee compensation differs according to the period during the corresponding year. Thus, for the Period 2020, Directors’ Committee compensation was determined by the annual general shareholders' meeting held on April 22, 2020. While for the Period 2021, Directors’ Committee compensation was determined by the annual general shareholders' meeting held on April 23, 2021. For each of these periods the compensation of the Directors Committee comprises:

Period 2020

(i) The payment of a fixed, gross and monthly amount of UF 200 in favor of each of the 3 directors who were members of the Directors’ Committee, regardless of the number of meetings of the Directors’ Committee that have or have not been held during the month concerned.

(ii) The payment in domestic currency and in favor of each of the 3 directors of a variable and gross amount equivalent to 0.015% of total net profit that the Company effectively obtains during the 2020 fiscal year.

Period 2021

(i) The payment of a fixed, gross and monthly amount of UF 200 in favor of each of the 3 directors who were members of the Directors’ Committee, regardless of the number of meetings of the Directors’ Committee that have or have not been held during the month concerned.

(ii) The payment in domestic currency and in favor of each of the 3 directors of a variable and gross amount equivalent to 0.02% of total net profit that the Company effectively obtains during the 2021 fiscal year.

These fixed and variable amounts for both periods shall not be challenged and those expressed in percentage terms shall be paid immediately after the respective annual general shareholders meeting approves the financial statements, the annual report, the account inspectors report and the external auditors report for the respective year. All amounts expressed in UF shall be paid in Chilean pesos at its value on the last day of the respective calendar month, as determined by the CMF (formerly Superintendence of Banks and Financial Institutions) the Chilean Central Bank or any other relevant institution that replaces them.

(d) Health, Safety and Environmental Matters Committee:

The remuneration of this committee for the 2020 period was composed of the payment of a fixed, gross, monthly amount of UF 100 for each of the 3 directors on the committee regardless of the number of meetings it has held. For the 2021 period, this remuneration remains unchanged.

(e) Corporate Governance Committee

The remuneration for this committee for the 2020 period was composed of the payment of a fixed, gross, monthly amount of UF 100 for each of the 3 directors on the committees regardless of the number of meetings it has held. For the 2021 period, this remuneration remains unchanged.

(f) Guarantees constituted in favor of the directors

No guarantees have been constituted in favor of the directors.

43 

      Notes to the Consolidated Interim Financial Statements  June 30, 2021  

  

(g) Senior management compensation:

(i) This includes monthly fixed salary and variable performance bonuses. (See Note 6.2)

(ii) The Company has an annual bonus plan based on goal achievement and individual contribution to the Company’s results. These incentives are structured as a minimum and maximum number of gross monthly salaries and are paid once a year.

(iii) In addition, there are retention bonuses for its executives (see Note 18.6)

(h) Guarantees pledged in favor of the Company’s management

No guarantees have been pledged in favor of the Company’s management.

(i)            Pensions, life insurance, paid leave, shares in earnings, incentives, disability loans, other than those mentioned in the above points.

The Company’s Management and Directors do not receive or have not received any benefit during the ended June 30, 2021 and the year ended December 31, 2020 or compensation for the concept of pensions, life insurance, paid time off, profit sharing, incentives, or benefits due to disability other than those mentioned in the preceding points.

6.2 Key management personnel compensation

As of June 30, 2021 and 2020, the number of the key management personnel is 125 and 128, respectively.

Key management personnel compensation	For the year ended June 30, 2021		For the year ended June 30, 2020
	ThUS$		ThUS$
Key management personnel compensation		16,966		12,034

Please also see the description of the compensation plan for executives in Note 18.6.

44 

      Notes to the Consolidated Interim Financial Statements  June 30, 2021  

  

Note 7    Background on companies included in consolidation and non-controlling interests

7.1 Background on companies included in consolidation

The following tables detail general information as of June 30, 2021 on the companies in which the group exercises control and significant influence:

					Ownership Interest
Subsidiaries	TAX ID No.	Address	Country of Incorporation	Functional Currency	Direct	Indirect	Total
SQM Nitratos S.A.	96.592.190-7	El Trovador 4285, Las Condes	Chile	Dollar	99.9999	0.0001	100.0000
SQM Potasio S.A.	96.651.060-9	El Trovador 4285, Las Condes	Chile	Dollar	99.9999	-	100.0000
Serv. Integrales de Tránsito y Transf. S.A.	79.770.780-5	Arturo Prat 1060, Tocopilla	Chile	Dollar	0.0003	99.9997	100.0000
Isapre Norte Grande Ltda.	79.906.120-1	Anibal Pinto 3228, Antofagasta	Chile	Peso	1.0000	99.0000	100.0000
Ajay SQM Chile S.A.	96.592.180-K	Av. Pdte. Eduardo Frei 4900, Santiago	Chile	Dollar	51.0000	-	51.0000
Almacenes y Depósitos Ltda.	79.876.080-7	El Trovador 4285, Las Condes	Chile	Peso	1.0000	99.0000	100.0000
SQM Salar S.A.	79.626.800-K	El Trovador 4285, Las Condes	Chile	Dollar	18.1800	81.8200	100.0000
SQM Industrial S.A.	79.947.100-0	El Trovador 4285, Las Condes	Chile	Dollar	99.0470	0.9530	100.0000
Exploraciones Mineras S.A.	76.425.380-9	El Trovador 4285, Las Condes	Chile	Dollar	0.2691	99.7309	100.0000
Sociedad Prestadora de Servicios de Salud Cruz del Norte S.A.	76.534.490-5	Anibal Pinto 3228, Antofagasta	Chile	Peso	-	100.0000	100.0000
Soquimich Comercial S.A.	79.768.170-9	El Trovador 4285, Las Condes	Chile	Dollar	-	60.6383	60.6383
Comercial Agrorama Ltda. (1)	76.064.419-6	El Trovador 4285, Las Condes	Chile	Peso	-	70.0000	70.0000
Comercial Hydro S.A.	96.801.610-5	El Trovador 4285, Las Condes	Chile	Dollar	-	100.0000	100.0000
Agrorama S.A.	76.145.229-0	El Trovador 4285, Las Condes	Chile	Peso	-	100.0000	100.0000
Orcoma Estudios SPA	76.359.919-1	Apoquindo 3721 OF 131, Las Condes	Chile	Dollar	100.0000	-	100.0000
Orcoma SPA	76.360.575-2	Apoquindo 3721 OF 131, Las Condes	Chile	Dollar	100.0000	-	100.0000
SQM MaG SpA	76.686.311-9	Los Militares 4290, Las Condes	Chile	Dollar	-	100.000	100.0000
Sociedad Contractual Minera Búfalo	77.114.779-8	Los Militares 4290, Las Condes	Chile	Dollar	99.9000	0.1000	100.0000
SQM North America Corp.	foreign	2727 Paces Ferry Road, Building Two, Suite 1425, Atlanta, GA	USA	Dollar	40.0000	60.0000	100.0000
RS Agro Chemical Trading Corporation A.V.V.	foreign	Caya Ernesto O. Petronia 17, Orangestad	Aruba	Dollar	98.3333	1.6667	100.0000
Nitratos Naturais do Chile Ltda.	foreign	Al. Tocantis 75, 6° Andar, Conunto 608 Edif. West Gate, Alphaville Barureri, CEP 06455-020, Sao Paulo	Brazil	Dollar	-	100.0000	100.0000
Nitrate Corporation of Chile Ltd.	foreign	1 More London Place London SE1 2AF	United Kingdom	Dollar	-	100.0000	100.0000
SQM Corporation N.V.	foreign	Pietermaai 123, P.O. Box 897, Willemstad, Curacao	Curacao	Dollar	0.0002	99.9998	100.0000

(1) SQM controls Soquimich Comercial, which in turn controls Comercial Agrorama Ltda, SQM has management control over Comercial Agrorama Ltda.

45 

      Notes to the Consolidated Interim Financial Statements  June 30, 2021  

					Ownership Interest
Subsidiaries	TAX ID No.	Address	Country of Incorporation	Functional Currency	Direct	Indirect	Total
SQM Perú S.A.	foreign	Avenida Camino Real N° 348 of. 702, San Isidro, Lima	Peru	Dollar	0.0091	99.9909	100.0000
SQM Ecuador S.A.	foreign	Av. José Orrantia y Av. Juan Tanca Marengo Edificio Executive Center Piso 2 Oficina 211	Ecuador	Dollar	0.00401	99.9960	100.0000
SQM Brasil Ltda.	foreign	Al. Tocantis 75, 6° Andar, Conunto 608 Edif. West Gate, Alphaville Barureri, CEP 06455-020, Sao Paulo	Brazil	Dollar	0.7100	99.2900	100.0000
SQMC Holding Corporation.	foreign	2727 Paces Ferry Road, Building Two, Suite 1425, Atlanta	USA	Dollar	0.1000	99.9000	100.0000
SQM Japan Co. Ltd.	foreign	From 1st Bldg 207, 5-3-10 Minami- Aoyama, Minato-ku, Tokio	Japan	Dollar	0.1597	99.8403	100.0000
SQM Europe N.V.	foreign	Houtdok-Noordkaai 25a B-2030 Amberes	Belgium	Dollar	0.5800	99.4200	100.0000
SQM Indonesia S.A.	foreign	Perumahan Bumi Dirgantara Permai, Jl Suryadarma Blok Aw No 15 Rt 01/09 17436 Jatisari Pondok Gede	Indonesia	Dollar	-	80.0000	80.0000
North American Trading Company	foreign	2727 Paces Ferry Road, Building Two, Suite 1425, Atlanta, GA	USA	Dollar	-	100.0000	100.0000
SQM Virginia LLC	foreign	2727 Paces Ferry Road, Building Two, Suite 1425, Atlanta, GA	USA	Dollar	-	100.0000	100.0000
SQM Comercial de México S.A. de C.V.	foreign	Av. Moctezuma 144-4 Ciudad del Sol CP 45050, Zapopan, Jalisco México	Mexico	Dollar	0.0100	99.9900	100.0000
SQM Investment Corporation N.V.	foreign	Pietermaai 123, P.O. Box 897, Willemstad, Curacao	Curacao	Dollar	1.0000	99.0000	100.0000
Royal Seed Trading Corporation A.V.V.	foreign	Caya Ernesto O. Petronia 17, Orangestad	Aruba	Dollar	1.6700	98.3300	100.0000
SQM Lithium Specialties Limited Partnership	foreign	2727 Paces Ferry Road, Building Two, Suite 1425, Atlanta, GA	USA	Dollar	-	100.0000	100.0000
Comercial Caimán Internacional S.A.	foreign	Edificio Plaza Bancomer	Panama	Dollar	-	100.0000	100.0000
SQM France S.A.	foreign	ZAC des Pommiers 27930, FAUVILLE	France	Dollar	-	100.0000	100.0000
Administración y Servicios Santiago S.A. de C.V.	foreign	Av. Moctezuma 144-4 Ciudad del Sol CP 45050, Zapopan, Jalisco México	Mexico	Dollar	-	100.0000	100.0000
SQM Nitratos México S.A. de C.V.	foreign	Av. Moctezuma 144-4 Ciudad del Sol CP 45050, Zapopan, Jalisco México	Mexico	Dollar	-	100.0000	100.0000
Soquimich European Holding B.V.	foreign	Loacalellikade 1 Parnassustoren 1076 AZ Amsterdan	Holland	Dollar	-	100.0000	100.0000
SQM Iberian S.A.	foreign	Provenza 251 Principal 1a CP 08008, Barcelona	Spain	Dollar	-	100.0000	100.0000
SQM Africa Pty Ltd.	foreign	Tramore House, 3 Wterford Office Park, Waterford Drive, 2191 Fourways, Johannesburg	South Africa	Dollar	-	100.0000	100.0000
SQM Oceanía Pty Ltd.	foreign	Level 9, 50 Park Street, Sydney NSW 2000, Sydney	Australia	Dollar	-	100.0000	100.0000
SQM Beijing Commercial Co. Ltd.	foreign	Room 1001C, CBD International Mansion N 16 Yong An Dong Li, Jian Wai Ave Beijing 100022, P.R.	China	Dollar	-	100.0000	100.0000
SQM Thailand Limited	foreign	Unit 2962, Level 29, N° 388, Exchange Tower Sukhumvit Road, Klongtoey Bangkok	Thailand	Dollar	-	99.9960	99.9960
SQM Colombia SAS	foreign	Cra 7 No 32 – 33 piso 29 Pbx: (571) 3384904 Fax: (571) 3384905 Bogotá D.C. – Colombia.	Colombia	Dollar	-	100.0000	100.0000
SQM Australia PTY	foreign	Level 16, 201 Elizabeth Street Sydney	Australia	Dollar	-	100.0000	100.0000
SQM International N.V.	foreign	Houtdok-Noordkaai 25a B-2030 Amberes	Belgium	Dollar	0.5800	99.4200	100.0000
SQM (Shanghai) Chemicals Co. Ltd.	foreign	Room 4703-33, 47F, No.300 Middle Huaihai Road, Huangpu district, Shanghai	China	Dollar	-	100.0000	100.0000
SQM Korea LLC	foreign	Suite 22, Kyobo Building, 15th Floor, 1 Jongno Jongno-gu, Seoul, 03154 South Korea	Korea	Dollar	-	100.0000	100.0000
SQM Holland B.V.	Extranjero	Herikerbergweg 238, 1101 CM Amsterdam Zuidoost	Holland	Dollar	-	100.0000	100.0000

