UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549










FORM 20-F



 ̈   
REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR (g) OF THE SECURITIES EXCHANGE ACT OF 1934

OR



x  
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the fiscal year ended December 31,
2012

OR



 ̈   
TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

OR



 ̈  
SHELL COMPANY REPORT PURSUANT TO SECTION 23 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

Date of event requiring this shell company
report_______________________________

For the transition period from   _____________to__________



Commission file number 33-65728



SOCIEDAD QUIMICA Y MINERA DE CHILE S.A.

(Exact name of registrant as specified in
its charter)



CHEMICAL AND MINING COMPANY OF CHILE
INC.

(Translation of registrant's name into English)

CHILE

(Jurisdiction of incorporation or organization)



El Trovador 4285, 6th Floor,
Santiago, Chile +56 2 425-2000

(Address of principal executive offices)



Mark Fones +56 2 2425-2485 mark.fones@sqm.com
El Trovador 4285, 6th Floor, Santiago, Chile
(Name, Telephone, E-mail and/or Facsimile Number and Address of Company Contact Person)



Securities registered or to be registered
pursuant to Section 12(b) of the Act.

|Title of each class                                        |  | Name of each exchange on which registered
|---------------------------------------------------------- |  | -----------------------------------------
|Series B shares, in the form of American Depositary Shares |  | New York Stock Exchange                  

Securities registered or to be registered
pursuant to Section 12(g) of the Act.

NONE



Securities for which there is a reporting
obligation pursuant to Section 15(d) of the Act.

NONE



Indicate the number of outstanding shares
of each of the issuer's classes of capital or common stock as of the close of the period covered by the annual report.

|Series A shares |  | 142,819,552
|--------------- |  | -----------
|Series B shares |  | 120,376,972



Indicate by check mark if the registrant
is a well-known seasoned issuer, as defined in rule 405 of the Securities Act:

x YES	  ̈ NO



If this report is an annual or transition
report, indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Securities
Exchange act of 1934:

 ̈ YES	 x  NO



Indicate by check mark whether the registrant
(1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding
12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.

x  YES 	 ̈  NO

Indicate by check mark whether the registrant
has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted
and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter
period that the registrant was required to submit and post such files).

 ̈ YES 	 ̈  NO



Indicate by check mark whether the registrant
is a large accelerated filer, an accelerated filer, or a non accelerated filer. See definition of “accelerated filer and
large accelerated filer” in rule 12b-2 of the Exchange Act.

x  Large accelerated filer      ̈  Accelerated filer      ̈  Non- accelerated filer



Indicate by check mark which basis of accounting
the registrant has used to prepare the financial statements included in this filing:

 ̈
U.S. GAAP xInternational Financial Reporting Standards as issued by the International
Accounting Standards Board  ̈ Other

If “Other”
has been checked in response to the previous question, indicate by check mark which financial statement item the registrant has
elected to follow.

Indicate by check mark which financial statement
item the registrant has elected to follow.

 ̈
Item 17   ̈  Item 18

If this is an annual report, indicate by
check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act):

 ̈ YES 	x  NO













TABLE OF CONTENTS



|                                                          |                                                                              | Page
|--------------------------------------------------------- | ---------------------------------------------------------------------------- | ----
|                                                          |                                                                              |     
|PRESENTATION OF INFORMATION                               | ii                                                                          
|GLOSSARY                                                  | ii                                                                          
|CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS | iv                                                                          
|                                                          |                                                                              |     
|PART I                                                    |                                                                              | 2   
|                                                          |                                                                              |     
|ITEM 1.                                                   | IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS                        | 2   
|ITEM 2.                                                   | OFFER STATISTICS AND EXPECTED TIMETABLE                                      | 2   
|ITEM 3.                                                   | KEY INFORMATION                                                              | 2   
|ITEM 4.                                                   | INFORMATION ON THE COMPANY                                                   | 15  
|ITEM 5.                                                   | OPERATING AND FINANCIAL REVIEW AND PROSPECTS                                 | 57  
|ITEM 6.                                                   | DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES                                   | 79  
|ITEM 7.                                                   | MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS                            | 91  
|ITEM 8.                                                   | FINANCIAL INFORMATION                                                        | 93  
|ITEM 9.                                                   | THE OFFER AND LISTING                                                        | 96  
|ITEM 10.                                                  | ADDITIONAL INFORMATION                                                       | 98  
|ITEM 11.                                                  | QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                   | 112 
|ITEM 12.                                                  | DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES                       | 113 
|                                                          |                                                                              |     
|PART II                                                   |                                                                              | 117 
|                                                          |                                                                              |     
|ITEM 13.                                                  | DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES                              | 117 
|ITEM 14.                                                  | MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS | 117 
|ITEM 15.                                                  | CONTROLS AND PROCEDURES                                                      | 117 
|ITEM 16.                                                  | RESERVED                                                                     | 118 
|ITEM 16.A                                                 | AUDIT COMMITTEE FINANCIAL  EXPERT                                            | 118 
|ITEM 16.B                                                 | CODE OF ETHICS                                                               | 118 
|ITEM 16.C                                                 | PRINCIPAL ACCOUNTANT FEES AND SERVICES                                       | 119 
|ITEM 16.D                                                 | EXEMPTIONS FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES                   | 119 
|ITEM 16.E                                                 | PURCHASES OF EQUITY SECURITIES BY THE ISSUERS AND AFFILIATED PURCHASERS.     | 119 
|ITEM 16.F                                                 | CHANGE IN REGISTRANT'S CERTIFYING ACCOUNTANT.                                | 119 
|ITEM 16.G                                                 | CORPORATE GOVERNANCE.                                                        | 120 
|ITEM 16.H                                                 | MINE SAFETY AND DISCLOSURE.                                                  | 120 
|                                                          |                                                                              |     
|PART III                                                  |                                                                              | 119 
|                                                          |                                                                              |     
|ITEM 17.                                                  | FINANCIAL STATEMENTS                                                         | 121 
|ITEM 18.                                                  | FINANCIAL STATEMENTS                                                         | 121 
|ITEM 19.                                                  | EXHIBITS                                                                     | 121 
|SIGNATURES                                                | 122                                                                         
|                                                          |                                                                              |     
|CONSOLIDATED FINANCIAL STATEMENTS                         | 123                                                                         



EXHIBIT 1.1

EXHIBIT 8.1

EXHIBIT 12.1

EXHIBIT 12.2

EXHIBIT 13.1

EXHIBIT 13.2



i







PRESENTATION OF INFORMATION



In this Annual Report on Form 20-F, except
as otherwise provided or unless the context requires otherwise, all references to "we", "us",
"Company" or "SQM" are to Sociedad Química y Minera de Chile S.A., an open stock corporation
(sociedad anónima abierta) organized under the laws of the Republic of Chile, and its consolidated subsidiaries.



All references to "$,"
"US$," "U.S. dollars," “USD” and "dollars" are to United
States dollars, references to "pesos," “CLP” and "Ch$" are to Chilean pesos,
references to ThUS$ are to thousands of United States dollars, references to ThCh$ are to thousands of Chilean pesos and references
to "UF" are to Unidades de Fomento. The UF is an inflation-indexed, peso-denominated unit that is linked
to, and adjusted daily to reflect changes in, the previous month's Chilean consumer price index. As of December 28, 2012, UF 1.00
was equivalent to US$47.75 and Ch$22,851.84.



The Republic of Chile is governed by a
democratic government, organized in fourteen regions plus the Metropolitan Region (surrounding and including Santiago, the capital
of Chile). Our production operations are concentrated in northern Chile, specifically in the Tarapacá Region and in the
Antofagasta Region.



Our fiscal year ends on December 31. As
December 31 is a public holiday in Chile; certain financial information is reflected as of December 28, 2012.



We use the metric system of weights and
measures in calculating our operating and other data. The United States equivalent units of the most common metric units used by
us are as shown below:



1 kilometer equals approximately
0.6214 miles



1 meter equals approximately
3.2808 feet



1 centimeter equals approximately
0.3937 inches



1 hectare equals approximately
2.4710 acres



1 metric ton (“MT”)
equals 1,000 kilograms or approximately 2,205 pounds.



We are not aware of any independent, authoritative
source of information regarding sizes, growth rates or market shares for most of our markets. Accordingly, the market size, market
growth rate and market share estimates contained herein have been developed by us using internal and external sources and reflect
our best current estimates. These estimates have not been confirmed by independent sources.



Percentages and certain amounts contained
herein have been rounded for ease of presentation. Any discrepancies in any figure between totals and the sums of the amounts presented
are due to rounding.



GLOSSARY



“assay values”
Chemical result or mineral component amount that contains the sample.



“average
global metallurgical recoveries” Percentage that measures the metallurgical treatment effectiveness based on the quantitative
relationship between the initial product contained in the mine-extracted material and the final product produced in the plant.



“average
mining exploitation factor” Index or ratio that measures the mineral exploitation effectiveness, based on the quantitative
relationship between (in-situ mineral minus exploitation losses) / in-situ mineral.



“CAGR”Compound annual growth rate, the year over year growth rate of an investment over a specified period of time



“cash
and cash equivalents”The International Accounting Standards Board (IASB) defines cash and cash equivalents as
short-term, highly liquid investments that are readily convertible to known amounts of cash and which are subject to an insignificant
risk of changes in value.



“Controller
Group”** A person or company or group of persons or companies that according to Chilean law, have executed a joint performance
agreement, that have a direct or indirect share in a company’s ownership and have the power to influence the decisions of
the company’s management.



ii







“Corfo”
Production Development Corporation (Corporación de Fomento de la Producción), formed in 1939, a national organization
in charge of promoting Chile's manufacturing productivity and commercial development.



“cut-off
grade” The minimal assay value or chemical amount of some mineral component above which exploitation is economical.



“dilution”
Loss of mineral grade because of contamination with barren material (or waste) incorporated in some exploited ore mineral.



“exploitation
losses” Amounts of ore mineral that have not been extracted in accordance with exploitation designs.



“fertigation”
The process by which plant nutrients are applied to the ground using an irrigation system.



“geostatistical
analysis” Statistical tools applied to mining planning, geology and geochemical data that allow estimation of averages,
grades and quantities of mineral resources and reserves.



“heap
leaching” A process whereby minerals are leached from a heap, or pad, of crushed ore by leaching solutions percolating
down through the heap and collected from a sloping, impermeable liner below the pad.



“horizontal
layering” Rock mass (stratiform seam) with generally uniform thickness that conform to the sedimentary fields (mineralized
and horizontal rock in these cases).



“hypothetical
resources” Mineral resources that have limited geochemical reconnaissance, based mainly on geological data and samples
assay values spaced between 500–1000 meters.



“Indicated
Mineral Resource” See "Resources—Indicated Mineral Resource."



“Inferred
Mineral Resource” See "Resources—Inferred Mineral Resource."



“industrial
crops” Refers to crops that require processing after harvest in order to be ready for consumption or sale. Tobacco, tea
and seed crops are examples of industrial crops.



“Kriging
Method”A technique used to estimate ore reserves, in which the spatial distribution of continuous geophysical variables
is estimated using control points where values are known.



“LIBOR”
London Inter Bank Offered Rate.



“limited
reconnaissance” Low or limited level of geological knowledge.



“Measured
Mineral Resource” See "Resources—Measured Mineral Resource."



“metallurgical
treatment” A set of chemical and physical processes applied to the caliche ore and to the salar brines to extract their
useful minerals (or metals).



“ore depth”
Depth of the mineral that may be economically exploited.



“ore type”
Main mineral having economic value contained in the caliche ore (sodium nitrate or iodine).



“ore”
A mineral or rock from which a substance having economic value may be extracted.



“Probable
Mineral Reserve” See "Reserves—Probable Mineral Reserve."



“Proved Mineral
Reserve” See “Reserves—Proved Mineral Reserve.”



“Reserves—Probable
Mineral Reserve”* The economically mineable part of an Indicated Mineral Resource and, in some circumstances, Measured
Mineral Resource. The calculation of the reserves includes diluting of materials and allowances for losses which may occur when
the material is mined. Appropriate assessments, which may include feasibility studies, have been carried out and include consideration
of and modification by realistically assumed mining, metallurgical, economic, marketing, legal, environmental, social and governmental
factors. These assessments demonstrate at the time of reporting that extraction is reasonably justified. A Probable Mineral Reserve
has a lower level of confidence than a Proved Mineral Reserve.



“Reserves—Proved
Mineral Reserve”* The economically mineable part of a Measured Mineral Resource. The calculation of the reserves includes
diluting materials and allowances for losses which may occur when the material is mined. Appropriate assessments, which may include
feasibility studies, have been carried out and include consideration of and modification by realistically assumed mining, metallurgical,
economic, marketing, legal, environmental, social and governmental factors. These assessments demonstrate at the time of reporting
that extraction is reasonably justified.



iii









“Resources—Indicated
Mineral Resource”* That part of a Mineral Resource for which tonnage, densities, shape, physical characteristics, grade
and mineral content can be estimated with a reasonable level of confidence. The calculation is based on exploration, sampling and
testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings, and drill
holes. The locations are too widely or inappropriately spaced to confirm geological continuity and/or grade continuity but are
spaced closely enough for continuity to be assumed. An Indicated Mineral Resource has a lower level of confidence than that applying
to a Measured Mineral Resource, but has a higher level of confidence than that applying to an Inferred Mineral Resource.



A deposit
may be classified as an Indicated Mineral Resource when the nature, quality, amount and distribution of data are such as to allow
the Competent Person, as that term is defined under Chilean Law Number 20,235, determining the Mineral Resource to confidently
interpret the geological framework and to assume continuity of mineralization. Confidence in the estimate is sufficient to allow
the appropriate application of technical and economic parameters and to enable an evaluation of economic viability.



“Resources—Inferred
Mineral Resource”* That part of a Mineral Resource for which tonnage, grade and mineral content can be estimated with
a low level of confidence, by inferring them on the basis of geological evidence and assumed but not verified geological and/or
grade continuity. The estimate is based on information gathered through appropriate techniques from locations such as outcrops,
trenches, pits, workings and drill holes, and this information is of limited or uncertain quality and/or reliability. An Inferred
Mineral Resource has a lower level of confidence than that applying to an Indicated Mineral Resource.



“Resources—Measured
Mineral Resource”* The part of a Mineral Resource for which tonnage, densities, shape, physical characteristics, grade
and mineral content can be estimated with a high level of confidence. The estimate is based on detailed and reliable exploration,
sampling and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings,
and drill holes. The locations are spaced closely enough to confirm geological and/or grade continuity.



A deposit
may be classified as a Measured Mineral Resource when the nature, quality, amount and distribution of data are such as to leave
no reasonable doubt, in the opinion of the Competent Person, as that term is defined under Chilean Law Number 20,235, determining
the Mineral Resource, that the tonnage and grade of the deposit can be estimated within close limits and that any variation from
the estimate would not significantly affect potential economic viability. This category requires a high level of confidence in,
and understanding of, the geology and controls of the mineral deposit. Confidence in the estimate is sufficient to allow the appropriate
application of technical and economic parameters and to enable an evaluation of economic viability.



“solar
salts”A mixture of 60% sodium nitrate and 40% potassium nitrate used in the storage of thermo- energy.



“vat
leaching” A process whereby minerals are extracted from crushed ore by placing the ore in large vats containing leaching
solutions.



“waste”
Rock or mineral which is not economical for metallurgical treatment.



“Weighted
Average Age” The sum of the product of the age of each fixed asset at a given facility and its current gross book value
as of December 31, 2012 divided by the total gross book value of the Company's fixed assets at such facility as of December 31,
2012.



| | * | The definitions we use for resources and reserves are based on those provided by the “Instituto
de Ingenieros de Minas de Chile” (Chilean Institute of Mining Engineers).
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | ** | The definition of a Controller Group that has been provided is the one that applies to the Company.
Chilean law provides for a broader definition of a Controller Group.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------



CAUTIONARY STATEMENT REGARDING
FORWARD-LOOKING STATEMENTS



This Form 20-F contains statements that
are or may constitute forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995. These
statements are not based on historical facts and reflect our expectations for future events and results. Words such as "believe,"
"expect," "predict," "anticipate," "intend," "estimate," "should,"
"may," "likely", "could" or similar expressions may identify forward-looking information. These statements
appear throughout this Form 20-F and include statements regarding the intent, belief or current expectations of the Company and
its management, including but not limited to any statements concerning:





iv







| | · | trends affecting the prices and volumes of the products we sell;
| | - | ----------------------------------------------------------------

| | · | level of reserves, quality of the ore and brines, and production levels and yields;
| | - | -----------------------------------------------------------------------------------

| | · | our capital investment program and development of new products;
| | - | ---------------------------------------------------------------

| | · | the future impact of competition; and
| | - | -------------------------------------

| | · | regulatory changes.
| | - | -------------------



Such forward-looking statements are not
guarantees of future performance and involve risks and uncertainties. Actual results may differ materially from those described
in such forward-looking statements included in this Form 20-F, including, without limitation, the information under Item 4. Information
on the Company,Item 5. Operating and Financial Review and Prospects and Item 11. Quantitative and Qualitative Disclosures About
Market Risk. Factors that could cause actual results to differ materially include, but are not limited to:



| | · | volatility of global prices for our products;
| | - | ---------------------------------------------

| | · | political, economic and demographic developments in certain emerging market countries, where we
conduct a large portion of our business;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------

| | · | changes in production capacities;
| | - | ---------------------------------

| | · | the nature and extent of future competition in our principal markets;
| | - | ---------------------------------------------------------------------

| | · | our ability to implement our capital expenditures program, including our ability to obtain financing
when required;
| | - | -------------------------------------------------------------------------------------------------------------------

| | · | changes in raw material and energy prices;
| | - | ------------------------------------------

| | · | currency and interest rate fluctuations;
| | - | ----------------------------------------

| | · | risks relating to the estimation of our reserves;
| | - | -------------------------------------------------

| | · | changes in quality standards or technology applications;
| | - | --------------------------------------------------------

| | · | adverse legal, regulatory or labor disputes or proceedings;
| | - | -----------------------------------------------------------

| | · | changes in governmental regulations; and
| | - | ----------------------------------------

| | · | additional factors discussed below under Item 3. Key Information—Risk Factors
| | - | -----------------------------------------------------------------------------



v







PART I



ITEM
1.IDENTITY OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS



Not Applicable.



ITEM
2.OFFER STATISTICS AND EXPECTED TIMETABLE



Not Applicable.



ITEM
3.KEY INFORMATION



3.A.   Selected Financial Data

The following table presents selected financial
data as of December 31, 2012 and the previous four years. The selected financial data should be read in conjunction with the Consolidated
Financial Statements and notes thereto, “Item 5. Operating and Financial Review and Prospects” and other financial
information included herein.



Since January 1, 2010, the Company’s
consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards as published
by the International Accounting Standards Board (IASB).





The Company’s consolidated financial information as of
and for the year ended December 31, 2009, was restated in accordance with IFRS.



|                                                                                     |  | As of and for the year ended December 31, |         
|------------------------------------------------------------------------------------ |  | ----------------------------------------- | --------
|(in millions of U.S. dollars)(1)                                                     |  | 2012                                      |         
|Statement of income:                                                                 |  |                                           |         
|Revenues                                                                             |  |                                           | 2,429.2 
|Cost of sales                                                                        |  |                                           | (1,400.6
|Gross profit                                                                         |  |                                           | 1,028.6 
|                                                                                     |  |                                           |         
|Other income                                                                         |  |                                           | 12.7    
|Administrative expenses                                                              |  |                                           | (106.4  
|Other expenses                                                                       |  |                                           | (34.6   
|Other gains (losses)                                                                 |  |                                           | 0.7     
|Finance income                                                                       |  |                                           | 29.1    
|Finance expenses                                                                     |  |                                           | (54.1   
|Equity income of associates and joint ventures accounted for using the equity method |  |                                           | 24.4    
|Foreign currency exchange differences                                                |  |                                           | (26.8   
|Income before income tax expense                                                     |  |                                           | 873.5   
|                                                                                     |  |                                           |         
|Income tax expense                                                                   |  |                                           | (216.1  
|                                                                                     |  |                                           |         
|Profit for the year                                                                  |  |                                           | 657.4   
|Profit attributable to:                                                              |  |                                           |         
|Controlling interests                                                                |  |                                           | 649.2   
|Non-controlling interests                                                            |  |                                           | 8.2     



2









|                                              |  | As of and for the year ended December 31, |        
|--------------------------------------------- |  | ----------------------------------------- | -------
|(in millions of U.S. dollars)(1)              |  | 2012                                      |        
|Profit for the year                           |  |                                           | 657.4  
|                                              |  |                                           |        
|Basic earnings per share(2)                   |  |                                           | 2.47   
|Basic earnings per ADS(2)(3)                  |  |                                           | 2.47   
|Dividends per share(4)(5)(6)                  |  |                                           | 1.25   
|Dividends per ADS(5)(6)                       |  |                                           | 1.25   
|Weighted average shares outstanding (000s)(2) |  |                                           | 263,197



(1) Except shares outstanding, dividend
and net earnings per share and net earnings per ADS.



(2) There are no authoritative pronouncements
related to the calculation of earnings per share in accordance with IFRS. The Company has not conducted any type of operation which
would give rise to a potential dilutive effect on its earnings per share. The total number of outstanding shares is the same as
the weighted average shares outstanding.



(3) The Series A ADSs were delisted from
the New York Stock Exchange on March 27, 2008. The ratio of ordinary shares to Series B ADSs changed from 10:1 to 1:1 on March
28, 2008. The calculation of earnings per ADS is based on the ratio of 1:1.



(4) Dividends per share are calculated
based on 263,196,524 shares for the periods ended December 31, 2012, 2011, 2010, and 2009.



(5) Dividends may only be paid from net
income as determined in accordance with IFRS; see Item 8.A.8. Dividend Policy. For dividends in Ch$ see Item 8.A.8. Dividend Policy
— Dividends.



(6) Dividend amount paid per calendar year
to shareholders of the Company.



|                                                |  | As of and for the year ended December 31, |        
|----------------------------------------------- |  | ----------------------------------------- | -------
|(in millions of U.S. dollars)(1)                |  | 2012                                      |        
|Balance Sheet Data:                             |  |                                           |        
|Total assets                                    |  |                                           | 4,416.4
|Total liabilities                               |  |                                           | 2,229.0
|Total equity                                    |  |                                           | 2,187.4
|Equity attributable to controlling interests    |  |                                           | 2,132.8
|Equity attributable to non-controlling interest |  |                                           | 54.7   
|Capital stock                                   |  |                                           | 477.4  



EXCHANGE RATES



Chile has two currency markets, the Formal
Exchange Market (Mercado Cambiario Formal) in which we conduct our transactions, and the Informal Exchange Market (Mercado
Cambiario Informal). The Formal Exchange Market comprises banks and other entities authorized by the Chilean Central Bank(Banco Central de Chile). The Informal Exchange Market comprises entities that are not expressly authorized to operate
in the Formal Exchange Market, such as certain foreign exchange houses and travel agencies, among others. The Chilean Central Bank
is empowered to determine that certain purchases and sales of foreign currencies be carried out on the Formal Exchange Market.



Both the Formal Exchange Market and the
Informal Exchange Market are driven by free market forces. Current regulations require that the Chilean Central Bank be informed
of certain transactions and that these transactions be effected through the Formal Exchange Market.



3









The Observed Exchange Rate (dólar
observado), which is reported by the Chilean Central Bank and published daily in the Chilean newspapers, is computed by taking
the weighted average of the previous business day’s transactions on the Formal Exchange Market. The Chilean Central Bank
has the power to intervene by buying or selling foreign currency on the Formal Exchange Market to attempt to maintain the Observed
Exchange Rate within a desired range. During the past few years the Chilean Central Bank has intervened to attempt to maintain
the Observed Exchange Rate within a certain range only under special circumstances. Although the Chilean Central Bank is not required
to purchase or sell U.S. dollars at any specific exchange rate, it generally uses spot rates for its transactions. Other banks
generally carry out authorized transactions at spot rates as well.



The Informal Exchange Market reflects transactions
carried out at an informal exchange rate (the “Informal Exchange Rate”). There are no limits imposed on the extent
to which the Informal Exchange Rate can fluctuate above or below the Observed Exchange Rate. In recent years, the variations between
the Observed Exchange Rate and the Informal Exchange Rate have not been significant.



The Federal Reserve Bank of New York does
not report a noon buying rate for Chilean pesos.



|Observed Exchange Rate (1)
|--------------------------
|                          
|Year                      
|2008                      
|2009                      
|2010                      
|2011                      
|2012                      



|Last six months |  | Low (1) |        |  | High (1) |  |        | Average (1)(2) |  |  | Year/Month End(3) | 
|--------------- |  | ------- | ------ |  | -------- |  | ------ | -------------- |  |  | ----------------- | 
|2012            |  |         |        |  |          |  |        |                |  |  |                   | 
|October         |  |         | 471.54 |  |          |  | 481.98 |                |  |  | 475.67            | 
|November        |  |         | 476.20 |  |          |  | 484.48 |                |  |  | 480.56            | 
|December        |  |         | 474.36 |  |          |  | 481.28 |                |  |  | 477.11            | 
|2013            |  |         |        |  |          |  |        |                |  |  |                   | 
|January         |  |         | 470.67 |  |          |  | 475.47 |                |  |  | 472.28            | 
|February        |  |         | 470.67 |  |          |  | 473.60 |                |  |  | 472.42            | 
|March           |  |         | 471.10 |  |          |  | 474.82 |                |  |  | 472.44            | 



Source: Central
Bank of Chile



| | (1) | Reflects high and low rates on a day-to-day basis, for each period reported.
| | --- | ----------------------------------------------------------------------------



| | (2) | The monthly average rate is calculated on a day-to-day basis for each month reported. The yearly
average rate is calculated on a month-to-month basis for each year reported.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (3) | Based on transactions observed during the last day of the period.
| | --- | -----------------------------------------------------------------



4







3.B.   Capitalization
and Indebtedness

Not applicable.



3.C.   Reasons
for the Offer and Use of Proceeds

Not applicable.



3.D.   Risk
Factors

Our operations are subject to certain risk
factors that may affect SQM's financial condition or results of operations. In addition to other information contained in this
Annual Report on Form 20-F, you should carefully consider the risks described below. These risks are not the only ones we face.
Additional risks not currently known to us or that are known but we currently believe are not significant may also affect our business
operations. Our business, financial condition or results of operations could be materially affected by any of these risks.



Risks Relating to our Business



Volatility of world fertilizer and
chemical prices and changes in production capacities could affect our business, financial condition and results of operations



The prices of our products, specifically
potassium chloride, are determined principally by world prices, which, in some cases, have been subject to substantial volatility
in recent years. World fertilizer and chemical prices vary depending upon the relationship between supply and demand at any given
time. Supply and demand dynamics for our products are tied to a certain extent to global economic cycles, and have been impacted
by current global economic conditions. Furthermore, the supply of certain fertilizers or chemical products, including certain products
that we provide, varies principally depending on the production of the major producers, including SQM, and their respective business
strategies.



During 2008, world prices of potassium-based
fertilizers (including some of our specialty plant nutrients and potassium chloride) increased significantly during the first nine
months of the year. Towards the end of 2008, fertilizer prices generally fell as a result of the global economic and financial
slowdown. In 2009, volatility in prices continued to affect commodity markets around the world. Since 2010, prices of potassium-based
fertilizers have stabilized after the conclusion of important contract negotiations between major producers and buyers at the end
of 2009. However, during the last quarter of 2012, we observed lower pricing of contracts between Chinese purchasers and major
potash producers, which has created increased volatility in the price of fertilizers. We cannot assure you that prices and sales
volumes will not decline in the future.



Iodine prices have followed an upward trend
since late 2003, reaching an average price of approximately US$53 per kilogram in 2012, over 40% higher than average prices in
2011. During 2012, iodine demand reached record highs, surpassing demand in previous years. We cannot assure you that prices or
sales volumes will not decline in the future.



We started production of lithium carbonate
from the brines extracted from the Salar de Atacama in October 1996 and started selling lithium carbonate commercially in January
1997. Our entry into the market created an oversupply of lithium carbonate, resulting in a drop in prices from over US$3,000 per
ton before our entry to less than US$2,000 per ton in 1997. At the end of 2008, prices were approximately US$6,000 per ton and
remained at this level until the fourth quarter of 2009 when prices declined to approximately US$5,000 per ton. As a result of
events in global markets during 2009, demand for lithium carbonate declined, causing a drop in lithium prices and sales volumes.
In September 2009, we announced a 20% price cut for lithium carbonate and lithium hydroxide as a measure to stimulate demand. As
a result, in 2010, we observed demand recovery in the lithium market, which continued in 2011. In 2012, we continued to see strong
market growth, driven mostly by an increase in demand related to battery use. We cannot assure you that this positive trend will
continue in the future. We cannot assure you that prices and sales volumes will not decline in the future.



5









We expect that prices for the products
we manufacture will continue to be influenced, among other things, by worldwide supply and demand and the business strategies of
major producers. Some of the major producers, including SQM, have increased or have the ability to increase production. As a result,
the prices of our products may be subject to substantial volatility. High volatility or a substantial decline in the prices, or
in volume demand, of one or more of our products could have a material adverse effect on our business, financial condition and
results of operations.



Our sales to emerging markets and
expansion strategy expose us to risks related to economic conditions and trends in those countries



We sell our
products in more than 110 countries around the world. In 2012, approximately 46% of our sales were made in emerging market countries:
17% in Central and South America (excluding Chile); 6% to Africa and the Middle East; 11% in Chile; and 12% in Asia and Oceania
(excluding Japan). We expect to expand our sales in these and other emerging markets in the future. In addition, we may carry out
acquisitions or joint ventures in jurisdictions in which we currently do not operate, relating to any of our businesses or to new
businesses in which we believe we may have sustainable competitive advantages. The results of our operations and our prospects
in other countries in which we establish operations will depend, in part, on the general level of political stability and economic
activity and policies in those countries. Future developments in the political systems or economies of these countries or the implementation
of future governmental policies in those countries, including the imposition of withholding and other taxes, restrictions on the
payment of dividends or repatriation of capital, the imposition of import duties or other restrictions, the imposition of new environmental
regulations or price controls or changes in relevant laws or regulations, could have a material adverse effect on our sales or
operations in those countries.



Our inventory levels may increase
because of the global economic slowdown



In general, the global economic slowdown
experienced during 2008 and 2009 had an impact on our inventories. Demand decreased during 2009 and, as a result, inventories increased
significantly and continue to be high in 2013. Higher inventories carry a financial risk due to increased need for cash to fund
working capital. Higher inventory levels could also imply increased risk of loss of product. We cannot assure you that inventory
levels will not continue to remain high in 2013, or increase further, in the future. These factors could have a material adverse
effect on our business, financial condition and results of operations.



Our level of and exposure to unrecoverable
accounts receivable may significantly increase



Potentially negative effects of the global
economic slowdown on the financial condition of our customers may include the extension of the payment terms of our accounts receivable
and may increase our exposure to bad debt. While we have implemented, such as using credit insurance, letters of credits and prepayment
for a portion of sales, to minimize this risk, the increase in our accounts receivable coupled with the financial condition of
customers may result in losses that could have a material adverse effect on our business, financial condition and results of operations.



6







New production of iodine or lithium carbonate from current
or new competitors



Potential new production of iodine and
lithium carbonate from current or new competitors in the markets in which we operate could adversely affect prices. There is limited
information on the status of new iodine or lithium carbonate production capacity expansion projects being developed by current
and potential competitors and, as such, we cannot make accurate projections regarding the capacities of possible new entrants into
the market and the dates on which they could become operational. If these potential projects are completed in the short term, they
could adversely affect market prices and our market share, which, in turn, could have a material adverse effect on our business,
financial condition and results of operations.



We have an ambitious capital expenditure
program that is subject to significant risks and uncertainties



Our business is capital intensive. Specifically,
the exploration and exploitation of reserves, mining and processing costs, the maintenance of machinery and equipment and compliance
with applicable laws and regulations require substantial capital expenditures. We must continue to invest capital to maintain or
to increase our exploitation levels and the amount of finished products we produce. We require environmental permits for our new
projects. Obtaining permits in certain cases may cause significant delays in the execution and implementation of new projects and,
consequently, may require us to reassess the related risks and economic incentives. We cannot assure you that we will be able to
maintain our production levels or generate sufficient cash flow, or that we will have access to sufficient investments, loans or
other financing alternatives, to continue our activities at or above present levels, or that we will be able to implement our projects
or receive the necessary permits required for them in time. Any or all of these factors may have a material adverse effect on our
business, financial condition and results of operations.



High raw materials and energy prices could increase our
production costs and cost of sales, and energy may become unavailable at any price



We rely on certain raw materials and various
sources of energy (diesel, electricity, natural gas, including LNG, fuel oil and others) to manufacture our products. Purchases
of raw materials that we do not produce and energy constitute an important part of our cost of sales, approximately 20% in 2012.
In addition, we may not be able to obtain energy at any price if supplies of our sources of energy are curtailed or otherwise become
unavailable. To the extent we are unable to pass on increases in raw materials and energy prices to our customers or we are unable
to obtain energy, our business, financial condition and results of operations could be materially adversely affected.



Currency fluctuations may have a
negative effect on our financial performance



We transact a significant portion of our
business in U.S. dollars, and the U.S. dollar is the currency of the primary economic environment in which we operate. In addition,
the U.S. dollar is our functional currency for financial statement reporting purposes. A significant portion of our costs, however,
is related to the Chilean peso. Therefore, an increase or decrease in the exchange rate between the Chilean peso and the U.S. dollar
would affect our costs of production. The Chilean peso has been subject to large devaluations and revaluations in the past and
may be subject to significant fluctuations in the future. As of December 31, 2012, the Chilean peso exchange rate was Ch$479.96
per U.S. dollar, while as of December 31, 2011, the Chilean peso exchange rate was Ch$519.20 per U.S. dollar. As of March 15, 2013,
the Observed Exchange Rate was Ch$471.10 per U.S. dollar.



7









As an international company operating in
several other countries, we also transact business and have assets and liabilities in other non-U.S. dollar currencies, such as,
among others, the euro, the South African rand, the Mexican peso, the Chinese yuan and the Brazilian real. As a result, fluctuations
in the exchange rates of such foreign currencies to the U.S. dollar may have a material adverse effect on our business, financial
condition and results of operations.



Interest rate fluctuations may have
a material impact on our financial performance



We have outstanding short and long-term
debt that bears interest based on the London Interbank Offered Rate (“LIBOR”), plus a spread. Since we are currently
hedging only a portion of these liabilities into fixed rates, we are exposed to interest rate risk relating to LIBOR fluctuations.
As of December 31, 2012, approximately 21% our financial debt had LIBOR-based pricing that was not hedged into fixed rates. A relative
increase in the rate could materially impact our financial condition and results of operations.



Our reserves estimates could be subject to significant
changes



Our mining reserves estimates are prepared
by our own geologists, and were validated in February 2013, by Mrs. Marta Aguilera, a geologist with over 20 years of experience
in the field. She is currently employed by SQM as Manager of Non-metallic Geology.  Mrs. Aguilera is a Competent Person (Persona
Competente), as that term is defined under Chilean Law No. 20,235 that Regulates the Position of Competent Person and Creates
the Qualifying Committee for Competencies in Mining Resources and Reserves (Ley que Regula la Figura de las Personas Competentes
y Crea la Comisión Calificadora de Competencias de Recursos y Reservas Minerasor“Competent Person Law”).
Estimation methods involve numerous uncertainties as to the quantity and quality of the reserves, and reserve estimates could change
upwards or downwards. In addition, our reserve estimates are not subject to review by external geologists or an external auditing
firm. A downward change in the quantity and/or quality of our reserves could affect future volumes and costs of production and
therefore have a material adverse effect on our business, financial condition and results of operations.