46 

Notes to the Consolidated Interim Financial Statements June 30, 2021  

7.2 Assets, liabilities, results of consolidated subsidiaries as of June 30, 2021 and for the period then ended.

	Assets				Liabilities									Comprehensive
	Currents		Non-currents		Currents		Non-currents		Revenue		Net profit (loss)			income (loss)
Subsidiaries	ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$			ThUS$
SQM Nitratos S.A.		575,590		57,752		473,867		6,363		79,317		21,366			21,502
SQM Potasio S.A.		29,360		1,188,545		198,538		22,497		1,198		50,004			50,592
Serv. Integrales de Tránsito y Transf. S.A.		70,203		35,392		87,842		7,052		13,848		1,545			1,602
Isapre Norte Grande Ltda.		761		785		650		180		2,070		52			51
Ajay SQM Chile S.A.		21,118		1,683		4,628		753		24,508		707			707
Almacenes y Depósitos Ltda.		250		54		-		-		-		(9	)		(36	)
SQM Salar S.A.		966,059		1,088,362		928,821		231,702		347,226		45,783			46,443
SQM Industrial S.A.		1,080,852		700,417		717,479		113,974		381,928		66,176			67,695
Exploraciones Mineras S.A.		14,423		21,925		6,701		-		367		(209	)		(209	)
Sociedad Prestadora de Servicios de Salud Cruz del Norte S.A.		256		525		390		254		1,848		(6	)		(8	)
Soquimich Comercial S.A.		171,320		13,511		96,073		12,011		53,235		6,289			6,370
Comercial Agrorama Ltda.		625		925		3,951		20		644		101			104
Comercial Hydro S.A.		4,835		11		9		3		14		4			4
Agrorama S.A.		71		-		5,465		2		89		53			60
Orcoma SpA		16		2,366		60		-		-		(11	)		(11	)
Orcoma Estudio SpA		27		5,283		1,162		-		-		(5	)		(5	)
SQM MaG SPA		1,948		494		1,556		4		1,619		5			6
Sociedad Contractual Minera Búfalo		82		577		648		-		-		(12	)		(12	)
SQM North America Corp.		132,376		20,748		112,243		1,499		150,635		2,655			3,058
RS Agro Chemical Trading Corporation A.V.V.		5,155		-		103		-		-		(15	)		(15	)
Nitratos Naturais do Chile Ltda.		2		129		3,149		-		-		(34	)		(34	)
Nitrate Corporation of Chile Ltd.		5,076		-		-		-		-		-			-
SQM Corporation N.V.		7,696		58,550		3,615		-		-		2,300			2,309
SQM Perú S.A.		27		-		84		-		-		1			1
SQM Ecuador S.A.		25,362		873		19,265		59		20,607		2,591			2,591
SQM Brasil Ltda.		153		1		517		2,137		-		(100	)		(100	)
Subtotal		3,113,643		3,198,908		2,666,816		398,510		1,079,153		199,231			202,665

47 

Notes to the Consolidated Interim Financial Statements June 30, 2021  

	Assets				Liabilities									Comprehensive
	Currents		Non-currents		Currents		Non-currents		Revenue		Net profit (loss)			income (loss) Currents
Subsidiaries	ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$			ThUS$
SQMC Holding Corporation L.L.P.		31,390		17,687		2,173		-		-		1,399			1,399
SQM Japan Co. Ltd.		27,246		227		24,004		238		33,071		48			48
SQM Europe N.V.		410,138		6,536		339,447		2,244		420,641		17,123			17,123
SQM Indonesia S.A.		3		-		1		-		-		-			-
North American Trading Company		156		145		-		-		-		-			-
SQM Virginia LLC		14,798		14,340		14,798		-		-		-			-
SQM Comercial de México S.A. de C.V.		98,203		7,255		63,947		1,757		115,141		3,070			3,070
SQM Investment Corporation N.V.		13,964		147,795		5,550		865		-		15,019			15,046
Royal Seed Trading Corporation A.V.V.		49		-		18,904		-		-		(25	)		(25	)
SQM Lithium Specialties LLP		15,746		3		1,264		-		-		-			-
Comercial Caimán Internacional S.A.		257		-		1,122		-		-		(1	)		(1	)
SQM France S.A.		345		6		114		-		-		-			-
Administración y Servicios Santiago S.A. de C.V.		322		90		486		189		1,358		8			8
SQM Nitratos México S.A. de C.V.		160		18		84		20		609		17			17
Soquimich European Holding B.V.		5,880		191,987		316		-		-		20,244			20,280
SQM Iberian S.A.		47,158		2,337		22,351		4		67,699		3,418			3,418
SQM Africa Pty Ltd.		39,817		1,510		30,494		-		26,553		(19	)		(19	)
SQM Oceania Pty Ltd.		4,939		-		2,868		-		1,790		(376	)		(376	)
SQM Beijing Commercial Co. Ltd.		2,053		8		18		-		5,343		(132	)		(132	)
SQM Thailand Limited		3,242		-		2		-		-		(215	)		(215	)
SQM Colombia SAS		8,092		162		7,751		-		7,527		359			359
SQM International NV		31,720		767		10,108		11,767		41,025		(908	)		(908	)
SQM Shanghai Chemicals Co. Ltd.		139,631		219		115,329		-		122,218		19,305			19,305
SQM Australia Pty Ltd.		39,282		158,476		13,414		62		-		(2,149	)		(2,149	)
SQM Korea LLC		1,299		164		869		-		503		(73	)		(73	)
SQM Holland B.V.		8,337		15,783		4,443		17		10,360		109			109
Subtotal		944,227		565,515		679,857		17,163		853,838		76,221			76,284
Total		4,057,870		3,764,423		3,346,673		415,673		1,932,991		275,452			278,949

48 

Notes to the Consolidated Interim Financial Statements June 30, 2021  

Assets, liabilities, results of consolidated subsidiaries as of December 31, 2020 and for the period ended June 30, 2020.

	Assets				Liabilities									Comprehensive
	Current		Non-current		Current		Non-current		Revenue		Net profit (loss)			income (loss)
Subsidiary	ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$			ThUS$
SQM Nitratos S.A.		475,132		63,848		395,914		5,047		93,568		32,282			32,254
SQM Potasio S.A.		16,680		1,108,579		155,379		23,323		1,356		26,095			26,064
Serv. Integrales de Tránsito y Transf. S.A.		55,142		36,291		75,848		6,485		17,683		3,664			3,671
Isapre Norte Grande Ltda.		812		839		795		181		1,476		48			30
Ajay SQM Chile S.A.		25,441		1,549		9,563		713		18,685		730			730
Almacenes y Depósitos Ltda.		256		51		-		-		-		(1	)		(93	)
SQM Salar S.A.		855,683		1,035,088		814,686		214,914		283,692		31,602			31,561
SQM Industrial S.A.		950,058		679,345		634,105		113,230		433,304		65,972			66,174
Exploraciones Mineras S.A.		16,572		22,293		9,010		-		-		(114	)		(114	)
Sociedad Prestadora de Servicios de Salud Cruz del Norte S.A.		279		571		305		396		1,064		35			22
Soquimich Comercial S.A.		136,623		13,796		56,293		12,630		35,367		1,296			1,332
Comercial Agrorama Ltda.		683		970		4,215		23		607		-			(2	)
Comercial Hydro S.A.		4,834		15		14		4		14		12			12
Agrorama S.A.		55		-		5,631		10		152		149			149
Orcoma SpA		3		2,365		35		-		-		(5	)		(5	)
Orcoma Estudio SpA		4		4,559		411		-		-		(322	)		(322	)
SQM MaG SPA		1,491		521		1,129		6		959		55			55
Sociedad Contractual Minera Búfalo		50		323		350		-		-		2			2
SQM North America Corp.		124,679		21,085		107,801		1,638		123,630		(37	)		(37	)
RS Agro Chemical Trading Corporation A.V.V.		5,155		-		88		-		-		(12	)		(12	)
Nitratos Naturais do Chile Ltda.		-		128		3,109		-		-		230			230
Nitrate Corporation of Chile Ltd.		5,076		-		-		-		-		-			-
SQM Corporation N.V.		7,696		56,356		3,607		-		-		3,678			3,678
SQM Perú S.A.		25		-		83		-		-		-			-
SQM Ecuador S.A.		26,490		918		23,074		59		16,833		(527	)		(527	)
SQM Brasil Ltda.		217		1		508		2,111		-		111			111
Subtotal		2,709,136		3,049,491		2,301,953		380,770		1,028,390		164,943			164,963