Quality standards in markets in which we sell our products
could become stricter over time



In the markets in which we do business,
customers may impose quality standards on our products and/or governments may enact or are enacting stricter regulations for the
distribution and/or use of our products. As a result, if we cannot meet such new standards or regulations, we may not be able to
sell our products. In addition, our cost of production may increase in order to meet any such newly imposed or enacted standards.
Failure to sell our products in one or more markets or to important customers could materially adversely affect our business, financial
condition and results of operations.



8







Chemical and physical properties of our products could
adversely affect their commercialization



Since our products are derived from natural
resources, they contain inorganic impurities that may not meet certain customer or government standards. As a result, we may not
be able to sell our products if we cannot meet such requirements. In addition, our cost of production may increase in order to
meet such standards. Failure to meet such standards could materially adversely affect our business, financial condition and results
of operations.



Our business is subject to many operating
and other risks for which we may not be fully covered under our insurance policies



Our facilities and business operations
in Chile and abroad are insured against losses, damages or other risks by insurance policies that are standard for the industry
and that would reasonably be expected to be sufficient by prudent and experienced persons engaged in businesses similar to ours.



We may be subject to certain events that
may not be covered under our insurance policies, which could have a material adverse effect on our business, financial condition
and results of operations. Additionally, as a result of the major earthquake in Chile in February 2010 and other natural disasters
worldwide in 2011 and 2012, conditions in the insurance market have changed and may continue to change in the future, and as a
result, we may face higher premiums and reduced coverage.



Changes in technology or other developments
could result in preferences for substitute products



Our products, particularly iodine, lithium
and their derivatives, are preferred raw materials for certain industrial applications, such as rechargeable batteries and LCD
screens. Changes in technology, the development of substitute raw materials or other developments could adversely affect demand
for these and other products which we produce.



We are exposed to labor strikes and
labor liabilities that could impact our production levels and costs



Over 96% of our employees are employed
in Chile, of which approximately 67% were represented by 24 labor unions as of December 31, 2012. As in previous years, during
2012, we renegotiated collective labor contracts with individual unions one year before the expiration of such contracts. As of
December 31, 2012, we had concluded advanced negotiations with 22 labor unions, which represent 96% of our total unionized workers,
signing new agreements with each for durations of three years. We are in the process of negotiating collective labor contracts
with the two remaining unions. We are exposed to labor strikes that could impact our production levels. If a strike occurs and
continues for a sustained period of time, we could be faced with increased costs and even disruption in our product flow that could
have a material adverse effect on our business, financial condition and results of operations.



Chilean Law No. 16,744, known as the Law
on Work Related Accidents and Professional Diseases(Ley de Accidentes de Trabajo y Enfermedades Profesionales or
the “Labor Accidents Law”), provides that when a serious accident in the workplace occurs, a company must halt work
at the site where the accident took place until authorities from either the National Geology and Mining Service (Servicio Nacional
de Geología y Minería or “SERNAGEOMIN”) or the Labor Board (Dirección del Trabajo or
“Labor Board”) or the National Health Service (Servicio Nacional de Salud or “SNA”), inspect the
site and prescribe the measures such company must take to prevent future risks. Work may not be resumed until such company has
taken the prescribed measures, and the period of time before work may be resumed may last for a number of hours, days, or longer.
The effects of this law could have a material adverse effect on our business, financial condition and results of operations.



9









Lawsuits and arbitrations could adversely
impact us



We are party to a range of lawsuits and
arbitrations involving different matters as described in Note 16.1 of our Consolidated Financial Statements. Although we intend
to defend our positions vigorously, our defense of these actions may not be successful. Judgments or settlements in these lawsuits
may have a material adverse effect on our business, financial condition and results of operations. In addition, our strategy of
being a world leader includes entering into commercial and production alliances, joint ventures and acquisitions to improve our
global competitive position. As these operations increase in complexity and are carried out in different jurisdictions, we might
be subject to legal proceedings that, if settled against us, could have a material adverse effect on our business, financial condition
and results of operations.



The Chilean labor code (Código
del Trabajo or “Labor Code”) has recently established new procedures for labor matters which include oral trials
conducted by specialized judges. The majority of these oral trials have found in favor of the employee. These new procedures could
increase the probability of adverse judgments in labor lawsuits which could have a material adverse effect on our business, financial
condition and results of operations.



We have operations in multiple jurisdictions
with differing regulatory, tax and other regimes



We operate in multiple jurisdictions with
complex regulatory environments subject to different interpretations by companies and respective governmental authorities. These
jurisdictions may each have their own tax codes, environmental regulations, labor codes and legal framework, which could complicate
efforts to comply with these regulations, which could have, in turn, a material adverse effect on our business, financial condition
and results of operations.



Our water supply could be affected
by geological changes



Our access to water may be impacted by
changes in geology or other natural factors, such as wells drying up, that we cannot control, and which may have a material adverse
effect on our business, financial condition and results of operations.



Risks Relating to Chile



As we are a company based in Chile,
we are exposed to Chilean political risks



Our business, results of operations, financial
condition and prospects could be affected by changes in policies of the Chilean government, other political developments in or
affecting Chile, and regulatory and legal changes or administrative practices of Chilean authorities, over which we have no control.



10









Changes in regulations regarding,
or any revocation or suspension of our concessions could negatively affect our business



Any changes to regulations to which we
are subject or adverse changes to our concession rights, or a revocation or suspension of our concessions, could have a material
adverse effect on our business, financial condition and results of operations.



Changes in mining or port concessions
could affect our operating costs



We conduct our mining (including brine
extraction) operations under exploitation and exploration concessions granted in accordance with provisions of the Chilean constitution
and related laws and statutes. Our exploitation concessions essentially grant a perpetual right to conduct mining operations in
the areas covered by the concessions, provided that we pay annual concession fees. Our exploration concessions permit us to explore
for mineral resources on the land covered thereby for a specified period of time and to subsequently request a corresponding exploitation
concession. Furthermore, under the regulations of theChilean Nuclear and Energy Commission (Comisión Chilena
de Energía y Nuclear or “CCHEN”), we are limited to 180,100 tons of total lithium extraction in the
aggregate for all periods. More than halfway through the term of the lease agreement, we have extracted less than half of the total
accumulated extraction limit of lithium. However, there can be no assurance that we will not reach the lithium extraction limit
prior to the term of the lease agreement.



We also operate port facilities at Tocopilla,
Chile for the shipment of our products and the delivery of certain raw materials, pursuant to concessions granted by Chilean regulatory
authorities. These concessions are renewable provided that we use such facilities as authorized and pay annual concession fees.



Any significant changes to any of these
concessions could have a material adverse effect on our business, financial condition and results of operations.



Changes in water rights laws could
affect our operating costs



We hold water rights that are key to our
operations. These rights were obtained from the Chilean Water Authority (Dirección General de Aguas) for supply of
water from rivers and wells near our production facilities, which we believe are sufficient to meet current operating requirements.
However, the Chilean water rights code (Código de Aguas or the “Water Code”) is subject to changes, which
could have a material adverse impact on our business, financial condition and results of operations. For example, an amendment
published on June 16, 2005 modified the Water Code, allowing, under certain conditions, the granting of permanent water rights
of up to two liters per second for each well built prior to June 30, 2004, in the locations where we conduct our mining operations,
without considering the availability of water, or how the new rights may affect holders of existing rights. Therefore, the amount
of water we can effectively extract based on our existing rights could be reduced if these additional rights are exercised. In
addition, we must pay annual concession fees to maintain water rights we are not exercising. These and potential future changes
to the Water Code could have a material adverse effect on our business, financial condition and results of operations.



The Chilean government could levy
additional taxes on corporations operating in Chile



In 2005, the Chilean Congress approved
Law No. 20,026 that Establishes a Specific Tax on Mining Activity (Ley que Establece un Impuesto Específico a la Actividad
Minera or the “Royalty Law”), establishing a royalty tax to be applied to mining activities developed in Chile.



11









As a result of the earthquake and tsunami
in February 2010, the Chilean government raised the corporate income tax rate in order to pay for reconstruction following the
earthquake and tsunami. Such legislation increased the general corporate tax rate from its historic rate of 17.0% to 20.0% for
the income accrued in 2011, which was declared and paid in 2012. On September 27, 2012, Law No. 20,630 introduced new amendments
to existing tax legislation. Among the amendments introduced, the corporate income tax was permanently maintained at 20% effective
for the 2012 calendar year.



We cannot assure you that the manner in
which the Royalty Law or the corporate tax rate are interpreted and applied will not change in the future. In addition, the Chilean
government may decide to levy additional taxes on mining companies or other corporations in Chile. Such changes could have a material
adverse effect on our business, financial condition and results of operations.



Environmental laws and regulations
could expose us to higher costs, liabilities, claims and failure to meet current and future production targets



Our operations
in Chile are subject to national and local regulations relating to environmental protection. We are required to conduct environmental
impact studies or statements of any future projects or activities (or significant modifications thereto) that may affect the environment
and we are required to obtain an environmental license for certain projects and activities. Theenvironmental assessment
service (Servicio de Evaluación Ambiental or “Environmental Assessment Service”) currently
evaluates environmental impact studies submitted for its approval, and private citizens, public agencies or local authorities may
challenge projects that may adversely affect the environment, either before these projects are executed or once they are already
operating, if they fail to comply with applicable regulations. Enforcement remedies available include fines up to approximately
US$10 million and temporary or permanent closure of facilities and revocation of the environmental license.



Chilean environmental regulations have
become increasingly stringent in recent years, both with respect to the approval of new projects and in connection with the implementation
and development of projects already approved, and we believe that this trend is likely to continue. Given public interest in environmental
enforcement matters, these regulations or their application may also be subject to political considerations that are beyond our
control.



We continuously
monitor the impact of our operations on the environment and have, from time to time, made modifications to our facilities to minimize
any adverse environmental impacts. We believe we are currently in compliance in all material respects with applicable environmental
regulations in Chile. Future developments in the creation or implementation of environmental requirements, or in their interpretation,
could result in substantially increased capital, operation or compliance costs or otherwise adversely affect our business, financial
condition and results of operations. In connection with our current investments at the Salar
de Atacama and Nueva Victoria, the success of these investments is dependent on the behavior of the ecosystem variables being monitored
over time. If the behavior of these variables in future years does not meet environmental requirements, our operation may be subject
to important restrictions by the authorities on the maximum allowable amounts of brine and water extraction.



Our future development depends on our ability
to sustain future production levels, which requires additional investments and the submission of the corresponding environmental
impact studies or statements. If we fail to obtain approval or required environmental licenses, our ability to maintain production
at specified levels will be seriously impaired, thus having a material adverse effect on our business, financial condition and
results of operations.



12









In addition, our worldwide operations are
subject to international and other local environmental regulations. Since environmental laws and regulations in the different jurisdictions
in which we operate may change, we cannot guarantee that future environmental laws, or changes to existing environmental laws,
will not materially adversely impact our business, financial condition and results of operations.



Ratification of the International
Labor Organization’s Convention 169 concerning indigenous and tribal peoples might affect our development plans



Chile, a member of the International Labor
Organization (“ILO”), has ratified the ILO’s Convention 169 (the “Indigenous Rights Convention”)
concerning indigenous and tribal peoples. The Indigenous Rights Convention established several rights for indigenous individuals
and communities. Among other rights, the Indigenous Rights Convention outlines that (i) indigenous groups be notified of and consulted
prior to the development of any project on land deemed indigenous (without any veto or approval right) and of any legislative or
administrative measure that may affect them directly; and (ii) indigenous groups have, to the extent possible, a stake in benefits
resulting from the exploitation of natural resources in alleged indigenous land. The extent of these benefits has not been defined
by the Chilean government. The new rights outlined in the Indigenous Rights Convention could affect the development of our investment
projects in alleged indigenous lands which could have a material adverse effect on our business, financial condition and results
of operations.



Chile is located in a seismically
active region



Chile is prone to earthquakes because it
is located along major fault lines.  The most recent major earthquake in Chile occurred in February 2010 and caused substantial
damage to major areas of the country. Chile also has experienced volcanic activity.  A major earthquake or a volcano eruption
could have significant negative consequences for our operations and for the general infrastructure, such as roads, rail, and access
to goods, in Chile. Although we maintain insurance policies standard for this industry with earthquake coverage, we cannot assure
you that a future seismic event will not have a material adverse effect on our business, financial condition and results of operations.



Risks
related to our shares and to our ADRs



The price of our ADRs and the
U.S. dollar value of any dividends will be affected by fluctuations in the U.S. dollar/Chilean peso exchange rate



Chilean trading in the shares underlying
our ADRs is conducted in Chilean pesos. The depositary will receive cash distributions that we make with respect to the shares
in Chilean pesos. The depositary will convert such Chilean pesos to U.S. dollars at the then prevailing exchange rate to make dividend
and other distribution payments in respect of ADSs. If the value of the Chilean peso falls relative to the U.S. dollar, the value
of the ADRs and any distributions to be received from the depositary will decrease.



Developments in other emerging
markets could materially affect the value of our ADRs



The Chilean financial and securities markets
are, to varying degrees, influenced by economic and market conditions in other emerging market countries or regions of the world.
Although economic conditions are different in each country or region, investor reaction to developments in one country or region
can have significant effects on the securities of issuers in other countries and regions, including Chile and Latin America. Events
in other parts of the world may have a material effect on Chilean financial and securities markets and on the value of our ADRs.



13









The volatility and low liquidity
of the Chilean securities markets could affect the ability of our shareholders to sell our ADRs



The Chilean securities markets are substantially
smaller, less liquid and more volatile than the major securities markets in the United States. The volatility and low liquidity
of the Chilean markets could increase the price volatility of our ADRs and may impair the ability of a holder to sell our ADRs
into the Chilean market in the amount and at the price and time he wishes to do so.



Our share price may react negatively
to future acquisitions and investments



As world leaders in our core businesses,
part of our strategy is to look for opportunities that will allow us to consolidate and strengthen our competitive position in
jurisdictions in which we currently do not operate. Pursuant to this strategy, we may carry out acquisitions or joint ventures
relating to any of our businesses or to new businesses in which we believe we may have sustainable competitive advantages. Depending
on our capital structure at the time of such acquisitions, we may need to raise significant debt and/or equity which will affect
our financial condition and future cash flows. Any change in our financial condition could affect our results of operations, negatively
impacting our share price.



You may be unable to enforce
rights under U.S. Securities Laws



Because we are a Chilean company subject
to Chilean law, the rights of our shareholders may differ from the rights of shareholders in companies incorporated in the United
States, and you may not be able to enforce or may have difficulty enforcing rights currently in effect under U.S. Federal or State
securities laws.



Our Company is a "sociedad anónima
abierta" (open stock corporation) incorporated under the laws of the Republic of Chile. Most of our directors and officers
reside outside the United States, principally in Chile. All or a substantial portion of the assets of these persons are located
outside the United States. As a result, if any of our shareholders, including holders of our ADRs, were to bring a lawsuit against
our officers or directors in the United States, it may be difficult for them to effect service of legal process within the United
States upon these persons. Likewise, it may be difficult for them to enforce judgments obtained in United States courts based upon
the civil liability provisions of the federal securities laws of the United States against them in United States courts.



In addition, there is no treaty between
the United States and Chile providing for the reciprocal enforcement of foreign judgments. However, Chilean courts have enforced
judgments rendered in the United States, provided that the Chilean court finds that the United States court respected basic principles
of due process and public policy. Nevertheless, there is doubt as to whether an action could be brought successfully in Chile in
the first instance on the basis of liability based solely upon the civil liability provisions of the United States federal securities
laws.



As preemptive rights may be
unavailable for our ADR holders, they have the risk of their holdings being diluted if we issue new stock



Chilean laws require companies to offer
their shareholders preemptive rights whenever selling new shares of capital stock. Preemptive rights permit holders to maintain
their existing ownership percentage in a company by subscribing for additional shares. If we increase our capital by issuing new
shares, a holder may subscribe for up to the number of shares that would prevent dilution of the holder's ownership interest.



If we issue preemptive rights, United States
holders of ADRs would not be able to exercise their rights unless a registration statement under the Securities Act were effective
with respect to such rights and the shares issuable upon exercise of such rights or an exemption from registration were available.
We cannot assure holders of ADRs that we will file a registration statement or that an exemption from registration will be available.
We may, in our absolute discretion, decide not to prepare and file such a registration statement. If our holders were unable to
exercise their preemptive rights because we did not file a registration statement, the depositary bank would attempt to sell their
rights and distribute the net proceeds from the sale to them, after deducting the depositary's fees and expenses. If the depositary
could not sell the rights, they would expire and holders of ADRs would not realize any value from them. In either case, ADR holders'
equity interest in us would be diluted in proportion to the increase in our capital stock.



14









If we were classified as a
Passive Foreign Investment Company there could be adverse consequences for U.S. investors



We believe that we were not classified
as a passive foreign investment company, or PFIC, for 2012. Characterization as a PFIC could result in adverse U.S. tax consequences
to you if you are a U.S. investor in our shares or ADRs. For example, if we (or any of our subsidiaries) are a PFIC, our U.S. investors
may become subject to increased tax liabilities under U.S. tax laws and regulations and will become subject to burdensome reporting
requirements. The determination of whether or not we (or any of our subsidiaries or portfolio companies) are a PFIC is made on
an annual basis and will depend on the composition of our (or their) income and assets from time to time. See Item 10.E. Taxation
– United States Tax Considerations.



Changes in Chilean tax regulations
could have adverse consequences for U.S. investors



Currently cash dividends paid by us to
foreign shareholders are subject to a 35% Chilean withholding tax. If we have paid corporate income tax (the "First Category
Tax") on the income from which the dividend is paid, a credit for the First Category Tax effectively reduces the rate of Withholding
Tax. Changes in Chilean tax regulations could have adverse consequences for U.S. investors.



ITEM
4.INFORMATION ON THE COMPANY



4.A. History
and Development of the Company



Historical
Background



Sociedad Química y Minera de Chile
S.A. "SQM" is an open stock corporation (sociedad anónima abierta) organized under the laws of the Republic
of Chile. We were constituted by public deed issued on June 17, 1968 by the Notary Public of Santiago, Mr. Sergio Rodríguez
Garcés. Our existence was approved by Decree No. 1,164 of June 22, 1968 of the Ministry of Finance, and we were registered
on June 29, 1968 in the Registry of Commerce of Santiago, on page 4,537 No. 1,992. Our headquarters is located at El Trovador 4285,
Fl. 6, Las Condes, Santiago, Chile. Our telephone number is +56 2 2425-2000.



Commercial exploitation of the caliche
ore deposits in northern Chile began in the 1830s, when sodium nitrate was extracted from the ore for use in the manufacturing
of explosives and fertilizers. By the end of the nineteenth century, nitrate production had become the leading industry in Chile
and the country was the world's leading supplier of nitrates. The accelerated commercial development of synthetic nitrates in the
1920s and the global economic depression in the 1930s caused a serious contraction of the Chilean nitrate business, which did not
recover significantly until shortly before the Second World War. After the war, the widespread commercial production of synthetic
nitrates resulted in a further contraction of the natural nitrate industry in Chile, which continued to operate at depressed levels
into the 1960s.



We were formed in 1968 through a joint
venture between Compañía Salitrera Anglo Lautaro S.A. (“Anglo Lautaro”) and Corporación de
Fomento de la Producción (“Production Development Corporation” or “Corfo”), a Chilean government
entity. Three years after our formation, in 1971, Anglo Lautaro sold all of its shares to Corfo, and we were wholly owned by the
Chilean Government until 1983. In 1983, Corfo began a process of privatization by selling our shares to the public and subsequently
listing such shares on the Santiago Stock Exchange. By 1988, all of our shares were publicly owned. Our Series B ADRs have traded
on the NYSE under the ticker symbol “SQM” since 1993.



15









Since our inception, in addition to producing
nitrates, we have produced iodine, which is also found in the caliche ore deposits in northern Chile.



Between the years 1994 and 1999, we invested
approximately US$300 million in the development of the Salar de Atacama project in northern Chile. The project involved the construction
of a potassium chloride plant, a lithium carbonate plant, a potassium sulfate plant, and a boric acid plant.



To help finance the above projects, we
accessed the international capital markets by issuing additional Series B ADRs on the New York Stock Exchange in 1995. In 1999
we issued additional Series A shares, which were also listed on the New York Stock Exchange as ADRs. Effective March 27, 2008,
the Company voluntarily delisted its Series A ADR (“SQM-A”) from the New York Stock Exchange. In addition, on April
5, 2013. we filed a Form F-6 in order to issue 100 million additional Series B ADRs on the New York Stock Exchange, to be effective
as of April 15, 2013.



During the period from 2000 through 2004,
we principally consolidated the investments carried out in the preceding five years. We focused on reducing costs and improving
efficiencies throughout the organization.



Since 2005, we have strengthened our leadership
in our main businesses by increasing our capital expenditure program and making advantageous acquisitions and divestitures. During
this period we acquired Kemira Emirates Fertiliser Company (Kefco)
in Dubai and the iodine business of Royal DSM N.V. (DSM). We also sold (i) Fertilizantes Olmeca, our Mexican subsidiary, (ii) our
butyllithium plant located in Houston, Texas and (iii) our stake in Impronta S.R.L., our Italian subsidiary. These sales allowed
us to concentrate our efforts on our core products. In 2007, we completed the construction of a new prilling and granulating plant.
In 2008, we completed our lithium carbonate capacity expansion and began work on the engineering stage of a new potassium nitrate
plant.



From 2010 to 2012, we continued to expand
our production capacity of potassium products in our operations in the Salar de Atacama. In 2011, we completed the construction
of a new potassium nitrate facility in Coya Sur, increasing our overall production capacity of potassium nitrate by 300,000 metric
tons. In addition, in 2008 we entered into a joint venture with Migao Corporation (“Migao”) for the construction of
a potassium nitrate plant with a production capacity of 40,000 metric tons per year. This facility was completed and began operating
in January 2011.



In the second half of 2011, we effected
a corporate reorganization whereby our subsidiary Soquimich European Holding B.V. acquired a 66.6% ownership in Fertilizantes Naturales
S.A. (later renamed SQM Iberian S.A.) from Nutrisi Holding N.V. Soquimich European Holding B.V. owned a non-controlling 50% stake
in Nutrisi Holding N.V. which was divested following this acquisition in December 2011. The effect of these transactions has been
that we indirectly control SQM Iberian S.A. through Soquimich European Holding B.V. SQM Iberian S.A. sells and distributes fertilizers,
primarily in Spain.



In 2012, SQM Vitas FZ Company, our joint
venture with the French Roullier Group, started the construction of new plants in Brazil (Candeias), Peru and South Africa (Durban)
for the production of water soluble fertilizers containing different relative amounts of nitrogen, phosphorus and potassium, and,
occasionally, smaller amounts of other chemicals. The Brazilian plant (Candeias Industrial Complex) began operating in March 2012.
It has a production capacity of 25,000 metric tons per year, and represented a total investment of US$10 million.



16









Capital Expenditure Program



We regularly review different opportunities
to improve our production methods, reduce costs, increase production capacity of existing products and develop new products and
markets. Additionally, significant capital expenditures are required every year in order to sustain our production capacity. We
are focused on developing new products in response to identified customer demand, as well as new products that can be derived as
part of our existing production or other products that could fit our long-term development strategy. Our capital expenditures during
the past five years were mainly related to the acquisition of new assets, construction of new facilities and renewal of plant and
equipment.



Our capital expenditures include investments
aimed at sustaining, improving or increasing production levels, including acquisitions and investments in related companies.



Our capital expenditures for the years
ended December 31, 2012, 2011 and 2010 were as follows:



|(in millions of US dollars) |  | 2012 |       |  | 2011 |  |       | 2010 | 
|--------------------------- |  | ---- | ----- |  | ---- |  | ----- | ---- | 
|Capital Expenditures        |  |      | 446.0 |  |      |  | 501.1 |      | 



During 2010, we had total capital expenditures
of US$336.0 million, primarily relating to:



| | · | continued investment in a new potassium nitrate production facility in Coya Sur;
| | - | --------------------------------------------------------------------------------



| | · | investments related to increasing production capacity of potassium-based products at the Salar
de Atacama;
| | - | ----------------------------------------------------------------------------------------------------------



| | · | upgrades of our railroad system to handle expanded production capacity; and
| | - | ---------------------------------------------------------------------------



| | · | various projects designed to maintain production capacity, increase yields and reduce costs.
| | - | --------------------------------------------------------------------------------------------



During 2011, had total capital expenditures
of US$501.1 million, primarily relating to:



| | · | increased production capacity of potassium-based products at the Salar de Atacama, with the continued
construction and completion of potassium chloride and granulated potassium chloride facilities at the Salar de Atacama;
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | increased capacity and efficiencies at nitrate and iodine facilities;
| | - | ---------------------------------------------------------------------



| | · | optimization of our rail system; and
| | - | ------------------------------------



| | · | various projects designed to maintain production capacity, increase yields and reduce costs.
| | - | --------------------------------------------------------------------------------------------



During 2012, we had total capital expenditures
of US$446.0 million, primarily relating to:



| | · | projects to increase capacity and efficiencies at nitrate and iodine facilities in the Tarapacá
region;
| | - | -------------------------------------------------------------------------------------------------------



| | · | continued investments related to increasing production capacity of potassium-based products at
the Salar de Atacama, including several projects related to production of finished products; and
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | various projects designed to maintain production capacity, increase yields and reduce costs.
| | - | --------------------------------------------------------------------------------------------



We have developed a capital expenditure
program for 2013 calling for investments totaling approximately US$500.0 million, excluding possible mergers, acquisitions or similar
arrangements. Among other things, the program will focus on:



17









| | · | investments related to increasing production of potassium-based products at the Salar de Atacama;
| | - | -------------------------------------------------------------------------------------------------



| | · | continued investments related to increased production capacity and efficiencies at our nitrate
and iodine facilities;
| | - | ---------------------------------------------------------------------------------------------------------------------



| | · | optimization of our muriate of potassium facility at the Salar de Atacama; and
| | - | ------------------------------------------------------------------------------



| | · | various projects designed to maintain production capacity, increased yields and reduce costs.
| | - | ---------------------------------------------------------------------------------------------



We expect substantially all of the approximately
US$500.0 million under our current capital expenditure program to be made in Chile. No external financing is required to finance
the capital expenditure program for the 2013 period; however, we reserve the right to access capital markets in order to optimize
its financial position.



4.B. Business
Overview



The
Company



We believe that we are the world’s
largest producer of potassium nitrate, iodine and lithium chemicals. We produce specialty plant nutrients, iodine and iodine derivatives,
lithium and lithium derivatives, potassium chloride, potassium sulfate and certain industrial chemicals (including industrial nitrates
and solar salt). Our products are sold in more than 110 countries through our worldwide distribution network, with 89% of our sales
in 2012 derived from countries outside Chile.



Our products are mainly derived from mineral
deposits found in northern Chile. We mine and process caliche ore and brine deposits. The caliche ore in northern Chile contains
the only known nitrate and iodine deposits in the world and is the world’s largest commercially exploited source of natural
nitrates. The brine deposits of the Salar de Atacama, a salt-encrusted depression in the Atacama desert in northern Chile, contain
high concentrations of lithium and potassium as well as significant concentrations of sulfate and boron.



From our caliche ore deposits, we produce
a wide range of nitrate-based products used for specialty plant nutrients and industrial applications, as well as iodine and iodine
derivatives. At the Salar de Atacama, we extract brines rich in potassium, lithium, sulfate and boron in order to produce potassium
chloride, potassium sulfate, lithium solutions, boric acid and bischofite (magnesium chloride). We produce lithium carbonate and
lithium hydroxide at our plant near the city of Antofagasta, Chile, from the solutions brought from the Salar de Atacama. We market
all of these products through an established worldwide distribution network.



Our products are divided into six categories:
specialty plant nutrients; iodine and its derivatives; lithium and its derivatives; potassium chloride and potassium sulfate; industrial
chemicals; and other commodity fertilizers. Specialty plant nutrients are premium fertilizers that enable farmers to improve yields
and the quality of certain crops. Iodine, lithium and their derivatives are used in human nutrition, pharmaceuticals and other
industrial applications. Iodine and its derivatives are mainly used in the X-ray contrast media and biocides industries and in
the production of polarizing film, which is an important component in liquid crystal display (“LCD”) screens. Lithium
and its derivatives are mainly used in batteries, greases and frits for production of ceramics. Potassium chloride is a commodity
fertilizer that is produced and sold by us worldwide. In addition, we complement our portfolio of plant nutrients through the buying
and selling of other commodity fertilizers for use mainly in Chile. Industrial chemicals have a wide range of applications in certain
chemical processes such as the manufacturing of glass, explosives and ceramics, and, more recently, industrial nitrates are being
used in solar thermal energy plants as a means for energy storage.



18









For the year ended December 31, 2012, we
had revenues of US$2,429.2 million, gross profit of US$1,028.6 million and profit attributable to controlling interests of US$649.2
million. Our world wide market capitalization as of December 31, 2012 was approximately US$15.0 billion.



Our Series A and Series B common shares
are listed on the Santiago Stock Exchange. Our Series B American Depositary Shares (“ADSs”) have been listed on the
New York Stock Exchange (the “NYSE”) since 1993. Our ticker symbols on the Santiago Stock Exchange for our Series A
and Series B common shares are “SQM-A” and “SQM-B,” respectively, and our ticker symbol on the NYSE for
the Series B ADSs is “SQM.”



Specialty Plant Nutrition:
We produce four principal types of specialty plant nutrients: potassium nitrate, sodium nitrate, sodium potassium nitrate, and
specialty blends. Furthermore, we sell other specialty fertilizers including trading of third party products. All of these specialty
plant nutrition products are used in either solid or liquid form mainly on high value crops such as vegetables, fruits and flowers.
They are widely used in crops that employ modern agricultural techniques such as hydroponics, greenhousing, fertigation (where
fertilizer is dissolved in water prior to irrigation) and foliar application. According to the type of use or application our products
are marketed under the brands: UltrasolTM (fertigation), QropTM (open field application), SpeedfolTM (foliar application),
and AllganicTM (organic farming). Specialty plant nutrition has certain advantages over commodity fertilizers, such as rapid
and effective absorption (without requiring nitrification), superior water solubility, increased soil pH (which reduces soil acidity)
and low chlorine content. One of the most important products in this business line is potassium nitrate, which is available in
crystalline and prill form, allowing for multiple application methods. Crystalline potassium nitrate products are ideal for application
by fertigation and foliar sprays, and potassium nitrate prills are suitable for soil applications.



The needs of more sophisticated customers
are leading the industry to provide solutions rather than individual products. The advantages of our products, plus customized
specialty blends that meet specific needs along with agronomic service provided, allow us to create plant nutrition solutions that
add value to crops through higher yields and better quality production. Because our products are derived from natural nitrate compounds
or natural potassium brines, they have certain advantages over synthetically produced fertilizers, including the presence of certain
beneficial trace elements, which makes them more attractive to customers who prefer products of natural origin. As a result, specialty
plant nutrition products are sold at a premium price compared to other commodity fertilizers.



Iodine and its derivatives:
We believe that we are the world's leading producer of 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 liquid crystal displays
(“LCDs”), antiseptics, biocides and disinfectants in the synthesis of pharmaceuticals, herbicides, electronics, pigments,
and dye components.



Lithium and its derivatives:
We are the leading producer of 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 used primarily as a raw material in the lubricating grease industry and certain
cathodes for batteries.



19







Potassium:We produce 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.



Industrial Chemicals: We
produce four industrial chemicals: sodium nitrate, potassium nitrate, and boric acid. Sodium nitrate is used primarily in the production
of glass, explosives, charcoal briquettes and metal treatment. Potassium nitrate is used in the manufacturing of specialty glass,
and it is also an important raw material for the production 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 solar-based electricity generating plants. Boric
acid is used in the manufacture of frits for the ceramics and enamel industries, LCDs, glass and fiberglass. Potassium chloride
is used as an additive in oil drilling as well as in the production of carragenine.



Other Products and Services:
We also sell other fertilizers and blends, some of which we do not produce.



We are the only company that produces and
distributes the three main potassium sources: potassium nitrate, potassium sulphate and potassium chloride.



The following table sets forth the percentage
breakdown of our revenues for 2012, 2011 and 2010 according to our product lines:



|                          |  | 2012 |     |   | 2011 |  |     | 2010 | 
|------------------------- |  | ---- | --- | - | ---- |  | --- | ---- | 
|Specialty Plant Nutrition |  |      | 28  | % |      |  | 34  | %    | 
|Iodine and Derivatives    |  |      | 24  | % |      |  | 21  | %    | 
|Lithium and Derivatives   |  |      | 9   | % |      |  | 9   | %    | 
|Potassium                 |  |      | 25  | % |      |  | 26  | %    | 
|Industrial Chemicals      |  |      | 10  | % |      |  | 7   | %    | 
|Other                     |  |      | 4   | % |      |  | 4   | %    | 
|Total                     |  |      | 100 | % |      |  | 100 | %    | 



Business Strategy



Our general business strategy
is to:



| | · | maintain leadership in specialty plant nutrients, iodine, lithium and industrial nitrates, in terms
of production capacity, competitive pricing and the development of new products;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | increase our production capacity of potassium-related fertilizers from the Salar de Atacama;
| | - | --------------------------------------------------------------------------------------------

| | · | maintain our competitiveness through the continued increase in the efficiency of our production
processes and cost reduction;
| | - | -----------------------------------------------------------------------------------------------------------------------------

| | · | evaluate and execute acquisitions, joint ventures or commercial alliances which have concrete synergies
with our current core businesses or provide sustainable competitive advantages; and
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | · | maintain a solid, conservative financial position and investment grade ratings for our debt securities.
| | - | -------------------------------------------------------------------------------------------------------



We have identified market
demand in each of our major product lines, both within our existing customer base and in new markets, for existing products and
for additional products that can be produced from our natural resources. In order to take advantage of these opportunities, we
have developed specific strategies for each of our product lines.



20









Specialty Plant Nutrition

Our strategy in our specialty plant nutrients
business is to: (i) continue expanding our sales of natural nitrates by continuing to leverage the advantages of our specialty
products over commodity-type fertilizers; (ii) selectively expand by increasing our sales of higher margin specialty plant nutrients
based on potassium and natural nitrates, particularly soluble potassium nitrate and NPK blends; (iii) pursue investment opportunities
in complementary businesses to enhance our product portfolio, increase production, reduce costs, and add value to, and improve
the marketing of, our products; (iv) develop new specialty nutrient blends produced in our mixing plants that are strategically
located in or near our principal markets, in order to meet specific customer needs; (v) focus primarily on the markets for plant
nutrients in soluble and foliar applications in order to establish a leadership position; (vi) further develop our global distribution
and marketing system directly and through strategic alliances with other producers and global or local distributors; and (vii)
reduce our production costs through improved processes and higher labor productivity so as to compete more effectively.



Iodine and its derivatives

Our strategy in our iodine business is
to (i) maintain our leadership in the iodine market by expanding our production capacity in line with demand growth; (ii) encourage
demand growth and develop new iodine derivatives, (iii) participate in iodine recycling projects; and (iv) reduce our production
costs through improved processes and higher productivity in order to compete more effectively.



Lithium and its derivatives

Our strategy in our lithium business is
to (i) maintain our leadership in the lithium industry as a principal producer and distributor of lithium carbonate and lithium
hydroxide; (ii) encourage demand growth, (iii) selectively pursue opportunities in the lithium derivatives business by creating
new lithium compounds; and (iv) reduce our production costs through improved processes and higher productivity in order to compete
more effectively.



Potassium

Our strategy in our potassium business
is to significantly increase our production capacity of potassium chloride and potassium sulfate. Our distribution strategy is
to (i) offer a portfolio of potassium products, including potassium sulfate, potassium chloride and other fertilizers to our traditional
markets; (ii) create flexibility to offer crystalized (standard) or granular (compacted) form products according to market requirements;
and (iii) focus on markets where we have logistical advantages.



Industrial Chemicals

Our strategy in our industrial chemical
business is to (i) maintain our leadership position in the industrial nitrates market, (ii) encourage demand growth in different
applications, (iii) become a long-term, reliable supplier for the thermal storage industry; and (iv) reduce our production costs
through improved processes and higher productivity in order to compete more effectively.





21







New Business Ventures



From time to time we evaluate opportunities
to expand in our current core businesses or within new businesses in which we believe we may have sustainable competitive advantages,
both within and outside Chile, and we expect to continue to do so in the future. We are currently exploring concessions for certain
metallic minerals. If such minerals are found, we may decide to exploit, sell or enter into a joint venture to extract these resources.
We may decide to acquire part or all of the equity of, or undertake joint ventures or other transactions with, other companies
involved in our businesses or in other businesses. We are also exploring the possibility of acquiring controlling interests in
companies that have mining properties in our core business areas, and that are in early stages of development.  Consistent
with our business strategy, we will continue to evaluate acquisitions, joint ventures and alliances in our core businesses and,
depending on all facts and circumstances, may seek to acquire controlling stakes or other interests in companies with mining properties
outside of Chile and Latin America, including in other emerging markets.



In addition we are actively conducting
exploration operations in various properties we own for copper, gold and other metals deposits and we have already identified several
areas in which we are conducting more targeted exploration. Fiel Rosita, a copper-gold deposit located close to the city of Vallenar,
is our most advanced prospect. It is located in the same district as other deposits currently being exploited by other companies.
We are completing a preliminary economic assessment, expected in 2013, based on which we will decide whether to conduct a pre-feasibility
study or to sell part or all of the deposit. We may decide not to move forward with any potential metallic prospects discovered
from our exploration operations.



In parallel to our exploration operations,
we have entered into memoranda of understanding, option agreements and similar arrangements with third-party mining companies relating
to metallic minerals.  In all these agreements, we retain the rights on non-metallic minerals such as nitrate, iodine, potassium,
lithium and their respective derivatives



Main Business Lines



Specialty
Plant Nutrition



We believe we are the world’s largest
producer of potassium nitrate. We estimate that our sales accounted for approximately 46% of global potassium nitrate sales by
volume in 2012. This estimate does not include potassium nitrate we produced and sold locally in China, only net imports. During
2012, the potassium nitrate market was stable compared to 2011, despite increases in price. Global sales totaled approximately
0.9 million metric tons in 2012. We also produce the following specialty plant nutrients: sodium nitrate, sodium potassium nitrate
and specialty blends (containing various combinations of nitrogen, phosphate and potassium and generally known as “NPK blends”).



These specialty plant nutrients have specific
characteristics that increase productivity and enhance quality when used on certain crops and soils. Our specialty plant nutrients
have significant advantages for certain applications over commodity fertilizers based on nitrogen and potassium, such as urea and
potassium chloride.



In particular, our specialty plant nutrients:



| | · | are fully water soluble, allowing their use in hydroponics, fertigation, foliar applications and
other advanced agricultural techniques;
| | - | ----------------------------------------------------------------------------------------------------------------------------------------

| | · | improve the water use efficiency of crops and help conserve water;
| | - | ------------------------------------------------------------------

| | · | are chlorine-free, which prevents chlorine toxicity in certain crops associated with high levels
of chlorine in plant nutrients;
| | - | --------------------------------------------------------------------------------------------------------------------------------

| | · | provide nitrogen in nitric form, thereby allowing crops to absorb nutrients faster than they absorb
urea or ammonium-based fertilizers;
| | - | ---------------------------------------------------------------------------------------------------------------------------------------



22







| | · | do not release hydrogen after application, thereby avoiding increased soil acidity;
| | - | -----------------------------------------------------------------------------------

| | · | possess trace elements, which promote disease resistance in plants; and
| | - | -----------------------------------------------------------------------

| | · | are more attractive to customers who prefer products of natural origin.
| | - | -----------------------------------------------------------------------



In 2012, our specialty plant nutrients
sales were US$675.3 million, representing 28% of our total sales for that year and a 6.4% decrease from US$721.7 million specialty
plant nutrients sales in 2011. This increase was a result of higher demand for premium vegetables and fruits, caused by improved
economic conditions, which has reinforced the consumption of specialty fertilizers.



Specialty Plant Nutrition:
Our Market

The target market for our specialty plant
nutrients includes producers of high-value crops such as vegetables, fruits, industrial crops, flowers, cotton and others. Furthermore,
we sell specialty plant nutrients to producers of chloride-sensitive crops. Since 1990, the international market for specialty
plant nutrients has grown at a faster rate than the international market for commodity-type fertilizers. This is mostly due to:
(i) the application of new agricultural technologies such as fertigation and hydroponics, and the increasing use of greenhouses;
(ii) the increase in the cost of land and the scarcity of water, which has forced farmers to improve their yields and reduce water
use; and (iii) the increase in demand for higher quality crops, such as fruits and vegetables.



Over the last 10 years, the compound annual
growth rate for vegetable production per capita was 3.0% while the compound annual growth rate for the world population was only
1.5%.



Worldwide scarcity of water and arable
land drives the development of new agricultural techniques to maximize the use of these resources. Irrigation has grown at an average
annual rate of 1.5% during last 20 years (a pace equal with population growth). However, micro-irrigation has grown at 10% per
year over the same period. Microirrigation systems, which include drip-irrigation and micro-sprinklers, are the most efficient
forms of technical irrigation. Global microirrigation acreage is estimated at 10 million hectares, which represents approximately
3% of total worldwide irrigated area. These applications require fully water-soluble plant nutrients. Our nitrate-based specialty
plant nutrients provide nitrogen in nitric form, which helps crops absorb these nutrients faster than they absorb urea- or ammonium-based
fertilizers, facilitating a more efficient application of nutrients to the plant and thereby increasing the crop’s yield
and improving its quality.



Specialty Plant Nutrition:
Our Products



Potassium nitrate, sodium potassium nitrate
and specialty blends are higher margin products derived from, or consisting of, sodium nitrate, and they are all produced in crystallized
or prilled form. Specialty blends are produced using our own specialty plant nutrients and other components at blending plants
operated by us or our affiliates and related companies in Chile, the United States, Mexico, United Arab Emirates, South Africa,
Turkey, China, India, Thailand, Brazil and Peru.



23







The following table shows our sales volumes
of and revenues from specialty plant nutrients for 2012, 2011 and 2010.



|                                               |  | 2012 |       |  | 2011 |  |       | 2010 | 
|---------------------------------------------- |  | ---- | ----- |  | ---- |  | ----- | ---- | 
|Sales Volume  (Th. MT)                         |  |      |       |  |      |  |       |      | 
|Sodium nitrate                                 |  |      | 24.4  |  |      |  | 22.2  |      | 
|Potassium nitrate and sodium potassium nitrate |  |      | 469.3 |  |      |  | 551.1 |      | 
|Blended and other specialty plant nutrients(1) |  |      | 286.5 |  |      |  | 276.0 |      | 
|Total Revenues (in US$ millions)               |  |      | 675.3 |  |      |  | 721.7 |      | 



| | (1) | Includes blended and other specialty plant nutrients. It also includes Yara’s products sold
pursuant to our commercial agreement
| | --- | --------------------------------------------------------------------------------------------------------------------------------



Specialty Plant Nutrition:
Marketing and Customers



In 2012, we sold our specialty plant nutrients
in close to 90 countries. During the same year, sales of our specialty plant nutrients were exported to the following regions:
18% to customers in Central and South America (not including Chile), 19% to customers in Chile, 27% to customers in North America,
18% to customers in Europe and 18% to customers in other regions. No single customer represented more than 10% of our specialty
plant nutrient sales during 2012, and we estimate that our 10 largest customers accounted in the aggregate for approximately 29%
of sales during that period.



|Sales Breakdown         |  | 2012 |    |   | 2011 |  |    | 2010 | 
|----------------------- |  | ---- | -- | - | ---- |  | -- | ---- | 
|Central & South America |  |      | 18 | % |      |  | 14 | %    | 
|North America           |  |      | 27 | % |      |  | 24 | %    | 
|Europe                  |  |      | 18 | % |      |  | 26 | %    | 
|Chile                   |  |      | 19 | % |      |  | 17 | %    | 
|Others                  |  |      | 18 | % |      |  | 19 | %    | 



We sell our specialty plant nutrients products
outside Chile mainly through our own worldwide network of representative offices and through our distribution affiliates.



We maintain stocks of our specialty plant
nutrients in the main markets of the Americas, Asia, Europe, the Middle East and Africa in order to facilitate prompt deliveries
to customers. In addition, we sell specialty plant nutrients directly to some of our large customers. Sales are made pursuant to
spot purchase orders and short-term contracts.



In connection with our marketing efforts,
we provide technical and agronomical assistance and support to some of our customers. By working closely with our customers, we
are able to identify new, higher-value-added products and markets. Our specialty plant nutrients products are used on a wide variety
of crops, particularly value-added crops, where the use of our products enables our customers to increase yield and command a premium
price.



Our customers are located in both the northern
and southern hemispheres. Consequently, we believe there are no material seasonal or cyclical factors that can materially affect
the sales of our specialty plant nutrient products.



24









From time to time we evaluate opportunities
to expand in our current core businesses, including our specialty plant nutrients business, or within new businesses in which we
believe we may have sustainable competitive advantages, both within and outside Chile. Consistent with our business strategy, we
evaluate potential acquisitions, joint ventures and alliances in our core businesses with companies outside of Chile and Latin
America, including in emerging markets.



In November 2001, we signed an agreement
with Yara. This agreement allows us to make use of Yara’s distribution network in countries where its presence and commercial
infrastructure are larger than ours. Similarly, in those markets where our presence is larger, both our specialty plant nutrients
and Yara’s are marketed through our offices. Both parties, however, maintain an active control over the marketing of their
own products.



In 2005, SQM acquired 100% of the shares
of Kefco, which has a urea phosphate plant located in Dubai. Urea phosphate is a specialty plant nutrient that is used primarily
in drip irrigation systems. The plant has an annual production capacity of 30,000 metric tons.



In 2005, SQM and Yara formed a joint venture
called MISR Specialty Fertilizers, for the production of tailor-made liquid NPK (nitrogen-phosphate-potassium) fertilizers. The
plant is located in Egypt and has a production capacity of 80,000 metric tons per year. We sold our stake in this joint venture
in 2012.



In May 2008, we signed a commitment letter
for a joint venture with Migao for the production and distribution of specialty plant nutrients in China. In 2009, we signed a
shareholders agreement in connection with this joint venture. Through the joint venture, we constructed a potassium nitrate plant
with a production capacity of 40,000 metric tons per year. The plant began operating in January 2011. This joint venture will enable
us to increase our presence in China, which represents one of the most important and fastest-growing markets for the fertilizer
industry.



In May 2009, our subsidiary Soquimich European
Holdings entered into an agreement with Coromandel Fertilizers Ltd. to create a joint venture for the production and distribution
of water soluble fertilizers in India. The agreement established a 50⁄50 contribution to the joint venture. As part of the
agreement, a new 15,000 metric ton facility was constructed in the city of Kakinada to produce water soluble fertilizers (NPK grades).
This new facility required a total investment of approximately US$2.6 million and began operating in January 2012.



In October 2009, SQM S.A. signed an agreement
with Qingdao Star Plant Protection Technology Co., Ltd., resulting in the creation of the joint venture SQM Star, for the production,
distribution and sale of soluble NPK specialty plant nutrients in China. The agreement, a 50⁄50 joint venture, entailed a
total investment of US$2 million for the construction of a new production plant. The plant, located in the city of Jimo, province
of Shangdong, is currently operational and has an annual production capacity of 15,000 metric tons.



In December 2009, we signed an agreement
with the French Roullier Group to form the joint venture SQM Vitas. This agreement joins two of the largest companies in the businesses
of specialty plant nutrients, specialty animal nutrition and professional hygiene. Peru, Brazil and Dubai are the main focus markets
of this joint venture. As part of the agreement, our phosphate plant located in Dubai became part of this joint venture. In September
2010, SQM Vitas implemented a new phosphate line that will allow the production of two of the main water soluble phosphorus products
in the world: mono ammonium phosphate and urea phosphate.



25









In the second half of 2011, we effected
a corporate reorganization whereby our subsidiary Soquimich European Holding B.V. acquired a 66.6% ownership in Fertilizantes Naturales
S.A. (later renamed SQM Iberian S.A.) from Nutrisi Holding N.V. Soquimich European Holding B.V. owned a non-controlling 50% stake
in Nutrisi Holding N.V. which was sold following this acquisition. The effect of these transactions has been that we indirectly
control SQM Iberian S.A. through Soquimich European Holding B.V. SQM Iberian S.A. sells and distributes fertilizers, primarily
in Spain.



In 2012, SQM Vitas started the construction
of new plants in Brazil (Candeias), Peru and South Africa (Durban) for the production of water soluble fertilizers containing different
relative amounts of nitrogen, phosphorus and potassium, and at times, smaller amounts of other chemicals. The Brazilian plant (Candeias
Industrial Complex) began operating in March 2012. It has a production capacity of 25,000 million tons per year, and represented
a total investment of US$10 million.



Between 2010 and 2012, we continued to
expand our production capacity of potassium products in our operations in the Salar de Atacama. In 2011, we completed the construction
of a new potassium nitrate facility in Coya Sur, increasing our overall production capacity of potassium nitrate by 300,000 metric
tons. In addition, as mentioned above, we entered into a joint venture with Migao in 2008 for the construction of a potassium nitrate
plant with a production capacity of 40,000 metric tons per year that began operating in January 2011.



Specialty Plant Nutrition: Fertilizer
Sales in Chile



We market specialty plant nutrients in
Chile through Soquimich Comercial S.A., either as a standalone product or in blends with other imported products, in particular
triple super phosphate (TSP) and diammonium phosphate (DAP).



Soquimich Comercial S.A. sells imported
fertilizers to farmers in Chile principally for use in the production of sugar beets, cereals, industrial crops, potatoes, grapes
and other fruits. Most of the fertilizers that Soquimich Comercial S.A. imports are purchased on a spot basis from different countries
in the world, including China, Mexico and Venezuela.



All contracts and agreements between Soquimich
Comercial S.A. and its suppliers of imported fertilizers generally contain standard and customary commercial terms and conditions.
During the preceding 10 years, Soquimich Comercial S.A. has experienced no material difficulties in obtaining adequate supplies
of such fertilizers at satisfactory prices.



Soquimich Comercial S.A.’s sales
of fertilizers represented approximately 30% of total fertilizer sales in Chile during 2012. No single customer represented more
than 8% of Soquimich Comercial S.A.’s total fertilizer sales revenues, and its 10 largest customers in total represented
less than 43% of its revenues. Revenues generated by Soquimich Comercial S.A. represented 10.6% of our 2012 consolidated revenues.
Soquimich Comercial S.A.’s consolidated revenues were approximately US$256 million and US$227 million in 2012 and 2011, respectively.



Specialty Plant Nutrition: Competition



We believe we are the world’s largest
producer of sodium and potassium nitrate for agricultural use. Our sodium nitrate products compete indirectly with specialty and
commodity-type substitutes, which may be used by some customers instead of sodium nitrate depending on the type of soil and crop
to which the product will be applied. Such substitute products include calcium nitrate, ammonium nitrate and calcium ammonium nitrate.



In the potassium nitrate market our largest
competitor is Haifa Chemicals Ltd. (“Haifa”), in Israel, which is a subsidiary of Trans Resources International Inc.
We estimate that sales of potassium nitrate by Haifa accounted for approximately 34% of total world sales during 2012 (excluding
sales by Chinese producers to the domestic Chinese market), compared to our share of the market which accounted for approximately
46% of global potassium nitrate sales by volume for the period.



26









ACF, another Chilean producer, mainly oriented
to iodine production, has produced potassium nitrate from caliche ore and potassium chloride since 2005. Kemapco, a Jordanian producer
owned by Arab Potash, produces potassium nitrate in a plant located close to the Port of Aqaba, Jordan. In addition, there are
several potassium nitrate producers in China, the largest of which are Wentong and Migao. Most of the Chinese production is consumed
by the Chinese domestic market.



The principal means of competition in the
sale of potassium nitrate are product quality, customer service, location, logistics, agronomic expertise and price.



In Chile, our products mainly compete with
imported fertilizer blends that use calcium ammonium nitrate or potassium magnesium sulfate. Our specialty plant nutrients also
compete indirectly with lower-priced synthetic commodity-type fertilizers such as ammonia and urea, which are produced by many
producers in a highly price-competitive market. Our products compete on the basis of advantages that make them more suitable for
certain applications as described above.



Iodine and its derivatives



We believe we are the world’s largest
producer of iodine. In 2012, our revenues from iodine and iodine derivatives amounted to US$578.1 million, representing 24% of
our total revenues in that year. We estimate that our sales accounted for approximately 34% of world iodine sales by volume in
2012.



Market



Iodine and iodine derivatives are used
in a wide range of medical, agricultural and industrial applications as well as in human and animal nutrition products. Iodine
and iodine derivatives are used as raw materials or catalysts in the formulation of products such as X-ray contrast media, biocides,
antiseptics and disinfectants, pharmaceutical intermediates, polarizing films for LCDs, chemicals, herbicides, organic compounds
and pigments. Iodine is also added in the form of potassium iodate or potassium iodide to edible salt to prevent iodine deficiency
disorders. Iodine is also added in the form of potassium iodate or potassium iodide to edible salt to prevent iodine deficiency
disorders. We have seen consistent growth in the iodine market in recent years, with demand being led by uses related to X-ray
contrast media and pharmaceuticals. We estimate that the global market size in 2012 was between 30,500 and 31,000 metric tons,
with almost 60% of supply coming from Chilean producers, including us. Increased supply entered the market in 2012 and we expect
to see additional new supply in 2013.



Iodine: Our Products

We produce iodine, and through a joint
venture with Ajay North America L.L.C., (“Ajay”), a U.S.-based Company, we produce organic and inorganic iodine derivatives.
Ajay-SQM Group (“ASG”), established in the mid-1990s, has production plants in the United States, Chile and France.
ASG is the world’s leading inorganic and organic iodine derivatives producer.



Consistent with our business strategy,
we are constantly working on the development of new applications for our iodine-based products, pursuing a continuing expansion
of our businesses and maintaining our market leadership.



27









We manufacture our iodine and iodine derivatives
in accordance with international quality standards and have qualified our iodine facilities and production processes under the
ISO-9001:2008 program, providing third party certification of the quality management system and international quality control standards
that we have implemented.



The following table sets forth our total
sales and revenues from iodine and iodine derivatives for 2012, 2011 and 2010:



|                           |  | 2012 |       |  | 2011 |  |       | 2010 | 
|-------------------------- |  | ---- | ----- |  | ---- |  | ----- | ---- | 
|Sales Volume (Th. MT)      |  |      |       |  |      |  |       |      | 
|Iodine and derivatives     |  |      | 11.0  |  |      |  | 12.2  |      | 
|Revenues (in US$ millions) |  |      | 578.1 |  |      |  | 454.5 |      | 



Our sales revenues increased from US$454.5
million in 2011 to US$578.1 million in 2012. This increase was primarily attributable to increases in price as a consequence of
strong demand growth among most uses.



Iodine: Marketing and Customers



In 2012, we sold our iodine products to
approximately 300 customers in 60 countries and most of our sales were exports: 31% was sold to customers in Europe, the Middle
East and Africa, 36% to customers in North America, 3% to customers in Central and South America and 30% to customers in Asia and
other regions. No single customer accounted for more than 8% of our iodine sales in 2012, and we estimate that our 10 largest customers
accounted in the aggregate for approximately 47% of sales.



The following table sets forth the geographical
breakdown of our sales for 2012, 2011, and 2010.



|Sales Breakdown              |  | 2012 |    |   | 2011 |  |    | 2010 | 
|---------------------------- |  | ---- | -- | - | ---- |  | -- | ---- | 
|Europe, Middle East & Africa |  |      | 31 | % |      |  | 36 | %    | 
|North America                |  |      | 36 | % |      |  | 32 | %    | 
|Central & South America      |  |      | 3  | % |      |  | 3  | %    | 
|Others                       |  |      | 30 | % |      |  | 29 | %    | 



We sell iodine through our own worldwide
network of representative offices and through our sales, support and distribution affiliates. We maintain inventories of iodine
at our facilities throughout the world to facilitate prompt delivery to customers. Iodine sales are made pursuant to spot purchase
orders or within the framework of supply agreements. Supply agreements generally specify annual minimum and maximum purchase commitments,
and prices are adjusted periodically, according to prevailing market prices.



Iodine: Competition



The world’s main iodine producers
are based in Chile, Japan and the United States. Iodine is also produced in Russia, Turkmenistan, Indonesia and China.



Iodine production in Chile starts from
a unique mineral ore known as caliche ore, whereas in Japan, the United States, Russia, Turkmenistan and Indonesia, producers extract
iodine from underground brines that are mainly obtained together with the extraction of natural gas and petroleum. In China, iodine
is extracted from seaweed.



28









Six Chilean companies (SQM; Sirocco Mining
Inc., a Canadian company previously known as Atacama Minerals; Atacama Chemical S.A. (Cosayach), controlled by the Chilean holding
Inverraz S.A.; ACF Minera S.A. also owned by a Chilean family; Algorta Norte S.A., a joint venture between ACF Minera and Toyota
Tsusho; and SCM Bullmine) accounted for approximately 58% of global iodine sales in 2012 (34% by SQM and 24% by the other five
Chilean producers).



We estimate that eight Japanese iodine
producers accounted for approximately 31% of global iodine sales in 2012, including recycled iodine.



We estimate that iodine producers in the
United States (one of which is owned by Ise Chemicals Ltd., a Japanese company) accounted for 4% of world iodine sales in 2012.



Iodine recycling is an increasing trend
worldwide. Several Japanese producers have recycling facilities where they recover iodine and iodine derivatives from iodine waste
streams. Iodine recycling, mainly related to LCD consumption, has increased over the past few years and currently represents approximately
17% of world iodine sales. It is estimated that approximately 70% to 75% of the world recycling was done by Japanese iodine producers.



We, through ASG or alone, are also actively
participating in the iodine recycling business using iodinated side-streams from a variety of chemical processes in Europe, the
United States and Asia.



We estimate that worldwide sales of iodine
were between 30,500 and 31,000 metric tons in 2012.



The prices of iodine and iodine derivative
products are determined by market conditions. World iodine prices vary depending upon, among other things, the relationship between
supply and demand at any given time. The supply of iodine varies principally depending upon the production of the few major iodine
producers, including us, and their respective business strategies. As a result of steadily growing demand, and despite new supply
from other Chilean producers, our average iodine sales prices increased to more than US$50 per kilogram in 2012.



Demand for iodine varies depending upon
overall levels of economic activity and the level of demand in the medical, pharmaceutical, industrial and other sectors that are
the main users of iodine and iodine-derivative products.



The main factors of competition in the
sale of iodine and iodine derivative products are reliability, price, quality, customer service and the price and availability
of substitutes. We believe we have competitive advantages compared to other producers due to the size and quality of our mining
reserves and the available production capacity. We believe our iodine is competitive with that produced by other manufacturers
in certain advanced industrial processes. We also believe we benefit competitively from the long-term relationships we have established
with our largest customers. While there are substitutes for iodine available for certain applications, such as antiseptics and
disinfectants, there are limited cost-effective substitutes currently available for the main nutritional, pharmaceutical, animal
feed, and main chemical uses of iodine, which together account for most iodine sales.



29









Lithium and its derivatives



We believe we are the leading producer
of lithium carbonate and one of the world’s largest producers of lithium hydroxide. In 2012, our revenues from lithium sales
amounted to US$222.2 million, representing 9% of our total revenues. We estimate that our sales accounted for approximately 35%
of the sale of global lithium chemicals sales in volume.



Lithium: Market



Lithium carbonate is used in a variety
of applications, including electrochemical materials for batteries, ceramic and enamel frits, heat resistant glass (ceramic glass),
primary aluminum smelting process, air conditioning chemicals, continuous casting powder for steel extrusion, synthesis of pharmaceuticals
and lithium derivatives.



Lithium hydroxide is primarily used as
a raw material in the lubricating grease industry, as well as in the dyes and the battery industries.



Lithium: Our Products



We produce lithium carbonate at the Salar
del Carmen facilities, near Antofagasta, Chile, from solutions with high concentrations of lithium coming from the potassium chloride
production at the Salar de Atacama. The annual production capacity of our lithium carbonate plant is 48,000 metric tons per year.
We believe that the technologies we use, together with the high concentrations of lithium and unique characteristics of the Salar
de Atacama, such as high evaporation rate and concentration of other minerals, allow us to be one of the lowest cost producers
worldwide.



We also produce lithium hydroxide at our
facilities at the Salar del Carmen, next to the lithium carbonate operation. The lithium hydroxide facility has a production capacity
of 6,000 metric tons per year and is one of the largest plants in the world.



The following table sets forth our total
sales and revenues from lithium carbonate and its derivatives for 2012, 2011 and 2010:



|                           |  | 2012 |       |  | 2011 |  |       | 2010 | 
|-------------------------- |  | ---- | ----- |  | ---- |  | ----- | ---- | 
|Sales Volume (Th. MT)      |  |      |       |  |      |  |       |      | 
|Lithium and derivatives    |  |      | 45.7  |  |      |  | 40.7  |      | 
|Revenues (in US$ millions) |  |      | 222.2 |  |      |  | 183.4 |      | 



Our revenues in 2012 were US$222.2 million,
a 21% increase from US$183.4 million in 2011, due to higher sales volumes resulting from an increase in demand in 2012, mainly
driven by an increase in demand for rechargeable batteries and by uses related to construction, such as grease and glass. Other
producers experienced some supply constraints during part of the year, allowing us to strengthen our position as a leader in lithium
carbonate supply.



Lithium: Marketing and Customers



In 2012, we sold our lithium products to
over 300 customers in approximately 50 countries. Virtually all of our lithium products were sold overseas: 24% to customers in
Europe, the Middle East and Africa, 10% to customers in North America, 64% to customers in Asia and Oceania and 2% to customers
in other regions. No single customer accounted for more than 13% of our lithium sales in 2012, and we estimate that our 10 largest
customers accounted in aggregate for approximately 50% of sales.



30









The following table sets forth the geographical
breakdown of our sales for 2012, 2011 and 2010.



|Sales Breakdown              |  | 2012 |    |   | 2011 |  |    | 2010 | 
|---------------------------- |  | ---- | -- | - | ---- |  | -- | ---- | 
|                             |  |      |    |   |      |  |    |      | 
|Europe, Middle East & Africa |  |      | 24 | % |      |  | 28 | %    | 
|North America                |  |      | 10 | % |      |  | 10 | %    | 
|Asia & Oceania               |  |      | 64 | % |      |  | 61 | %    | 
|Others                       |  |      | 2  | % |      |  | 1  | %    | 



We sell lithium carbonate and lithium hydroxide
through our own worldwide network of representative offices and through our sales, support and distribution affiliates. We maintain
inventories of these products at our facilities throughout the world to facilitate prompt delivery to customers. Sales of lithium
carbonate and lithium hydroxide are made pursuant to spot purchase orders or within the framework of supply agreements. Supply
agreements generally specify annual minimum and maximum purchase commitments, and prices are adjusted periodically, according to
prevailing market prices.



Lithium: Competition



Our main competitors in the lithium carbonate
and lithium hydroxide businesses are Rockwood Lithium (“Rockwood”), a subsidiary of Rockwood Specialties Group Inc.,
and FMC Corporation (“FMC”). In addition, a number of Chinese producers together accounted for approximately 29% of
the world market in 2012 in volume. Rockwood produces lithium carbonate at its operations in Chile, through Sociedad Chilena del
Litio Limitada, and in Nevada, United States. Its production of downstream lithium products is mostly performed in the United States,
Germany and Taiwan. FMC has production facilities in Argentina through Minera del Altiplano S.A., where it produces lithium chloride
and lithium carbonate. Production of its downstream lithium products is mostly performed in the United States and the United Kingdom.



We believe that lithium production will
increase in the near future. A number of new projects to develop lithium deposits have been announced recently, some of which could
materialize in the short- to medium-term.



We estimate that worldwide sales of lithium
chemicals, expressed as lithium carbonate equivalent (excluding direct use for lithium minerals), amounted to approximately 125,000
metric tons in 2012.



Potassium



We produce potassium chloride and potassium
sulfate by extracting brines from the Salar de Atacama that are rich in potassium chloride and other salts.



Since 2009, our end product capacity has
increased to over 2 million metric tons per year, granting us improved flexibility and market coverage.



In 2012, our potassium chloride and potassium
sulfate revenues amounted to US$605.1 million, representing 25% of our total revenues and a 8.9% increase compared to 2011. We
are currently making investments within our potassium products that will enable us to increase our production and sales of these
products.



31









Potassium is one of the three macronutrients
that a plant needs to develop. Although potassium does not form part of a plant’s structure, it is essential to the development
of its basic functions. Potassium chloride is the most commonly used potassium-based fertilizer, and it is used to fertilize crops
that can resist high levels of chloride, such as wheat, corn and soybeans, among others.



Some benefits that may be obtained through the use of potassium
are:



| | · | increased yield and quality;
| | - | ----------------------------



| | · | increased production of proteins;
| | - | ---------------------------------



| | · | increased photosynthesis;
| | - | -------------------------



| | · | intensified transport and storage of assimilates;
| | - | -------------------------------------------------



| | · | prolonged and more intense assimilation period;
| | - | -----------------------------------------------



| | · | improved water efficiency;
| | - | --------------------------



| | · | regulated opening and closure of stomata; and
| | - | ---------------------------------------------



| | · | synthesis of lycopene.
| | - | ----------------------



Potassium chloride is also an important
component for our specialty plant nutrients product line where it is used as a raw material to produce potassium nitrate.



Potassium: Market



During the last decade, the potassium chloride
market has experienced rapid growth due to several key factors such as a growing world population, higher demand for protein-based
diets and less arable land. All of these factors have contributed to growing demand for fertilizers and, in particular, potassium
chloride, as efforts are being made to maximize crop yields and use resources more efficiently. For the last 10 years, the compound
annual growth for the global potassium chloride market was approximately 2%.



Demand in the potassium chloride market
decreased in 2012. We estimate that demand reached the level of 50 million metric tons for potassium chloride during 2012, a reduction
of approximately 10% as compared to 2011. Despite favorable economic conditions for relevant crops, the demand was mainly affected
by economic uncertainty. We expect the potassium chloride market to return to levels closer to 55 million during 2013.



Average prices in the potassium market
remained relatively stable compared to 2011. The market has seen major industry contracts close at significantly lower prices in
the early months of 2012. We believe these price pressures will have an impact on our potassium revenues in the near term.



Potassium: Our Products



Potassium chloride differs from our specialty
plant nutrient products because it is a commodity fertilizer and contains chloride. We offer potassium chloride in two grades:
standard and compacted. Potassium sulfate is considered a specialty fertilizer and we offer three grades: standard, compacted and
soluble.



The following table shows our sales volumes
of and revenues from potassium chloride and potassium sulfate for 2012, 2011 and 2010.



|                                       |  | 2012 |         |  | 2011 |  |         | 2010 | 
|-------------------------------------- |  | ---- | ------- |  | ---- |  | ------- | ---- | 
|Sales Volume (Th. MT)                  |  |      |         |  |      |  |         |      | 
|Potassium Chloride & Potassium Sulfate |  |      | 1,209.5 |  |      |  | 1,103.4 |      | 
|Revenues (in US$ millions)             |  |      | 605.1   |  |      |  | 555.7   |      | 



32









Potassium: Marketing and Customers



In 2012, we sold potassium chloride and
potassium sulfate in approximately 80 countries, with 5% of our sales to customers in Chile, 42% to customers in other countries
in Central and South America, 11% to customers in Africa, 15% to customers in North America and 27% to customers in other regions.
No single customer accounted for more than 23% of our sales of potassium chloride and potassium sulfate in 2012, and we estimate
that our 10 largest customers accounted in the aggregate for approximately 61% of such sales.



The following table sets forth the geographical breakdown of
our sales for 2012, 2011, and 2010.



|Sales Breakdown         |  | 2012 |    |   | 2011 |  |    | 2010 | 
|----------------------- |  | ---- | -- | - | ---- |  | -- | ---- | 
|Chile                   |  |      | 5  | % |      |  | 8  | %    | 
|Central & South America |  |      | 42 | % |      |  | 32 | %    | 
|Africa                  |  |      | 11 | % |      |  | 15 | %    | 
|North America           |  |      | 15 | % |      |  | 11 | %    | 
|Others                  |  |      | 27 | % |      |  | 34 | %    | 



Potassium: Competition



We estimate that we accounted for less
than 3% of global sales of potassium chloride in 2012. Our main competitors are Uralkali Group, PCS, Belaruskali and Mosaic. We
believe that in 2012 the principal producers in the market were Uralkali Group, which accounted for approximately 18% of global
sales, PCS and Belaruskali, which each accounted for approximately 16% of global sales, and Mosaic, which accounted for approximately
15% of global sales.



In the potassium sulfate market, we have
several competitors, of which the most important are K+S KALI GmbH (Germany), Tessenderlo Chemie (Belgium) and Great Salt Lake
Minerals Corp. (United States). We believe that those three producers account for approximately 40% of the world production of
potassium sulfate.



Industrial Chemicals



In addition to producing sodium and potassium
nitrate for agricultural applications, we produce three grades of sodium and potassium nitrate for industrial applications: industrial,
technical and refined grades. The three grades differ mainly in their chemical purity. We enjoy certain operational flexibility
when producing industrial sodium and potassium nitrate because they are produced from the same process as their equivalent agricultural
grades, needing only an additional step of purification. We may, with certain constraints, shift production from one grade to the
other depending on market conditions. This flexibility allows us to maximize yields and to reduce commercial risk.



In addition to producing industrial nitrates,
we produce and commercialize other industrial chemicals such as boric acid, a by-product of the production of potassium sulfate,
and industrial-grade potassium chloride, both of which are sold into industrial markets in crystalline form. In 2012, our revenues
from industrial chemicals were US$245.2 million, representing approximately 10% of our total revenues for that year.



33







Industrial Chemicals: Market



Industrial sodium and potassium nitrates
are used in a wide range of industrial applications, including the production of glass, ceramics, explosives, charcoal briquettes,
metal treatments and various chemical processes. In addition, this product line enjoys long-term growth potential from industrial
nitrates for thermal storage in solar energy projects. Solar salts for this specific application contain a blend of 60% sodium
nitrate and 40% potassium nitrate by weight ratio.



Boric acid is primarily used as raw material
in the manufacturing of glass, fiberglass, ceramic and enamel frits, and LCD flat panel displays.



Industrial potassium chloride is mainly
used as an additive in oil and gas drilling fluids as well as in the production of carragenine.



Industrial Chemicals: Our Products



The following table sets forth our sales
volumes of industrial chemicals and total revenues for 2012, 2011 and 2010:



|                           |  | 2012 |       |  | 2011 |  |       | 2010 | 
|-------------------------- |  | ---- | ----- |  | ---- |  | ----- | ---- | 
|Sales Volume (Th. MT)      |  |      |       |  |      |  |       |      | 
|Industrial nitrates        |  |      | 277.7 |  |      |  | 181.2 |      | 
|Boric Acid                 |  |      | 1.8   |  |      |  | 2.4   |      | 
|Revenues (in US$ millions) |  |      | 245.2 |  |      |  | 139.5 |      | 



Sales of industrial chemicals increased
from US$139.5 million in 2011 to US$245.2 million in 2012 primarily as a result of an increase in sales volumes of solar salts
products due to new alternative energy projects that utilize industrial grade sodium and potassium nitrate solar thermal energy.