49 

Notes to the Consolidated Interim Financial Statements June 30, 2021  

	Assets				Liabilities									Comprehensive
	Currents		Non-currents		Currents		Non-currents		Revenue		Net profit (loss)			income (loss) Currents
Subsidiaries	ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$			ThUS$
SQMC Holding Corporation L.L.P.		30,777		16,414		1,687		-		-		1,212			1,212
SQM Japan Co. Ltd.		25,122		243		21,926		255		38,876		268			268
SQM Europe N.V.		456,357		3,844		399,930		2,411		331,012		(4,453	)		(4,453	)
SQM Indonesia S.A.		3		-		1		-		-		-			-
North American Trading Company		156		145		-		-		-		38			38
SQM Virginia LLC		14,798		14,340		14,798		-		-		(3	)		(3	)
SQM Comercial de México S.A. de C.V.		107,803		7,574		76,721		1,972		107,292		2,084			2,084
SQM Investment Corporation N.V.		13,965		132,994		5,434		864		-		438			438
Royal Seed Trading Corporation A.V.V.		21		-		18,851		-		-		(21	)		(21	)
SQM Lithium Specialties LLP		15,746		3		1,264		-		-		(3	)		(3	)
Comercial Caimán Internacional S.A.		258		-		1,122		-		-		-			-
SQM France S.A.		345		6		114		-		-		-			-
Administración y Servicios Santiago S.A. de C.V.		221		47		350		188		1,322		63			63
SQM Nitratos México S.A. de C.V.		141		13		77		20		487		(5	)		(5	)
Soquimich European Holding B.V.		5,046		172,956		245		-		-		3,843			3,843
SQM Iberian S.A.		41,485		2,359		20,118		4		53,708		1,087			1,087
SQM Africa Pty Ltd.		47,069		1,420		37,636		-		23,232		1,488			1,488
SQM Oceania Pty Ltd.		3,951		-		1,516		-		1,690		106			106
SQM Beijing Commercial Co. Ltd.		12,086		30		9,942		-		10,258		49			49
SQM Thailand Limited		3,539		-		83		-		1,669		212			212
SQM Colombia SAS		11,621		176		11,653		-		5,785		(38	)		(38	)
SQM International		31,998		923		17,374		4,027		61,571		559			559
SQM Shanghai Chemicals Co. Ltd.		84,318		379		79,482		-		17,508		(1,147	)		(1,147	)
SQM Australia Pty Ltd.		21,749		130,152		4,306		158		-		(546	)		(546	)
SQM Korea LLC		587		122		42		-		-		-			-
SQM Holland B.V.		3,767		16,248		460		4		-		(26	)		(26	)
Subtotal		932,929		500,388		725,132		9,903		654,410		5,205			5,205
Total		3,642,065		3,549,879		3,027,085		390,673		1,682,800		170,148			170,168

50 

Notes to the Consolidated Interim Financial Statements June 30, 2021  

7.3 Background on non-controlling interests

	% of interests in the ownership			Profit (loss) attributable to non-controlling interests for the period ended				Equity, non-controlling interests for the period ended						Dividends paid to non-controlling interests for the period ended
Subsidiary	held by non- controlling interests			As of June 30, 2021		As of June 30, 2020		As of June 30, 2021			As of June 30, 2020			As of June 30, 2021		As of June 30, 2020
				ThUS$		ThUS$		ThUS$			ThUS$			ThUS$		ThUS$
SQM Potasio S.A.		0.0000001	%		-		-		-			-			-		-
Ajay SQM Chile S.A.		49.00000	%		347		357		8,536			8,598			-		277
Soquimich Comercial S.A.		39.36168	%		2,475		510		30,209			36,405			4,443		2,478
Comercial Agrorama Ltda.		30.00000	%		30		1		(726	)		(632	)		-		-
SQM Indonesia S.A.		20.00000	%		-		-		1			1			-		-
Agrorama S.A.		0.00000	%		-		-		-			-			-		-
SQM Thailand Limited		0,00400	%		-		-		-			-			-		-
Total					2,852		868		38,020			44,372			4,443		2,755

51 

Notes to the Consolidated Interim Financial Statements
June 30, 2021  

Note 8  Equity-accounted investees

8.1  Investments in associates recognized according to the equity method of accounting

As of June 30, 2021, and December 31, 2020, in accordance with criteria established in Note 2:

Associates	Equity-accounted investees				Share in profit (loss) of associates accounted for using the equity method for the period ended					Share in other comprehensive income of associates accounted for using the equity method for the period ended						Share in comprehensive income of associates accounted for using the equity method for the period ended
	As of June 30, 2021 (***)		As of December 31, 2020 (***)		As of June 30, 2021		As of June 30, 2020			As of June 30, 2021			As of June 30, 2020			As of June 30, 2021		As of June 30, 2020
	ThUS$		ThUS$		ThUS$		ThUS$			ThUS$			ThUS$			ThUS$		ThUS$
Abu Dhabi Fertilizer Industries WWL		8,705		11,505		-		(156	)		-			-			-		(156	)
Doktor Tarsa Tarim Sanayi AS (*)		-		-		-		4,031			-			(254	)		-		3,777
Ajay North America		15,868		14,468		1,683		1,430			-			-			1,683		1,430
Ajay Europe SARL		7,252		7,875		797		731			(343	)		18			454		749
SQM Eastmed Turkey (*)		-		-		-		247			-			(79	)		-		168
Kore Potash PLC (**)		-		26,175		-		218			-			(129	)		-		89
Total		31,825		60,023		2,480		6,501			(343	)		(444	)		2,137		6,057

(*) These investments were disposed of in 2020 as informed in the annual financial statements.

(**) For more details, See Note 8.3 (a).

52 

Notes to the Consolidated Interim Financial Statements
June 30, 2021  

	Description of the nature of the		Country of	Share of ownership			Dividends received for the period ending
Associate	relationship	Address	incorporation	in associates			As of June 30, 2021		As of June 30, 2020
							ThUS$		ThUS$
Abu Dhabi Fertilizer Industries WWL	Distribution and commercialization of specialty plant nutrients in the Middle East.	PO Box 71871, Abu Dhabi	United Arab Emirates		37	%		-		-
Ajay North America	Production and distribution of iodine and iodine derivatives.	1400 Industry RD Power Springs GA 30129	United States		49	%		411		890
Ajay Europe SARL	Production and distribution of iodine and iodine derivatives.	Z.I. du Grand Verger BP 227 53602 Evron Cedex	France		50	%		992		1,197
Kore Potash PLC	Prospecting, exploration and mining development.	L 3 88 William ST Perth, was 6000	United Kingdom		14.65	%		-		-
Doktor Tarsa Tarim Sanayi AS	Distribution and commercialization of specialty plant nutrients in the Turkey.	Organize Sanayi Bolgesi, Ikinci Kisim, 22 cadde TR07100 Antalya	Turkey		50	%		-		-
SQM Eastmed Turkey	Production and trading of specialty products.	Organize Sanayi Bolgesi, Ikinci Kisim, 22 cadde TR07100 Antalya	Turkey		50	%		-		-
Total								1,403		2,087

53 

Notes to the Consolidated Interim Financial Statements
June 30, 2021  

8.2  Assets, liabilities, revenue and expenses of associates

	As of June 30, 2021								For the period ended as of June 30, 2021
Associate	Assets				Liabilities									Other comprehensive			Comprehensive
	Current		Non-current		Current		Non-current		Revenue		Net gain (loss)			income			income
	ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$			ThUS$			ThUS$
Abu Dhabi Fertilizer Industries WWL		26,356		5,072		7,806		96		-		(7,568	)		-			(7,568	)
Ajay North America		23,565		15,368		6,549		-		26,396		3,435			-			3,435
Ajay Europe SARL		26,636		1,395		13,527		-		28,187		1,595			(343	)		1,252
Total		76,557		21,835		27,882		96		54,583		(2,538	)		(343	)		(2,881	)

	As of December 31, 2020								For the period ended as of June 30, 2020
Associate	Assets				Liabilities									Other comprehensive			Comprehensive
	Current		Non-current		Current		Non-current		Revenue		Net gain (loss)			income			income
	ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$			ThUS$			ThUS$
Abu Dhabi Fertilizer Industries WWL		29,313		8,586		6,706		101		6,641		(420	)		-			(420	)
Doktor Tarsa Tarim Sanayi AS		-		-		-		-		56,385		8,063			(508	)		7,555
Ajay North America		18,513		15,749		4,737		-		23,920		2,917			-			2,917
Ajay Europe SARL		22,032		1,493		7,773		-		23,507		1,462			37			1,499
SQM Eastmed Turkey		-		-		-		-		1,546		495			(158	)		337
Kore Potash PLC		5,691		124,112		786		-		-		-			(676	)		(676	)
Total		75,549		149,940		20,002		101		111,999		12,517			(1,305	)		11,212

54 

Notes to the Consolidated Interim Financial Statements
June 30, 2021  

8.3  Other information

(a)  Transactions for the period ended June 30, 2021:

· During the first quarter 2021, Kore Potash PLC made a share payment to its non-executive board members (remuneration shares) plus certain employees and former employees (performance shares) which resulted in a 0.05% share reduction for the company, leaving it with 20.15%.During the second quarter of 2021, Kore Potash PLC approved a capital stock increase of ThUS$ 13,931 through the issuance of common shares, which resulted in a dilution of 5.5% of SQM shares in the company, with an impact of ThUS$ (5,778) on other losses. As a result of the dilution, the Company considers that there has been a loss of significant influence on the investment, discontinued the measurement through the equity method, and recognized an amount of ThUS$ 3,739 in other losses related to items in other comprehensive income associated with this investment. See Note 13.1 for more details.

· On June 30, 2021, the Company made an assessment of the recovery of the investment in Abu Dhabi Fertilizer Industries WWL and recognized an impairment of ThUS$ 2,800 in other losses.

(b)  Transactions for the period ended June 30, 2020:

· Kore Potash PLC made a share payment to its non-executive board members, which resulted in a 0.60% share reduction for the company, finalizing with a share percentage of 19.07% at the close of the second quarter of 2020.

· During the second quarter of 2020, Soquimich European Holding made a prepayment of ThUS$ 562 in favor of the agreement to purchase the plant that processes the WNSPK product. This is presented in Non-Current Other Financial Assets.

55 

Notes to the Consolidated Interim Financial Statements
June 30, 2021  

Note 9  Joint Ventures

9.1 Investment in joint ventures accounted for under the equity method of accounting.

	Equity-accounted investees				Share in profit (loss) of joint ventures accounted for using the equity method, for the period ended					Share on other comprehensive income of joint ventures accounted for using the equity method, for the period ended						Share on  comprehensive income of joint ventures accounted for using the equity method for the period ended
Joint Venture	As of June 30, 2021 (****)		As of December 31, 2020 (****)		As of June 30, 2021		As of June 30, 2020			As of June 30, 2021			As of June 30, 2020			As of June 30, 2021		As of June 30, 2020
	ThUS$		ThUS$		ThUS$		ThUS$			ThUS$			ThUS$			ThUS$		ThUS$
SQM Vitas Fzco.		14,754		9,720		2,743		8			233			(1,689	)		2,976		(1,681	)
SQM Qingdao Star Corp Nutrition Co. Ltd. (*)		-		-		-		82			-			-			-		82
Pavoni & C. Spa		7,301		7,222		338		194			(142	)		7			196		201
Covalent Lithium Pty Ltd. (**)		-		-		-		216			17			39			17		255
Sichuan SQM Migao Chemical Fertilizers Co Ltd. (***)		-		9,028		-		(608	)		-			-			-		(608	)
Total		22,055		25,970		3,081		(108	)		108			(1,643	)		3,189		(1,751	)

(*)These investments were disposed of in 2020 as informed in the annual financial statements. .

(**) See more details in Note 9.4 (a).

56 

Notes to the Consolidated Interim Financial Statements
June 30, 2021  

The amounts described in the following box represent numbers used in the consolidation of the company:

	Equity-accounted investees				Share in profit (loss) of associates and joint ventures accounted for using the equity method, for the period ended					Share on other comprehensive income of associates and joint ventures accounted for using the equity method, for the period ended					Share on total other comprehensive income of associates and joint ventures accounted for using the equity method for the period ended
Associates	As of June 30, 2021		As of December 31, 2020		As of June 30, 2021		As of June 30, 2020			As of June 30, 2021		As of June 30, 2020			As of June 30, 2021		As of June 30, 2020
	ThUS$		ThUS$		ThUS$		ThUS$			ThUS$		ThUS$			ThUS$		ThUS$
SQM Vitas Brasil Agroindustria (1)		7,087		3,511		2,562		(392	)		233		(1,689	)		2,795		(2,081	)
SQM Vitas Perú S.A.C. (1)		3,047		1,659		179		134			-		-			179		134
Total		10,134		5,170		2,741		(258	)		233		(1,689	)		2,974		(1,947	)

The following companies are subsidiaries of:

(1) SQM Vitas Fzco.