Industrial Chemicals: Marketing and
Customers



We sold our industrial nitrate products
in 50 countries in 2012, with 49% percent of our sales of industrial chemicals to customers in North America, 37% to customers
in Europe, the Middle East and Africa, 7% to customers in Central and South America and 7% to customers in other regions. No single
customer accounted for more than 33% of our sales of industrial chemicals in 2012, and we estimate that our 10 largest customers
accounted in the aggregate for approximately 70% of such sales.



The following table sets forth the geographical breakdown of
our sales for 2012, 2011, and 2010.



|Sales Breakdown              |  | 2012 |    |   | 2011 |  |    | 2010 | 
|---------------------------- |  | ---- | -- | - | ---- |  | -- | ---- | 
|Europe, Middle East & Africa |  |      | 37 | % |      |  | 52 | %    | 
|North America                |  |      | 49 | % |      |  | 26 | %    | 
|Central & South America      |  |      | 7  | % |      |  | 17 | %    | 
|Others                       |  |      | 7  | % |      |  | 5  | %    | 



We sell our industrial chemical products
mainly through our own worldwide network of representative offices and through our sales and distribution affiliates. We maintain
inventories of our different grades of sodium nitrate and potassium nitrate products at our facilities in Europe, North America,
South Africa and South America to achieve prompt deliveries to customers. Our Research and Development department, together with
our foreign affiliates, provides technical support to our customers and continuously works with them to develop new products or
applications for our products.



34









Industrial Chemicals: Competition



We believe we are the world’s largest
producer of industrial sodium and potassium nitrate. In the case of industrial sodium nitrate, we estimate that our sales represented
60% of world demand in 2012 (excluding China and India internal demand, for which we believe reliable estimates are not available).
Our competitors are mainly based in Europe and Asia, producing sodium nitrate as a by-product of other production processes. In
refined grade sodium nitrate, BASF AG, a German corporation and several producers in China and Eastern Europe are highly competitive
in the European and Asian markets. Our industrial sodium nitrate products also compete indirectly with substitute chemicals, including
sodium carbonate, sodium hydroxide, sodium sulfate, calcium nitrate and ammonium nitrate, which may be used in certain applications
instead of sodium nitrate and are available from a large number of producers worldwide.



Our main competitor in the industrial potassium
nitrates business is Haifa; which we estimate had a 25% of the market share. We estimate that our market share was approximately
40% for 2012.



Producers compete in the market for industrial
sodium and potassium nitrate based on reliability, product quality, price and customer service. We believe that we are a low cost
producer of both products and are able to produce high quality products.



In the boric acid market, we are a relatively
small producer mainly supplying regional needs.



Other Products



A large part of our other revenue is related
to fertilizer trading, usually commodities. These fertilizers are traded in large volumes worldwide. We have developed a trade,
supply, and inventory management business that allows us to respond quickly and effectively to the changing fertilizer market in
which we operate and profit on these trades.



Production Process



Our integrated production process can be classified according
to our natural resources:



| | · | caliche ore deposits, which contain nitrates and iodine; and
| | - | ------------------------------------------------------------

| | · | salar brines, which contain potassium, lithium, sulfate, boron and magnesium.
| | - | -----------------------------------------------------------------------------



Caliche
Ore Deposits



Caliche ore deposits are located in northern
Chile. During 2012, we operated three mines in this region: Pedro de Valdivia, El Toco (mining site of Maria Elena production facilities)
and Nueva Victoria. In March 2010, operations at El Toco and Pampa Blanca, two of our mines, were temporarily suspended in an effort
to optimize inventory of these products due to decreased global demand for nitrates and iodine during the preceding 15 months.
In November 2010, mining activities resumed in El Toco.



Caliche ore is found under a layer of barren
overburden in seams with variable thickness from twenty centimeters to five meters, and with the overburden varying in thickness
from half a meter to one and a half meters.



35









Before proper mining begins, a full exploration
stage is carried out, including full geological reconnaissance, sampling and drilling caliche ore to determine the features of
each deposit and its quality. Drill-hole samples are properly identified and tested at our chemical laboratories. With the exploration
information on a closed grid pattern of drill holes, the ore evaluation stage provides information for mine planning purposes.
Mine planning is done on a long-term basis (10 years), medium-term basis (three years) and short-term basis (one year). A mine
production plan is a dynamic tool that details daily, weekly and monthly production plans. After drill holes are made, information
is updated to offer the most accurate ore supply schedule to the processing plants.



The mining process generally begins with
bulldozers first ripping and removing the overburden in the mining area. This process is followed by production drilling and blasting
to break the caliche seams. Front-end loaders load the ore on off-road trucks. In the Pedro de Valdivia mine, trucks deliver the
ore to stockpiles next to rail loading stations. The stockpiled ore is later loaded onto railcars that take the mineral to the
processing facilities.



At the Pedro de Valdivia facility, the
ore is crushed and leached to produce concentrated solutions carrying the nitrate and iodine. The crushing of the ore produces
a coarse fraction that is leached in a vat system and a fine fraction that is leached by agitation. These are followed by liquid-solid
separation, where solids precipitate as sediment and liquids containing nitrate and iodine are sent to be processed. Operations
at the El Toco mining site of Maria Elena use a heap leaching production process. In Nueva Victoria and El Toco, the run of mine
ore is loaded in heaps and leached to produce concentrated solutions.



Caliche Ore-Derived Products



Caliche ore-derived products are: sodium nitrate, potassium
nitrate, sodium potassium nitrate, iodine and iodine derivatives.



Sodium Nitrate



During 2012, sodium nitrate for both agricultural
and industrial applications was produced at the Pedro de Valdivia facility using the Guggenheim method, which was originally patented
in 1921, and is based on a closed circuit method of leaching vats. This process uses heated brines to leach the crushed caliche
in vats and selectively dissolve the contents. The concentrated solution is then cooled, producing sodium nitrate crystals, which
can then be separated from the brine using basket centrifuges. After the crystallization process, the brine is pumped to the iodine
facilities, where the iodide is separated in a solvent extraction plant. The brine is returned to the vat leaching process. The
fine fraction of caliche’s crushing process is leached at ambient temperature with water, producing a weak solution that
is pumped to the iodine facilities. After a solvent extraction process, the brine is pumped to solar evaporation ponds in Coya
Sur, 15 km south of María Elena.



Our total current crystallized sodium nitrate
production capacity at the Pedro de Valdivia facility is approximately 500,000 metric tons per year. Crystallized sodium nitrate
is processed further at the Coya Sur and María Elena production plants to produce potassium nitrate in different qualities,
sodium potassium nitrate and/or crystallized or prilled nitrates (potassium or sodium), which are transported to our port facilities
in Tocopilla by railway for shipping to customer and distributors worldwide.



36







Potassium nitrate



Potassium nitrate is produced at our Coya
Sur facility using a production process developed by us. The brine leached with the fine fraction process at Pedro de Valdivia
and the brines produced by heap leaching process in Maria Elena are pumped to Coya Sur’s solar evaporation ponds for a nitrate
concentration process. After the nitrate concentration process, the brine is pumped to a conversion plant where potassium salts
are added and where a chemical reaction begins and produces brine with dissolved potassium nitrate. This brine is pumped to a crystallization
plant, which crystallizes the potassium nitrate by cooling and separating it from the liquid by centrifuge.



Concentrated nitrate salts were produced
at Pampa Blanca until March 2010, and are currently produced at Nueva Victoria by leaching caliche ore in heaps in order to extract
solutions that are rich in iodine and nitrates. These solutions are then sent to plants where iodine is extracted through both
solvent-extraction and blow out processes. The remaining solutions are subsequently sent to solar evaporation ponds where the solutions
are evaporated and rich nitrate salts are produced. These concentrated nitrate salts are then sent to Coya Sur where they are used
to produce potassium nitrate.



Our current potassium nitrate production
capacity at Coya Sur is approximately 950,000 metric tons per year, including 500,000 metric tons per year of technical grade potassium
nitrate. A new potassium nitrate plant began operations in 2011. During 2012, we produced approximately 246,000 tons of potassium
nitrate at this plant. This new plant was designed to use raw material salts harvested in Nueva Victoria and potassium salts from
the Salar de Atacama.



The nitrates produced in crystallized or
prilled form at Coya Sur have been certified by TÜV-Rheiland under the quality standard ISO 9001:2008. Potassium nitrate produced
at Coya Sur and María Elena is transported to Tocopilla for shipping to customers and distributors.



Sodium potassium nitrate



Sodium potassium nitrate is a mixture of
approximately two parts sodium nitrate per one part potassium nitrate. We produce sodium potassium nitrate at our Coya Sur and
María Elena prilling facilities using standard, non-patented production methods we have developed. Crystallized sodium nitrate
is mixed with the crystallized potassium nitrate to make sodium potassium nitrate, which is then prilled. The prilled sodium potassium
nitrate is transported to Tocopilla for bulk shipment to customers.



The production process for sodium potassium
nitrate is basically the same as that for sodium nitrate and potassium nitrate. With certain production restraints and following
market conditions we may supply sodium nitrate, potassium nitrate or sodium potassium nitrate either in prilled or crystallized
form.



Iodine and iodine derivatives



We produce iodine at our Pedro de Valdivia,
Maria Elena and Nueva Victoria facilities.During 2012, iodine was produced by extracting it from the solutions resulting
from the heap leaching of caliche ore at María Elena and Nueva Victoria, including the Iris facility as part of the Nueva
Victoria facility, and from the vat leaching of caliche ore at the Pedro de Valdivia facilities.Production of iodine at
the Iris plant began in December 2011.



As in the case of nitrates, the process
of extracting iodine from the caliche ore is well established, but variations in the iodine and other chemical contents of the
treated ore and other operational parameters require a high level of know-how to manage the process effectively and efficiently.



37







The solutions resulting from the leaching
of caliche carry iodine in iodate form. Part of the iodate solution is reduced to iodide using sulfur dioxide, which is produced
by burning sulfur. The resulting iodide is combined with the rest of the untreated iodate solution to release elemental iodine
in low concentrations. The iodine is then extracted from the aqueous solutions and concentrated as iodide form using a solvent
extraction and stripping plant in the Pedro de Valdivia and Nueva Victoria facilities and using a blow out plant in Iris. The concentrated
iodide is oxidized to solid iodine, which is then refined through a smelting process and prilled. We have obtained patents in the
United States and recently in Chile under the Chilean patent number 47,080, for our iodine prilling process.



Prilled iodine is tested for quality control
purposes, using international standard procedures that we have implemented, then packed in 20 to 50 kilogram drums or 350 to 700
kilogram maxibags and transported by truck to Antofagasta or Iquique for export. Our iodine and iodine derivatives production facilities
have qualified under the new ISO-9001:2008 program, providing third-party certification—by TÜV-Rheiland—of the
quality management system. The last recertification process was approved in February 2011. Iodine from the Iris plant was certified
under ISO-9001:2008 in April 2012.



Our total iodine production in 2012 was
approximately 10,900 metric tons: approximately 6,000 metric tons from Nueva Victoria and Iris, 3,200 metric tons from Pedro de
Valdivia, and 1,700 metric tons from María Elena. The Nueva Victoria facility is also used for recycling iodine from the
potassium iodide contained in the LCD waste solutions imported mainly from Korea. Nueva Victoria is also equipped to toll iodine
from iodide delivered from other SQM facilities. We have the flexibility to adjust our production according to market conditions.
Our total current production capacity at our iodine production plants is approximately 12,500 metric tons per year.



We use a portion of the produced iodine
to manufacture inorganic iodine derivatives, which are intermediate products used for manufacturing agricultural and nutritional
applications, at facilities located near Santiago, Chile. We also produce inorganic and organic iodine derivative products together
with Ajay, which purchases iodine from us. In the past, we have primarily marketed our iodine derivative products in South America,
Africa and Asia, while Ajay and its affiliates have primarily sold their iodine derivative products in North America and Europe.



In September 2010, the National Environmental
Commission of Chile (Comisión Nacional del Medioambiente or “CONAMA”) approved the environmental study
of our Pampa Hermosa project in the Region of Tarapacá in Chile. This approval allowed us to increase the production capacity
of our Nueva Victoria operations from 4,500 to 11,000 metric tons of iodine per year and to produce up to 1.2 million metric tons
of nitrates, mine up to 33 million metric tons of caliche per year and use new water rights of up to 570.8 liters per second. During
2012, we made investments in order to increase the water capacity in the Nueva Victoria operations from two water sources approved
by the environmental study of Pampa Hermosa, expand the capacity of solar evaporation ponds and to implement new areas of mining
and collection of solutions. Additional expansions may be done from time to time in the future, depending on market conditions.



During 2012, we submitted a request to
the CONAMA requesting approval to expand our caliche ore extraction in the region of Antofagasta, which, if approved, is expected
to increase production capacity by 10,000 tons of iodine and 1.3 million tons of nitrates per year. The project also requested
permission to build a pipeline from the Pacific Ocean to the mining site. Currently, the request is being evaluated by the commission
and other governmental agencies.



38







Salar
de Atacama Brine Deposits



The Salar de Atacama, located approximately
250 kilometers east of Antofagasta, is a salt-encrusted depression in the Atacama desert, within which lies an underground deposit
of brines contained in porous sodium chloride rock fed by an underground inflow from the Andes mountains. The brines are estimated
to cover a surface of approximately 2,800 square kilometers and contain commercially exploitable deposits of potassium, lithium,
sulfates and boron. Concentrations vary at different locations throughout the Salar de Atacama. Our production rights to the Salar
de Atacama are pursuant to a lease agreement with Corfo, which expires in 2030. The lease agreement permits the CCHEN to establish
a total accumulated extraction limit of 180,100 tons of lithium.



Brines are pumped from depths of 1.5 to
60 meters below surface, through a field of wells that are located in areas of the Salar de Atacama that contain relatively high
concentrations of potassium, lithium, sulfate, boron and other minerals.



We process these brines to produce potassium
chloride, potassium sulfate, lithium carbonate, lithium hydroxide, lithium chloride, boric acid and bischofite (magnesium chloride).



Potassium chloride



We use potassium chloride in the production
of potassium nitrate. Production of our own supplies of potassium chloride provides us with substantial raw material cost savings.



In order to produce potassium chloride,
brines from the Salar de Atacama are pumped to solar evaporation ponds. Evaporation of the brines results in a complex crystallized
mixture of salts of potassium, sodium and magnesium. Waste sodium chloride salts are removed by precipitation. After further evaporation,
the sodium and potassium salts are harvested and sent for treatment at one of the potassium chloride plants where potassium chloride
is separated by a grinding, flotation, and filtering process. Potassium salts also containing magnesium are harvested and sent
for treatment at one of the cold leach plants where magnesium is removed. Potassium chloride is transferred for approximately 300
kilometers to our Coya Sur facilities via a dedicated truck transport system, where it is used in the production of potassium nitrate.
We sell potassium chloride produced at the Salar de Atacama in excess of our needs to third parties. All of our potassium-related
plants in the Salar de Atacama currently have a production capacity in excess of up to 2.6 million metric tons per year. Actual
production capacity will depend on volume, metallurgical recovery rates and quality of the mining resources pumped from the Salar
de Atacama.



During 2012, we achieved a production capacity
of compacted potassium chloride in excess of 1.2 million metric tons per year and we plan to carry out further expansions of production
capacity of the compaction plant during 2013.



The by-products of the potassium chloride
production process are (i) brines remaining after removal of the potassium chloride, which are used to produce lithium carbonate
as described below, with the excess amount being reinjected into the Salar de Atacama; (ii) sodium chloride, which is similar to
the surface material of the Salar de Atacama and is deposited at sites near the production facility; and (iii) other salts containing
magnesium chloride.



39







Lithium carbonate and lithium chloride



A portion of the brines remaining after
the production of potassium chloride is sent to additional solar concentration ponds adjacent to the potassium chloride production
facility. Following additional evaporation, the remaining concentrated solution of lithium chloride is transported by truck to
a production facility located near Antofagasta, approximately 230 kilometers from the Salar de Atacama. At the production facility,
the solution is purified and treated with sodium carbonate to produce lithium carbonate, which is dried and then, if necessary,
compacted and finally packaged for shipment. A portion of this purified lithium chloride solution is packaged and shipped to customers.
The production capacity of our lithium carbonate facility is approximately 48,000 metric tons per year. Future production will
depend on the actual volumes and quality of the lithium solutions sent by the Salar de Atacama operations, as well as prevailing
market conditions.



Lithium carbonate production quality assurance
program has been certified by TÜV-Rheiland under ISO 9001:2000 since 2005 and under ISO 9001:2008 since October 2009.



Lithium hydroxide



Lithium carbonate is sold to customers,
and we also use it as a raw material for our lithium hydroxide monohydrate facility, which started operations at the end of 2005.
This facility has a production capacity of 6,000 metric tons per year and is located in the Salar del Carmen, adjacent to our lithium
carbonate operations. In the production process, lithium carbonate is reacted with a lime solution to produce lithium hydroxide
brine and calcium carbonate salt, which is filtered and piled in reservoirs. The brine is evaporated in a multiple effect evaporator
and crystallized to produce the lithium hydroxide monohydrate, which is dried and packaged for shipment to customers.



Lithium hydroxide production quality assurance
program has been certified by TÜV-Rheiland under ISO 9001:2000 since 2007 and under ISO 9001:2008 since October 2009.



Potassium sulfate and boric acid



Approximately 12 kilometers northeast of
the potassium chloride facilities at the Salar de Atacama, we use the brines from the Salar de Atacama to produce potassium sulfate,
potassium chloride (as a by-product of potassium sulfate process) and boric acid. The plant is located in an area of the Salar
de Atacama where high sulfate and potassium concentrations are found in the brines. Brines are pumped to pre-concentration solar
evaporation ponds where waste sodium chloride salts are removed by precipitation. After further evaporation, the sulfate and potassium
salts are harvested and sent for treatment at the potassium sulfate plant. Potassium sulfate is produced using flotation, concentration
and reaction processes, after which it is crystallized, dried and packaged for shipment. Production capacity for the potassium
sulfate plant is approximately 340,000 metric tons per year. This capacity is part of the total plant capacity of 2.6 million metric
tons per year, in our dual plant complex where we may switch, to some extent, between potassium chloride and potassium sulfate
production. Part of the pond system in this area is also used to process potassium chloride brines extracted from the low
sulfate sulfate concentration areas found in the salar.



40







The principal by-products of the production
of potassium sulfate are: (i) non-commercial sodium chloride, which is deposited at sites near the production facility, and (ii)
remaining solutions, which are re-injected into the Salar de Atacama or returned to the evaporation ponds. The principal by-products
of the boric acid production process are remaining solutions that are treated with sodium carbonate to neutralize acidity and then
are reinjected into the Salar de Atacama.



Raw materials



The main raw material that we require in
the production of nitrate and iodine is caliche ore, which is obtained from our surface mines. The main raw material in the production
of potassium chloride, lithium carbonate and potassium sulfate is the brine extracted from our operations at the Salar de Atacama.



Other important raw materials are sodium
carbonate (used for lithium carbonate production and for the neutralization of iodine solutions), sulfur, sulfuric acid, kerosene,
anti-caking and anti-dust agents, ammonium nitrate (used for the preparation of explosives in the mining operations), woven bags
for packaging our final products, electricity acquired from electric utilities, and liquefied natural gas and fuel oil in heat
generation. Our raw material costs (excluding caliche ore and salar brines and including energy) represented approximately 20%
of our cost of sales in 2012.



We have several electricity supply agreements
signed with major producers in Chile which are expected to cover our electricity needs until 2030. We have been connected to the
northern power grid in Chile, which currently supplies electricity to most cities and Industrial facilities in northern Chile,
since April 2000.



In May 2001, we entered into a 10-year
gas supply contract with Distrinor S.A. (a subsidiary of E-CL) for a maximum of 3,850,000 million Btu per year. This gas supply
was considered sufficient at the time to satisfy the requirements for the facilities that are connected to a natural gas supply.
However, beginning in 2004, the Argentinean government imposed restrictions on the supply of natural gas to Chile and, in 2011,
the supply came to a complete stop. In 2010, Chile began to import liquefied natural gas. In 2012, we received liquefied natural
gas through this supply stream.



We obtain ammonium nitrate, sulfur, sulfuric
acid, kerosene and soda ash from several large suppliers, mainly in Chile and the United States, under long-term contracts or general
agreements, some of which contain provisions for annual revisions of prices, quantities and deliveries. Diesel fuel is obtained
under contracts that provide fuel at international market prices.



We believe that all of our contracts and
agreements with third-party suppliers with respect to our main raw materials contain standard and customary commercial terms and
conditions.



Water
Supply



The
main sources of water for our nitrate and iodine facilities at Pedro de Valdivia, María Elena and Coya Sur are the Loa and
San Salvador rivers, which run near our production facilities. Water for our Nueva Victoria and Salar de Atacama facilities is
obtained from wells near the production facilities. We additionally buy water from third parties for our production processes at
the Salar del Carmen lithium carbonate plant. In addition, we purchase potable water from local utility companies. We have not
experienced significant difficulties obtaining the necessary water to conduct our operations.



41







Government
Regulations



Regulations in Chile Generally



We are subject to the full range of government
regulations and supervision generally applicable to companies engaged in business in Chile, including labor laws, social security
laws, public health laws, consumer protection laws, environmental laws, tax laws, securities laws and anti-trust laws. These include
regulations to ensure sanitary and safety conditions in manufacturing plants.



We conduct our mining operations pursuant
to exploration concessions and exploitation concessions granted pursuant to applicable Chilean law. Exploitation concessions essentially
grant a perpetual right to conduct mining operations in the areas covered by the concessions, provided that annual concession fees
are paid (with the exception of the Salar de Atacama rights, which have been leased to us until 2030). Exploration concessions
permit us to explore for mineral resources on the land covered thereby for a specified period of time, and to subsequently request
a corresponding exploitation concession.



Under Law No. 16,319 that created the CCHEN
(Ley 16.319 que crea la Comisión Chilena de Energía Nuclear), we have an agreement with the CCHEN regarding
the exploitation and sale of lithium from the Salar de Atacama. The agreement sets quotas for the tonnage of lithium authorized
to be sold.



We also hold water rights obtained from
the Chilean water regulatory authority for the supply of water from rivers or wells near our production facilities sufficient to
meet our current and anticipated operating requirements. See “Risk factors—Risks relating to Chile.” The Water
Code is subject to changes, which could have a material adverse impact on our business, financial condition and results of operations.
Law No. 20,017, published on June 16, 2005, modified the Chilean laws relating to water rights. Under certain conditions, these
modifications allow the constitution of permanent water rights of up to two liters per second for each well built prior to June
30, 2004, in the locations where we conduct our mining operations. In constituting these new water rights, the law does not consider
the availability of water, or how the new rights may affect holders of existing rights. Therefore, the amount of water we can effectively
extract based on our existing rights could be reduced if these additional rights are exercised. These and other potential future
changes to Chilean laws relating to water rights could have a material adverse impact on our business, financial condition and
results of operations.



We operate port facilities at Tocopilla
for shipment of products and delivery of certain raw materials pursuant to maritime concessions, under applicable Chilean laws,
which are normally renewable on application, provided that such facilities are used as authorized and annual concession fees are
paid.



In 2005, the Chilean Congress approved
the Royalty Law, which established a royalty tax to be applied to mining activities developed in Chile. In 2010, modifications
were made to the law and taxes were increased. In 2012, new modifications to the tax laws were enacted to permanently set the corporate
tax rate at 20%. The Chilean government may again decide to levy additional taxes on mining companies or other corporations in
Chile, and such taxes could have a material adverse impact on our business, financial condition and results of operations.



42







In 2006, the Chilean Congress amended the
Labor Code, and effective January 15, 2007, certain changes were made affecting companies that hire subcontractors to provide certain
services. This new law, known as the Subcontracting Law (Ley de Subcontratación), further amends the Labor Accidents
Law No. 16,744 to provide that, that when a serious accident in the workplace occurs, a company must halt work at the site where
the accident took place until authorities from the SERNAGEOMIN, the Labor Board or the SNA, inspect the site and prescribe the
measures such company must take to prevent future risks. Work may not be resumed until such company has taken the prescribed measures,
and the period of time before work may be resumed may last for a number of hours, days, or longer. The effects of this law could
have a material adverse effect on our business, financial condition and results of operations.



On December 2, 2009, Law No. 20,393 went
into effect, establishing a system of criminal liability for legal entities. The objective of the new regulation is to allow legal
entities to be prosecuted for the crimes of (a) asset laundering, (b) financing terrorism and (c) bribery, where such crimes are
committed by people who hold relevant positions within a legal entity in order to benefit that legal entity. The law establishes
a prevention model that includes, among others, the designation of a person in charge of prevention and the establishment of special
programs and policies. The implementation of this model can exempt a company from liability.



On January 1, 2010, Law No. 20,382 went
into effect, introducing modifications to the Securities Law and Law No. 18,046 on Corporations (Ley de Sociedades Anónimas
or the “Chilean Corporations Act”). The new law relates to corporate governance and, in general, seeks to improve such
matters as the professionalization of senior management at corporations, the transparency of information, and the detection and
resolution of possible conflicts of interest. The law establishes the concept of an independent director for certain corporations,
including SQM. Such director has a preferential right to be a member of the Directors’ Committee, which position, in turn,
grants the director further powers. The new independent director may be proposed by any shareholder with an ownership interest
of 1% or more in a company, but he or she must satisfy a series of independence requirements with respect to the company and the
company’s competition, providers, customers and majority shareholders. The new law also refines the regulations regarding
the information that companies must provide to the general public and to the SVS, as well as regulations relating to the use of
inside information, the independence of external auditors, and procedures for the analysis of transactions with related parties.



On January 26, 2010, the Chilean Congress
amended the Environmental Law to create the Ministry of Environment, the Environmental Assessment Service and the environmental
enforcement superintendence (Superintendencia del Medioambiente or “Environmental Enforcement Superintendence”).
These changes introduced important amendments to environmental regulations by setting up new agencies and introducing new provisions
and procedures applicable to projects whose operations bear an impact on the environment. The new Ministry designs and implements
environmental policies relating to environmental conservation, sustainable growth and the protection of Chile’s renewable
energy resources. In addition, the Ministry is responsible for enacting emission and quality standard regulations, as well as recovery
and decontamination plans. The Environmental Assessment Service pursues procedures of the Environmental Impact Assessment System,
pursuant to which projects are environmentally approved or rejected. In procedures for obtaining an environmental license, any
person, including legal entities and companies, will be allowed to file oppositions and comments. Summary procedures, such as Environmental
Impact Statements, allow comments in support or opposition under certain circumstances. Technical reports from governmental agencies
are considered to be final. The Environmental Enforcement Superintendence is an independent agency which oversees and coordinates
with other governmental agencies in charge of supervision of suspended projects and projects requiring environmental approval.
Likewise, it will receive, investigate and decide complaints concerning the infringement of environmental regulations and will
sanction violators, deliver injunction orders and levy relevant fines. The Environmental Enforcement Superintendence had its powers
suspended until the First Environmental Court was installed in Santiago on December 28, 2012.



43







There are currently no material legal or
administrative proceedings pending against us except as discussed in Note 16.1 to our Consolidated
Financial Statements and below under “—Safety, health and environmental regulations in Chile,” and we
believe that we are in compliance in all material respects with all applicable statutory and administrative regulations with respect
to our business.



Safety, Health and Environmental
Regulations in Chile



Our operations in Chile are subject to
both national and local regulations related to safety, health, and environmental protection. In Chile, the main regulations on
these matters that are applicable to SQM are the Mine Health and Safety Act of 1989 (Reglamento de Seguridad Minera or the
“Mine Health and Safety Act”), the Health Code (Código Sanitario), the Health and Safety Act 1999 (Reglamento
sobre Condiciones Sanitarias y Ambientales Básicas en los Lugares de Trabajoor the “Health and Basic Conditions
Act”), the Subcontracting Law, and the environmental framework law (Ley sobre Bases Generales del Medio Ambiente or
the “Environmental Law”).



Health and safety at work are fundamental
aspects in the management of mining operations, which is why SQM has made constant efforts to maintain good health and safety conditions
for the people working at its mining sites. In addition to the role played by us in this important matter, the Chilean government
has a regulatory role, enacting and enforcing regulations in order to protect and ensure the health and safety of workers. The
Chilean government, acting through the Ministry of Health and the SERNAGEOMIN, performs health and safety inspections and oversees
mining projects, among other tasks, and it has exclusive powers to enforce standards related to environmental conditions and the
health and safety of the people performing activities related to mining.



The Mine Health and Safety Act protects
workers and nearby communities against health and safety hazards, and it provides for enforcement of the law where compliance has
not been achieved. SQM’s Internal Mining Standards (Reglamentos Internos Mineros) establish our obligation to maintain
a workplace that is safe and free of health risks, in as much as this is reasonably practicable. We must comply with the general
provisions of the Health and Basic Conditions Act, our own internal standards, and the provisions of the Mine Health and Safety
Act. In the event of non-compliance, the Ministry of Health and particularly the SERNAGEOMIN are entitled to use their enforcement
powers to ensure compliance with the law.



In November 2011, the Ministry of Mining
enacted Law No. 20,551 that Regulates Mine Closure and its Facilities (Ley que Regula el Cierre de Faenas e Instalaciones Mineras).
This new statute entered in force in November 2012. Its main requirements are related to disclosures to the SERNAGEOMIN regarding
decommissioning plans for each mining site and its facilities, along with the estimated cost to implement such plans. There is
a requirement to provide a form of financial assurance to the SERNAGEOMIN to secure compliance with the decommissioning plans.
There are various types of financial assurance that satisfy the requirement.  By November 2014, we have to inform the SERNAGEOMIN
of the estimated costs for each of our decommissioning plans and the corresponding financial assurances we propose to provide,
which are subject to approval by the SVS.



44







The Environmental Law was subjected to
several important modifications that entered into effect in January 2010, including the creation of the Ministry of the Environment,
the Environmental Assessment Service, and the Environmental Enforcement Superintendence. The Environmental Enforcement Superintendence
began operations on December 28, 2012. The new and modified Environmental Law replaced the CONAMA with both the Ministry of the
Environment, which is currently the governmental agency responsible for coordinating and supervising environmental issues and the
Environmental Assessment Service. Under the new Environmental Law, we will continue to be required to conduct environmental impact
studies or statements of any future projects or activities (or their significant modifications) that may affect the environment.
With the above mentioned modifications to the Environmental Law, the Environmental Assessment Service, together with other public
institutions with mandates related to the environment, evaluates environmental impact studies or statements submitted for its approval.
The Environmental Enforcement Superintendence is responsible for auditing environmental performance during the construction, operation,
and closure of the projects. The Environmental Law also promotes citizen participation in project evaluation and implementation,
providing more opportunities during the environmental evaluation process.



In August 10, 1993, the Ministry of Health
published in the Official Gazette a resolution establishing that atmospheric particulate levels at our production facilities in
María Elena and Pedro de Valdivia exceeded air quality standards, affecting the nearby towns. The high particulate matter
levels came principally from dust produced during the processing of caliche ore, particularly the crushing of the ore before leaching.
Residents of the town of Pedro de Valdivia were relocated to the town of María Elena, practically removing Pedro de Valdivia
from the scope of the determination of the Ministry of Health. In 1998, authorities approved a plan to reduce the atmospheric particulate
levels later modified by Decree No. 37/2004 in March 2004, which called for an 80% reduction of the emissions of atmospheric particulate
material. This was achieved by 2008 through the implementation of a project that modified the milling and screening systems used
in the processing of the caliche ore at the María Elena facilities. Due to international market conditions, this project
ceased its operation in March 2010, and today the milling and screening systems used in the processing of the caliche ore at the
María Elena facilities remain closed. Air quality in the area has improved significantly and compliance of air quality standards
required by law is being assessed. When the average of three consecutive years meets the Chilean air quality standard, the resolution
of 1993 of the Ministry of Health may be reviewed.



On March 16, 2007, the Ministry of Health
published in the Official Gazette a resolution establishing that atmospheric particulate levels exceeded air quality standards
in the coast-town of Tocopilla, where we have our port operations. The high particulate matter levels are caused mainly by two
thermoelectric power plants that use coal and fuel oil and are located next to our port operations. Our participation in particulate
matter emissions is very small (less than 0.20% of the total). However, a decontamination plan was developed by the environmental
authority, and its implementation began in October 2010. During 2008 and 2009, earlier than required, SQM implemented control measures
for mitigating particulate matter emissions in its port operations according to the requirements of this plan. We do not expect
any additional measures to be required of SQM following the implementation of the plan.



We continuously monitor the impact of our
operations on the environment and have made, from time to time, modifications to our facilities in an effort to eliminate any adverse
impacts. Also, over time, new environmental standards and regulations have been enacted, which have required minor adjustments
or modifications of our operations for full compliance. We anticipate that additional laws and regulations will be enacted over
time with respect to environmental matters. While we believe that we will continue to be in compliance with all applicable environmental
regulations of which we are now aware, there can be no assurance that future legislative or regulatory developments will not impose
new restrictions on our operations. We are committed to both complying with all applicable environmental regulations and applying
an Environmental Management System to continuously improve our environmental performance.



45







We have submitted and will continue to
submit several environmental impact assessment studies related to our projects to the governmental authorities. We require the
authorization of these submissions in order to maintain and to increase our production capacity.



International Regulations



In 2007, a new European Community Regulation
on chemicals and their safe use went into effect.  This regulation, called REACH (Regulation, Evaluation, Authorisation and
Restriction of Chemical Substances), requires all manufacturers and importers of chemicals – including us – to identify
and manage risks linked to the substances they manufacture and market.  Non-compliance with this regulation would preclude
us from commercializing our products in the European market. In 2010, we completed, on schedule, the registration of all products
exported to the European Community in quantities larger than 1,000 MT, and since 2011 we have been working on the registration
of products exported in amounts under 1,000 MT, which will be completed by 2013; thus, ensuring delivery to European customers.



In 2012, the Environmental
Protection Agency (“EPA”) required importers of chemicals into the US to comply with the Chemical Data Reporting Rule.
For the 2012 submission period, we have provided the required information for the year 2011 for all reportable chemical substances.
In addition, the Occupational Health and Safety Administration (“OSHA”) aligned the standard for chemicals hazard communication
to comply with the Globally Harmonized System (“GHS”), which requires companies to review hazard information for all
chemicals imported into the US, classify chemicals according to the new classification criteria, and update labels and safety data
sheets by June 2015. We are already working on a program which aims to comply with the requirements of this new regulation in line
with the stages and deadlines established by OSHA, and we have updated the Material Safety Data Sheets (“MSDS”) for
products imported into the US.



Research and development, patents
and licenses



See Item 5.C. Research and Development,
Patents and Licenses, etc.