							Dividends received for the period ending
							As of June 30, 2021		As of June 30, 2020
Joint venture	Description of the nature of the relationship	Domicile	Country of incorporation	Share of interest in ownership			ThUS$		ThUS$
Sichuan SQM Migao Chemical Fertilizers Co Ltd.	Production and distribution of soluble fertilizers.	Huangjing Road, Dawan Town, Qingbaijiang Dristrict, Chengdu Municipality, Sichuan Province	China		50	%		-		-
Coromandel SQM India	Production and distribution of potassium nitrate.	1-2-10, Sardar Patel Road, Secunderabad – 500003 Andhra Pradesh	India		50	%		-		-
SQM Vitas Fzco.	Production and commercialization of specialty plant, animal nutrition and industrial hygiene.	Jebel ALI Free Zone P.O. Box 18222, Dubai	United Arab Emirates		50	%		-		-
SQM Qingdao Star Corp Nutrition Co. Ltd.	Production and distribution of nutrient plant solutions with specialties NPK soluble.	Longquan Town, Jimo City, Qingdao Municipality, Shangdong Province	China		50	%		-		2,223
Pavoni & C. Spa	Production of specialty fertilizers and others for distribution in Italy and other countries.	Corso Italia 172, 95129 Catania (CT), Sicilia	Italy		50	%		-		-
Covalent Lithium Pty Ltd.	Development and operation of the Mt Holland Lithium project, which will include the construction of a lithium extraction and refining mine.	L18, 109 St Georges Tce Perth WA 6000 |PO Box Z5200 St Georges Tce Perth WA 6831	Australia		50	%		-		-
Total								-		2,223

57 

Notes to the Consolidated Interim Financial Statements
June 30, 2021

The companies described in the following table are related to the following joint ventures:

(1)	SQM Vitas Fzco.
(2)	Pavoni & C. Spa.

							Dividends received for the period ending
Joint venture	Description of the nature of the relationship	Domicile	Country of incorporation	Share of interest in ownership (*)			As of June 30, 2021		As of June 30, 2020
							ThUS$		ThUS$
SQM Vitas Brasil Agroindustria (1)	Production and trading of specialty vegetable and animal nutrition and industrial hygiene.	Via Cndeias, Km. 01 Sem Numero, Lote 4, Bairro Cia Norte, Candeias, Bahia.	Brazil		49.99	%		-		-
SQM Vitas Perú S.A.C. (1)	Production and trading of specialty vegetable and animal nutrition and industrial hygiene	Av. Juan de Arona 187, Torre B, Oficina 301-II, San Isidro, Lima	Peru		50	%		-		-
Arpa Speciali S.R.L. (2)	Production of specialty fertilizers and others for distribution in Italy and other countries.	Mantova (MN) Via Cremona 27 Int. 25	Italy		50.48	%		-		-
Total								-		-

(*) The percentages presented correspond to the ownership used in the consolidation of the company.

58 

Notes to the Consolidated Interim Financial Statements
June 30, 2021  

9.2 Assets, liabilities, revenue and expenses from joint ventures

	As of June 30, 2021								For the period ended June 30, 2021
Joint Venture	Assets				Liabilities								Other comprehensive			Comprehensive
	Current		Non-current		Current		Non-current		Revenue		Net gain (loss)		income			income
	ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$			ThUS$
SQM Vitas Fzco.		3,623		26,394		509		-		-		5,486		-			5,486
SQM Vitas Brasil Agroindustria		45,687		6,006		33,920		-		46,240		5,125		467			5,592
SQM Vitas Perú S.A.C.		25,132		7,633		23,198		944		20,848		359		-			359
Pavoni & C. Spa		14,931		7,134		13,187		689		12,127		675		(285	)		390
Covalent Lithium Pty Ltd.		3,473		1,855		4,453		950		-		73		35			108
Total		92,846		49,022		75,267		2,583		79,215		11,718		217			11,935

	As of December 31, 2020									For the period ended June 30, 2020
Joint Venture	Assets					Liabilities									Other comprehensive			Comprehensive
	Current			Non-current		Current		Non-current		Revenue		Net gain (loss)			income			income
	ThUS$			ThUS$		ThUS$		ThUS$		ThUS$		ThUS$			ThUS$			ThUS$
Sichuan SQM Migao Chemical Fertilizers Co Ltd.		29,507			4,412		14,156		-		-		(1,217	)		-			(1,217	)
SQM Vitas Fzco.		(496	)		20,431		496		-		-		15			-			15
SQM Qingdao Star Corp Nutrition Co. Ltd.		-			-		-		-		2,770		166			-			166
SQM Vitas B.V.		-			-		-		-		-		-			-			-
SQM Vitas Brasil Agroindustria		40,064			5,527		33,410		-		35,709		(784	)		(3,379	)		(4,163	)
SQM Vitas Perú S.A.C.		34,548			7,928		33,145		1,080		17,244		267			-			267
Pavoni & C. Spa		10,645			7,493		9,270		836		10,048		387			15			402
Covalent Lithium Pty Ltd.		1,418			2,131		2,823		910		-		432			79			511
Total		115,686			47,922		93,300		2,826		65,771		(734	)		(3,285	)		(4,019	)

59 

Notes to the Consolidated Interim Financial Statements
June 30, 2021  

9.3 Other Joint Venture disclosures

	Cash and cash equivalents				Other current financial liabilities				Other non-current financial liabilities
Joint Venture	As of June 30, 2021		As of December 31, 2020		As of June 30, 2021		As of December 31, 2020		As of June 30, 2021		As of December 31, 2020
	ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$
Sichuan SQM Migao Chemical Fertilizers Co Ltd.		-		30		-		-		-		-
SQM Vitas Fzco.		4,092		4,251		-		-		-		-
SQM Vitas Brasil Agroindustria		2,385		4,065		7,774		6,820		-		-
SQM Vitas Perú S.A.C.		436		1,043		233		227		495		691
Pavoni & C. Spa		810		767		6,706		5,573		-		-
Covalent Lithium Pty Ltd.		2,696		653		785		953		-		-
Total		10,419		10,809		15,498		13,573		495		691

	Depreciation and amortization expense for the period ending						Interest expense for the period ending						Income tax benefit (expense) for the period ending
Joint Venture	As of June 30, 2021			As of June 30, 2020			As of June 30, 2021			As of June 30, 2020			As of June 30, 2021			As of June 30, 2020
	ThUS$			ThUS$			ThUS$			ThUS$			ThUS$			ThUS$
Sichuan SQM Migao Chemical Fertilizers Co Ltd.		-			(366	)		-			-			-			82
SQM Vitas Fzco.		-			-			-			(1	)		-			-
SQM Qingdao Star Corp Nutrition Co. Ltd.		-			(18	)		-			-			-			(10	)
SQM Vitas Brasil Agroindustria		(153	)		(148	)		(154	)		(359	)		-			-
SQM Vitas Perú S.A.C.		(178	)		(170	)		(153	)		(164	)		(107	)		(107	)
Pavoni & C. Spa		(126	)		(117	)		(153	)		(188	)		(319	)		(267	)
Covalent Lithium Pty Ltd.		(88	)		(85	)		(23	)		(13	)		-			432
Total		(545	)		(904	)		(483	)		(725	)		(426	)		130

60 

Notes to the Consolidated Interim Financial Statements
June 30, 2021  

9.4 Disclosure of interests in joint ventures

a)            Transactions for the period ended June 30, 2021

●  On February 9, 2021, two of the Company’s subsidiaries signed an agreement to terminate a dispute related to sales contracts and interest in the joint venture of Sichuan SQM Migao Chemical Fertilizers Co Ltd. Consequently, the Company received US$ 11.5 million.

b)            Transactions for the period ended June 30, 2020

●  SQM Vitas BV became a wholly owned subsidiary of the Company during the second quarter of 2020, through its subsidiary Soquimich European Holdings, at a cost of ThUS$ 1,276 and its name has been changed to SQM Holland. See Note 8.1.

9.5 Joint Operation

In 2017, together with our subsidiary SQM Australia Pty, we entered into an agreement to acquire 50% of the assets of the Mt Holland lithium project in Western Australia. The Mt Holland Lithium Project consist, to design, construct and operate a mine, concentrator and refinery to produce approximately 50,000 metric tons of lithium hydroxide per year.

In addition, the Company will finance the activities of Mt Holland for a year in an amount of US$ 30 million. As of December 31, 2020, the Company had made contributions in the amount of US$ 30 million, of which, US$ 15 million was paid in favor of the partner in the project and presented as other receivables. As of June 30, 2021, this receivable was collected when it was contributed to Mt Holland in the Company’s name. The Company approved the investment decision referred to in Note 1.8.

61 

Notes to the Consolidated Interim Financial Statements
June 30, 2021  

Note 10 Cash and cash equivalents

10.1 Types of cash and cash equivalents

As of June 30, 2021, and December 31, 2020, cash and cash equivalents are detailed as follows:

Cash	As of June 30, 2021		As of December 31, 2020
	ThUS$		ThUS$
Cash on hand		49		54
Cash in banks		574,714		244,548
Other demand deposits		-		2,527
Total Cash		574,763		247,129

Cash equivalents	As of June 30, 2021		As of December 31, 2020
	ThUS$		ThUS$
Short-term deposits, classified as cash equivalents		137,688		51,595
Short-term investments, classified as cash equivalents		530,402		210,378
Total cash equivalents		668,090		261,973
Total cash and cash equivalents		1,242,853		509,102

10.2 Short-term investments, classified as cash equivalents

As of June 30, 2021, and December 31, 2020, the short-term investments classified as cash and cash equivalents relate to mutual funds (investment liquidity funds) for investments in:

Institution	As of June 30, 2021		As of December 31, 2020
	ThUS$		ThUS$
Legg Mason - Western Asset Institutional Cash Reserves		256,635		107,625
JP Morgan US dollar Liquidity Fund Institutional		273,767		102,753
Total		530,402		210,378

Short-term investments are highly liquid mutual funds that are basically invested in short-term fixed rate notes in the U.S. market.

62 

Notes to the Consolidated Interim Financial Statements
June 30, 2021  

10.3 Information on cash and cash equivalents by currency

As of June 30, 2021, and December 31, 2020, information on cash and cash equivalents by currency is detailed as follows:

Currency	As of June 30, 2021		As of December 31, 2020
	ThUS$		ThUS$
Peso (*)		13,496		7,190
Dollar		1,177,528		454,402
Euro		4,586		17,144
Mexican Peso		1,616		1,378
South African Rand		4,137		14,286
Japanese Yen		1,813		1,646
Peruvian Sol		6		3
Indian rupee		-		6
Chinese Yuan		14,275		11,597
Indonesian rupee		3		3
Pound Sterling		3		19
Australian Dollar		24,463		1,411
South Korean won		331		16
Dirham United Arab Emirates		595		-
Polish Zloty		1		1
Total		1,242,853		509,102

(*) The Company maintains financial derivative instruments policies which allow management to convert term deposits denominated in pesos and UF to Dollars.

10.4 Amount restricted cash balances

The Company has granted a guarantee consisting of financial instruments, specified in deposits, custody and administration to Banco de Chile, for its subsidiary Isapre Norte Grande Ltda., in compliance with the provisions of the Superintendence of Health, which regulates social security health institutions.

According to the regulations of the Superintendence of Health, this guarantee is for the total payable to its affiliates and medical providers. Banco de Chile reports the current value of the guarantee to the Superintendence of Health and Isapre Norte Grande Ltda. on a daily basis.

As of June 30, 2021, and, December 31, 2020 pledged assets are as follows

Restricted cash balances	As of June 30, 2021		As of December 31, 2020
	ThUS$		ThUS$
Isapre Norte Grande Ltda.		691		731
Total		691		731

63 

Notes to the Consolidated Interim Financial Statements
June 30, 2021

10.5            Short-term deposits, classified as cash equivalents

The detail at the end of each period is as follows:

Receiver of the deposit	Type of deposit	Original Currency	Interest Rate			Placement date	Expiration date	Principal		Interest accrued to-date		As of June 30, 2021
								ThUS$		ThUS$		ThUS$
Banco Itaú Corpbanca	Fixed term	Peso		0.35	%	05-04-2021	08-02-2021		18,000		10		18,010
Banco Itaú Corpbanca	Fixed term	Dollar		0.35	%	05-08-2021	07-27-2021		20,000		7		20,007
Banco Itaú Corpbanca	Fixed term	Dollar		0.35	%	04-15-2021	07-14-2021		8,000		6		8,006
Scotiabank Sud Americano	Fixed term	Dollar		0.35	%	04-15-2021	07-14-2021		46,000		34		46,034
Banco Itaú Corpbanca	Fixed term	Dollar		0.17	%	06-29-2021	07-07-2021		5,000		-		5,000
Banco crédito e inversiones	Fixed term	Dollar		0.07	%	06-29-2021	07-07-2021		8,000		-		8,000
Banco crédito e inversiones	Fixed term	Dollar		0.05	%	06-01-2021	07-02-2021		2,500		-		2,500
Banco de Chile	Fixed term	Dollar		0.06	%	06-22-2021	07-30-2021		2,000		-		2,000
Banco de Chile	Fixed term	Dollar		0.11	%	06-04-2021	07-19-2021		1,500		-		1,500
Banco de Chile	Fixed term	Dollar		0.11	%	06-07-2021	07-09-2021		1,000		-		1,000
Banco de Chile	Fixed term	Dollar		0.16	%	06-11-2021	07-23-2021		4,000		-		4,000
Banco Estado	Fixed term	Dollar		0.12	%	06-30-2021	07-07-2021		4,122		-		4,122
Banco Santander	Fixed term	Dollar		0.30	%	05-10-2021	07-15-2021		6,000		3		6,003
Banco Santander	Fixed term	Dollar		0.09	%	06-30-2021	07-30-2021		3,000		-		3,000
Scotiabank Sud Americano	Fixed term	Dollar		0.04	%	06-23-2021	07-09-2021		5,000		-		5,000
Scotiabank Sud Americano	Fixed term	Dollar		0.40	%	06-29-2021	07-30-2021		3,500		-		3,500
Banco Itaú Corpbanca	Fixed term	Dollar		2.45	%	06-26-2021	07-06-2021		6		-		6
Total									137,628		60		137,688

64 

Notes to the Consolidated Interim Financial Statements
June 30, 2021

Receiver of the deposit	Type of deposit	Original Currency	Interest Rate			Placement date	Expiration date	Principal		Interest accrued to-date		As of December 31, 2020
								ThUS$		ThUS$		ThUS$
Banco Santander - Santiago	Fixed term	Dollar		0.35	%	12-30-2020	03-30-2021		7,000		-		7,000
Scotiabank Sud Americano	Fixed term	Dollar		0.35	%	11-30-2020	01-08-2021		1,500		1		1,501
Banco de Chile	Fixed term	Dollar		0.61	%	11-30-2020	01-08-2021		2,000		1		2,001
Banco de Chile	Fixed term	Dollar		0.61	%	11-30-2020	01-08-2021		3,500		1		3,501
Banco crédito e inversiones	Fixed term	Dollar		0.46	%	12-01-2020	01-15-2021		500		-		500
Scotiabank Sud Americano	Fixed term	Dollar		0.40	%	12-01-2020	01-15-2021		500		-		500
Scotiabank Sud Americano	Fixed term	Dollar		0.40	%	12-02-2020	01-20-2021		2,500		1		2,501
Banco Santander - Santiago	Fixed term	Dollar		0.50	%	12-09-2020	01-25-2021		500		-		500
Scotiabank Sud Americano	Fixed term	Dollar		0.50	%	12-09-2020	01-25-2021		1,000		-		1,000
Banco Santander - Santiago	Fixed term	Dollar		0.50	%	12-09-2020	01-25-2021		6,000		1		6,001
Banco crédito e inversiones	Fixed term	Dollar		0.51	%	12-09-2020	01-25-2021		6,000		1		6,001
Banco crédito e inversiones	Fixed term	Dollar		0.26	%	12-14-2020	01-29-2021		500		-		500
Banco Estado	Fixed term	Dollar		0.14	%	12-14-2020	01-29-2021		1,000		1		1,001
Scotiabank Sud Americano	Fixed term	Dollar		0.40	%	12-14-2020	01-29-2021		1,500		-		1,500
Banco de Chile	Fixed term	Dollar		0.56	%	12-14-2020	01-29-2021		5,000		1		5,001
Banco Itaú Corpbanca	Fixed term	Dollar		0.68	%	12-18-2020	02-01-2021		500		-		500
Banco Itaú Corpbanca	Fixed term	Dollar		0.68	%	12-18-2020	02-01-2021		2,000		1		2,001
Banco crédito e inversiones	Fixed term	Dollar		0.20	%	12-23-2020	02-05-2021		2,000		1		2,001
Banco Itaú Corpbanca	Fixed term	Dollar		0.40	%	12-24-2020	02-08-2021		1,000		-		1,000
Banco Santander - Santiago	Fixed term	Dollar		0.26	%	12-29-2020	01-08-2021		2,500		1		2,501
Banco Santander - Santiago	Fixed term	Dollar		0.15	%	12-30-2020	02-12-2021		700		-		700
Banco Itaú Corpbanca	Fixed term	Peso		0.35	%	12-29-2020	01-05-2021		3,798		-		3,798
BBVA Banco Francés	Fixed term	Dollar		1.80	%	12-31-2020	03-06-2021		86		-		86
Total									51,584		11		51,595

65 

Notes to the Consolidated Interim Financial Statements
June 30, 2021

10.6            Net Debt reconciliation

This section presents an analysis of net debt plus lease liabilities and their movements for each of the reported periods. The definition of the net debt is described in Note 20.1.

Net debt	As of June 30, 2021			As of December 31, 2020
	ThUS$			ThUS$
Cash and cash equivalents		1,242,853			509,102
Other current financial assets		709,453			348,069
Other non-current financial hedge assets		18,399			37,276
Other current financial liabilities		(42,137	)		(68,955	)
Lease liabilities, current		(7,770	)		(5,528	)
Other non-current financial liabilities		(1,898,493	)		(1,899,513	)
Non-current Lease liabilities		(31,448	)		(25,546	)
Total		(9,143	)		(1,105,095	)

				From cash flow								Not from cash flow
Cash and cash equivalents	As of December 31, 2020			Amounts from loans			Amounts from interests			Other cash income/expenses		Hedging and non- hedging instruments			Exchange rate differences			Others			As of June 30, 2021
	ThUS$			ThUS$			ThUS$			ThUS$		ThUS$			ThUS$			ThUS$			ThUS$
Obligations with the public and bank loans		(1,922,864	)		7,518			38,034			-		-			625			(38,882	)		(1,915,569	)
Current and non-current lease liabilities		(31,074	)		3,967			720			-		-			-			(12,831	)		(39,218	)
Financial instruments derived from hedging		18,070			(463	)		3,542			-		(4,025	)		-			(20,716	)		(3,592	)
Financial instruments derived from non-hedging		-			-			-			-		-			-			-			-
Current and non-current financial liabilities		(1,935,868	)		11,022			42,296			-		(4,025	)		625			(72,429	)		(1,958,379	)
Cash and cash equivalents		509,102			-			-			741,775		-			(8,024	)		-			1,242,853
Deposits that do not qualify as cash and cash equivalents		345,459			-			-			365,638		-			(7,730	)		(489	)		702,878
Derivatives from hedge assets		(21,004	)		-			(2,375	)		17,218		6,856			-			273			968
Derivatives from other financial non-hedge assets		(2,784	)		-			-			578		4,743			-			-			2,537
Total		(1,105,095	)		11,022			39,921			1,125,209		7,574			(15,129	)		(72,645	)		(9,143	)

66 

Notes to the Consolidated Interim Financial Statements
June 30, 2021

Note 11 Inventories

The composition of inventory at each period-end is as follows:

Type of inventory	As of June 30, 2021		As of December 31, 2020
	ThUS$		ThUS$
Raw material		3,605		10,694
Production supplies		37,255		31,007
Products-in-progress		530,093		487,830
Finished product		524,673		563,497
Total		1,095,626		1,093,028

As of June 30, 2021, and December 31, 2020, the Company held caliche stockpiles, solutions in solar ponds and intermediary salts amounting ThUS$ 440,664 and ThUS$ 422,535, respectively (including products in progress).

As of June 30, 2021, bulk inventories recognized within work in progress and finished goods were ThUS$ 135,458 and ThUS$ 172,593 respectively.

As of June 30, 2021, and December 2020, inventory allowances recognized, amounted to ThUS$ 77,407 and ThUS$ 80,930, respectively. For finished and in-process products, recognized allowances include the provision associated with the lower value of stock (considers lower realizable value, uncertain future use, reprocessing costs of off-specification products, etc.), provision for inventory differences and the provision for potential errors in the determination of inventories (e.g., errors in topography, grade, moisture, etc.), (see Note 3.14).

For raw materials, supplies, materials and parts, the lower value provision was associated to the proportion of defective materials and potential differences.

The breakdown of inventory allowances is detailed as follows:

Type of inventory	As of June 30, 2021		As of December 31, 2020
	ThUS$		ThUS$
Raw material and supplies for production		1,143		1,934
Products-in-progress		61,954		66,122
Finished product		14,310		12,874
Total		77,407		80,930

The Company has not pledged inventory as collateral for the periods indicated above.

67 

Notes to the Consolidated Interim Financial Statements
June 30, 2021

As of June 30, 2021, and December 31, 2020, movements in provisions are detailed as follows:

Conciliation	As of June 30, 2021			As of December 31, 2020
	ThUS$			ThUS$
Beginning balance		80,930			88,174
Increase in Lower Value (1)		(3,755	)		(5,404	)
Additional Provision Differences of Inventory (2)		-			(704	)
Increase / Decrease eventual differences and others (3)		905			1,244
Provision Used		(673	)		(2,380	)
Total changes		(3,523	)		(7,244	)
Final balance		77,407			80,930

(1)	There are three types of Lower Value Provisions: (a) Economic Realizable Lower Value, (b) Potential Inventory with Uncertain Future Use and (c) Reprocessing Costs of Off-Specification Products.
(2)	Provisions for Inventory Differences generated when physical differences are detected when taking inventory, which exceed the tolerance levels for this process.
(3)	This algorithm corresponds to the provision of diverse percentages based on the complexity in the measurement and rotation of stock, as well as standard differences based on previous results, as is the case with provisions relating to Commercial Offices.

68 

Notes to the Consolidated Interim Financial Statements
June 30, 2021  

Note 12 Related party disclosures

12.1 Related party disclosures

Balances pending at period-end are not guaranteed, accrue no interest and are settled in cash, no guarantees have been delivered or received for trade and other receivables due from related parties or trade and other payables due to related parties.