46









4.C.      Organizational
Structure



All of our principal operating subsidiaries
are essentially wholly-owned, except for Soquimich Comercial S.A., which is approximately 61% owned by us and whose shares are
listed and traded on the Santiago Stock Exchange, and Ajay SQM Chile S.A., which is 51% owned by us. The following is a summary
of our main subsidiaries as of December 31, 2012. For a list of all our consolidated subsidiaries, see Note 2.5 to our Consolidated
Financial Statements.



|Principal subsidiaries                                                                                                                                    |  | Activity                                                                                                                         |  | Country of
        Incorporation |  | SQM Beneficial
        Ownership Interest
        (Direct/Indirect)
|--------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------- |  | -------------------------------------------------------------------
|                                                                                                                                                          |  |                                                                                                                                  |  |                                  |  |                                                                    
|SQM Nitrates S.A.                                                                                                                                         |  | Extracts and sells caliche ore to subsidiaries and affiliates of SQM                                                             |  | Chile                            |  | 100%                                                               
|                                                                                                                                                          |  |                                                                                                                                  |  |                                  |  |                                                                    
|SQM Industrial S.A.                                                                                                                                       |  | Produces and markets SQM’s products directly and through other subsidiaries and affiliates of SQM                                |  | Chile                            |  | 100%                                                               
|                                                                                                                                                          |  |                                                                                                                                  |  |                                  |  |                                                                    
|SQM Salar S.A.                                                                                                                                            |  | Exploits the Salar de Atacama to produce and market SQM’s products directly and through other subsidiaries and affiliates of SQM |  | Chile                            |  | 100%                                                               
|                                                                                                                                                          |  |                                                                                                                                  |  |                                  |  |                                                                    
|SQM Potasios S.A.                                                                                                                                         |  | Produces and markets SQM’s products directly and through other subsidiaries and affiliates of SQM                                |  | Chile                            |  | 100%                                                               
|                                                                                                                                                          |  |                                                                                                                                  |  |                                  |  |                                                                    
|Servicios Integrates de Transitos y Transferencias S.A. (SIT)                                                                                             |  | Owns and operates a rail transport system and also owns and operates the Tocopilla port facilities                               |  | Chile                            |  | 100%                                                               
|                                                                                                                                                          |  |                                                                                                                                  |  |                                  |  |                                                                    
|Soquimich Comercial S.A.                                                                                                                                  |  | Markets SQM’s specialty plant nutrition products domestically and imports fertilizers for resale in Chile                        |  | Chile                            |  | 61%                                                                
|                                                                                                                                                          |  |                                                                                                                                  |  |                                  |  |                                                                    
|Ajay-SQM Chile S.A.                                                                                                                                       |  | Produces and markets SQM’s iodine and iodine derivatives                                                                         |  | Chile                            |  | 51%                                                                
|                                                                                                                                                          |  |                                                                                                                                  |  |                                  |  |                                                                    
|Sales and distribution subsidiaries in the United States, Belgium, Brazil, Venezuela, Ecuador, Peru, Argentina, Mexico, South Africa and other locations. |  | Market SQM’s products throughout the world                                                                                       |  | Various                          |  |                                                                    





47







4.D.      Property,
Plant and Equipment



Discussion of our mining rights is organized
below according to the geographic location of our mining operations. SQM's mining interests located throughout the valley of the
Tarapacá and Antofagasta regions of northern Chile (in a part of the country known as “el Norte Grande”), referred
to collectively as the “Caliche Ore Mines”, are discussed first. The Company's mining interests within the Atacama
Desert in the eastern region of el Norte Grande (the “Salar de Atacama Brines”) are discussed second.



Description of the Caliche Ore Mines



As of December 31, 2012, we held constituted
exploitation rights to mineral resources representing approximately 543,882 hectares. In addition, as of December 31, 2012, we
held exploration rights to mineral resources representing approximately 2,700 hectares, and we have applied for additional exploration
rights for approximately 19,900 hectares. Currently, Pedro de Valdivia, María Elena and Nueva Victoria are being exploited.



Pedro de Valdivia

The mine and facilities that we operate
in Pedro de Valdivia are located 170 kilometers northeast of Antofagasta and are accessible by highway. These facilities have been
in operation for approximately 79 years and were previously owned and operated by Anglo Lautaro. The areas currently being mined
are located approximately 17 kilometers southeast and approximately 20 kilometers west of the Pedro de Valdivia production facilities.
Our mining facilities at Pedro de Valdivia have a Weighted Average Age of approximately 11.41 years. Electricity, diesel, and fuel
oil are the primary sources of power for this operation.



María Elena

We operated mining facilities at María
Elena until March 2010, and mining activities using heap leaching resumed in November 2010. The María Elena mine and facilities,
named El Toco, are located 220 kilometers northeast of Antofagasta and are accessible by highway. These facilities were operated
for approximately 83 years before operations were suspended and were previously owned and operated by Anglo Lautaro. The area mined
until operations were suspended is located approximately 14 kilometers north of the María Elena production facilities. Electricity,
diesel, and fuel oil are the primary sources of power. The Weighted Average Age of the Company's mining facilities at María
Elena is approximately 12.58 years.



Pampa Blanca

We operated mining facilities in Pampa
Blanca, which is located 100 kilometers northeast of Antofagasta, until operations were suspended in March 2010. Ore from the Pampa
Blanca mine was transported by truck to nearby heap leaching pads where it is used to produce iodine and nitrate salts. The Weighted
Average Age of the ore recovery facilities at Pampa Blanca is approximately 13.78 years. Electricity, produced by mobile diesel
generators was the primary source of power.



Nueva Victoria

We currently conduct caliche ore operations
in Nueva Victoria, which is located 180 kilometers north of María Elena and is accessible by highway. Since 2007, the Nueva
Victoria mine includes the mining properties Soronal, Mapocho and Iris. Ore from Nueva Victoria is transported by truck to heap
leaching pads where it is then used to produce iodine in Nueva Victoria and the Iris plants. The Weighted Average Age of the ore
recovery facilities at Nueva Victoria is approximately 3.32 years. Electricity is the primary source of power.



48







Description
of the Salar de Atacama Brines



Salar de Atacama Brines



As of December 31, 2012, SQM Salar S.A.
held exclusive rights to exploit the mineral resources in an area covering approximately 140,000 hectares of land in the Salar
de Atacama in northern Chile, of which SQM Salar S.A. is entitled to exploit the mineral resources existing in 81,920 hectares.
These rights are owned by Corfo and leased to SQM Salar S.A. pursuant to a lease agreement between Corfo and SQM Salar S.A. (the
“Lease Agreement”). Corfo may not unilaterally amend the Lease Agreement, and the rights to exploit the resources cannot
be transferred. The Lease Agreement provides that SQM Salar S.A. is responsible for the maintenance of Corfo’s exploitation
rights and for annual payments to the Chilean government, and it expires on December 31, 2030. Furthermore, the same lease Agreement
permits the CCHEN to establish a total accumulated extraction limit set at,180,100 tons of lithium per year. SQM Salar S.A. is
required to make lease-royalty payments to Corfo according to specified percentages of the value of production of minerals extracted
from the Salar de Atacama brines. SQM Salar S.A. holds an additional 119,023 hectares of constituted exploitation rights in the
Salar de Atacama.



In addition, as of December 31, 2012, we
held constituted exploration rights covering approximately 52,400 hectares, and we had applied for additional exploration rights
covering approximately 54,600 hectares. Exploration rights are valid for a period of two years, after which we can (i) request
an exploitation concession for the land, (ii) request an extension of the exploration rights for an additional two years (the extension
only applies to a reduced surface area equal to 50% of the initial area), or (iii) cease exploration of the zone covered by the
rights. The weighted average age of the assets of our mining facilities at the Salar de Atacama is approximately 6.79 years. Solar
energy is the primary source of power used by the Salar de Atacama operation.



Under the terms of the Salar de Atacama
project agreement between Corfo and SQM Salar S.A., (the “Project Agreement”), Corfo has agreed that it will not permit
any other person to explore, exploit or mine any mineral resources in approximately 147,000 hectares of the Salar de Atacama (which
include the 140,000 hectares) mentioned above. The Project Agreement expires on December 31, 2030.



Concessions,
Extraction Yields and Reserves for the Caliche Ore Mines and Salar Brines



Concessions Generally



Caliche ore. We hold our mineral
rights pursuant to one of two types of exclusive concessions granted pursuant to applicable law in Chile:



(1) “Exploitation Concessions”
These are concessions whereby we are legally entitled to use the land in order to exploit the mineral resources contained therein
on a perpetual basis subject to annual payments to the Chilean government; or



(2) “Exploration Concessions”
These are concessions whereby we are legally entitled to use the land in order to explore for mineral resources for a period of
two years, at the expiration of which the concession may be extended one time only for two additional years if the area covered
by the concession is reduced by half.



49







An Exploration Concession is generally
obtained for purposes of evaluating the mineral resources in an area. Generally, after the holder of the Exploration Concession
has determined that the area contains exploitable mineral resources, such holder will apply for an Exploitation Concession for
the area. Such application will give the holder absolute priority with respect to such Exploitation Concession against third parties.
If the holder of the Exploration Concession determines that the area does not contain commercially exploitable mineral resources,
the concession is usually allowed to lapse. An application also can be made for an Exploitation Concession without first having
obtained an Exploration Concession for the area involved.



Concessions for the Caliche Ore Mines
and Salar Brines



As of December 31, 2012, approximately
93% of our total mining concessions were held pursuant to exploitation concessions and 7% pursuant to exploration concessions.
Of the exploitation concessions, approximately 80% already have been granted pursuant to applicable Chilean law, and approximately
20% are in the process of being granted. Of the exploration concessions, approximately 54% already have been granted pursuant to
applicable Chilean law, and approximately 46% are in the process of being granted.



We made payments to the Chilean government
for our exploration and exploitation concessions of approximately US$9.6 million in 2012.



The following table sets forth our constituted
exploitation and exploration concessions as of December 31, 2012:



|                           |  | Exploitation concessions |       |  | Exploration concessions |  |           | Total        | 
|-------------------------- |  | ------------------------ | ----- |  | ----------------------- |  | --------- | ------------ | 
|Mines                      |  | Total
number             |       |  | Hectares                |  |           | Total
number | 
|Pedro de Valdivia          |  |                          | 576   |  |                         |  | 147,302   |              | 
|EI Toco                    |  |                          | 611   |  |                         |  | 180,964   |              | 
|Pampa Blanca               |  |                          | 465   |  |                         |  | 136,962   |              | 
|Nueva Victoria             |  |                          | 303   |  |                         |  | 78,654    |              | 
|Subtotal Caliche Ore Mines |  |                          | 1,955 |  |                         |  | 543,882   |              | 
|Salar de Atacama(1)        |  |                          | 409   |  |                         |  | 266,143   |              | 
|Subtotal Mines             |  |                          | 2,364 |  |                         |  | 810,025   |              | 
|                           |  |                          |       |  |                         |  |           |              | 
|Subtotal other Areas       |  |                          | 7,609 |  |                         |  | 1,690,433 |              | 
|Total                      |  |                          | 9,973 |  |                         |  | 2,500,458 |              | 










| | (1) | See Description of Salar Brines, Item 4.D.
| | --- | ------------------------------------------



50







Extraction yields



The following table sets forth certain operating data relating
to each of our mines for 2012, 2011 and 2010:



|(in thousands, unless otherwise stated)                          |  | 2012 |        |  | 2011 |  |        | 2010 | 
|---------------------------------------------------------------- |  | ---- | ------ |  | ---- |  | ------ | ---- | 
|Pedro de Valdivia                                                |  |      |        |  |      |  |        |      | 
|Metric tons of ore mined                                         |  |      | 12,027 |  |      |  | 12,151 |      | 
|Average grade nitrate (% by weight)                              |  |      | 7.3    |  |      |  | 7.2    |      | 
|Iodine (parts per million (ppm))                                 |  |      | 406    |  |      |  | 417    |      | 
|Metric tons of crystallized nitrate produced                     |  |      | 466    |  |      |  | 454    |      | 
|Metric tons of iodine produced                                   |  |      | 3.2    |  |      |  | 3.1    |      | 
|                                                                 |  |      |        |  |      |  |        |      | 
|Maria Elena(1)                                                   |  |      |        |  |      |  |        |      | 
|Metric tons of ore mined                                         |  |      | 6,787  |  |      |  | 6,027  |      | 
|Average grade nitrate (% by weight)                              |  |      | 6.2    |  |      |  | 5.9    |      | 
|Iodine (ppm)                                                     |  |      | 454    |  |      |  | 466    |      | 
|Metric tons of crystallized nitrate produced                     |  |      | –      |  |      |  | –      |      | 
|Metric tons of iodine produced                                   |  |      | 1.7    |  |      |  | 0.8    |      | 
|                                                                 |  |      |        |  |      |  |        |      | 
|Coya Sur(2)                                                      |  |      |        |  |      |  |        |      | 
|Metric tons of crystallized nitrate produced                     |  |      | 491    |  |      |  | 395    |      | 
|                                                                 |  |      |        |  |      |  |        |      | 
|Pampa Blanca(1)                                                  |  |      |        |  |      |  |        |      | 
|Metric tons of ore mined                                         |  |      | –      |  |      |  | –      |      | 
|Iodine (ppm)                                                     |  |      | –      |  |      |  | –      |      | 
|Metric tons of iodine produced                                   |  |      | –      |  |      |  | –      |      | 
|                                                                 |  |      |        |  |      |  |        |      | 
|Nueva Victoria                                                   |  |      |        |  |      |  |        |      | 
|Metric tons of ore mined                                         |  |      | 23,937 |  |      |  | 18,418 |      | 
|Iodine (ppm)                                                     |  |      | 465    |  |      |  | 457    |      | 
|Metric tons of iodine produced                                   |  |      | 6.0    |  |      |  | 5.2    |      | 
|                                                                 |  |      |        |  |      |  |        |      | 
|Salar de Atacama (3)                                             |  |      |        |  |      |  |        |      | 
|Metric tons of lithium carbonate produced                        |  |      | 41     |  |      |  | 38     |      | 
|Metric tons of potassium chloride and potassium sulfate produced |  |      | 1,977  |  |      |  | 1,448  |      | 








| | (1) | Operations at the El Toco and Pampa Blanca mines were temporarily suspended in March 2010. Mining activities resumed at El
Toco in November 2010. Operations have not yet resumed at Pampa Blanca.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | Includes production at Coya Sur from treatment of fines from María Elena and Pedro de Valdivia, nitrates from pile treatment
at Pampa Blanca and net production from NPT, or technical (grade) potassium nitrate, plants.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (3) | Lithium carbonate is extracted at the Salar de Atacama and processed at our facilities at the Salar del Carmen.
| | --- | ---------------------------------------------------------------------------------------------------------------



Reserves



Reserves for the Caliche Ore
Deposits



Our in-house staff of geologists and mining
engineers prepares our estimates of caliche ore reserves. The proven and probable reserve figures presented below are estimates,
and no assurance can be given that the indicated levels of recovery of nitrates and iodine will be realized.



We estimate ore reserves based on engineering
evaluations of assay values derived from sampling of drill-holes and other openings. Drill-holes have been made at different space
intervals in order to recognize mining resources. Normally, we start with 400x400 meters and then we reduce spacing to 200x200
meters, 100x100 meters and 50x50 meters. The geological occurrence of caliche mineral is unique and different from other metallic
and non-metallic minerals. Caliche ore is found in large horizontal layers at depths ranging from one to four meters and has an
overburden between zero and two meters. This horizontal layering is a natural geological condition and allows us to estimate the
continuity of the caliche bed based on surface geological reconnaissance and analysis of samples and trenches. Mining resources
can be calculated using the information from the drill-hole sampling.



51







According to our experience in caliche
ore, the grid pattern drill-holes with spacing equal to or less than 100 meters produce data on the caliche resources that is sufficiently
defined to consider them measured resources and then, adjusting for technical, economic and legal aspects, as proven reserves.
These reserves are obtained using the Kriging Method and the application of operating parameters to obtain economically profitable
reserves. Similarly, the information obtained from detailed geologic work and samples taken from grid pattern drill-holes with
spacing equal to or less than 200 meters can be used to determine indicated resources. By adjusting such indicated resources to
account for technical, economic and legal factors, it is possible to calculate probable reserves. Probable reserves are calculated
by evaluating polygons and have an uncertainty or error margin greater than that of proven reserves. However, the degree of certainty
of probable reserves is high enough to assume continuity between points of observation.



Probable reserves are the economically
mineable part of a “mineral resource” and, in some circumstances, a “measured mineral resource.” An indicated
mineral resource is that part of a mineral resource for which tonnage, densities, shape, physical characteristics, grade and mineral
content can be estimated with a reasonable level of confidence. The calculation is based on exploration, sampling and testing information
gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings, and drill holes. A measured
mineral resource is the part of a mineral resource for which tonnage, densities, shape, physical characteristics, grade and mineral
content can be estimated with a high level of confidence. The estimate is based on detailed and reliable exploration, sampling
and testing information gathered through appropriate techniques from locations such as outcrops, trenches, pits, workings, and
drill holes.



The calculation of reserves includes diluting
materials and allowances for losses which may occur when the material is mined. Appropriate assessments, which may include feasibility
studies, have been carried out and include consideration of and modification by realistically assumed mining, metallurgical, economic,
marketing, legal, environmental, social and governmental factors. These assessments demonstrate at the time of reporting that extraction
is reasonably justified.



Proven and probable reserves are determined
using extensive drilling, sampling and mine modeling, in order to estimate potential restrictions on production yields, including
cut-off grades, ore type, dilution, waste-to-ore ratio and ore depth. Economic feasibility is determined on the basis of this information.



The estimates
of proven reserves of caliche ore at each of our mines as of December 31, 2012are as follows:



|Mine              |  | Proven Reserves(1) (millions of metric tons) |       |  | Nitrate Average Grade(percentage by weight) |  |     | Iodine Average Grade(parts per million) | 
|----------------- |  | -------------------------------------------- | ----- |  | ------------------------------------------- |  | --- | --------------------------------------- | 
|Pedro de Valdivia |  |                                              | 172.3 |  |                                             |  | 7.0 | %                                       | 
|Maria Elena       |  |                                              | 135.3 |  |                                             |  | 7.1 | %                                       | 
|Pampa Blanca      |  |                                              | 71.4  |  |                                             |  | 5.6 | %                                       | 
|Nueva Victoria    |  |                                              | 351.2 |  |                                             |  | 5.7 | %                                       | 



52







In addition, the estimates of our probable
reserves of caliche ore at each of our principal mines as of December 31, 2012, are as follows:



|Mine(3)           |  | Probable Reserves(1)(2) (millions of metric tons) |       |  | Nitrate
    Average Grade (percentage by weight) |  |     | Iodine
    Average Grade  (parts per million) | 
|----------------- |  | ------------------------------------------------- | ----- |  | ------------------------------------------------ |  | --- | --------------------------------------------- | 
|Pedro de Valdivia |  |                                                   | 78.5  |  |                                                  |  | 6.9 | %                                             | 
|Maria Elena       |  |                                                   | 98.0  |  |                                                  |  | 7.3 | %                                             | 
|Pampa Blanca      |  |                                                   | 447.8 |  |                                                  |  | 5.8 | %                                             | 
|Nueva Victoria    |  |                                                   | 59.1  |  |                                                  |  | 7.6 | %                                             | 

Notes on Reserves:



| | (1) | The proven and probable reserves set forth in the tables above are shown before losses related
to exploitation and mineral treatment. Proven and probable reserves are affected by mining exploitation methods, which result in
differences between the estimated reserves that are available for exploitation in the mining plan and the recoverable material
that is finally transferred to the leaching vats or heaps. The average mining exploitation factor for our different mines ranges
between 80% and 90%, whereas the average global metallurgical recoveries of processes for nitrate and iodine contained in the recovered
material vary between 55% and 65%.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | Probable reserves can be expressed as proven reserves
using a conversion factor. On average, this conversion factor is higher than 60%. This factor depends on geological conditions
and caliche ore continuity, which vary from mine to mine. The difference between the probable reserve amounts and the converted
probable reserve amounts is the result of the lower degree of certainty pertaining to probable reserves compared with proven reserves.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (3) | Information set forth in the table above was validated in February 2013, by Mrs. Marta Aguilera,
a geologist with over 20 years of experience in the field. She is currently employed by SQM as Manager of Non-metallic Geology.
Mrs. Aguilera is a Competent Person (Persona Competente), as that term is defined under the Competent Person Law.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The provenand
probable reserves shown above are the result of exploration and evaluation of approximately 19.3% of the total caliche-related
mining property of SQM. However, we have explored those areas in which we believe there is a higher potential of finding high-grade
caliche ore minerals. The remaining 80.7% of this area has not been explored yet or has had limited reconnaissance to determine
hypothetical resources. Reserves shown in these tables are calculated based on mining properties that are not involved in any legal
disputes between SQM and other parties.



We maintain an ongoing program of exploration
and resource evaluation on the land surrounding the mines at Nueva Victoria, Pedro de Valdivia, María Elena and Pampa Blanca
and at other sites for which we have the appropriate concessions. In 2012, we continued a basic reconnaissance program on new mining
properties including a geological mapping of the surface and spaced drill-hole campaign covering approximately 17,000 hectares.
Additionally, we conducted general explorations based on a closer grid pattern of drill-holes over a total area of approximately
9,365 hectares and, in addition, carried out in-depth sampling of approximately 3,563 hectares (771 hectares at Pedro de Valdivia,
206 hectares at Maria Elena and 2,586 hectares at Nueva Victoria). The exploration and development program in 2013 calls for a
basic reconnaissance program over a total area of 4,378 hectares, general exploration over a total area of approximately 2,400
hectares and, in addition, in-depth sampling of approximately 1,957 hectares.



Reserves for the Salar de Atacama
Brines



Our in-house staff of
hydro-geologists and mining engineers prepares our estimates of potassium, sulfate, lithium and boron reserves at the Salar
de Atacama. We have carried out geological explorations, brine sampling and geostatistical analysis in 819.2
square kilometers of our exploration concessions. We estimate that our proven and probable reserves as of December 31, 2012,
based on economic restrictions, geological exploration, brine sampling and geostatistical analysis up to a depth of 100
meters of our total exploration concessions, and additionally, up to a depth of 500 meters over approximately 47% of the same
total area, are as follows:



53







|                    |  | Proven Reserves (1)       |      |  | Probable Reserves (1)     |  |      | Total Proven and Probable Reserves | 
|------------------- |  | ------------------------- | ---- |  | ------------------------- |  | ---- | ---------------------------------- | 
|                    |  | (millions of metric tons) |      |  | (millions of metric tons) |  |      | (millions of metric tons)          | 
|Potassium (K+) (2)  |  |                           | 54.0 |  |                           |  | 18.6 |                                    | 
|Sulfate (SO4-2) (3) |  |                           | 39.7 |  |                           |  | 2.3  |                                    | 
|Lithium (Li+) (4)   |  |                           | 3.0  |  |                           |  | 3.2  |                                    | 
|Boron (B3+) (5)     |  |                           | 1.1  |  |                           |  | 0.2  |                                    | 



| | Note: | Information set forth in the table above was validated
in February 2013, by Mrs. Aguilera, a geologist with over 20 years of experience in the field. She is currently employed by SQM
as Manager of Non-metallic Geology. Mrs. Aguilera is a Competent Person (Persona Competente), as that term is defined under
the Competent Person Law.
| | ----- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Notes
on Reserves:



| | (1) | Metric tons of potassium, sulfate, lithium and boron considered in the proven and probable reserves
are shown before losses from evaporation processes and metallurgical treatment. The recoveries of each ion depend on both brine
composition, which changes over time, and the process applied to produce the desired commercial products.
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | Recoveries for potassium vary from 47% to 77%.
| | --- | ----------------------------------------------



| | (3) | Recoveries for sulfate vary from 27% to 45%.
| | --- | --------------------------------------------



| | (4) | Recoveries for lithium vary from 28% to 40%.
| | --- | --------------------------------------------



| | (5) | Recoveries for boron vary from 28% to 32%.
| | --- | ------------------------------------------



The proven and probable reserves are based
on drilling, brine sampling and geo-statistic reservoir modeling in order to estimate brine volumes and their composition. To evaluate
reserves, we conduct a geostatistical study using the Kriging Method in 2D. We calculate the quality of brine effectively drainable
or exploitable in each evaluation unit. We consider chemical parameters to determine the process to be applied to the brines. Based
on the chemical characteristics, the volume of brine and drainable porosity, we determine the number of metric tons for each of
the chemical ions. Proven reserves are defined as those geographical blocks that comply with a Kriging method estimation error
of up to 15%. In the case of probable reserves, the selected blocks must comply with an estimation error between 15% and 35%. Blocks
with an error greater than 35% are not considered in the evaluation of reserves. This procedure is used to estimate potential restrictions
on production yields and the economic feasibility of producing such commercial products as potassium chloride, potassium sulfate,
lithium carbonate and boric acid is determined on the basis of the evaluation.



Ports and water rights



We operate port facilities at Tocopilla
in northern Chile for shipment of products and delivery of certain raw materials pursuant to renewable concessions granted by Chilean
regulatory authorities, provided that such facilities are used as authorized and annual concession fees are paid by us. We also
hold water rights for the supply of water from rivers and wells near our production facilities sufficient to meet our current operational
requirements.



PRODUCTION
FACILITIES

Our principal production facilities are
located near our mines and extraction facilities in northern Chile. The following table sets forth the principal production facilities
as of December 31, 2012:



|Location                          |  | Type of Facility                                                       |  | Approximate Size (Hectares)
|--------------------------------- |  | ---------------------------------------------------------------------- |  | ---------------------------
|Pedro de Valdivia (1)             |  | Nitrates and iodine production                                         |  | 236                        
|María Elena (1)                   |  | Nitrates and iodine production                                         |  | 98                         
|Coya Sur (1)                      |  | Nitrates and iodine production                                         |  | 251                        
|Pampa Blanca (1)                  |  | Concentrated nitrate salts and iodide production                       |  | 129                        
|Nueva Victoria (1)                |  | Concentrated nitrate salts and iodine production                       |  | 537                        
|Salar de Atacama (2)              |  | Potassium chloride, lithium chloride, potassium sulfate and boric acid |  | 4,122                      
|Salar del Carmen, Antofagasta (2) |  | Lithium carbonate and lithium hydroxide production                     |  | 63                         
|Tocopilla                         |  | Port facilities                                                        |  | 22                         





54







(1)	          Includes
production facilities, solar evaporation ponds and leaching heaps.



(2)	          Includes
production facilities and solar evaporation ponds.



We own, directly or indirectly through
subsidiaries, all of the facilities free of any material liens, pledges or encumbrances, and believe that they are suitable and
adequate for the business we conduct in them. As of December 31, 2012, the approximate gross book value of the property and associated
plant and equipment at our locations was as follows: Pedro de Valdivia (US$117.9 million), María Elena (US$157.3 million),
Coya Sur (US$311.7 million), Pampa Blanca (US$18.5 million), Nueva Victoria (US$357.3 million), Salar de Atacama (US$697.5 million),
Salar del Carmen (US$214.0 million) and Tocopilla (US$87.5 million).



In addition to the above-listed facilities,
we operate a computer and information system linking our principal subsidiaries to our operating facilities throughout Chile via
a local area network. The computer and information system is used mainly for accounting, monitoring of supplies and inventories,
billing, quality control and research activities. The system's mainframe computer equipment is located at our offices in Santiago.



The approximate Weighted Average Age of
our production facilities as of December 31, 2012 was as follows: Pedro de Valdivia (11.02 years), María Elena (11.66 years),
Coya Sur (6.04 years), Nueva Victoria (7.27 years), Salar de Atacama (6.79 years), and Salar del Carmen (9.00 years). Our railroad
line between our production facilities and Tocopilla was originally constructed in 1890, but the rails, locomotives and rolling
stock have been replaced and refurbished as needed. The Tocopilla port facilities were originally constructed in 1961 and have
been refurbished and expanded since that time. The Weighted Average Age of the Tocopilla port facilities is approximately 11.13
years. We consider the condition of our principal plant and equipment to be good.



TRANSPORTATION AND STORAGE FACILITIES



We own and operate railway lines and equipment,
as well as port and storage facilities, for the transport and handling of finished products and consumable materials.



Our main center for production and storage
of raw materials is the hub composed of the facilities in Coya Sur - Pedro de Valdivia and the Salar de Atacama facilities. Other
facilities include Nueva Victoria and the lithium carbonate and lithium hydroxide finishing plants. The Tocopilla port terminal
(“Tocopilla Port Terminal”), which we own, is the main facility for storage and shipment of our products.



Nitrate raw materials are produced and
first stored at our Pedro de Valdivia mine, and then transported by trucks to the plants described in the next paragraph, for further
processing. Nitrate raw material is also produced at Nueva Victoria, from where it is transported by trucks to Coya Sur for further
processing.



55







Nitrate finished products are produced
at our facilities in Coya Sur and then transported by our rail system to Tocopilla Port Terminal, where they are stored and shipped,
either bagged or in bulk. Potassium chloride is produced at our facilities in the Salar de Atacama and transported either to Tocopilla
Port Terminal or Coya Sur by truck owned by a third-party dedicated contractor. Products transported to Coya Sur are used as a
raw material for the production of potassium nitrate. Potassium sulfate and boric acid are both produced at our facilities in the
Salar de Atacama and are then transported by trucks to the Tocopilla Port Terminal.



Lithium solutions, produced at our facilities
in the Salar de Atacama, are transported to the lithium carbonate facility in the Salar del Carmen area, where finished lithium
carbonate is produced. Part of the lithium carbonate is fed to the adjacent lithium hydroxide plant, where finished lithium hydroxide
is produced. These two products are bagged and stored on the premises and are subsequently transported by truck to the Tocopilla
Port Terminal or to the Antofagasta and Mejillones terminals for shipment on charter vessels or container vessels.



Iodine raw material, obtained in the same
mines as the nitrates, is processed, bagged and stored exclusively in the facilities of Pedro de Valdivia and Nueva Victoria, and
then shipped by truck to Antofagasta, Mejillones or Iquique for vessel container transport or by truck to Santiago, where iodine
derivatives are produced.



The facilities at Tocopilla Port Terminal
are located approximately 186 kilometers north of Antofagasta and approximately 124 kilometers west of Pedro de Valdivia, 84 kilometers
west of María Elena and Coya Sur and 372 kilometers west of the Salar de Atacama. Our subsidiary, Servicios Integrales de
Tránsitos y Transferencias S.A. (SIT) operates the facilities under maritime concessions granted pursuant to applicable
Chilean laws. The port also complies with ISPS (International Ship and Port Facility Security Code) regulation. The Tocopilla Port
Terminal facilities include a railcar dumper to transfer bulk product into the conveyor belt system used to store and ship bulk
product.



Storage facilities consist of a six silo
system, with a total production capacity of 55,000 metric tons, and an open storage area for approximately 250,000 metric tons.
Additionally, to meet future storage needs, we will continue to make investments in accordance with the investment plan outlined
by management. Products are also bagged at port facilities in Tocopilla, where the bagging capacity is approximately 300,000 metric
tons per year.



For shipping bulk product, the conveyor
belt system extends over the coast line to deliver product directly inside bulk carrier hatches. Using this system, the loading
capacity is 1,200 tons per hour. Bags are loaded to bulk vessels using barges that are loaded in the Tocopilla Port Terminal dock
and unloaded by vessel cranes into the hatches. Both bulk and bagged trucks are loaded in Tocopilla Port Terminal for transferring
product directly to customers or for container vessels shipping from other ports, mainly Antofagasta, Mejillones and Iquique.



Bulk carrier loading in the Tocopilla Port
Terminal is mostly contracted to transfer product to our hubs around the world or for shipping to customers, which in limited cases
use their own contracted vessels for delivery. Trucking is provided by a mix of spot, contracted and customer- owned equipment.



Tocopilla processes related to the reception,
handling, storage, and shipment of bulk/packaged nitrates produced in Coya Sur are certified by third party organization TÜV-Rheiland
under the quality standard ISO 9001:2008.



56







ITEM 4A.   UNRESOLVED STAFF COMMENTS



Not applicable.



ITEM
5.OPERATING AND FINANCIAL REVIEW AND PROSPECTS



The information in this Item 5 should be
read in conjunction with the Company’s Consolidated Financial Statements and the notes thereto included elsewhere in this
Annual Report.



Since January 1, 2010, the Company’s
consolidated financial statements have been prepared in accordance with the International Financial Reporting Standards as published
by the International Accounting Standards Board (IASB).



CRITICAL ACCOUNTING POLICIES AND ESTIMATES



Critical accounting policies are defined
as those that are reflective of significant judgments and uncertainties, which would potentially result in materially different
results under different assumptions and conditions.



We believe that our critical accounting
policies applied in the preparation of our audited consolidated financial statements are limited to those described below. It should
be noted that in many cases, IFRS specifically dictates the accounting treatment of a particular transaction, limiting management’s
judgment in their application. There are also areas in which management’s judgment in selecting available alternatives would
not produce materially different results.



Trade and Other Accounts Receivable



Trade and other accounts receivable relate
to non-derivative financial assets with fixed payments that can be determined and are not quoted in any active market. These arise
from sales operations involving the products and/or services that we sell directly to our customers that are not within the following
categories:



| | · | those which we have the intention of selling immediately in the near future and which are held-for-sale;
| | - | --------------------------------------------------------------------------------------------------------

| | · | those designated at their initial recognition as available-for-sale; and
| | - | ------------------------------------------------------------------------

| | · | those through which the holder does not intend to partially recover substantially its entire investment
for reasons other than credit impairment and therefore must be classified as available-for-sale.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



These assets are initially recognized at
their fair value (which is equivalent to their face value, discounting implicit interest for installment sales) and subsequently
at amortized cost according to the effective interest rate method less a provision for impairment loss. When the face value of
the account receivable does not significantly differ from its fair value, it is recognized at face value. An allowance for impairment
loss is established for trade accounts receivable when there is objective evidence that we will not be able to collect all the
amounts owed to us according to the original terms of accounts receivable.



57







Implicit interest in installment sales
is recognized as interest income when interest is accrued over the term of the sale.



Income tax



Corporate income tax for the year is determined
as the aggregate of current taxes from all of the consolidated companies. Current taxes are calculated on the basis of the tax
laws enacted or substantively enacted as of the date of our statements of financial position in the countries in which we and our
subsidiaries operate and generate taxable income.



Deferred tax is recognized using the liability
method on temporary differences arising between the tax basis for assets and liabilities and their carrying amounts in our audited
consolidated financial statements. Deferred income taxes are calculated using the tax rates expected to be applicable when the
assets are realized or the liabilities are settled.



In conformity with current Chilean 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 credits associated with it. The balances
of these accounts are presented in current income taxes recoverable or current taxes payable, as applicable.



Tax on companies and variations in deferred
tax assets or liabilities that are not the result of business combinations are recorded in income statement accounts or net shareholders’
equity accounts in our consolidated statements of financial position, depending on the origin
of the gains or losses which have generated them.



At year end, the carrying value of deferred
tax assets has been reviewed and reduced for as long as it is possible for there to be no sufficient taxable income to allow the
recovery of all or a portion of the deferred tax asset. Likewise, at the date of the statement of financial position, deferred
tax assets not recognized are revalued and recognized as long as it has become possible that future taxable income will allow the
recovery of the deferred tax asset.



With respect to deductible temporary differences
associated with investments in subsidiaries, associated companies and interests in joint ventures, deferred tax assets are recognized
solely provided that there is a possibility 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 income tax related to entries
directly recognized in equity is recognized with an effect on equity and not with an effect on profit or loss.



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.



Inventories



We state inventory for the lower of cost
and net realizable value. The method used to determine the cost of inventory is weighted average cost. The cost of finished products
and products-in-progress includes direct costs of materials and, as applicable, labor costs, indirect costs incurred to transform
raw materials into finished products and general expenses incurred in carrying inventory to their current location and conditions.



58







The net realizable value represents the
estimate of the sales price less all finishing estimated costs and costs that will be incurred in sales and distribution processes.
Commercial discounts, rebates obtained and other similar entries are deducted in the determination of the cost. We conduct an evaluation
of the net realizable value of inventory at the end of each year, recording a provision with a charge to income when circumstances
warrant. When the circumstances that previously gave rise to the reserve cease to exist, or when there is clear evidence of an
increase in the net realizable value due to a change in economic circumstances or prices of main raw materials, the estimate made
previously is modified. The valuation of obsolete, impaired or slow-moving products relates to their estimated net realizable value.



Provisions on our inventory have been made
based on a technical study which covers the different variables affecting products in stock (density, humidity, among others).