12.2 Relationships between the parent and the entity

Pursuant to Article 99 of Law of the Securities Market Law, the CMF may determine that a company does not have a controlling entity in accordance with the distribution and dispersion of its ownership. On November 30, 2018, the CMF issued the ordinary letter No. 32,131 whereby it determined that Pampa Group, do not exert decisive power over the management of the Company since it does not have a predominance in the ownership that allows it to make management decisions. Therefore, the CMF has determined not to consider Pampa Group as the controlling entity of the Company and that the Company does not have a controlling entity given its current ownership structure.

69 

Notes to the Consolidated Interim Financial Statements
June 30, 2021  

12.3 Detailed identification of related parties and subsidiaries

As of June 30, 2021 and December 31, 2020, the detail of entities that are identified as subsidiaries or related parties of the SQM Group is as follows:

Tax ID No	Name	Country of origin	Functional currency	Nature
foreign	Nitratos Naturais Do Chile Ltda.	Brazil	Dollar	Subsidiary
foreign	Nitrate Corporation of Chile Ltd.	United Kingdom	Dollar	Subsidiary
foreign	SQM North America Corp.	United States	Dollar	Subsidiary
foreign	SQM Europe N.V.	Belgium	Dollar	Subsidiary
foreign	Soquimich European Holding B.V.	Netherlands	Dollar	Subsidiary
foreign	SQM Corporation N.V.	Curacao	Dollar	Subsidiary
foreign	SQM Comercial De México S.A. de C.V.	Mexico	Dollar	Subsidiary
foreign	North American Trading Company	United States	Dollar	Subsidiary
foreign	Administración y Servicios Santiago S.A. de C.V.	Mexico	Dollar	Subsidiary
foreign	SQM Perú S.A.	Peru	Dollar	Subsidiary
foreign	SQM Ecuador S.A.	Ecuador	Dollar	Subsidiary
foreign	SQM Nitratos Mexico S.A. de C.V.	Mexico	Dollar	Subsidiary
foreign	SQMC Holding Corporation L.L.P.	United States	Dollar	Subsidiary
foreign	SQM Investment Corporation N.V.	Curacao	Dollar	Subsidiary
foreign	SQM Brasil Limitada	Brazil	Dollar	Subsidiary
foreign	SQM France S.A.	France	Dollar	Subsidiary
foreign	SQM Japan Co. Ltd.	Japan	Dollar	Subsidiary
foreign	Royal Seed Trading Corporation A.V.V.	Aruba	Dollar	Subsidiary
foreign	SQM Oceania Pty Limited	Australia	Dollar	Subsidiary
foreign	Rs Agro-Chemical Trading Corporation A.V.V.	Aruba	Dollar	Subsidiary
foreign	SQM Indonesia S.A.	Indonesia	Dollar	Subsidiary
foreign	SQM Virginia L.L.C.	United States	Dollar	Subsidiary
foreign	Comercial Caimán Internacional S.A.	Panama	Dollar	Subsidiary
foreign	SQM África Pty. Ltd.	South Africa	Dollar	Subsidiary
foreign	SQM Colombia SAS	Colombia	Dollar	Subsidiary
foreign	SQM Internacional N.V.	Belgium	Dollar	Subsidiary
foreign	SQM (Shanghai) Chemicals Co. Ltd.	China	Dollar	Subsidiary
foreign	SQM Lithium Specialties LLC	United States	Dollar	Subsidiary
foreign	SQM Iberian S.A.	Spain	Dollar	Subsidiary
foreign	SQM Beijing Commercial Co. Ltd.	China	Dollar	Subsidiary
foreign	SQM Thailand Limited	Thailand	Dollar	Subsidiary
foreign	SQM Australia PTY	Australia	Dollar	Subsidiary
foreign	SQM Holland B.V.	Netherlands	Dollar	Subsidiary
foreign	SQM Korea LLC	Korea	Dollar	Subsidiary
96.801.610-5	Comercial Hydro S.A.	Chile	Dollar	Subsidiary
96.651.060-9	SQM Potasio S.A.	Chile	Dollar	Subsidiary
96.592.190-7	SQM Nitratos S.A.	Chile	Dollar	Subsidiary
96.592.180-K	Ajay SQM Chile S.A.	Chile	Dollar	Subsidiary
79.947.100-0	SQM Industrial S.A.	Chile	Dollar	Subsidiary
79.906.120-1	Isapre Norte Grande Ltda.	Chile	Peso	Subsidiary
79.876.080-7	Almacenes y Depósitos Ltda.	Chile	Peso	Subsidiary

70 

Notes to the Consolidated Interim Financial Statements
June 30, 2021  

Tax ID No	Name	Country of origin	Functional currency	Nature
79.770.780-5	Servicios Integrales de Tránsitos y Transferencias S.A.	Chile	Dollar	Subsidiary
79.768.170-9	Soquimich Comercial S.A.	Chile	Dollar	Subsidiary
79.626.800-K	SQM Salar S.A.	Chile	Dollar	Subsidiary
76.534.490-5	Sociedad Prestadora de Servicios de Salud Cruz del Norte S.A.	Chile	Peso	Subsidiary
76.425.380-9	Exploraciones Mineras S.A.	Chile	Dollar	Subsidiary
76.064.419-6	Comercial Agrorama Ltda.	Chile	Peso	Subsidiary
76.145.229-0	Agrorama S.A.	Chile	Peso	Subsidiary
76.359.919-1	Orcoma Estudios SPA	Chile	Dollar	Subsidiary
76.360.575-2	Orcoma SPA	Chile	Dollar	Subsidiary
76.686.311-9	SQM MaG SpA	Chile	Dollar	Subsidiary
77.114.779-8	Sociedad Contractual Minera Búfalo	Chile	Dollar	Subsidiary
foreign	Abu Dhabi Fertilizer Industries WWL	Arab Emirates	Arab Emirates dirham	Associate
foreign	Ajay North America	United States	Dollar	Associate
foreign	Ajay Europe SARL	France	Euro	Associate
foreign	Kore Potash PLC	United Kingdom	Dollar	Associate
foreign	SQM Vitas Fzco.	Arab Emirates	Arab Emirates dirham	Joint venture
foreign	Covalent Lithium Pty Ltd.	Australia	Dollar	Joint venture
foreign	Pavoni & C, SPA	Italy	Euro	Joint venture
96.511.530-7	Sociedad de Inversiones Pampa Calichera	Chile	Dollar	Other related parties
96.529.340-K	Norte Grande S.A.	Chile	Peso	Other related parties
79.049.778-9	Callegari Agrícola S.A.	Chile	Peso	Other related parties
foreign	SQM Vitas Brasil Agroindustria (1)	Brazil	Brazilian real	Other related parties
foreign	SQM Vitas Perú S.A.C. (1)	Peru	Dollar	Other related parties
foreign	Abu Dhabi Fertilizer Industries WWL (2)	Oman	United Arab Emirates dirham	Other related parties
foreign	International Technical and Trading Agencies CO WLL (2)	Jordan	United Arab Emirates dirham	Other related parties

(1)	These Companies are subsidiaries of the joint venture SQM Vitas Fzco.
(2)	These Companies are subsidiaries of the joint venture Abu Dhabi Fertilizer Industries WWL Ltda. and therefore it absorbs these and takes responsibility of all of their assets and liabilities.

The following entities were considered related parties as of December 31, 2020: Sichuan SQM Migao Chemical Fertilizers Co Ltd.

71 

Notes to the Consolidated Interim Financial Statements
June 30, 2021  

The following other related parties correspond to mining contractual corporations.

Tax ID No.	Name	Country of origin	Functional currency	Relationship
N/A	Ara Dos Primera del Salar de Pampa Blanca, Sierra Gorda	Chile	Peso	Other related parties
N/A	Ara Tres Primera del Salar de Pampa Blanca, Sierra Gorda	Chile	Peso	Other related parties
N/A	Ara Cuatro Primera del Salar de Pampa Blanca, Sierra Gorda	Chile	Peso	Other related parties
N/A	Ara Cinco Primera del Salar de Pampa Blanca, Sierra Gorda	Chile	Peso	Other related parties
N/A	Curicó Dos Primera del Salar de Pampa Alta, Sierra Gorda	Chile	Peso	Other related parties
N/A	Curicó Tres Primera del Sector de Pampa Alta, Sierra Gorda	Chile	Peso	Other related parties
N/A	Evelyn Veinticuatro Primera de Sierra Gorda	Chile	Peso	Other related parties
N/A	Filomena Tres Primera de Oficina Filomena, Sierra Gorda	Chile	Peso	Other related parties
N/A	Filomena Cuatro Primera de Oficina Filomena, Sierra Gorda	Chile	Peso	Other related parties
N/A	Francis Cuatro Primera de Pampa Blanca, Sierra Gorda	Chile	Peso	Other related parties
N/A	Francis Cuatro Segunda del Salar de Pampa Blanca, Sierra Gorda	Chile	Peso	Other related parties
N/A	Francis Cuatro Tercera de Pampa Blanca, Sierra Gorda	Chile	Peso	Other related parties
N/A	Francis Cuatro Cuarta de Pampa Blanca, Sierra Gorda	Chile	Peso	Other related parties
N/A	Francis Cuatro Quinta de Pampa Blanca, Sierra Gorda	Chile	Peso	Other related parties
N/A	Francis Primera del Salar de Pampa Blanca de Sierra Gorda	Chile	Peso	Other related parties
N/A	Francis Segunda del Salar de Pampa Blanca de Sierra Gorda	Chile	Peso	Other related parties
N/A	Francis Tercera del Salar de Pampa Blanca de Sierra Gorda	Chile	Peso	Other related parties
N/A	Ivon Primera de Sierra Gorda	Chile	Peso	Other related parties
N/A	Ivon Décima Segunda de Sierra Gorda	Chile	Peso	Other related parties
N/A	Ivon Sexta de Sierra Gorda	Chile	Peso	Other related parties
N/A	Julia Primera de Sierra Gorda	Chile	Peso	Other related parties
N/A	Lorena Trigésimo Quinta de Sierra Gorda	Chile	Peso	Other related parties
N/A	Perseverancia Primera de Sierra Gorda	Chile	Peso	Other related parties
N/A	Tamara 40 Primera del Sector S.E. OF. Concepción, Sierra Gorda	Chile	Peso	Other related parties
N/A	Tamara Tercera de Oficina Concepción, Sierra Gorda	Chile	Peso	Other related parties
N/A	Tamara 40 Segunda del Sector S.E. OF Concepción, Sierra Gorda	Chile	Peso	Other related parties

Below is a list of transactions with clients and suppliers with whom a relationship with key Company personnel was identified:

Tax ID No	Name	Country of origin	Nature
76.389.727-3	Sociedad Periodística El Libero	Chile	Other related parties
90.193.000-7	El Mercurio S.A.P.	Chile	Other related parties
92.580.000-7	Empresa Nacional de Telecomunicaciones S.A.	Chile	Other related parties
96.806.980-2	Entel PCS Telecomunicaciones S.A.	Chile	Other related parties
97.004.000-5	Banco de Chile	Chile	Other related parties
99.012.000-5	Compañía de Seguros de Vida Consorcio Nacional	Chile	Other related parties
10.581.580-8	Gonzalo Guerrero Yamamoto	Chile	Other related parties
96.529.340-K	Norte Grande S.A.	Chile	Other related parties

72 

Notes to the Consolidated Interim Financial Statements
June 30, 2021  

12.4 Detail of related parties and related party transactions

Transactions between the Company and its subsidiaries, associated businesses, joint ventures and other related parties are part of the Company's common transactions. Their conditions are those customary for this type of transactions in respect of terms and market prices. Maturity terms for each case vary by virtue of the transaction giving rise to them.