Raw materials, supplies and materials are
recorded at the lower of acquisition cost or market value. Acquisition cost is calculated according to the annual average price
method.



Obligations related to staff severance
indemnities and pension commitments



Our obligations with respect to our employees
are established in collective bargaining agreements and individual employment contracts. In the case of certain employees in the
United States, our obligations are established through a pension plan, which was terminated in 2002.



These obligations are valued using the
actuarial calculation, which considers such hypotheses 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.



Actuarial losses and gains that may be
generated by variations in previously defined obligations are directly recorded in profit or loss for the year.



Actuarial losses and gains that have their
origin in deviations between the estimate and the actual behavior of actuarial hypotheses or in the reformulation of established
actuarial hypotheses are recorded in equity.



The discount rate used by us for calculating
obligation’s outside the United States was 6% for the periods ended as of December 31, 2012 and 2011.



Our United States subsidiary, SQM North
America Corp. has established pension plans for its retired employees that are calculated by measuring the projected obligation
of International Accounting Standards (“IAS”) using a net salary progressive rate net of adjustments to inflation,
mortality and turnover assumptions, deducting the resulting amounts at present value using a 5.0% interest rate for 2012 and 2011.
The net balance of this obligation is presented in the line item called Noncurrent Employee Benefit Provisions.



59







Mining development costs



Mine exploration costs and stripping costs
to maintain production of mineral resources extracted from operating mines are considered variable production costs and are included
in the cost of inventory produced during the period. Mine development costs at new mines, and major development costs at operating
mines outside existing areas under extraction that are expected to benefit future production, are capitalized under “other
long-term assets” and amortized using a units-of-production method over the associated proven and probable reserves. We determine
our proven and probable reserves based on drilling, brine sampling and geostatistical reservoir modeling in order to estimate mineral
volume and composition.



All other mine exploration costs, including
expenses related to low grade mineral resources rendering reserves that are not economically exploitable, are charged to the statement
of income in the period in which they are incurred.



Asset value impairment



We assess on an annual basis any impairment
on the amount of buildings, plant and equipment, intangible assets, goodwill and investments accounted for using the equity method
of accounting in accordance with IAS 36 “Impairment of Assets.” Assets to which this method applies are:



| | · | investments recognized using the equity method of accounting;
| | - | -------------------------------------------------------------

| | · | property, plant and equipment;
| | - | ------------------------------

| | · | intangible assets; and
| | - | ----------------------

| | · | goodwill.
| | - | ---------



Assets are reviewed for impairment as to
the existence of any indication that the carrying value is lower than the recoverable amount. If such an indication exists, the
asset recoverable amount is calculated in order to determine the extent of the impairment, if any. In the event that the asset
does not generate any cash flows independent from other assets, we determine the recoverable amount of the cash generating unit
to which this asset belongs according to the corresponding business segment (specialty plant nutrients, iodine and derivatives,
lithium and derivatives, potassium, industrial chemicals and other products and services.)



We conduct impairment tests on intangible
assets and goodwill with indefinite useful lives on an annual basis and every time there is indication of impairment. If the recoverable
value of an asset is estimated at an amount lower than its carrying value, the latter decreases to its recoverable amount.



Financial derivatives and hedging
transactions



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



| | a. | fair value hedge of assets and liabilities recognized (fair value hedges); or
| | -- | -----------------------------------------------------------------------------

| | b. | hedging of a single risk associated with an asset or liability recognized or a highly possible
foreseen transaction (cash flow hedge).
| | -- | --------------------------------------------------------------------------------------------------------------------------------------



60







At the beginning of the transaction, we
document the relationship between hedging instruments and those entries hedged, as well as their objectives for risk management
purposes and the strategy to conduct different hedging operations.



We also document our evaluation both at
the beginning and the end of each period of whether derivatives used in hedging transactions are highly effective to offset changes
in the fair value or in cash flows of hedged entries.



The fair value of derivative instruments
used for hedging purposes is shown in Note 9.3 to our Consolidated Financial Statements.



Non-hedge instruments are classified as
current assets or liabilities, and the change in their fair value is recognized directly in profit or loss.



| | a. | Fair value hedge
| | -- | ----------------



The change in the fair value of a derivative
is recognized with a debit or credit to profit or loss, as applicable. The change in the fair value of the hedged entry attributable
to hedged risk is recognized as part of the carrying value of the hedged entry and is also recognized with a debit or credit to
profit or loss.



For fair value hedging related to items
recorded at amortized cost, the adjustment of the fair value is amortized against income on the remaining year to its expiration.
Any adjustment to the carrying value of a hedged financial instrument for which the effective rate is used is amortized with a
debit or credit to profit or loss at its fair value attributable to the risk being covered.



If the hedged entry no longer meets the
criteria for hedge accounting, the fair value not amortized is immediately recognized with a debit or credit to profit or loss.



| | b. | Cash flow hedge
| | -- | ---------------



The effective portion of gains or losses
from the hedging instrument is initially recognized as “other revenue” with a debit or credit to other comprehensive
income whereas any ineffective portion is immediately recognized with a debit or credit to profit or loss, as applicable.



Amounts accumulated in equity are transferred
to profit or loss when the hedged transaction affects income for the period, such as when the hedged interest income or expense
is recognized when a forecasted sale occurs. When the hedged item is the cost of a non-financial asset or liability, amounts taken
to equity are transferred to the initial carrying value of the non-financial asset or liability.



Should the expected firm transaction or
commitment no longer be expected to occur, the amounts previously recognized other comprehensive income are transferred to income.
If a hedging instrument expires, is sold, finished, and exercised without any replacement, or if a rollover is performed or if
its designation as hedging is revoked, the amounts previously recognized in equity are maintained in equity until the expected
firm transaction or commitment occurs.



61







5.A.      Operating
Results



Introduction



The following discussion should be read
in conjunction with the Company's Consolidated Financial Statements. Certain calculations (including percentages) that appear herein
have been rounded.



Our Consolidated Financial Statements are
prepared in accordance with IFRS standards and prepared in U.S. dollars. The U.S. dollar is the primary currency in which we operate.



We operate as an independent corporation.
Nonetheless we are a "controlled corporation", as that term is defined under Chilean law. See Item 6.E. Share Ownership.



Overview
of Our Results of Operations



We divide our operations into the production
and sale of the following product lines:



·     specialty
plant nutrients;

·     iodine
and its derivatives;

·     lithium
and its derivatives;

·     potassium,
including potassium chloride and potassium sulfate;

·     industrial
chemicals, principally industrial nitrates and solar salts; and

·     the
purchase and sale of other commodity fertilizers for use primarily in Chile.



We sell our products through three primary
channels: our own sales offices; a network of distributors; and, in the case of our fertilizer products, through Yara International
ASA’s (formerly Norsk Hydro ASA) (“Yara”) distribution network in countries where its presence and commercial
infrastructure are larger than ours. Similarly, in those markets where our presence is larger, both our specialty plant nutrients
and Yara’s are marketed through our offices.



Factors
Affecting Our Results of Operations



Our results of operations substantially
depend on:



·     trends
in demand for and supply of our products, including global economic conditions, which impact prices and volumes;

·     efficient
operations of our facilities, particularly as some of them run at production capacity;

·     our
ability to accomplish our capital expenditures program in a timely manner;

·     the
levels of our inventories;

·     trends
in the exchange rate between the U.S. dollar and Chilean peso, as a significant portion of the cost of sales is in Chilean pesos,
and trends in the exchange rate between the U.S. dollar and the euro, as a significant portion of our sales is denominated in euros;
and

·     energy,
logistics, raw materials, labor and maintenance costs.



62







The following table sets forth our revenues
(in millions of U.S. dollars) and the percentage accounted for by each of our product lines for each of the periods indicated:



|                          |  | 2012 |         |  | 2011 |  |     | 2010 | 
|------------------------- |  | ---- | ------- |  | ---- |  | --- | ---- | 
|                          |  | US$  |         |  | %    |  |     | US$  | 
|Specialty plant nutrition |  |      | 675.3   |  |      |  | 28  | %    | 
|Iodine and derivatives    |  |      | 578.1   |  |      |  | 24  | %    | 
|Lithium and derivatives   |  |      | 222.2   |  |      |  | 9   | %    | 
|Potassium                 |  |      | 605.1   |  |      |  | 25  | %    | 
|Industrial chemicals      |  |      | 245.2   |  |      |  | 10  | %    | 
|Other Income(1)           |  |      | 103.2   |  |      |  | 4   | %    | 
|                          |  |      |         |  |      |  |     |      | 
|Total                     |  |      | 2,429.2 |  |      |  | 100 |      | 



The following table sets forth certain
financial information of the Company under IFRS (in millions of U.S. dollars) for each of the periods indicated, as a percentage
of revenues:



|                                                                                     |  | Year Ended December 31, |         
|------------------------------------------------------------------------------------ |  | ----------------------- | --------
|                                                                                     |  | 2012                    |         
|(in millions of U.S. dollars)                                                        |  | US$                     |         
|Revenues                                                                             |  |                         | 2,429.2 
|Cost of sales                                                                        |  |                         | (1,400.6
|Gross profit                                                                         |  |                         | 1,028.6 
|Other income                                                                         |  |                         | 12.7    
|Administrative expenses                                                              |  |                         | (106.4  
|Other expenses                                                                       |  |                         | (34.6   
|Other gains (losses)                                                                 |  |                         | 0.7     
|Finance income                                                                       |  |                         | 29.1    
|Finance expenses                                                                     |  |                         | (54.1   
|Equity income of associates and joint ventures accounted for using the equity method |  |                         | 24.4    
|Foreign currency exchange differences                                                |  |                         | (26.8   
|Income before income tax expense                                                     |  |                         | 873.5   
|Income tax expense                                                                   |  |                         | (216.1  
|                                                                                     |  |                         |         
|Profit attributable to:                                                              |  |                         |         
|Controlling interests                                                                |  |                         | 649.2   
|Non-controlling interests                                                            |  |                         | 8.2     
|Profit for the year                                                                  |  |                         | 657.4   





Results
of Operations – 2012 compared to 2011



Revenues



During 2012, we generated total revenues
of US$2,429.2 million, a 13.2% increase compared to US$2,145.3 million in 2011.



63







The main factors causing the increase in
revenues and the variation in the different product lines are described below.



Specialty plant
nutrition



Specialty plant nutrition revenues for
2012 totaled US$675.3 million, a 6.4% decrease compared to US$721.7 million in 2011. Set forth below are sales volume data for
the specified years by product category in this product line.



|(in Th. MT)                                    |  | 2012 |       |  | 2011 |  |       | % Change | 
|---------------------------------------------- |  | ---- | ----- |  | ---- |  | ----- | -------- | 
|Potassium nitrate and sodium potassium nitrate |  |      | 469.3 |  |      |  | 551.1 |          | 
|Specialty blends                               |  |      | 197.5 |  |      |  | 189.3 |          | 
|Other specialty plant nutrients (*)            |  |      | 89.0  |  |      |  | 86.7  |          | 
|Sodium nitrate                                 |  |      | 24.4  |  |      |  | 22.2  |          | 

* Includes trading of other specialty fertilizers.



Market supplies of the specialty plant
nutrition market increased during 2012, as a significant competitor returned to normal production levels. In general, the specialty
plant nutrition markets are less volatile than commodity and fertilizer markets, but future improvement in this product line will
depend on the behavior of the market for potassium based fertilizers such as potassium chloride.



Our overall sales volumes in the specialty plant
nutrition product line in 2012 decreased compared to 2011. This was a result of increased supply in the market and low market growth
due mainly to the financial situation in Europe, one of the most important markets for this product line. Prices within our specialty
plant nutrition product line increased by almost 2% in 2012 as compared to 2011.



Iodine and its derivatives



Revenues for iodine and its derivatives
during 2012 totaled US$578.1 million, a 27.2% increase compared to US$454.5 million in 2011. Set forth below are sales volume data
for the specified years.



|(in Th. MT)                |  | 2012 |      |  | 2011 |  |      | % Change | 
|-------------------------- |  | ---- | ---- |  | ---- |  | ---- | -------- | 
|Iodine and its derivatives |  |      | 11.0 |  |      |  | 12.2 |          | 



Overall market sales volumes of iodine
reached new levels in 2012 mainly as a result of increased demand. Strong demand was led primarily by X-ray contrast media and
pharmaceutical applications. Increased supply entered the market in 2012, and we expect to see additional new supply in 2013.



Our sales volumes decreased by approximately 10%
in 2012, as a result of new market supply, and as we returned to normal operational inventory. These volume decreases were more
than offset by prices that were more than 40% higher than average prices during 2011, increasing gross profit in the iodine product
line by over 38%.



Lithium and its derivatives



Revenues for lithium and its derivatives totaled US$222.2 million
during 2012, a 21.2% increase compared to US$183.4 million in 2011. Set forth below are sales volume data for the specified years.



|(in Th. MT)                 |  | 2012 |      |  | 2011 |  |      | % Change | 
|--------------------------- |  | ---- | ---- |  | ---- |  | ---- | -------- | 
|Lithium and its derivatives |  |      | 45.7 |  |      |  | 40.7 |          | 



64







The lithium market continued to grow in
2012, primarily due to growth in the rechargeable battery and lubricating grease markets, as has been the trend in recent years.



Our sales volumes in the lithium segment
increased by 12% in 2012, as compared to 2011. We believe we supply over one-third of the world lithium chemical market, and aim
to maintain this market share in coming years.



Along with increased volumes, we saw increased
prices of approximately 8% in this product line during 2012 as compared to the previous year, increasing our gross margin by approximately
30% as compared with 2011.



We believe we are the lowest cost producer
of lithium in the world. We produce lithium as a by-product of potassium chloride, which gives us a unique competitive advantage.



Potassium



Potassium revenues for 2012 totaled US$605.1 million, an 8.9%
increase as compared to US$555.7 million in 2011. Set forth below are sales volume data for the specified years.



|(in Th. MT)                              |  | 2012 |         |  | 2011 |  |         | % Change | 
|---------------------------------------- |  | ---- | ------- |  | ---- |  | ------- | -------- | 
|Potassium chloride and potassium sulfate |  |      | 1,209.5 |  |      |  | 1,103.4 |          | 



We estimate that market sales volumes of
potassium chloride decreased by 12% in 2012 as compared to 2011. Despite favorable economic conditions of relevant crops, demand
was mainly affected by economic uncertainty in Europe and the behavior of influential buyers in China and India.



We increased our sales volumes in this
product line approximately 10% compared to 2011, as we took advantage of our developed distribution network. Average prices in
the potassium market remained relatively stable as compared to 2011. In the fourth quarter of 2012, the potassium market saw major
contracts close at lower prices than seen earlier in 2012; during the first quarter of 2013, prices have remained stable.



Industrial chemicals



Industrial chemicals revenues for 2012
totaled US$245.2 million, a 75.8% increase as compared to US$139.5 million in 2011. Set forth below are sales volume data for the
specified years by product category.



|(in Th. MT)         |  | 2012 |       |  | 2011 |  |       | % Change | 
|------------------- |  | ---- | ----- |  | ---- |  | ----- | -------- | 
|Industrial nitrates |  |      | 277.7 |  |      |  | 181.2 |          | 
|Boric acid          |  |      | 1.8   |  |      |  | 2.4   |          | 



Industrial chemical demand for traditional
applications such as detergents and glass has remained relatively stable as compared to 2011.



New alternative energy projects that utilize
industrial-grade sodium and potassium nitrate in solar thermal energy storage had a positive impact on our 2012 industrial chemicals
volumes, which increased by over 50% as compared to 2011.



65







Prices for industrial chemicals increased
by 15%, mainly because of the product mix, increasing our gross margins by approximately 48%.



Other products and services



Revenues from sales of other commodity
fertilizers and other products totaled US$103.2 million during 2012, a 14.0% increase compared to US$90.5 million in 2011.



Cost of sales



During 2012, cost of sales increased by
8.5% to US$1,400.6 million in 2012 from US$1,290.5 million in 2011, but remained stable as a percentage of revenues, representing
58% of revenues in 2012 as compared to 60% of revenues in 2011. This increase was principally caused by higher volume production
and a stronger Chilean peso. Cost of sales includes, among others, the costs of depreciation and amortization.



Gross profit



Gross profit increased by 20.3% from US$854.8
million in 2011 to US$1,028.6 million in 2012 and remained stable as percentage of revenues, representing 42.3% of revenues in
2012 as compared to 39.8% of revenues in 2011. Gross margin was impacted by generally higher average prices in 2012 compared to
2011, led by iodine prices, which increased by 40% on average in 2012 as compared to prices in 2011.



Administrative expenses



Administrative expenses as a percentage
of revenues remained stable in 2012 as compared to 2011. Administrative expenses were US$106.4 million (4.4% of revenues) in 2012
and US$91.8 million (4.3% of revenues) in 2011.



Other expenses



Other expenses decreased by 45.1% to US$34.6
million in 2012 from US$63.0 million in 2011. Other expenses represented 1.4% of revenues in 2012 as compared to 2.9% of revenues
in 2011. Thedecrease in other expenses is attributable to a decrease
in expenses accounted for as depreciation of assets no longer in use.



Other gains (losses)



Other gains (losses) decreased by 87.9%
to a gain of US$0.7 million in 2012 from a gain of US$5.8 million in 2011, but remained stable as a percentage of revenues, representing
0.03% of revenues in 2012 as compared to 0.3% of revenues in 2011. The decrease is attributable in part to a loss in sales of investment
in associates and a provision no longer in effect for the suspension of our operations at El Toco mine at the Maria Elena facility.



66







Finance income



Finance income increased by 25.4% to US$29.1
million in 2012 from US$23.2 million in 2011, but remained stable as a percentage of revenues, representing 1.2% of revenues in
2012 as compared to 1.1% of revenues in 2011.



Finance expenses



Finance expenses increased by 37.7% to
US$54.1 million in 2012 from US$39.3 million in 2011, but remained stable as a percentage of revenues, representing 1.8% of revenues
in 2011 as compared to 2.1% of revenues in 2012. The increase in finance expenses was due to a net increase in indebtedness during
2012 and a decrease in capitalized interest related to ongoing capital expenditure projects as compared to 2011.



Equity income of associates and joint
ventures accounted for using the equity method



Equity income of associates and joint ventures
accounted for using the equity method increased by 11.9% to US$24.4 million in 2012 from US$21.8 million in 2011, but remained
stable as a percentage of revenues, representing 1.0% of revenues both in 2012 and in 2011.



Foreign currency exchange differences



Losses from foreign currency exchange differences
increased by 5.9% to a loss of US$26.8 million in 2012 from a loss of US$25.3 million in 2011, but remained stable as a percentage
of revenues, representing 1.1% of revenues in 2012 as compared to 1.2% of revenues in 2011. Since most of our operations are in
Chile, part of our costs of sales are related to the Chilean peso. Although we have an active hedging program and policy, we are
subject to currency fluctuations. During 2012, the Chilean peso appreciated by 7.6% against the U.S. dollar.



Income tax expense



In 2012, income taxes were US$216.1 million,
compared to income taxes of US$179.7 million in 2011. During 2012, the Chilean tax rate increased to 20%. The effective tax rate
in 2012 was 24.7% compared with 24.5% in 2011. The difference between the statutory and effective tax rates is due primarily to
royalty taxes on income.



Profit for the year



Profit for the year increased by 18.6%
to US$657.4 million in 2012 from US$554.1 million in 2011, as a result of the foregoing factors.



Results
of Operations – 2011 compared to 2010



Revenues



During 2011, we generated total revenues
of US$2,145.3 million, a 17.2% increase compared to US$1,830.4 million in 2010.



The main factors causing the increase in
revenues and the variation in the different product lines are described below:



67







Specialty plant
nutrition



Specialty plant nutrition revenues for
2011 totaled US$721.7 million, a 19.5% increase compared to US$603.7 million in 2010. Set forth below are sales volume data for
the specified years by product category in this product line.



|(in Th. MT)                                    |  | 2011 |       |  | 2010 |  |       | % change | 
|---------------------------------------------- |  | ---- | ----- |  | ---- |  | ----- | -------- | 
|Potassium nitrate and sodium potassium nitrate |  |      | 551.1 |  |      |  | 534.7 |          | 
|Specialty blends                               |  |      | 189.3 |  |      |  | 176.3 |          | 
|Other specialty plant nutrients(*)             |  |      | 86.7  |  |      |  | 87.6  |          | 
|Sodium nitrate                                 |  |      | 22.2  |  |      |  | 16.8  |          | 

* Includes trading of other specialty fertilizers.



Market sales volumes of fertilizer showed
a significant improvement in 2011 over 2010 levels, and our specialty plant nutrition product line was no exception. The specialty
plant nutrition market showed the same upward trend as the potash market. Additionally, tight supply issues in the potassium nitrate
market created opportunities to increase sales volumes, and this, coupled with strong growth in demand in potassium, led to increased
prices in 2011. North American and European markets were demand drivers during 2011.



Average prices in 2011 increased by 14%
over average prices in 2010. We also had improved margins as a result of increased production from the highly efficient facility
in Coya Sur.



Iodine and its derivatives



Revenues for iodine and its derivatives
during 2011 totaled US$454.5 million, a 43.7% increase compared to US$316.3 million in 2010. Set forth below are sales volume data
for the specified years.



|(in Th. MT)                |  | 2011 |      |  | 2010 |  |      | % change | 
|-------------------------- |  | ---- | ---- |  | ---- |  | ---- | -------- | 
|Iodine and its derivatives |  |      | 12.2 |  |      |  | 11.9 |          | 



Iodine markets surpassed previous records
and reached historical levels in 2011. Demand increased in most applications, but specifically in the X-ray contrast media market
and for pharmaceutical uses. Weakened supply also had an impact on the iodine markets in 2011, driving spot prices to unprecedented
highs. As a result of a strong demand recovery, together with a tightened availability from other suppliers, iodine prices increased
substantially during 2011, and SQM saw an increase in average prices for iodine of almost 40%.



We continue to be a world leader in the iodine market,
and we were uniquely positioned to take advantage of increased demands in the iodine markets and meet the shortfall in supply in
2011.



Lithium and its derivatives



Revenues for lithium and its derivatives totaled US$183.4 million
during 2011, a 21.6% increase as compared to US$150.8 million in 2010. Set forth below are sales volume data for the specified
years.



|(in Th. MT)                 |  | 2011 |      |  | 2010 |  |      | % change | 
|--------------------------- |  | ---- | ---- |  | ---- |  | ---- | -------- | 
|Lithium and its derivatives |  |      | 40.7 |  |      |  | 32.4 |          | 



68







The lithium market continued to grow in
2011, primarily due to growth in the rechargeable battery and lubricating grease markets. Lithium sales exceeded expectations in
2011. Prices in this product line remained relatively stable throughout 2011.



Potassium



Potassium revenues for 2011 totaled US$555.7
million, a 5.2% increase as compared to US$528.21 million in 2010. Set forth below are sales volume data for the specified years.



|(in Th. MT)                            |  | 2011 |         |  | 2010 |  |         | % change | 
|-------------------------------------- |  | ---- | ------- |  | ---- |  | ------- | -------- | 
|Potassium chloride & Potassium Sulfate |  |      | 1,103.4 |  |      |  | 1,273.0 |          | 



The potassium chloride market continued
to be robust in 2011, as farmers continued to be motivated to maximize yields and improve soil productivity through optimal fertilization.
Additionally, world demand for commodity products continues to expand as the world population grows and the demand for more and
better quality food increases.



Prices in the fertilizer market continued
to increase over the course of 2011, and average prices in the potassium product line were 21% higher in 2011 as compared to 2010.



Industrial chemicals



Industrial chemicals revenues for 2011 totaled US$139.5 million,
a 6.8% decrease from US$149.7 million in 2010. Set forth below are sales volume data for the specified years by product category.



|(in Th. MT)         |  | 2011 |       |  | 2010 |  |       | % change | 
|------------------- |  | ---- | ----- |  | ---- |  | ----- | -------- | 
|Industrial nitrates |  |      | 181.2 |  |      |  | 198.9 |          | 
|Boric acid          |  |      | 2.4   |  |      |  | 2.6   |          | 



Industrial chemical demand for traditional
applications such as explosives, detergents and glass, among others, remained relatively stable in 2011 as compared to 2010. Average
prices for industrial chemicals in 2011 saw a slight increase compared to 2010.



Other
products and services



Revenues from sales of other commodity
fertilizers and other products totaled US$90.5 million during 2011, a 10.6% increase compared to US$81.8 million in 2010.



Cost of sales



During 2011, cost of sales increased by
7.1% to US$1,290.5 in 2011 from from US$1,204.4 million in 2010, but decreased as a percentage of revenues, representing 60% of
revenues in 2011 as compared to 66% of revenues in 2010. This cost of sales increase was mainly caused by higher energy prices
and a stronger Chilean peso. Cost of sales includes, among others, the costs of depreciation and amortization.



Gross profit



Gross profit increased by 36.5% from US$626.0
million in 2010 to US$854.8 million in 2011. As a percentage of revenues, gross profit increased from 34.2% of revenues in 2010
to 39.8% of revenues in 2011. Gross margin increased mainly as a result of higher average prices of potash (approximately 20%)
and iodine (approximately 40%) in 2011as compared to 2010.



69







Administrative expenses



Administrative expenses as a percentage
of revenues remained unchanged in 2011 as compared to 2010. Administrative expenses were US$91.8 million in 2011 and US$78.8 million
in 2010, representing 4.3% of revenues in both years.



Other expenses



Other expenses increased by 74.0% to US$63.0
million in 2011 from US$36.2 million in 2010. Other expenses represented 2.9% of revenues in 2011 as compared to 2.0% of revenues
in 2010. The increase in other expenses is attributable in part to the recognition of depreciation of certain assets that we no
longer use.



Other gains (losses)



Other gains (losses) increased to a gain of US$5.8 million in
2011 from a loss of US$7.0 million in 2010, but remained stable as a percentage of revenues, representing 0.3% of revenues in 2011
as compared to 0.4% of revenues in 2010. This increase is attributable in part to the provision relating to the temporary suspension
of our operations at El Toco mine at the Maria Elena facility.



Finance income



Finance income increased by 79.8% to US$23.2 million in 2011
from US$12.9 million in 2010, but remained stable as a percentage of revenues, representing 1.1% of revenues in 2011 as compared
to 0.7% of revenues in 2010. The increase was mainly due to an increase in cash and cash equivalents in 2011, together with higher
investment yields in Chile in 2011.



Finance expenses



Finance expenses increased by 12.3% to
US$39.3 million in 2011 from US$35.0 million in 2010, but remained stable as a percentage of revenues, representing 1.8% of revenues
in 2011 as compared to 1.9% of revenues in 2010.



Equity income of associates and joint ventures accounted
for using the equity method



Equity income of associates and joint ventures
accounted for using the equity method increased by 103.7% to US$21.8 million in 2011 from US$10.7 million in 2010, but remained
relatively stable as a percentage of revenues, representing 1.0% of revenues in 2011 as compared to 0.6% of revenues in 2010.



Foreign currency exchange differences



Losses from foreign currency exchange differences increased
to a loss of US$25.3 million in 2011 from a loss of US$5.8 million in 2010, partly due to significant depreciations in the euro
and South African rand. Although we have an active hedging program and policy, we are still subject to exchange rate fluctuations.



70







Income tax expense



In 2011, income tax expense increased by 69.5% to
US$179.7 million, representing an effective consolidated tax rate of 24.5%, as compared to income tax expense of US$106.0 million
in 2010. This increase was a result of an increase in the Chilean corporate tax rate from 17% in 2010 to 20% in 2011, as well as
an increase in gross profit of 36.5% from 2010 to 2011.



Profit for the year



Profit for the year increased by 43.1%
to US$554.1 million in 2011 from US$387.3 million in 2010, as a result of the foregoing factors.



Impact of Foreign Exchange Rates



We transact a significant portion of our
business in U.S. dollars, which is the currency of the primary economic environment in which we operate and is our financial currency
for financial reporting purposes. A significant portion of our operating costs is related to the Chilean peso, and therefore an
increase or decrease in the exchange rate between the Chilean peso and the U.S. dollar affects our costs of production. Additionally,
as an international company operating in Chile and several other countries, we transact a portion of our business and have assets
and liabilities in Chilean pesos and other non-U.S. dollar currencies, such as the Euro, the South African Rand and the Mexican
peso. As a result, fluctuations in the exchange rate of such currencies to the U.S. dollar may affect our financial condition and
results of operations. See Note 24 of Financial Statements included in this Annual Report.



We monitor and attempt to maintain our
non-dollar assets and liabilities position in balance and make use of foreign exchange contracts and other hedging instruments
aiming to minimize our exposure to the risks of changes in foreign exchange rates. As of December 31, 2012, for hedging purposes
we had open contracts to buy U.S. dollars and sell Euros for approximately US$310.1 million (EUR235million) and sell South African
rand for approximately US$30.8 million (ZAR260.5 million), as well as forward exchange contracts to sell U.S. dollars and buy Chilean
pesos for US$75.5 million (CH$36,237 million). As of this date, all of our UF and Chilean pesos bonds were hedged with cross-currency
swaps to the U.S. dollar for approximately US$ 515.2 million.



Also, we had open forward exchange contracts
to buy U.S. dollars and sell Chilean pesos to hedge our time deposits in Chilean Pesos for approximately US$245.21 million (CH$117,629
million) and forward contracts to buy U.S. dollars and sell Chilean pesos for approximately US$70.1million (CH$33,645million) hedging
our fertilizer trading business in Chile.



5.B.      Liquidity
and Capital Resources



As of December 31, 2012,
we had US$568.5 million of cash and cash equivalents and time deposits. In addition, as of December 31, 2012, we had unused uncommitted
working capital credit lines amounting to US$530.0 million.



Shareholders’ equity
increased from US$1,812.8 million as of December 31, 2011 to US$2,132.8 million as of December 31, 2012. Our ratio of total liabilities
to total equity (including non-controlling interest) on a consolidated basis decreased from 1.08 as of December 31, 2011 to 1.02
as of December 31, 2012.



71







We evaluate from time to time our cash
requirements to fund capital expenditures, dividend payouts and increases in working capital. As debt requirements also depend
on the level of accounts receivables and inventories, we cannot accurately determine the amount of debt we will require.



The table below sets forth our cash flows for 2012, 2011, and
2010:



|(in millions of U.S. dollars)                                      |  | 2012 |        |   | 2011 |  |        | 2010 | 
|------------------------------------------------------------------ |  | ---- | ------ | - | ---- |  | ------ | ---- | 
|Net cash from (used in):                                           |  |      |        |   |      |  |        |      | 
|Net cash from operating activities                                 |  |      | 650.2  |   |      |  | 571.3  |      | 
|Net cash used in financing activities                              |  |      | (197.7 | ) |      |  | (105.2 | )    | 
|Net cash used in investing activities                              |  |      | (562.9 | ) |      |  | (516.2 | )    | 
|Effects of exchange rate fluctuations on cash and cash equivalents |  |      | (10.3  | ) |      |  | (29.6  | )    | 
|Net increase (decrease) in cash and cash equivalents               |  |      | (120.6 | ) |      |  | (79.7  | )    | 



We operate a capital-intensive business
that requires significant investments in revenue-generating assets. Our growth strategy has included the purchase of production
facilities and equipment and has also included the improvement and expansion of existing facilities. Funds for capital expenditures
and working capital requirements have been obtained from net cash from operating activities, borrowings under credit facilities
and issuance of debt securities.



Our capital expenditures, including the
purchase of property, plant and equipment, amounted to approximately US$446.0 million in 2012. For
2013, we expect total capital expenditures of approximately US$500.0 million, which amount may be increased or decreased based
on market conditions. See “Business—Business strategy—Capital expenditure program.”



We expect substantially all of the approximately
US$500.0 million under our current capital expenditure program to be made in Chile. No external financing is required to finance
the capital expenditure program for the 2013 period; however, we reserve the right to access capital markets in order to optimize
its financial position.



Our other major use of funds is the payment
of dividends. We paid dividends of US$334.8 million and US$277.3 million during 2012 and 2011, respectively. Our current dividend
policy, as approved by shareholders, is to pay 50% of our profit for each fiscal year in dividends. Under Chilean law, the minimum
dividend payout is 30% of profit for each fiscal year.



Financing activities

Our current ratio (current assets divided by current liabilities)
was 3.69 as of December 31, 2012. The following table sets forth key information about our outstanding long- and short-term debt
as of December 31, 2012.



72







|Debt Instrument(1)(2)                   |  | Interest rate |      |   | Issue date |               | Maturity date |               | Amortization
|--------------------------------------- |  | ------------- | ---- | - | ---------- | ------------- | ------------- | ------------- | ------------
|Series O Bond — UF 1.50 million         |  |               | 3.80 | % |            | Apr. 4, 2012  |               | Feb. 1, 2033  |             
|Series H Bond — UF 4 00 million         |  |               | 4.90 | % |            | Jan. 13, 2009 |               | Jan. 5, 2030  |             
|Series C Bond — UF 2.1 million          |  |               | 4.00 | % |            | Jan. 24, 2006 |               | Dec. 1 , 2026 |             
|5.50% Notes due 2020 — US$ 250 million  |  |               | 5.50 | % |            | Apr. 21, 2010 |               | Apr. 21, 2020 |             
|Series M Bond — UF 1.00 million         |  |               | 3.30 | % |            | Apr. 4, 2012  |               | Feb. 1, 2017  |             
|Bilateral loan — US$140 million         |  |               | 2.69 | % |            | Sep. 13, 2012 |               | Sep. 13, 2017 |             
|6.125% Notes due 2016 — US$ 200 million |  |               | 6.13 | % |            | Apr. 5, 2006  |               | Apr. 15, 2016 |             
|Bilateral loan — US$40 million          |  |               | 1.52 | % |            | Oct. 6, 2011  |               | Oct. 6, 2016  |             
|Bilateral loan — US$50 million          |  |               | 1.26 | % |            | Oct. 12, 2011 |               | Oct. 12, 2016 |             
|Bilateral loan — US$50 million          |  |               | 1.46 | % |            | Dec. 21, 2011 |               | Dec. 21, 2016 |             
|Bilateral loan — US$50 million          |  |               | 1.62 | % |            | Oct. 19, 2012 |               | Oct. 19, 2015 |             
|Series G Bond — CH$21,000 million       |  |               | 7.00 | % |            | Jan. 13, 2009 |               | Jan. 5, 2014  |             
|Series I Bond — UF 1.50 million         |  |               | 3.00 | % |            | May. 8, 2009  |               | Apr. 1, 2014  |             
|Series J Bond — CH$52,000 million       |  |               | 5.50 | % |            | May. 8, 2009  |               | Apr. 1, 2014  |             
|Bilateral loan — US$50 million          |  |               | 1.54 | % |            | Sep. 12, 2011 |               | Sep. 12, 2014 |             
|Bilateral loan — US$20 million          |  |               | 1.04 | % |            | Apr. 19, 2012 |               | Jan. 16, 2013 |             
|Bilateral loan — US$20 million          |  |               | 1.03 | % |            | May 4, 2012   |               | Feb. 28, 2013 |             
|Bilateral loan — US$20 million          |  |               | 1.90 | % |            | May 15, 2012  |               | May 10, 2013  |             
|Bilateral loan — US$20 million          |  |               | 1.64 | % |            | Jun. 25, 2012 |               | Jun. 20, 2013 |             
|Bilateral loan — US$20 million          |  |               | 1.70 | % |            | Jun. 29, 2012 |               | Jun. 24, 2013 |             
|Bilateral loan — US$20 million          |  |               | 1.09 | % |            | Dec. 3, 2012  |               | Aug. 30, 2013 |             





| | (1) | UF- and Ch$-denominated bonds are fully hedged to U.S.
dollars with cross-currency swaps.
| | --- | -----------------------------------------------------------------------------------------

| | (2) | Some floating rate bilateral loans are currently hedged to fixed rate loans using interest rate swaps.
| | --- | ------------------------------------------------------------------------------------------------------





As of December 31, 2012, we had total debt
of US$1,599 million, compared to total debt of US$1,398.03 million as of December 31, 2011. Taking into account the effects of
financial derivatives, our total debt amounted to US$1,498.39 million as of December 31, 2012 and US$1,341.93 million as of December
31, 2011. Of the total debt as of December 31, 2012, US$152.84 million was short-term debt. All of our UF and Ch$ local bonds,
as of December 31, 2012, were hedged with cross-currency swaps to the U.S. dollar.