For the period ended June 30, 2021 and 2020, the detail of significant transactions with related parties is as follows

Tax ID No	Name	Nature	Country of origin	Transaction	As of June  30, 2021		As of June  30, 2020
					ThUS$		ThUS$
Foreign	Doktor Tarsa Tarim Sanayi AS	Associate	Turkey	Sale of products		-		3,944
Foreign	Ajay Europe S.A.R.L.	Associate	France	Sale of products		20,871		16,457
Foreign	Ajay Europe S.A.R.L.	Associate	France	Dividends		992		1,197
Foreign	Ajay North America LL.C.	Associate	USA	Sale of products		15,869		15,248
Foreign	Ajay North America LL.C.	Associate	USA	Dividends		411		890
Foreign	SQM Vitas Brasil Agroindustria	Other related parties	Brazil	Sale of products		20,858		14,177
Foreign	SQM Vitas Perú S.A.C.	Other related parties	Peru	Sale of products		5,268		5,619
Foreign	Coromandel SQM India	Joint venture	India	Sale of products		1,111		410
Foreign	SQM Star Qingdao Corp Nutrition Co., Ltd.	Joint venture	China	Dividends		-		2,223
Foreign	Terra Tarsa Ukraine LLC	Other related parties	Ukraine	Sale of products		-		641
Foreign	Plantacote NV	Other related parties	Belgium	Sale of products		-		2,823
Foreign	Pavoni & CPA	Joint venture	Italy	Sale of products		701		1,125
Foreign	SQM Eastmed Turkey	Associate	Turquía	Sale of products		-		81
Foreign	Covalent Lithium Pty Ltd	Joint venture	Australia	Engineering services		1,376		-
Chile	Banco de Chile	Other related parties	Chile	Service provider		2,090		-
Chile	Empresa Nacional de Telecomunicaciones	Other related parties	Chile	Service provider		249		-

73 

Notes to the Consolidated Interim Financial Statements
June 30, 2021

12.5 Trade receivables due from related parties, current:

Tax ID No	Name	Nature	Country of origin	Currency	As of June 30, 2021	As of  December 31, 2020
					ThUS$	ThUS$
Foreign	Ajay Europe S.A. R.L.	Associate	France	Euro	8,976	4,625
Foreign	Ajay North America LLC.	Associate	United States of America	Dollar	4,515	2,956
Foreign	Abu Dhabi Fertilizer Industries WWL *	Associate	United Arab Emirates	United Arab Emirates Dirham	-	595
96.511.530-7	Soc. de Inversiones Pampa Calichera	Other related parties	Chile	Dollar	6	6
Foreign	SQM Vitas Brasil Agroindustria	Other related parties	Brazil	Dollar	21,329	24,335
Foreign	SQM Vitas Perú S.A.C.	Other related parties	Peru	Dollar	16,271	24,205
Foreign	SQM Vitas Fzco.	Joint venture	United Arab Emirates	United Arab Emirates Dirham	232	236
Foreign	Pavoni & C SpA	Joint venture	Italy	Euro	2,634	1,095
Foreign	Covalent Lithium Pty Ltd.	Joint venture	Australia	Australian dollar	575	84
Foreign	Sichuan SQM Migao Chemical Fertilizers Co Ltd.	Joint venture	China	Dollar	-	4,464
Total					54,538	62,601

* Accounts receivable from Abu Dhabi Fertilizer Industries WWL presented are net of provision for ThUS$ 595.

12.6 Trade payables due to related parties, current:

Tax ID No	Company	Nature	Country of origin	Currency	As of June 30, 2021	As of December 31, 2020
					ThUS$	ThUS$
Foreign	Ajay Europe S.A.R.L.	Associate	France	Euro	-	50
Foreign	Ajay North America LL.C.	Associate	United States of America	Dollar	-	232
Foreign	Covalent Lithium Pty Ltd	Joint venture	Australia	Australian dollar	-	324
Total					-	606

12.7 Other disclosures:

Note 6 describes the remuneration of the board of directors, administration and key management personnel.

74 

Notes to the Consolidated Interim Financial Statements
June 30, 2021

Note 13 Financial instruments

13.1 Types of other current and non-current financial assets

Description of other financial assets	As of June 30, 2021		As of December 31, 2020
	ThUS$		ThUS$
Financial assets at amortized cost (1)		702,879		345,459
Derivative financial instruments
- For hedging		3,911		-
- Non-hedging (2)		2,663		2,610
Total other current financial assets		709,453		348,069
Financial assets at fair value through other comprehensive income (4) (5)		7,653		14,569
Derivative financial instruments
- For hedging		18,423		37,276
Other financial assets at amortized cost		71		80
Total other non-current financial assets		26,147		51,925

Institution	As of June 30, 2021		As of December 31, 2020
	ThUS$		ThUS$
Banco de Crédito e Inversiones		114,935		185,589
Banco Santander (3)		208,463		45,168
Banco Itau Corpbanca		89,086		49,006
Banco de Chile		140,367		-
Scotiabank Sud Americano		150,028		31,668
JP Morgan Asset Management		-		34,028
Total		702,879		345,459

(1) Corresponds to term deposits whose maturity date is greater than 90 days and less than 360 days from the investment date constituted in the aforementioned financial institutions.

(2) Correspond to forwards and options that were not classified as hedging instruments (See detail in Note 13.3).

(3) As of June 30, 2021, and December 31, 2020 there were no margin calls.

(4) During the first quarter of 2021, equity instruments classified at fair value irrevocably through other comprehensive income were sold for US$ 16,413. The cumulative amount of the movements in other comprehensive income from the date of acquisition to the date of sale was transferred to retained earnings.

(5) During the second quarter of 2021, as a result of the loss of significant influence over the investment of Kore Potash (for more details, see note 8.3 letter a), the investment, which was previous recognized as an investment in associates, was reclassified as other non-current financial assets as it was classified as financial equity instrument at fair value through other comprehensive income irrevocably.

75 

Notes to the Consolidated Interim Financial Statements
June 30, 2021

13.2 Trade and other receivables

	As of June 30, 2021						As of December 31, 2020
Trade and other receivables	Current		Non-current		Total		Current		Non-current		Total
	ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$
Trade receivables, current		401,144		-		401,144		313,265		-		313,265
Prepayments, current		37,103		-		37,103		19,900		-		19,900
Other receivables, current		14,956		11,425		26,381		32,041		11,165		43,206
Total trade and other receivables		453,203		11,425		464,628		365,206		11,165		376,371

See discussion about credit risk in Note 4.2.

	As of June 30, 2021				As of December 31, 2020
Trade and other receivables	Assets before allowances	Allowance for doubtful trade receivables		Assets for trade receivables, net	Assets before allowances	Allowance for doubtful trade receivables		Assets for trade receivables, net
	ThUS$	ThUS$		ThUS$	ThUS$	ThUS$		ThUS$
Receivables related to credit operations, current	414,502	(13,358	)	401,144	327,586	(14,321	)	313,265
Trade receivables, current	414,502	(13,358	)	401,144	327,586	(14,321	)	313,265
Prepayments, current	37,887	(784	)	37,103	20,684	(784	)	19,900
Other receivables, current	20,137	(5,181	)	14,956	36,664	(4,623	)	32,041
Current trade and other receivables	58,024	(5,965	)	52,059	57,348	(5,407	)	51,941
Other receivables, non-current	11,425	-		11,425	11,165	-		11,165
Non-current receivables	11,425	-		11,425	11,165	-		11,165
Total trade and other receivables	483,951	(19,323	)	464,628	396,099	(19,728	)	376,371

76 

Notes to the Consolidated Interim Financial Statements
June 30, 2021

(a) Portfolio analysis

As of June 30, 2021, and December 31, 2020 the detail of the renegotiated portfolio is as follows:

As of June 30, 2021
Portfolio analysis
Past due segments	Number of customers with non- renegotiated portfolio	Gross non- renegotiated portfolio ThUS$	Number of customers with renegotiated portfolio	Gross renegotiated portfolio ThUS$
Current	1,309	387,116	15	314
1 - 30 days	125	16,392	5	9
31 - 60 days	18	2,955	-	-
61 - 90 days	12	826	-	-
91 - 120 days	1	20	1	25
121 - 150 days	-	1	2	35
151 - 180 days	-	-	2	7
181 - 210 days	-	-	1	41
211 - 250 days	2	2	-	-
>250 days	137	5,462	148	1,297
Total	1,604	412,774	174	1,728

As of December 31, 2020
Portfolio analysis
Past due segments	Number of customers with non- renegotiated portfolio	Gross non- renegotiated portfolio ThUS$	Number of customers with renegotiated portfolio	Gross renegotiated portfolio ThUS$
Current	1,281	301,939	23	179
1 - 30 days	119	12,140	8	60
31 - 60 days	12	1,226	-	-
61 - 90 days	5	159	-	-
91 - 120 days	5	1,448	1	41
121 - 150 days	2	2,384	2	2
151 - 180 days	3	1,398	4	12
181 - 210 days	1	-	2	5
211 - 250 days	3	2	6	114
>250 days	156	5,030	64	1,447
Total	1,587	325,726	110	1,860

77 

Notes to the Consolidated Interim Financial Statements
June 30, 2021

(b) Estimate for doubtful accounts

As of June 30, 2021
	Trade accounts receivable days past due
Trade and other receivables	Current		1 to 30 days		31 to 60 days		61 to 90 days		Over 90 days		Trade	Trade receivables due from related parties
											ThUS$	ThUS$
Expected Loss Rate on	1	%	11	%	19	%	54	%	93	%	-	-
Total Gross Book Value	387,430		16,401		2,955		826		6,890		414,502	56,019
Deterioration Estimate	4,150		1,780		574		443		6,411		13,358	1,481

As of December 31, 2020
	Trade accounts receivable days past due
Trade and other receivables	Current		1 to 30 days		31 to 60 days		61 to 90 days		Over 90 days		Trade	Trade receivables due from related parties
											ThUS$	ThUS$
Expected Loss Rate on	1	%	10	%	39	%	52	%	79	%	-	-
Total Gross Book Value	302,118		12,200		1,226		159		11,883		327,586	70,146
Deterioration Estimate	3,187		1,207		477		83		9,367		14,321	7,545

As of June 30, 2021, and December 31, 2020, movements in provisions are as follows:

Provisions	As of June 30, 2021			As of December 31, 2020
	ThUS$			ThUS$
Provision Impairment Accounts receivable at the beginning of the Period		27,273			32,707
Increase (decrease) impairment of accounts receivable		644			(4,684	)
Use of Provision		(7,113	)		(750	)
Impairment of Accounts Receivable Provision at the end of the Period		20,804			27,273
(1) Trade and other Receivables Provision		13,358			14,321
(2) Current Other Receivables Provision		5,965			5,407
(3) Provision Trade receivables with related parties, current		1,481			7,545
Recovery of Insurance		175			347
Impairment of Accounts Receivable Provision		20,804			27,273
Renegotiated Provision		1,450			1,728
Non-renegotiated Provision		19,354			25,545

78 

Notes to the Consolidated Interim Financial Statements 
June 30, 2021   

13.3     Hedging assets and liabilities

The balance represents derivative financial instruments measured at fair value which have been classified as hedges for exchange and interest rate risks relating to the total obligations with the public associated with bonds in UF and investments in Chilean pesos. See more detail in Note 4.2 b). As of June 30, 2021, the notional amount of cash flows agreed upon in US dollars of the cross-currency swap contracts amounted to ThUS$ 546,171 (As of December 31, 2020 amounted to ThUS$ 565,295).

Expressed in ThUS$	Assets / (Liabilities) Derivative Instrument			Total Realized			Hedging Reserve in Gross Equity
Hedging with debt as underlying as of June 30, 2021
Hedging Assets		21,282			23,641			(2,359	)
Hedging Liabilities		(24,874	)		(13,127	)		(11,747	)
Underlying Debt Hedge		(3,592	)		10,514			(14,106	)
Underlying Investment Coverage as of June 30, 2021
Hedging Assets		1,052			1,172			(120	)
Hedging Liabilities		(84	)		(99	)		15
Underlying Investments Hedge		968			1,073			(105	)

Expressed in ThUS$	Assets / (Liabilities) Derivative Instrument			Total Realized			Hedging Reserve in Gross Equity
Hedging with debt as underlying as of December 31, 2020
Hedging Assets		37,276			24,428			12,848
Hedging Liabilities		(19,195	)		(12,956	)		(6,239	)
Underlying Debt Hedge		18,081			11,472			6,609
Underlying Investment Coverage as of December 31, 2020
Hedging Assets		-			-			-
Hedging Liabilities		(21,004	)		(20,626	)		(378	)
Underlying Investments Hedge		(21,004	)		(20,626	)		(378	)

Hedging Effect in Profit and Equity for the period as of June 30, 2021	Variation Total			Result			Hedge Reserve Variation
Analysis Effect by Type of Coverage
Underlying Debt Hedge		(21,673	)		(958	)		(20,715	)
Underlying Investments Hedge		21,972			21,699			273
Total hedging effect on profit or loss and equity in the period		299			20,741			(20,442	)
Analysis Effect by type of asset
Hedging in Current and Non-Current Assets		(14,942	)		385			(15,327	)
Hedging in Current and Non-Current Liabilities		15,241			20,356			(5,115	)
Total Hedge Effect in Profit or Loss and Equity for the period		299			20,741			(20,442	)

79 

Notes to the Consolidated Interim Financial Statements 
June 30, 2021   

The balances in the “total realized” column consider the intermediate effects of the contracts in force from January 1 to June 30, 2021 and from January 1 to December 31, 2020.

Derivative contract maturities are detailed as follows:

	Contract amount
Series	ThUS$		Currency	Maturity date
H		126,994	UF	01/04/2023
O		58,748	UF	02/01/2022
P		134,228	UF	01/15/2028
Q		106,933	UF	06/01/2030

Effectiveness

The Company uses cross currency swap derivative instruments to hedge the possible financial risk associated with the volatility of the exchange rate associated with Chilean pesos and UF. The objective is to hedge the exchange rate and inflation financial risks associated with bonds payable. Hedges are documented and tested to measure their effectiveness.

Based on a comparison of critical terms, hedging is highly effective, given that the hedged amount is consistent with obligations maintained for bonds denominated in Pesos and UF. Likewise, hedging contracts are denominated in the same currencies and have the same maturity dates of bond principal and interest payments.

Effectiveness tests have verified that hedges are effective as of the reporting date.

13.4     Financial liabilities

Other current and non-current financial liabilities

As of June 30, 2021 and December 31, 2020, the detail is as follows:

	As of June 30, 2021						As of December 31, 2020
Other current and non-current financial liabilities	Currents		Non-Current		Total		Currents		Non-Current		Total
	ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$
Liabilities at amortized cost
Bank borrowings		82		69,495		69,577		82		69,376		69,458
Obligations with the public		36,363		1,809,630		1,845,993		36,781		1,816,626		1,853,407
Derivative financial instruments
For hedging		5,567		19,368		24,935		26,699		13,511		40,210
Non-Hedging		125		-		125		5,393		-		5,393
Total		42,137		1,898,493		1,940,630		68,955		1,899,513		1,968,468

Current and non-current bank borrowings

As of June 30, 2021 and December 31. 2020, the detail is as follows:

Current and non-current bank borrowings	As of June 30, 2021		As of December 31, 2020
	ThUS$		ThUS$
Current borrowings		82		82
Non-current borrowings		69,495		69,376
Current and non-current bank borrowings		69,577		69,458

80 

Notes to the Consolidated Interim Financial Statements 
June 30, 2021   

a)            Bank borrowings, current:

As of June 30, 2021 and December 31, 2020, the detail of this caption is as follows:

Debtor

Creditor

Tax ID No.

Company

Country

Tax ID No.

Financial institution

Country

Currency or adjustment index

Payment of interest

Repayment

Effective rate

Nominal rate

93.007.000-9

SQM S.A.

Chile

O-E

Scotiabank Cayman

USA

USD

Upon maturity

05/30/2023

1.00

%

1.27

%

Debtor

Creditor

Nominal amounts as of June 30, 2021

Current amounts as of June 30, 2021

Company

Financial institution

Up to 90 days

90 days to 1 year

Total

Up to 90 days

90 days to 1 year

Subtotal

Borrowing costs

Total

ThUS$

ThUS$

ThUS$

ThUS$

ThUS$

ThUS$

ThUS$

ThUS$

SQM S.A.

Scotiabank Cayman

-

-

-

-

82

82

-

82

Total

-

-

-

-

82

82

-

82

Debtor

Creditor

Tax ID No.

Company

Country

Tax ID No.

Financial institution

Country

Currency or adjustment index

Repayment

maturity

Effective rate

Nominal rate

93.007.000-9

SQM S.A.

Chile

Foreign

Scotiabank Cayman

USA

US$

Upon maturity

05/30/2023

1.00

%

1.36

%

Debtor

Creditor

Nominal amounts as of December 31, 2020

Current amounts as of December 31, 2020

Company

Financial institution

Up to 90 days

90 days to 1 year

Total

Up to 90 days

90 days to 1 year

Subtotal

Borrowing costs

Total

ThUS$

ThUS$

ThUS$

ThUS$

ThUS$

ThUS$

ThUS$

ThUS$

SQM S.A.

Scotiabank Cayman

-

-

-

-

82

82

-

82

Total

-

-

-

-

82

82

-

82

81 

��

Notes to the Consolidated Interim Financial Statements 
June 30, 2021   

b) Unsecured obligations, current:

As of June 30, 2021 and December 31, 2020, the detail of current unsecured interest-bearing obligations is composed of promissory notes and bonds, as follows:

Debtor								Periodicity
Tax ID No.	Company	Country	Number of registration or ID of the instrument		Series	Maturity date	Currency or adjustment index	Payment of interest	Repayment	Effective rate			Nominal rate
93.007.000-9	SQM S.A.	Chile		-	MUS$250	07/28/2021	US$	Semiannual	Upon maturity		1.76	%		4.38	%
93.007.000-9	SQM S.A.	Chile		-	MUS$300	10/03/2021	US$	Semiannual	Upon maturity		0.91	%		3.63	%
93.007.000-9	SQM S.A.	Chile		-	MUS$450	11/07/2021	US$	Semiannual	Upon maturity		3.36	%		4.25	%
93.007.000-9	SQM S.A.	Chile		-	MUS$400	07/22/2021	US$	Semiannual	Upon maturity		4.06	%		4.25	%
93.007.000-9	SQM S.A.	Chile		564	H	07/05/2021	UF	Semiannual	Semiannual		1.81	%		4.90	%
93.007.000-9	SQM S.A.	Chile		699	O	08/01/2021	UF	Semiannual	Upon maturity		2.15	%		3.80	%
93.007.000-9	SQM S.A.	Chile		563	P	07/15/2021	UF	Semiannual	Upon maturity		2.21	%		3.25	%
93.007.000-9	SQM S.A.	Chile		700	Q	12/01/2021	UF	Semiannual	Upon maturity		2.82	%		3.45	%

Effective rates of bonds in Pesos and UF are expressed and calculated in Dollars based on the flows agreed in Cross Currency Swap Agreements.

			Nominal amounts as of June 30, 2021						Carrying amounts of maturities as of June 30, 2021
			Up to 90 days		90 days to 1 year		Total		Up to 90 days		90 days to 1 year		Subtotal		Borrowing costs			Total
Company	Country	Series	ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$			ThUS$
SQM S.A.	Chile	MUS$250		4,618		-		4,618		4,618		-		4,618		(433	)		4,185
SQM S.A.	Chile	MUS$300		-		2,628		2,628		-		2,628		2,628		(614	)		2,014
SQM S.A.	Chile	MUS$450		-		2,816		2,816		-		2,816		2,816		(680	)		2,136
SQM S.A.	Chile	MUS$400		7,461		-		7,461		7,461		-		7,461		(237	)		7,224
SQM S.A.	Chile	H		17,989		-		17,989		17,989		-		17,989		(172	)		17,817
SQM S.A.	Chile	O		954		-		954		954		-		954		(82	)		872
SQM S.A.	Chile	P		1,810		-		1,810		1,810		-		1,810		(12	)		1,798
SQM S.A.	Chile	Q		-		338		338		-		338		338		(21	)		317
Total				32,832		5,782		38,614		32,832		5,782		38,614		(2,251	)		36,363

82 

Notes to the Consolidated Interim Financial Statements
June 30, 2021    

Debtor								Periodicity
Tax ID No.	Company	Country	Number of registration or ID of the instrument		Series	Maturity date	Currency or adjustment index	Payment of interest	Repayment	Effective rate			Nominal rate
93.007.000-9	SQM S.A.	Chile		-	MUS$250	01/28/2021	US$	Semiannual	Upon maturity		1.95	%		4.38	%
93.007.000-9	SQM S.A.	Chile		-	MUS$300	04/03/2021	US$	Semiannual	Upon maturity		1.08	%		3.63	%
93.007.000-9	SQM S.A.	Chile		-	MUS$450	05/07/2021	US$	Semiannual	Upon maturity		3.59	%		4.25	%
93.007.000-9	SQM S.A.	Chile		-	MUS$400	01/22/2021	US$	Semiannual	Upon maturity		4.17	%		4.25	%
93.007.000-9	SQM S.A.	Chile		564	H	01/05/2021	UF	Semiannual	Semiannual		0.58	%		4.90	%
93.007.000-9	SQM S.A.	Chile		699	O	02/01/2021	UF	Semiannual	Upon maturity		2.24	%		3.80	%
93.007.000-9	SQM S.A.	Chile		563	P	01/15/2021	UF	Semiannual	Upon maturity		2.37	%		3.25	%
93.007.000-9	SQM S.A.	Chile		700	Q	06/01/2021	UF	Semiannual	Upon maturity		2.92	%		3.45	%

Effective rates of bonds in Pesos and UF are expressed and calculated in Dollars based on the flows agreed in Cross Currency Swap Agreements.

			Nominal amounts as of December 31, 2020						Carrying amounts of maturities as of December 31, 2020
			Up to 90 days		90 days to 1 year		Total		Up to 90 days		90 days to 1 year		Subtotal		Borrowing costs			Total
Company	Country	Series	ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$		ThUS$			ThUS$
SQM S.A.	Chile	MUS$250		4,648		-		4,648		4,648		-		4,648		(433	)		4,215
SQM S.A.	Chile	MUS$300		-		2,658		2,658		-		2,658		2,658		(614	)		2,044
SQM S.A.	Chile	MUS$450		7,508		-		7,508		7,508		-		7,508		(679	)		6,829
SQM S.A.	Chile	MUS$400		-		2,869		2,869		-		2,869		2,869		(237	)		2,632
SQM S.A.	Chile	H		18,212		-		18,212		18,212		-		18,212		(172	)		18,040
SQM S.A.	Chile	O		962		-		962		962		-		962		(82	)		880
SQM S.A.	Chile	P		1,824		-		1,824		1,824		-		1,824		(12	)		1,812
SQM S.A.	Chile	Q		-		350		350		-		350		350		(21	)		329
Total				33,154		5,877		39,031		33,154