All of our long-term debt (including the
current portion) as of December 31, 2012 was denominated in U.S. dollars, and all our UF and Ch$ local bonds were hedged with cross-currency
swaps to the U.S. dollar.



From December 31, 2012 to the date of this
Annual Report, we repaid or renewed the following debt:



| | · | On January 16, 2013, we repaid a short term bank loan, in the principal amount of US$20 million,
with a term of nine months and an annual interest rate of approximately LIBOR + 0.72%, and we entered into a short term bank loan,
in the principal amount of US$20 million, with a term of eight months and an annual interest rate of approximately LIBOR + 0.315%.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | On February 28, 2013, we repaid a short term bank loan, in the principal amount of US$20 million,
with a term of 10 months and an annual interest rate of approximately LIBOR + 0.72%, and we entered into a short term bank loan,
in an amount of US$20 million with a term of nine months and an annual interest rate of approximately LIBOR 3M + 0.35%.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



73







On April 3, 2013, we issued US$300 million
3.625% notes due 2023 the proceeds of which will be used to refinance existing debt and for general corporate purposes.



The financial covenants related to our
debt instruments include: (i) limitations on the ratio of total liabilities to equity (including non-controlling interest) on a
consolidated basis, (ii) minimum net worth requirements, (iii) limitations on net financial debt to EBITDA, (iv) limitations on
interest indebtedness of operating subsidiaries and (v) minimum production assets. We believe that the terms and conditions of
our debt agreements are standard and customary and that we are in compliance in all material respects with such terms and conditions.



The following table sets forth the maturities of our long-term
debt by year as of December 31, 2012 (in millions of US dollars):



|Maturity(1)         |  | Amount |         
|------------------- |  | ------ | --------
|2013                |  |        | 7.14    
|2014                |  |        | 300.67  
|2015                |  |        | 97.14   
|2016                |  |        | 287.14  
|2017                |  |        | 194.74  
|2018                |  |        | 7.14    
|2019 and thereafter |  |        | 568.92  
|Total               |  |        | 1,462.89



| | (1) | Only the principal amount has been included. For the UF- and Ch$-denominated local bonds, the amounts presented reflect the
real U.S. dollar obligation as of December 31, 2012, not including the effects of the cross currency swaps that hedge these bonds
to the U.S. dollar and which had, as of December 31, 2012, a market value of US$100.6 million in favor of SQM.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Environmental Projects



In 2012, we made disbursements amounting
to US$16.1 million related to environmental, safety and health projects. We have budgeted future disbursements for the year 2013
amounting to approximately US$14.9 million related to environmental, safety and health projects. This amount forms part of the
capital expenditure program discussed above.



5.C. Research
and Development, Patents and Licenses, etc.



One of the main objectives of our research
and development team is to develop new processes and products in order to maximize the returns obtained from the resources that
we exploit. Our research is performed by four different units whose research topics include chemical process design, phase chemistry,
chemical analysis methodologies and physical properties of finished products.



Our research and development policy emphasizes
the following: (i) optimization of current processes in order to decrease costs and improve product quality through the implementation
of new technology, and (ii) development of higher-margin products from current products through vertical integration or different
product specifications.



Our research and development activities
have been instrumental in improving our production processes and developing new value-added products. As a result of research and
development activities, new methods of extraction, crystallization and finishing products have been developed. Technological advances
in recent years have enabled us to improve process efficiency for the nitrate, potassium and lithium operations, to improve the
physical quality of our prilled products and to reduce dust emissions and caking by applying specially designed additives for our
products handled in bulk. Our research and development efforts have also resulted in new, value-added markets for our products.
One example is the use of sodium nitrate and potassium nitrate as thermal storage in solar power plants.



74











We have patented several production processes
for nitrate, iodine, and lithium products. These patents have been filed mainly in the United States, Chile, and in other countries
when necessary.



For the years ended December 31, 2012,
2011 and 2010, we invested US$10.4, US$6.9 million, and US$5.8 million, respectively, on research and development activities.



5.D.
Trend Information

Our revenues totaled
US$2,429.2 million during 2012, representing an increase of 13.2% from revenues of US$2,145.3 million in 2011. Gross margin reached
US$1,028.6 million (42.3% of revenues), 20.3% higher than gross revenues of US$854.8 million (39.8% of revenues) in 2011. Profit
attributable to controlling interests increased by 18.9% to US$649.2 million in 2012, compared to US$545.8 million in 2011.



Our sales volumes in
the specialty plant nutrition product line in 2012 decreased by 8.1% compared to 2011. The decrease was a result of increased supply
in the market and low market growth mainly due to economic uncertainty in Europe, one of the most important markets for the product
line. In general, the specialty plant nutrition markets are less volatile than commodity and fertilizer markets, but future improvement
in this product line will depend on the behavior of the market for potassium based fertilizers such as potassium chloride. Potassium
chloride is an important raw material in the production of potassium nitrate, a specialty fertilizer and, as a result, prices of
the two products are related. We feel confident in the future of specialty plant nutrient market as food quality requirements increase,
and land and fresh water scarcity impacts some parts of the world. We suspect market growth to be led primarily by potassium nitrate,
and we believe we are prepared to meet the growing market demand in the future.



Our sales volumes in
the iodine product line decreased by 10.0% in 2012, as a result of new supply by competitors in the market, and as we returned
to normal operational inventory. This volume decrease was more than offset by prices that were more than 40% higher than the average
prices in this product line during 2011, thus increasing margins in the iodine segment. This increase in average prices in 2012
was attributable to an increase in demand which was met by new supply in 2012, which stabilized average prices at higher levels
compared to 2011. We continue to be a world leader in the iodine market, and these special market conditions have created unique
opportunities for us. We expect to maintain our efforts to assure that world iodine needs are met in the future.



Our sales volumes in
the lithium product line increased by 12% in 2012 compared to 2011. Along with increased sales volumes, we saw increased prices
in this product line during 2012 when compared to 2011, resulting in increased margins in this product line by nearly 30%. The
increase in sales volumes and prices were principally attributable to stronger demand and higher costs for marginal producers compared
to 2011. We believe the lithium market is positioned to grow in the short and long term due to the development of new technologies,
as well as strong growth in industrial applications. We expect world lithium production to increase in the near future, as a number
of new projects have been announced and have begun procurement.



Our sales volumes in
the potassium product line increased by almost 10% in 2012 compared to the prior year, as we took advantage of our developed distribution
network. Our average prices in the potassium market remained relatively stable as compared to 2011. In the fourth quarter of 2012,
the potassium market saw major contracts close at lower prices than seen earlier in 2012; during the first quarter of 2013, prices
have remained stable. We expect market sales volumes to increase during 2013, but we expect that price pressures will have an impact
on potassium revenues in the near term.



75







Our sales volumes in
the industrial chemicals product line increased by 52% in 2012 compared to 2011. The increase was driven by new alternative energy
projects that utilize industrial-grade sodium and potassium nitrate in solar thermal energy storage. As a result of the uncertain
financial situation in Europe and continued slow growth in the United States, the market has seen higher financing costs for projects
in Europe and the United States. As a result, we anticipate some project delays which, in turn, we expect will have an impact on
short term sales in the industrial chemicals product line. We remain confident in the long-term prospects in the solar thermal
energy storage market, and expect to see industrial chemicals sales volumes in 2014 exceed volumes seen in 2013.



Our profit for the fourth
quarter of 2012 declined by 10.8% from the comparable period in 2011 and was 14.2% lower than our profit for the third quarter
of 2012, due principally to the decline in average prices in the potassium market during the fourth quarter of 2012, which affected
our specialty plant nutrients product line and potassium product line, and decreased sales volumes in our iodine product line as
a result of new supply by competitors in the market. Although potassium prices have remained stable in 2013 to date at the levels
reached during the fourth quarter of 2012, we expect pressure on potassium prices to have an impact on our overall profits during
the near term. The effect of the volume decrease in our iodine product line was partially offset by prices that were more than
40% higher for 2012 than the average prices in this product line during 2011. As mentioned above, increased supply entered the
market in 2012, and we expect to see additional new supply in 2013.



5.E. Off-Balance
Sheet Arrangements

We have not entered into any transactions
with unconsolidated entities whereby we have financial guarantees, retained or contingent interests in transferred assets, derivative
instruments or other contingent arrangements that would expose us to material continuing risks, contingent liabilities, or any
other obligations arising out of a variable interest in an unconsolidated entity that provides financing, liquidity, market risk
or credit risk support to us or that engages in leasing, hedging or research and development services with us.



5.F. Tabular
Disclosure of Contractual Obligations



The following table sets forth our material
expected obligations and commitments as of December 31, 2012:



|                                              |  |       |           |  | Less Than |  |         | 1  -  3 |  |  | 3  -  5 |  |  | More Than |        
|--------------------------------------------- |  | ----- | --------- |  | --------- |  | ------- | ------- |  |  | ------- |  |  | --------- | -------
|                                              |  | Total |           |  | 1 year    |  |         | years   |  |  | Years   |  |  | 5 years   |        
|                                              |  | ThUS$ |           |  | ThUS$     |  |         | ThUS$   |  |  | ThUS$   |  |  | ThUS$     |        
|Long- and short-term debt                     |  |       | 1,599,037 |  |           |  | 152,843 |         |  |  | 366,946 |  |  |           | 539,814
|Capital lease obligations                     |  |       | -         |  |           |  | -       |         |  |  | -       |  |  |           | -      
|Operating leases                              |  |       | 132,946   |  |           |  | 6,997   |         |  |  | 13,994  |  |  |           | 13,994 
|Purchase commitments (*)                      |  |       | 127,484   |  |           |  | 127,484 |         |  |  | -       |  |  |           | -      
|Staff severance indemnities                   |  |       | 34,839    |  |           |  | -       |         |  |  | -       |  |  |           | -      
|Total Contractual Obligations and Commitments |  |       | 1,894,306 |  |           |  | 287,324 |         |  |  | 350,940 |  |  |           | 553,808





(*) The purchase commitments held by the
Company are recognized as a liability when the services and goods are received by the Company.



76







5.G. Safe
Harbor



The information contained in Items 5.E and 5.F contains statements
that may constitute forward-looking statements. See “Cautionary Statement Regarding Forward-Looking Statements” in
this Annual Report, for safe harbor provisions.



77







ITEM
6.DIRECTORS, SENIOR MANAGEMENT AND EMPLOYEES



6.A. Directors
and Senior Management



We are managed by our executive officers
under the direction of our Board of Directors, which, in accordance with our by-laws, consists of eight directors, seven of whom
are elected by holders of Series A common shares and one of whom is elected by holders of Series B common shares. The entire Board
of Directors is regularly elected every three years at our ordinary shareholders’ meeting. Cumulative voting is allowed for
the election of directors. At the annual ordinary shareholders’ meeting that took place on April 28, 2011, a new Board was
elected, and their terms will expire in 2014. The Board of Directors may appoint replacements to fill any vacancies that occur
during periods between elections. If a vacancy occurs, the entire Board must be elected or re-elected at the next regularly scheduled
meeting of shareholders. On April 05, 2013, Mr. Kendrick T. Wallace resigned from his position as Director of the Company. In light
of this vacancy, we will hold elections for the entire board at the next regularly scheduled meeting of shareholders on or about
April 25, 2013. Our Chief Executive Officer is appointed by the Board of Directors and holds office at the discretion of the Board.
The Chief Executive Officer appoints our executive officers. There are regularly scheduled meetings of the Board of Directors once
a month. Extraordinary meetings may be called by the Chairman when requested by (i) the director elected by holders of the Series
B common shares, (ii) any other director with the assent of the Chairman or (iii) an absolute majority of all directors. The Board
has a Directors’ Committee and its regulations are discussed below.



Our directors as of the date of this Annual Report are as follows:



|Name              |  | Position and relevant experience                                                                                                                                                                                                                                                                                                                                                                                          |  | Current positionheld since
|----------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------
|Julio Ponce L.(1) |  | Chairman of the Board and Director. Mr. Ponce is a Forestry
        Engineer with a degree from the Universidad de Chile. He joined SQM in 1981. He is also Chairman of the board of directors of the
        following corporations: Sociedad de Inversiones Pampa Calichera S.A., Sociedad de Inversiones Oro Blanco S.A., Norte Grande S.A.
        and Soquimich Comercial S.A. He is the brother of Eugenio Ponce L. |  | September 1987            
|Wayne R. Brownlee |  | Vice Chairman of the Board and Director. Mr. Brownlee
is Executive Vice-President, Treasurer and Chief Financial Officer of Potash Corporation of Saskatchewan, Inc. Mr. Brownlee earned
degrees in Arts and Science and Business Administration from the University of Saskatchewan. He is on the board of directors of
Great Western Brewing Company. He became a director of SQM in December 2001.                     |  | December 2001             



78







|Name                     |  | Position and relevant experience                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |  | Current positionheld since
|------------------------ |  | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------
|                         |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  |                           
|Hernan Buchi B.          |  | Director. Mr. Buchi is a Civil Engineer with a degree from the
        Universidad de Chile. He served as Vice Chairman of SQM’s Board from January 2000 to April 2002. He is currently a member
        of the board of directors of Quinenco S.A. Banco de Chile, S.A.C.I. Falabella and Madeco S.A., among others. He is also Chairman
        of the board of directors of Universidad del Desarrollo.                                                                                                                                                                                                                                                                                                                   |  | April 1993                
|Jose Maria Eyzaguirre B. |  | Director. Mr. Eyzaguirre is a lawyer and is a partner of the
        Chilean law firm Claro y Cía. He obtained his law degree from the Universidad de Chile and was admitted to the Chilean Bar
        in 1985. In 1987, he obtained a Master’s Degree from New York University School of Law. He was admitted to the New York Bar
        in 1988. He is also a member of the board of directors of Gasoducto del Pacifico S.A., a transandean gas pipeline, Embotelladora
        Andina S.A., a bottler of The Coca Cola Company, and Chairman of the board of directors of Club de Golf Valle Escondido.                                                                                                                |  | December 2001             
|Daniel Yarur E.          |  | Director. Mr. Yarur is a businessman and an Information Engineer
        with a degree from the Universidad de Chile and holds an MS in Finance from the London School of Economics and an AMP from Harvard
        Business School. He is president of the Federación Deportiva Nacional Ajedrez Federado de Chile. Mr. Yarur was chairman
        of the Chilean Securities and Exchange Commission from 1994 to 2000 and was also chairman of the Council Organization of the Securities
        Regulators of America. He is also a professor in the Faculty of Economic and Administrative Sciences, Universidad de Chile and
        is currently studying for a PhD in philosophy at Pontificia Universidad Católica. |  | April 2003                
|Wolf von Appen           |  | Director. Mr. Von Appen is an entrepreneur. He is currently a member of Centro de Estudios Publicos.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  | May 2005                  



79







|Name             |  | Position and relevant experience                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |  | Current positionheld since
|---------------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------
|Eduardo Novoa C. |  | Director. Mr. Novoa is an economist with a degree from
the Universidad de Chile and holds a Master in Business Administration from the University of Chicago. He has held positions in
business development, corporate level strategic direction and asset management at a number of Chilean and multinational companies,
either as a member of the board of directors, chief development officer, country manager or CEO. Currently, Mr. Novoa provides
strategic advisory services and is a member of the board of several private companies. |  | April 2008                



Our executive officers as of the date of
this Annual Report were as follows:



|Name                      |  | Position and relevant experience                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |  | Current position
held since
|------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ---------------------------
|Patricio Contesse G.      |  | Chief Executive Officer. Mr. Contesse is a Forestry Engineer with a degree from the Universidad de Chile. He joined SQM in 1981 as CEO, a position he held until 1982, and again in 1988 for one year.  In the past, he has been CEO of Celco Limitada, Schwager S.A. and Compañía de Aceros del Pacífico S.A. He has also served as Operations Senior Executive Vice President of Codelco Chile, President of Codelco USA and Executive President of Codelco Chile. Mr. Contesse is also a member of the board of directors of Soquimich Comercial S.A. |  | March 1990                 
|                          |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |  |                            
|Patricio de Solminihac T. |  | Chief Operating Officer and Executive Vice President. Mr. de Solminihac is an Industrial Engineer with a degree from the Pontificia Universidad Católica de Chile and holds a Master in Business Administration from the University of Chicago.  He joined SQM in 1988 as Business Development Vice President. Currently he is a member of the board of directors of Melon S.A.  Mr. de Solminihac is also a member of the board of directors of Soquimich Comercial S.A.                                                                                |  | January 2000               



80







|Name                  |  | Position and relevant experience                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  | Current positionheld since
|--------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | --------------------------
|Matías Astaburuaga S. |  | General Counsel and Senior Vice President. Mr. Astaburuaga is a lawyer with a degree from the Pontificia Universidad Católica de Chile. He joined SQM in 1989.  Prior to joining SQM, he was Regional Counsel of The Coca Cola Export Corporation, Andean Region and Regional Counsel of American Life Insurance Company, Latin America Region.                                                                                                                                                                                                                                                                                |  | February 1989             
|                      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |  |                           
|Ricardo Ramos R.      |  | Chief Financial Officer and Business Development Senior Vice President.  Mr. Ramos is an Industrial Engineer with a degree from the Pontificia Universidad Católica de Chile. He joined SQM in 1989. Mr. Ramos is also a member of the board of directors of Soquimich Comercial S.A.                                                                                                                                                                                                                                                                                                                                          |  | November 1994             
|                      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |  |                           
|Jaime San Martín L.   |  | Nueva Victoria Operations Senior Vice President. Mr. San Martín is a Transportation Engineer with a degree from the Pontificia Universidad Católica de Chile.  He joined SQM in 1995 as Project Manager.  He became Metallic Mining Development Manager in 1997, and Development Manager in 1998, Business Development and Mining Property Vice President in 1999, Technical Senior Vice President in 2001, and Senior Vice President of Lithium Operations and Mining Affairs in January 2007. Since 2008, he has been the Senior Vice President of Nueva Victoria Operations (iodine and nitrates in the I Region of Chile). |  | March 2008                
|                      |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |  |                           
|Eugenio Ponce L.      |  | Senior Commercial Vice President. Mr. Ponce is a Mechanical Engineer with a degree from the Universidad Católica de Valparaíso. In 1981, he joined SQM as a Sales Manager.  He became Commercial Manager in 1982, Commercial and Operations Manager in 1988 and Chief Executive Officer of SQM Nitratos S.A. in 1991.  Currently he is a member of the board of directors of Soquimich Comercial S.A. and Vice Chairman of the board of directors of Pampa Calichera S.A.                                                                                                                                                      |  | March 1999                



81







|Name                   |  | Position and relevant experience                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |  | Current positionheld since
|---------------------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | --------------------------
|Carlos Díaz O.         |  | Nitrates-Iodine Operations Senior Vice President. Mr. Diaz is an Industrial Civil Engineer with an engineering degree and an MBA from the Pontificia Universidad Católica de Chile. In 1996, he joined SQM as Planning Engineer in the Sales Division where he was promoted to Planning Manager in 1998. In 2002, he assumed the position of Deputy Financial Manager of the Commercial Offices and after four years took up the position of Logistics Manager.                                                                                                                                                                                                                               |  | June 2005                 
|                       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |                           
|Pauline De Vidts S.    |  | Safety, Health & Environment Senior Vice President. Mrs. De Vidts is an Industrial Engineer with a degree from the Pontificia Universidad Católica de Chile and holds a Ph.D. in Chemical Engineering from Texas A&M University. She joined SQM in 1996 to work in process development for the Salar de Atacama Operations, becoming Development Manager for these operations in 1998, and later Corporate R&D and Environmental Issues Vice President in 2001. Since 2005, she has overseen safety, health and environmental issues, and in 2011, she also began overseeing public affairs for SQM.                                                                                          |  | June 2005                 
|                       |  |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |  |                           
|Juan Carlos Barrera P. |  | Salar and Lithium Operations Senior Vice
    President. Mr. Barrera is an Industrial Engineer with a degree from the Pontificia Universidad Católica de Chile and
    holds a Masters in Business Administration degree from Tulane University and a Masters in Business Administration degree from
    Universidad de Chile.  He joined SQM in 1991 as an advisor in the Business Development area and has served in many
    positions since then.  In 1995, he became Business Development Manager of SQM Nitratos S.A. In 1999, he became the
    Corporate Quality Manager, in 2000, Corporate Supply Chain Vice president and, in 2006, General Manager of Soquimich
    Comercial S.A. |  | January 2007              



82







|Name              |  | Position and relevant experience                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |  | Current positionheld since
|----------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | --------------------------
|Daniel Jiménez S. |  | Senior Vice President Human Resources, Corporate Services and Exploration Mr. Jiménez is an Industrial Engineer with a degree from the Pontificia Universidad Católica de Chile and holds a Masters in Business Administration degree from Old Dominion University. He joined SQM in 1991, holding several positions in the finance and sales areas at SQM’s headquarters and foreign subsidiaries in USA and Belgium, countries he was based in for eight years.  In 2002, he became VP Sales and Marketing Iodine, Lithium and Industrial Chemicals. |  | May 2007                  





---



| | (1) | Mr. Julio Ponce’s ownership interest in SQM is explained in Item 6.E. Share Ownership.
| | --- | --------------------------------------------------------------------------------------

| | (2) | The individual beneficially owns less than one percent of the Company’s shares
| | --- | ------------------------------------------------------------------------------



6.B. Compensation

During 2012, directors were paid a monthly
fee (UF 300 to the Chairman and UF 50 to each of the remaining seven directors), which was independent of attendance and the number
of Board sessions. In addition, the directors received variable compensation (in Chilean pesos) based on a profit-sharing program
approved by the shareholders. In 2012, the Chairman received the equivalent of 0.35% of 2011 profit and each of the remaining seven
directors received the equivalent of 0.04% of 2011 profit.



In addition, during 2012, members of the
Directors’ Committee were paid UF 17 regardless of the number of sessions held by the Committee. Additionally, shareholders
approved variable compensation for the 2012 fiscal year of an amount equal to 0.013% of 2011 profit for each Committee member.
This remuneration is also independent from what the Committee members obtain as members of our Board of Directors.



During 2012, the compensation paid to each
of our directors, who served on the Board during the year, was as follows (amounts in Chilean pesos):





|                         |  | SQM Board Meeting(Ch$) |               |  | SQM Committee (Ch$) |  |             | SQM Committee Meeting (Ch$) |  |  | Total (Ch$) | 
|------------------------ |  | ---------------------- | ------------- |  | ------------------- |  | ----------- | --------------------------- |  |  | ----------- | 
|Julio Ponce L.           |  |                        | 997,014,607   |  |                     |  | —           |                             |  |  | 73,102,445  | 
|Wayne R. Brownlee        |  |                        | 110,708,571   |  |                     |  | —           |                             |  |  | —           | 
|Hernan Buchi B.          |  |                        | 119,752,858   |  |                     |  | 39,123,095  |                             |  |  | —           | 
|Jose Maria Eyzaguirre B. |  |                        | 120,863,533   |  |                     |  | —           |                             |  |  | —           | 
|Daniel Yarur E.          |  |                        | 120,894,895   |  |                     |  | —           |                             |  |  | —           | 
|Wolf Von Appen           |  |                        | 110,708,571   |  |                     |  | 40,964,854  |                             |  |  | —           | 
|Eduardo Novoa C.         |  |                        | 119,780,195   |  |                     |  | 39,132,389  |                             |  |  | —           | 
|Kendrick T. Wallace      |  |                        | 110,708,571   |  |                     |  | —           |                             |  |  | —           | 
|Total                    |  |                        | 1,810,431,801 |  |                     |  | 119,220,338 |                             |  |  | 73,102,445  | 



For the year ended December 31, 2012, the aggregate compensation
paid to our 120 principal executives based in Chile was US$32.9 million. We do not disclose to our shareholders or otherwise make
available to the public information as to the compensation of our individual executive officers.



83







We maintain incentive programs for our employees, based on individual
performance, company performance, and short- medium- and long-term indicators. Additionally, in order to provide incentives to
key executives and to retain such executives, we maintain a long-term cash bonus compensation plan for certain senior executives,
which consists of a long-term bonus linked to share price and is payable between 2012 and 2016.



As of December 31, 2012, the provision
providing a long-term bonus linked to our share price would have increased or decreased by approximately US$1.1 million per each
movement of US$1 in the Series B common share price. The amount of actual cash bonuses payable under the long-term incentive program
will vary depending on the market share price of the Series B common shares on the date as of which the bonuses are paid.



As of December 31, 2012, we had a provision
related to all of the incentive programs in an aggregate of US$33.9 million.



We do not maintain any pension or retirement
programs for the members of the Board or our executive officers in Chile.



6.C. Board
Practices

Information regarding the period of time
each of SQM's current Directors has served in his or her respective office is provided in the discussion of each member of the
board above in Item 6.A Directors and Senior Managers.



The date of expiration of the term of the
current Board of Directors is April 2014. The contracts of our executive officers are indefinite. On April 05, 2013, Mr. Kendrick
T. Wallace resigned from his position as Director of the Company. As required by our by-laws and in light of this vacancy, we will
hold elections for the entire board at the next regularly scheduled meeting of shareholders on April 25, 2013.



The members of the Board are remunerated
in accordance with the information provided above in Item 6.B. Compensation. There are no contracts between SQM, or any of its
subsidiaries, and the members of the Board providing for benefits upon termination of their term.



Directors' Committee – Audit Committee



As required by Chilean Law, during 2012,
we had a Directors’ Committee (Comité de Directores) composed of three directors, which performs many of the functions
of an audit committee. This Directors’ Committee complies with the requirements of the NYSE corporate governance rules applicable
to audit committees. Under the NYSE corporate governance rules, the audit committee of a U.S. company must perform the functions
detailed in the NYSE Listed Company Manual Rules 303A.06 and 303A.07. Non-U.S. companies are required to comply with Rule 303A.06
but are not at any time required to comply with Rule 303A.07.



As of December 31, 2012, our Directors’
Committee was comprised of three Directors: Mr. Buchi, Mr. Novoa and Mr. Von Appen. Each of the three members meet the NYSE independence
requirements for audit committee members. According to Chilean independence requirements, Mr. Novoa meets the requirements for
independence. Our Directors’ Committee operates in accordance with article 50 bis of the Chilean Corporations Act, which
provides that the Directors’ Committee will, among other things:



(a)	examine and issue an
opinion regarding the external auditor’s report including financial statements prior to its final presentation for approval
at the ordinary shareholders meeting;



(b)	propose to the Board
the external auditors and the rating agencies that will be presented to the ordinary shareholders meeting;



84







(c)	examine and elaborate
a report concerning the operations covered by Title XVI of the Chilean Corporations Act, which relates to related party transactions;
and



(d)	examine the remuneration
and compensation plans of the senior management.



Accordingly, the following were the main
activities of our Directors’ Committee during 2012:



(a)	analysis of unaudited
financial reports;



(b)	analysis of audited
financial reports;



(c)	analysis of reports
and proposals submitted by external auditors, account inspectors and rating agencies, and recommendations to the Board of Directors
regarding external auditors and rating agencies that could be designated by shareholders at the respective annual general shareholders
meeting;



(d)	analysis of tax and
other non-audit services provided by external auditors for SQM and its subsidiaries in Chile and abroad;



(e)	analysis of functions,
objectives and working programs of the Internal Audit Department;



(f)	analysis of SQM’s
senior executives’ remuneration and compensation plans;



(g)	analysis of the records
relating to the transactions referred to in Title XVI of the Chilean Corporations Act;



(h)	analysis of matters
related to the Sarbanes-Oxley Act, especially regarding Section 404;



(i)	analysis of matters
related to IFRS and standards issued by U.S. standard-setter, the Public Company Accounting Oversight
Board; and



(j)	analysis of an internal
control report.



On April 26, 2012, the Annual General Shareholders
Meeting of SQM approved an operational budget for the Directors Committee; the operational budget is equivalent to the annual remuneration
of the members of the Directors Committee.



The activities carried out by the Committee,
as well as the expenses incurred by it, are to be disclosed at the General Shareholders Meeting. During 2012, the Directors Committee
did not incur any consulting expenses.



Article 50 bis of the Chilean Corporations
Act states that the Committee should consist of three directors, of which at least one member should preferably be independent
from the controller (i.e. any person or entity who “controls” the company for Chilean law purposes), if any, and that
their functions be remunerated.



Comparative Summary of Differences
in Corporate Governance Standards



The following table provides a comparative
summary of differences in corporate governance practices followed by us under our home-country rules and those applicable to U.S.
domestic issuers pursuant to Section 303A of the New York Stock Exchange (NYSE) Listed Company Manual.



Listed Companies that are foreign private
issuers, such as SQM, are permitted to follow home country practices in lieu of the provisions of Section 303A, except such companies
are required to comply with the requirements of Section 303A.06, 303A.11 and 303A.12(b) and (c).



|Section |  | NYSE Standards                                                  |  | SQM practices pursuant to Chilean Stock Exchangeregulations                                                                                                                    
|------- |  | --------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|303A.01 |  | Listed companies must have a majority of independent directors. |  | There is no legal obligation to have a majority of independent directors on the Board but according to Chilean law, the Company's directors cannot serve as executive officers.



85







|Section |  | NYSE Standards                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  | SQM practices pursuant to Chilean Stock Exchangeregulations                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        
|------- |  | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|303A.02 |  | No director qualifies as "independent"
        unless the board of directors affirmatively determines that the director has no material relationship with the listed company (either
        directly or as a partner, shareholder or officer of an organization that has a relationship with the company).
        In addition, a director is not independent
        if:
        (i) The director is, or has been within
        the last three years, an employee of the listed company, or an immediate family member is, or has been within the last three
        years, an executive officer, of the listed company.
        (ii) The director has received,
        or has an immediate family member who has received, during any twelve-month period within the last three years, more than
        $120,000 in direct compensation from the listed company, other than director and committee fees and pension or other forms
        of deferred compensation for prior service (provided such compensation is not contingent in any way on continued service).
        (iii) (A) The director is a current partner
        or employee of a firm that is the listed company's internal or external auditor; (B) the director has an immediate family member
        who is a current partner of such a firm; (C) the director has an immediate family member who is a current employee of such a firm
        and personally works on the listed company's audit; or (D) the director or an immediate family member was within the last three
        years a partner or employee of such a firm and personally worked on the listed company's audit within that time.
        (iv) The director or an immediate
        family member is, or has been with the last three years, employed as an executive officer of another company where any of
        the listed company's present executive officers at the same time serves or served on that company's compensation committee.
        (v) The director is a current employee,
        or an immediate family member is a current executive officer, of a company that has made payments to, or received payments
        from, the listed company for property or services in an amount which, in any of the last three fiscal years, exceeds the greater
        of $1 million, or 2% of such other company's consolidated gross revenues. |  | A director would not be considered independent
        if, at any time, within the last 18 months he or she:
        
        (i)	Maintained
        any relationship of a relevant nature and amount with the company, with other companies of the same group, with its controlling
        shareholder or with the principal officers of any of them or has been a director, manager, administrator or officer of any of them;
        
        (ii)	 Maintained
        a family relationship with any of the members described in (i) above;
        
        (iii) Has been a director, manager, administrator
        o principal officer of non-profit organizations that have received contributions from (i) above;
        
        (iv) Has been a partner or a shareholder
        that has had or controlled, directly or indirectly, 10% or more of the capital stock or has been a director, manager, administrator
        or principal officer of an entity that has provided consulting or legal services for a relevant consideration or external audit
        services to the persons listed in (i) above;
        
        (v) Has been a partner or a shareholder
        that has had or controlled, directly or indirectly, 10% or more of the capital stock or has been a director, manager, administrator
        or principal officer of the principal competitor, supplier or clients.
|303A.03 |  | The non-management directors must meet
        at regularly scheduled executive sessions without management.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |  | These meetings are not needed given that
        directors cannot serve as executive officers.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     
|303A.04 |  | (a) Listed companies must have a nominating/corporate
        governance committee composed entirely of independent directors.
        (b) The nominating/corporate governance
        committee must have a written charter that addresses:
        (i) the committee's purpose and responsibilities
        – which, at minimum, must be to: identify individuals qualified to become board members, consistent with criteria approved
        by the board, and to select, or to recommend that the board select, the director nominees for the next annual meeting of shareholders;
        develop and recommend to the board a set of corporate governance guidelines applicable to the corporation; and oversee the
        evaluation of the board and management; and
        (ii) an annual performance evaluation of
        the committee.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  | This committee is not required as such in the Chilean regulations.  However, pursuant to Chilean regulations SQM has a Directors' Committee (see Board practices above).                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           



86







|Section |  | NYSE Standards                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  | SQM practices pursuant to Chilean Stock Exchangeregulations                                                                                                                                                                                                                                                                                                                                                                                                                                           
|------- |  | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|303A.05 |  | Listed companies must have a compensation
        committee composed entirely of independent directors, and must have a written charter                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |  | This committee is not required as such
        in the Chilean regulations. Pursuant to Chilean regulations SQM has a Director’s Committee (see Board practices above) that
        is in charge of reviewing management’s compensation.                                                                                                                                                                                                                                                               
|303A.06 |  | Listed companies must have an audit committee.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |  | This committee is not required as such
        in the Chilean regulations. Pursuant to Chilean regulations, SQM has a Directors’ Committee that performs the functions of
        an audit committee and that complies with the requirements of the NYSE corporate governance rules.                                                                                                                                                                                                                  
|303A.07 |  | The audit
        committee must have a minimum of three members. All audit committee members must satisfy requirements of independence, and the
        committee must have a written charter.The listed companies must have an internal audit
        function to provide management with ongoing assistance of the Company's
        risk management process and the system of internal controls                                                                                                                                                                                                                                                                               |  | Pursuant to Section 303A.00, SQM is not
        required to comply with requirements in 303A.07. Pursuant to Chilean Regulations SQM has a Director’s Committee (see Board
        practices above) that also performs the functions of an audit committee with certain requirements of independence.                                                                                                                                                                                                 
|303A.08 |  | Shareholders must have the opportunity to vote on all equity-compensation plans and material revisions thereto.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |  | SQM does not have equity compensation plans.
        However, as mentioned in Item 6.B Compensation, the Company does have a long-term cash bonus compensation plan for certain senior
        executives, which consists of a long-term bonus linked to the Company's share price. Directors and executives may only acquire
        SQM shares by individual purchases. The purchaser must give notice of such purchases to the Company and the Superintendence of
        Securities and Insurance.
|303A.09 |  | Listed
        companies must adopt and disclose corporate governance guidelines.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |  | Chilean law does not require that corporate
        governance guidelines be adopted. Directors' responsibilities and access to management and independent advisors are directly provided
        for by applicable law. Directors' compensation is approved at the annual meeting of shareholders, pursuant to applicable law.                                                                                                                                                                       
|303A.10 |  | Listed
        companies must adopt and disclose a code of business conduct and ethics for directors, officers and employeesand promptly
        disclose any waivers of the code for directors or executive officers.                                                                                                                                                                                                                                                                                                                                                                                                                                                            |  | Not required in the Chilean regulations.
        SQM has adopted and disclosed a Code of Business
        Conduct and Ethics, available at the Company's website, www.sqm.com.                                                                                                                                                                                                                                                                                                                        
|303A.11 |  | Listed
        foreign private issuers must disclose any significant ways in which their corporate governance practices differ from those followed
        by domestic companies under NYSE listed standards.                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |  | Pursuant to 303A.11, this table sets forth
        a comparative summary of differences in corporate governance practices followed by SQM under Chilean regulations and those applicable
        to U.S. domestic issuers pursuant to Section 303A.                                                                                                                                                                                                                                                   
|303A.12 |  | Each
listed company CEO must (a) certify to the NYSE each year that he or she is not aware of any violation by the listed company of
NYSE corporate governancelisting
standards; (b) promptly notify the NYSE in writing after any executive officer becomes aware of any material non-compliance with
any applicable provisions of Section 303A; and (c) must submit an executed Written Affirmation annually to the NYSE.In addition, each listed company must submit an interim Written Affirmation as and when
required by the interim Written Affirmation form specified by the NYSE. The annual and interim Written Affirmations must be in
the form specified by the NYSE. |  | Not required in the Chilean regulations.  The CEO must only comply with Section 303A.12 (b) and (c).                                                                                                                                                                                                                                                                                                                                                                                                  



87







|Section |  | NYSE Standards                                                                                            |  | SQM practices pursuant to Chilean Stock Exchangeregulations
|------- |  | --------------------------------------------------------------------------------------------------------- |  | -----------------------------------------------------------
|303A.13 |  | The NYSE may issue a public reprimand
letter to any listed company that violates a NYSE listing standard. |  | Not specified in the Chilean regulations.                  



6.D. Employees

As of December 31, 2012, we had 5,643 permanent employees, 193
of whom were employed outside of Chile. The average tenure of our permanent employees is approximately 6.5 years.



|                           |  | As of December 31, |      
|-------------------------- |  | ------------------ | -----
|                           |  | 2012               |      
|Employees in Chile         |  |                    | 5,450
|Employees outside of Chile |  |                    | 193  
|Total employees            |  |                    | 5,643



As of December 31, 2012, 67% of our permanent
employees in Chile were represented by 24 labor unions, which represent their members in collective negotiations with us. Compensation
for unionized personnel is established in accordance with the relevant collective bargaining agreements. The terms of most such
agreements currently in effect are three years, and expiration dates of such agreements vary from contract to contract. Under these
agreements, employees receive a salary according to a scale that depends upon job function, seniority and productivity. Unionized
employees also receive certain benefits provided by law and certain benefits provided under the applicable collective bargaining
agreement, which vary depending upon the terms of the collective agreement, such as housing allowances and additional death and
disability benefits.



In addition, we own all of the equity of
Institución de Salud Previsional Norte Grande Limitada (“Isapre Norte Grande”), which is a health care organization
that provides medical services primarily to our employees and Sociedad Prestadora de Servicios de Salud Cruz de Norte S.A. (“Prestadora”),
which is a hospital in María Elena. We make contributions to Isapre Norte Grande and to Prestadora in accordance with Chilean
laws and the provisions of our various collective bargaining agreements, but we are not otherwise responsible for its liabilities.



Non-unionized employees receive individually
negotiated salaries, benefits provided for by law and certain additional benefits which we provide.



We provide housing and other facilities
and services for employees and their families at the María Elena site.



We do not maintain any pension or retirement
programs for our Chilean employees. Most workers in Chile are subject to a national pension law, adopted in 1980, which establishes
a system of independent pension plans that are administered by the corresponding Sociedad Administradora de Fondos de Pensiones.
We have no liability for the performance of any of these pension plans or any pension payments to be made to our employees. We,
however, sponsor staff severance indemnities plans for our employees and employees of our Chilean subsidiaries whereby we commit
to provide a lump sum payment to each employee at the end of his/her employment, whether due to death, termination, resignation
or retirement.



88







Over 96% of our employees are employed
in Chile, of which approximately 67% were represented by 24 labor unions as of December 31, 2012. As in previous years, during
2012, we renegotiated collective labor contracts with individual unions one year before the expiration of such contracts. As of
December 31, 2012, we had concluded advanced negotiations with 22 labor unions, which represent 96% of our total unionized workers,
signing new agreements with each for durations of three years. We are in the process of negotiating collective labor contracts
with the two remaining unions. We are exposed to labor strikes that could impact our production levels. If a strike occurs and
continues for a sustained period of time, we could be faced with increased costs and even disruption in our product flow that could
have a material adverse effect on our business, financial condition and results of operations.



6.E. Share
Ownership

SQM has been informed that Mr. Julio Ponce
L., Chairman of the Board of SQM, and related persons beneficially own through Pampa Calichera, Potasios de Chile S.A. (“Potasios”)
and Inversiones Global Mining (Chile) Ltda. (“Global Mining”), a total of 84,135,095 shares, constituting 31.97% of
SQM’s total shares. SQM has been advised that this beneficial ownership is based on the following: Mr. Ponce and related
persons control 100% of the total shares of Inversiones SQYA S.A. (“SQYA”); SQYA controls 67.31% of the total shares
of Norte Grande S.A. (“Norte Grande”); Norte Grande controls 76.34% of the total shares of Sociedad de Inversiones
Oro Blanco S.A. (“Oro Blanco”); Oro Blanco controls 88.62% of the total shares of Pampa Calichera, and Potasios controls
10.07% of Pampa Calichera; Pampa Calichera and the related companies Global Mining and Potasios ultimately control 31.97% of SQM’s
total common shares. The stake held by Mr. Ponce and related parties as of December 31, 2011 and 2010 was, respectively, 31.97%
and 31.12% of SQM’s total shares.



Pampa Group and Kowa Group – which
was the owner, directly and indirectly, of 2.08% of the total shares of SQM as of December 31, 2012, entered into a joint Performance
Agreement on December 21, 2006, that allows them to currently control 34.05% of the total shares of SQM. As a result of this Agreement,
the group lead by Mr. Julio Ponce L. indirectly controls 34.05% of the total shares of SQM and is, therefore, the Controller Group
of SQM.



No director or executive officer other
than Mr. Ponce owns more than 1% of each share class of the Company as of December 31, 2012. See Item 6. Directors, Senior Management
and Employees—footnote (1).  Individual ownership has not been publicly disclosed.



We do not grant stock options or other
arrangements involving the capital of SQM to directors, managers or employees.



The following table shows the combined
stakes that the Controller Group held in SQM as of:



|                  |  | % Beneficial ownership |      
|----------------- |  | ---------------------- | -----
|December 31, 2012 |  |                        | 34.05
|December 31, 2011 |  |                        | 34.05
|December 31, 2010 |  |                        | 33.20



Separately from any ownership interest
held by the Controller Group, as of December 31, 2012, SQM has been informed that the Canadian company Potash Corporation of Saskatchewan
Inc. (“PCS”) indirectly controls 100% of the shares of Inversiones el Boldo Limitada and 100% of the shares of Inversiones
RAC Limitada. Through these companies PCS owns 32% of the total shares of SQM.  For additional information regarding share
ownership of the Company, see Item 7. below.

89









ITEM
7.MAJOR SHAREHOLDERS AND RELATED PARTY TRANSACTIONS



7.A. Major
Shareholders

The following table sets forth certain
information concerning beneficial ownership of the Series A and Series B common shares of SQM as of December 31, 2012 with respect
to each shareholder known by us to beneficially own more than 5% of the outstanding Series A or Series B common shares. The following
information is derived from our records and reports filed by certain of the persons named below with the SVS and the Santiago Stock
Exchange.



|Shareholder                    |  | Number of series A shares beneficially owned |            |  | % series A shares |  |       | Number of series B shares beneficially owned |  |  | % series B shares |  |  | % total shares |      
|------------------------------ |  | -------------------------------------------- | ---------- |  | ----------------- |  | ----- | -------------------------------------------- |  |  | ----------------- |  |  | -------------- | -----
|Inversiones El Boldo Ltda.(1)  |  |                                              | 44,751,196 |  |                   |  | 31.33 | %                                            |  |  | 17,571,676        |  |  |                | 14.60
|Pampa Calichera(2)(3)          |  |                                              | 44,558,830 |  |                   |  | 31.20 | %                                            |  |  | 9,003,799         |  |  |                | 7.48 
|The Bank of New York           |  |                                              | —          |  |                   |  | —     |                                              |  |  | 46,559,106        |  |  |                | 38.68
|Inversiones RAC Chile Ltda.(1) |  |                                              | 19,200,242 |  |                   |  | 13.44 | %                                            |  |  | 2,699,773         |  |  |                | 2.24 
|Potasios de Chile S.A.(3)      |  |                                              | 17,919,147 |  |                   |  | 12.55 | %                                            |  |  | —                 |  |  |                | —    



| | (1) | Potash Corporation of Saskatchewan (“PCS”) owns 100% of Inversiones El Boldo Limitada
and 100% of Inversiones RAC Ltda., and, accordingly, is the beneficial owner of 84,222,887 of SQM’s shares, or 32.00% of
SQM’s total shares. The stake held by PCS as of December 31, 2011 and 2010 was, respectively, 32.00% and 32.00% of SQM’s
total shares.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (2) | Pampa Calichera is a publicly held corporation whose shares are traded on the Santiago Stock Exchange.
Originally, the shareholders of Pampa Calichera were employees of SQM. Pampa Calichera was formed to hold the capital stock of
SQM contributed by such employees or later acquired in the open market.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (3) | SQM has been informed that Mr. Julio Ponce L., Chairman of the Board of SQM, and related persons
beneficially own through Pampa Calichera, Potasios de Chile S.A. (“Potasios”) and Inversiones Global Mining (Chile)
Ltda. (“Global Mining”), a total of 84,135,095 shares, constituting 31.97% of SQM’s total shares, of which 30.50%
is held directly and 1.47% is in the custody of various brokers, including LarrainVial, Euro America, Tanner, and BCI Corredora.
SQM has been advised that this beneficial ownership is based on the following: Mr. Ponce and related persons control 100% of the
total shares of Inversiones SQYA S.A. (“SQYA”); SQYA controls 67.31% of the total shares of Norte Grande S.A. (“Norte
Grande”); Norte Grande controls 76.34% of the total shares of Sociedad de Inversiones Oro Blanco S.A. (“Oro Blanco”);
Oro Blanco controls 88.62% of the total shares of Pampa Calichera, and Potasios controls 10.07% of Pampa Calichera; Pampa Calichera
and the related companies Global Mining and Potasios ultimately control 31.97% of SQM’s total common shares. The stake held
by Mr. Ponce and related parties as of December 31, 2011 and 2010 was, respectively, 31.97% and 31.12% of SQM’s total shares.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



On December 21, 2006, Pampa Calichera and
Kowa executed a joint performance agreement that allows them to become the “controller group” of the Company, as such
term is defined under Chilean law. We have been informed that, as of December 31, 2012, Mr. Julio Ponce L. and related persons
beneficially owned, through Pampa Calichera and certain other companies, 31.97% of the shares of the Company. As of December 31,
2012, Kowa owned, directly and indirectly, 2.08% of the shares of the Company. As of December 31, 2012, pursuant to the joint performance
agreement, the “controller group” led by Mr. Julio Ponce L. owned 34.05% of the total shares of the Company.



90







Series A and Series B common shares have
the same economic rights (i.e., both series are entitled to share equally in any dividends declared on the outstanding stock) and
voting rights at any shareholders meeting, whether ordinary or extraordinary, with the exception of the election of the Board,
in which the Series A shareholders elect seven members and the Series B shareholders elect one member. Additionally, Series B common
shares cannot exceed 50% of SQM’s issued and outstanding stock; shareholders of at least 5% of this series may call an ordinary
or extraordinary shareholders’ meeting; and the director elected by this series may request an extraordinary Board meeting
without the authorization of the Chairman of the Board. These conditions will remain in effect until 2043. Under our by-laws, the
maximum individual voting power personally and/or in representation of other shareholders per series is limited to 37.5% of the
subscribed shares of each series with voting rights and 32% of the total subscribed shares with voting rights. To calculate these
percentages, shares that belong to the voting shareholder’s related persons must be added. In addition, the director elected
by the Series B shareholders cannot vote in the election of the Chairman of the Board if a tie vote has occurred in the prior voting
process. As of December 31, 2012, there are 142,819,552 Series A common shares and 120,376,972 Series B common shares outstanding.



7.B. Related Party Transactions

Title XVI of the Chilean Corporations Act
regulates transactions with related parties for publicly held corporations and its related parties.



Articles 146 to 149 of the Chilean Corporations
Act requires that our transactions with related parties (i) have as their purpose to contribute to SQM’s interests (ii) be
on price, terms and conditions similar to those customarily prevailing in the market at the time of their approval and (iii) satisfy
the requirements and procedures established by the Chilean Corporations Act. Violation of such articles may also result in administrative
or criminal sanctions and civil liability may be sought by SQM, shareholders or interested third parties that suffer losses as
a result of such violations.



In addition, article 89 of the Chilean
Corporations Act requires that transactions between affiliates, subsidiaries or related parties of a sociedad anónima cerrada,
such as some of SQM’s main affiliates and subsidiaries, shall also be on terms similar to those customarily prevailing in
the market. Directors and executive officers of companies that violate article 89 are liable for losses resulting from such violations.



With
respect to SQM, operations with related parties include negotiations, proceedings, contracts or operations involving SQM and its
controller, directors, managers and officers, and their spouses and relatives, and other companies and persons connected to the
abovementioned parties or mentioned in the by-laws or by the Directors’ Committee. Such operations may only be carried out
if (i) their objective is to contribute to SQM’s interests and if their price, terms and conditions conform to prevailing
market prices, terms and conditions at the time of their approval and (ii) they satisfy the requirements and procedures established
by the Chilean Corporations Act. Such requirements include, among others:



·   that
the operation be informed to the Directors’ Committee and to the Board of Directors prior to its execution;

·   that
the Board of Directors, excluding any Directors involved in the operation, approves the operation with an absolute majority of
its members, or, if an absolute majority is not feasible, with a unanimous vote by the Directors not involved in the transaction,
or, if neither of these options is available, that an extraordinary shareholders’ meeting be held and that shareholders representing
2/3 of the outstanding shares with voting rights approve the operation. In the latter case, prior to the meeting, the shareholders
must be provided with a report by an independent evaluator and with statements by the directors as to whether or not such operation
is in SQM’s interest;

·   that
the grounds for the decision and for the exclusion be recorded in the respective minutes of the Board meeting; and



91







·   that
the agreement and the names of the directors who approved the same be reported at the next shareholders’ meeting. Infractions
will not affect the validity of the operation but they will grant SQM or its shareholders the right to demand that the related
party committing such infraction refund the amount equivalent to the benefits received by such party in the operation to SQM, and
that such party indemnify for any corresponding damages.



However, the Board of Directors may authorize
the following operations with related parties to be carried out without following such requirements and procedures, as long as
such authorization is obtained in advance: (a) operations wherein the amount of the transaction is not significant or (b) operations
that, according to the general policies on customary practices determined by the Board of Directors, are considered normal based
on SQM’s business activities or (c) operations carried out between legal entities wherein SQM holds at least a 95% ownership
interest in the counterpart.



We believe that we have complied with the
applicable requirements of the referred articles in all transactions with related parties. Accounts receivable from and payable
to related companies are stated in U.S. dollars and accrue no interest. Other than the above, transactions are made under terms
and conditions that are similar to those offered to unrelated third parties. We further believe that we could obtain from third
parties all raw materials now being provided by related parties that are not our affiliates. The provision of such raw materials
by new suppliers could initially entail additional expenses.



In each case, terms and conditions vary
depending on the transaction pursuant to which it was generated.





The Company regularly enters into business arrangements with
related parties, principally its joint ventures and associates, which are described in Note 8.2 and 8.3 to the Consolidated Financial
Statements (pages F-57 - F-61).





7.C. For
additional information concerning our transactions with affiliates and other related parties, see Note 8 of the Consolidated Financial
Statements. Interests of Experts and Counsel



Not applicable.



ITEM
8.FINANCIAL INFORMATION



8.A.
Consolidated Statements and Other Financial Information



8.A.1 See
Item 18. Financial Statements



8.A.2 See
Item 18. Financial Statements.



8.A.3 See
Item 18. Financial Statements—Reports of Independent Registered Public Accounting Firm.



8.A.4 Not
applicable.



8.A.5 Not
applicable.



8.A.6 Export Sales



We derive most of our revenues from sales
outside of Chile. The distribution of sales presented below reflects the location of the Company’s subsidiaries making such
sales and does not necessarily reflect the final destination of the products sold.



92









The following is the composition of the
consolidated sales for the periods ending on December 31:



|US$                |  | 2012 |           |   | 2011 |  |           | 2010 | 
|------------------ |  | ---- | --------- | - | ---- |  | --------- | ---- | 
|                   |  |      |           |   |      |  |           |      | 
|Foreign sales      |  |      | 2,159,739 |   |      |  | 1,897,776 |      | 
|Total sales        |  |      | 2,429,160 |   |      |  | 2,145,286 |      | 
|                   |  |      |           |   |      |  |           |      | 
|% of foreign sales |  |      | 88.91     | % |      |  | 88.46     | %    | 



8.A.7 Legal Proceedings



In October 2010, the City of Pomona, California,
named Sociedad Química y Minera de Chile S.A. (SQM) and SQM North America Corporation (SQMNA) as defendants in an action
filed in the California Superior Court for Los Angeles County. In this matter the plaintiff seeks damages for alleged groundwater
contamination from the use of defendant’s fertilizer products. This case has been dismissed by the trial court and is currently
on appeal by the plaintiff to the Ninth Circuit Court of Appeals.



In October 2010, the City of Lindsay, California,
named Sociedad Química y Minera de Chile S.A. (SQM) and SQM North America Corporation (SQMNA) as defendants in an action
filed in the California Superior Court for Tulare County. In this matter the plaintiff seeks damages for alleged groundwater contamination
from the use of defendant’s fertilizer products. This case is pending in the trial court subject to the resolution of the
Ninth Circuit Court of Appeals in the City of Pomona’s action.



SQM has not been served in either action.
SQMNA and SQM (if it is legally served) intend to vigorously defend both actions.



We are party to various other lawsuits
arising in the ordinary course of business. For more information on these lawsuits, see Note 16.1 to our Consolidated Financial
Statements. Also see Item 3.D. Risk Factors—Risks Relating to our Business—Lawsuits and arbitrations could adversely
impact us.



8.A.8. Dividend Policy



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 on an IFRS basis), unless and except to the extent
it has a deficit in retained earnings.



The dividend policy for 2012 established
that SQM must distribute and pay in favor of its shareholders, as a final dividend, the amount in Chilean pesos equivalent to 50%
of the distributable income for 2011. At the Annual Shareholders’ Meeting held on April 26, 2012, SQM’s shareholders
approved a payment of a definitive dividend in the amount of US$1.03679 per share. From this definitive dividend, the interim dividend
amount of US$0.73329 per share was deducted. Payments for this dividend were made on May 09, 2012.



93







At the Annual Shareholders’ Meeting
held on April 26, 2012, shareholders also agreed to pay and distribute a dividend equal to 50% of the distributable income corresponding
to 2012. For this purpose, distributable net income includes income for the year included in the income statement item “Profit
(Loss) Attributable to Owners of the Parent" less significant changes in the fair value of assets and liabilities that are
not realized - and which correspond to earnings net of taxes that have been generated in relation to the acquisition of companies.
Also, at the same meeting, shareholders agreed to the payment and distribution of an interim dividend. The interim dividend was
paid on December 05, 2012 in the amount of US$0.94986 per share.



We generally declare dividends in U.S.
dollars (but may declare dividends in Chilean Pesos) and pay such dividends in Chilean Pesos. When a dividend is declared in U.S.
dollars, the exchange rate to be used to convert the dividend into Chilean Pesos is decided by the shareholders at the meeting
that approves the dividend, which has usually been the Observed Exchange Rate on the date the dividend is declared. In the case
of interim dividends, the exchange rate to be used is the Observed Exchange Rate published five business days before the payment
date.



Although the Board of Directors has no
current plan to recommend a change in the dividend policy, the amount and timing for payment of dividends is subject to revision
from time to time, depending upon our then current level of sales, costs, cash flow and capital requirements, as well as market
conditions. Accordingly, there can be no assurance as to the amount or timing of declaration or payment of dividends in the future.
Any change in dividend policy would ordinarily be effective for dividends declared in the year following adoption of the change,
and a notice as to any such change of policy must be filed with Chilean regulatory authorities and would be publicly available
information.



Dividends



Each Series A Share and Series B Share
is entitled to share equally in any dividends declared on the outstanding capital stock of SQM.



The following table sets forth the U.S.
dollar equivalent of dividends per share and per ADS paid in each of the years indicated, based on the Observed Exchange Rate for
the date on which the dividend was declared.





|Dividends                      |  | Per Share |      |  | Per ADS(1) | 
|------------------------------ |  | --------- | ---- |  | ---------- | 
|Declared for the business year |  | Paid in   |      |  | Ch$        | 
|                               |  |           |      |  |            | 
|2007                           |  |           | 2008 |  |            | 
|2008 (interim)                 |  |           | 2008 |  |            | 
|2008                           |  |           | 2009 |  |            | 
|2009 (interim)                 |  |           | 2009 |  |            | 
|2009                           |  |           | 2010 |  |            | 
|2010 (interim)                 |  |           | 2010 |  |            | 
|2010                           |  |           | 2011 |  |            | 
|2011 (interim)                 |  |           | 2011 |  |            | 
|2011                           |  |           | 2012 |  |            | 
|2012 (interim)                 |  |           | 2012 |  |            | 



| | (1) | The Series A ADRs were delisted from the New York Stock
Exchange on March 27, 2008. The ratio of ordinary shares to Series B ADSs changed from 10:1 to 1:1 on March 28, 2008. The calculation
in the table for all periods is based on the ratio of 1:1.
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Dividends payable to holders of ADRs will
be paid net of conversion expenses of the Depositary and will be subject to Chilean withholding tax, currently imposed at the rate
of 35% (subject to credits in certain cases).



94







As a general requirement, a shareholder
who is not a resident of Chile must register as a foreign investor under one of the foreign investment regimes contemplated by
Chilean law to have dividends, sale proceeds or other amounts with respect to its shares remitted outside Chile through the Formal
Exchange Market. Under the Foreign Investment Contract, the Depositary, on behalf of ADR holders, will be granted access to the
Formal Exchange Market to convert cash dividends from Chilean Pesos to U.S. dollars and to pay such U.S. dollars to ADR holders
outside Chile net of taxes, and no separate registration of ADR holders is required.



8.B. Significant
Changes



No significant change has occurred since
the date of the financial statements set forth in Item 18.



ITEM
9.THE OFFER AND LISTING



9.A. Offer and Listing Details



Price History



The table below sets forth, for the periods
indicated, the reported high and low closing prices for our shares on the Santiago Stock Exchange and the high and low closing
prices of the ADRs as reported by the NYSE, as the two main exchanges on which our shares are traded. On March 27, 2008, the Company
voluntarily delisted its series A ADRs from the New York Stock Exchange. In addition, on March 28, 2008, a ratio change for the
Company’s series B ADSs entered into effect, modifying the ratio of ordinary shares to series B ADSs from the previous ratio
of 10:1 to a new ratio of 1:1.



| | (a) | Last 5 years
| | --- | ------------



|     |  | Santiago Stock Exchange |        |  | NYSE     | 
|---- |  | ----------------------- | ------ |  | -------- | 
|     |  | Per Share (1)           |        |  | Per ADR  | 
|     |  | Series A                |        |  | Series B | 
|     |  | High                    |        |  | Low      | 
|     |  | Ch$                     |        |  | Ch$      | 
|2008 |  |                         | 29,300 |  |          | 
|2009 |  |                         | 22,000 |  |          | 
|2010 |  |                         | 27,000 |  |          | 
|2011 |  |                         | 30,000 |  |          | 
|2012 |  |                         | 30,050 |  |          | 



| | (b) | Last 8 quarters
| | --- | ---------------



|               |  | Santiago Stock Exchange |        |  | NYSE     | 
|-------------- |  | ----------------------- | ------ |  | -------- | 
|               |  | Per Share (1)           |        |  | Per ADR  | 
|               |  | Series A                |        |  | Series B | 
|               |  | High                    |        |  | Low      | 
|               |  | Ch$                     |        |  | Ch$      | 
|               |  |                         |        |  |          | 
|2011           |  |                         |        |  |          | 
|First quarter  |  |                         | 28,200 |  |          | 
|Second quarter |  |                         | 29,000 |  |          | 
|Third quarter  |  |                         | 30,000 |  |          | 
|Fourth quarter |  |                         | 29,000 |  |          | 



95







|2012           |  |  |        |  |  |  |        |  |  |  |        |  |  |  |        |  |  |  |  |  |  |  |  |  |  |  |       |  |  |  |       | 
|-------------- |  |  | ------ |  |  |  | ------ |  |  |  | ------ |  |  |  | ------ |  |  |  |  |  |  |  |  |  |  |  | ----- |  |  |  | ----- | 
|First quarter  |  |  | 27,690 |  |  |  | 26,000 |  |  |  | 29,138 |  |  |  | 27,603 |  |  |  |  |  |  |  |  |  |  |  | 60.50 |  |  |  | 54.49 | 
|Second quarter |  |  | 28,000 |  |  |  | 27,000 |  |  |  | 28,869 |  |  |  | 26,267 |  |  |  |  |  |  |  |  |  |  |  | 59.74 |  |  |  | 51.12 | 
|Third quarter  |  |  | 30,050 |  |  |  | 27,400 |  |  |  | 30,475 |  |  |  | 27,739 |  |  |  |  |  |  |  |  |  |  |  | 65.09 |  |  |  | 56.09 | 
|Fourth quarter |  |  | 30,020 |  |  |  | 27,300 |  |  |  | 29,352 |  |  |  | 26,155 |  |  |  |  |  |  |  |  |  |  |  | 62.05 |  |  |  | 55.10 | 



| | (c) | Last 6 months
| | --- | -------------



|              |  | Santiago Stock Exchange |        |  | NYSE     | 
|------------- |  | ----------------------- | ------ |  | -------- | 
|              |  | Per Share (1)           |        |  | Per ADR  | 
|              |  | Series A                |        |  | Series B | 
|              |  | High                    |        |  | Low      | 
|              |  | Ch$                     |        |  | Ch$      | 
|October 2012  |  |                         | 30,020 |  |          | 
|November 2012 |  |                         | 30,000 |  |          | 
|December 2012 |  |                         | 27,400 |  |          | 
|January 2013  |  |                         | 27,350 |  |          | 
|February 2013 |  |                         | 27,350 |  |          | 
|March 2013    |  |                         | 25,990 |  |          | 



| | (1) | Pesos per share of Common Stock reflect nominal price
at trade date.
| | --- | --------------------------------------------------------------------

| | (2) | Series A shares started trading on the New York Stock
Exchange on April 9, 1999.
| | --- | --------------------------------------------------------------------------------

| | (3) | Series B shares began trading on the New York Stock Exchange
on September 20, 1993. Historical prices have been restated to reflect the change in the ratio of local shares to ADSs from 10:1
to 1:1, effective March 28, 2008.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



As of December 31, 2012, there were 46,559,106
Series B ADRs outstanding. As of December 31, 2012, such ADRs represented approximately 17.69% of the total number of issued and
outstanding shares of our Company.



9.BPlan
Of Distribution



Not Applicable.



9.CMarkets



The Series A shares and the Series B shares
are currently traded on the Santiago Stock Exchange, the Bolsa Electrónica de Chile Bolsa de Valores S.A., (the Electronic
Stock Exchange), and the Bolsa de Corredores Bolsa de Valores S.A., (the Valparaíso Stock Exchange). As of December 31,
2007, each series was also traded on the New York Stock Exchange in the form of ADRs, where each ADR represented 10 underlying
shares of the corresponding series. On February 26, 2008, the Company’s Board of Directors voted to voluntarily delist the
Series A ADRs from the New York Stock Exchange, due to the low trading volume of those shares. On the same date, the Board of Directors
also approved a ratio change for the Series B ADSs, modifying the previous ratio of 10 ordinary shares to 1 ADS to a new ratio
of 1:1. The Series A ADRs were delisted on March 27, 2008, and the Series B ratio change entered into effect on March 28, 2008.
Prior to their delisting, the ADRs representing Series A shares traded on the NYSE beginning on April 9, 1999. The ADRs representing
Series B shares have traded on the NYSE since September 20, 1993. The depositary bank for these ADRs is the Bank of New York
Mellon.



96







9.D	Selling
Shareholders



Not applicable.



9.E	Dilution



Not applicable.



9.F	Expenses
Of The Issue



Not applicable.



ITEM
10.ADDITIONAL INFORMATION



10.A. Share
Capital

Not applicable.



10.B. Memorandum
and Articles of Association

SQM S.A., headquartered at El Trovador
No. 4285, 6th Floor, Santiago, Chile, is an open stock corporation -sociedad anónima abierta- organized under the
laws of the Republic of Chile. The Company was constituted by public deed issued on June 17, 1968 by Mr. Sergio Rodríguez
Garcés, Notary Public of Santiago. 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 Business Registry of Santiago, on page 4,537 No. 1,992.



Corporate purposes



Our main purposes, which appear in article
4 of our By-laws, are to: (a) perform all kinds of chemical or mining activities and businesses and, among others, those
related to researching, prospecting, extracting, producing, working, processing, purchasing, disposing of, and commercializing
properties, as applicable, of all metallic and non-metallic and fossil mining substances and elements of any type or nature, to
be obtained from them or from one or more concessions or mining deposits, and in their natural or converted state, or transformed
into different raw materials or manufactured or partially manufactured products, and of all rights and properties thereon; (b)
manufacture, produce, work, purchase, transfer ownership, import, export, distribute, transport, and commercialize in any way,
all kinds of fertilizers, components, raw materials, chemical, mining, agricultural, and industrial products, and their by-products;
(c) generate, produce, distribute, purchase, transfer ownership, and commercialize, in any way, all kinds of electrical,
thermal, geothermic or other type of power, and hydric resources or water rights in general; (d) request, manifest, claim,
constitute, explore, work, lease, transfer ownership, and purchase, in any way, all kinds of mining concessions; (e) purchase,
transfer ownership, and administer, in any way, any kind of telecommunications, railroads, ships, ports, and any means of transport,
and represent and manage shipping companies, common carriers by water, airlines, and carries in general; (f)manufacture,
produce, commercialize, maintain, repair, assemble, construct, disassemble, purchase and transfer ownership, and in any way, any
kind of electromechanical structure, and substructure in general, components, parts, spares, or parts of equipment, and machines,
and execute, develop, advice, and commercialize, any kind of electromechanical or smelting activities; (g) purchase, transfer
ownership, lease, and commercialize any kind of agro industrial and farm forestry activities, in any way (h) purchase, transfer
ownership, lease, and commercialize, in any way, any kind of urban or rural real estate; (i) render any kind of health services
and manage hospitals, private clinics, or similar facilities; (j) construct, maintain, purchase, transfer ownership, and
manage, in any way, any kind of roads, tunnels, bridges, water supply systems, and other required infrastructure works, without
any limitation, regardless of whether they may be public or private, among others, to participate in bids and enter into any kind
of contracts, and to be the legal owner of the applicable concessions; and (k) purchase, transfer ownership, and commercialize,
in any way, any kind of intangible properties such as stocks, bonds, debentures, financial assets, commercial papers, shares or
rights in corporations, and any kind of bearer securities or instruments, and to administer such investments, acting always within
the Investment and Financing Policies approved by the applicable General Shareholders Meeting. We may comply with the foregoing
by acting ourselves or through or with other different legal entities or natural persons, within the country or abroad, with properties
of our own or owned by third parties, and additionally, in the ways and territories, and with the aforementioned properties and
purposes, we may also construct and operate industrial or agricultural facilities or installations; constitute, administer, purchase,
transfer ownership, dissolve, liquidate, transform, modify, or form part of partnerships, institutions, foundations, corporations,
or associations of any kind or nature; perform all actions, enter into all contracts, and incur in all obligations convenient or
necessary for the foregoing; perform any business or activity related to our properties, assets, or patrimony, or with that of
our affiliates, associated companies, or related companies; and render financial, commercial, technical, legal, auditing, administrative,
advisory, and other pertinent services.



97







Directors



As stated in article 9 of the Company's
By-laws, the Company has 8 Directors. One of the Directors must be “independent” as such term is defined in article
50 bis of Law No. 18,046. Moreover, the possession of shares is not a condition necessary to become a Director of the Company.



As stated in article 10 of the Company's
By-laws, the term of the Directors is of three years and they can be reelected indefinitely; thus, there is no age limit for their
retirement.



The Company's By-laws, in articles 16 and
16 bis, essentially establish that the transactions in which a Director has a material interest must comply with the provisions
set forth in articles 136 and 146 to 149 of Law No. 18,046 and the applicable regulations of such Law.



The Board
of Directors duties are remunerated, as stated in article 17 of the Company's By-laws, and the amount of that compensation is fixed
yearly by the Ordinary Shareholders’ Meeting. Therefore, Directors can neither determine nor modify their compensation.



Directors
cannot authorize Company loans on their behalf.



The Board
of Directors must provide shareholders and the public with sufficient, reliable and timely information pertaining to the Company’s
legal, economic and financial situation, as required by the Law or the Chilean Superintendency of Securities and Insurance. The
Board of Directors must adopt the appropriate measures in order to avoid the disclosure of such information to persons other than
those persons who should possess such information as a result of their title, position or activity within the Company before such
information is disclosed to shareholders and the public. The Board of Directors must treat business dealings and other information
about the Company as confidential until such information is officially disclosed. No Director may take advantage of the knowledge
about commercial opportunities that he has obtained through his position as Director.



Independent Directors and Directors
Committee



According
to Chilean Law, SQM must appoint at least one Independent Director and a Directors’ Committee, due to the fact that (a) the
Company has a market capitalization greater than or equal to UF 1,500,000 and (b) at least 12.5% of the Company’s shares
with voting rights are held by shareholders who, on an individual basis, control or possess less than 10% of such shares.



98







Persons
who have not been involved in any of the circumstances described in the Law at any time during the preceding 18 months are considered
independent. Candidates for the position of Independent Director must be proposed by shareholders representing 1% or more of the
Company’s shares, at least 10 days prior to the date of the Shareholders’ Meeting that has been called in order to
elect the Directors. No less than two days prior to the respective Shareholders’ Meeting, the candidate must provide the
Chief Executive Officer with a sworn statement indicating that he: (a) accepts his candidacy for the position of Independent Director
(b) does not meet any of the conditions that would prevent him from being the Independent Director (c) is not related to the Company,
the other companies of the group to which the Company belongs, the controller of the Company, or any of the Company’s officers
in such a way that would deprive a sensible person of a reasonable degree of autonomy, interfere with his ability to perform his
duties objectively and effectively, generate a potential conflict of interest, or interfere with his independent judgment, and
(d) assumes the commitment to remain independent as long as he holds the position of Director.



The Directors’
Committee shall have the following powers and duties: (a) to examine the reports of the external auditors, the balance sheet and
other financial statements presented by the Company’s managers or liquidators to its shareholders and issue an opinion about
the same prior to their submission for the approval of the shareholders (b) to propose to the Board of Directors the external auditors
and risk rating agencies to be proposed to the shareholders at the respective Shareholders’ Meeting. In the event that an
agreement cannot be reached, the Board of Directors shall formulate its own suggestion, and both options shall be submitted for
shareholder consideration at such Shareholders’ Meeting (c) to examine the information relating to operations referred to
in articles 146 to 149 of Law No. 18,046 and to prepare a report about such operations. A copy of such report shall be sent to
the Board of Directors, and such report must be read at the Board Meeting called for the purpose of approving or rejecting the
respective operation or operations (d) to examine the remuneration system and compensation plans for the Company’s management,
officers and employees (e) to prepare an annual report on its activities, including its main recommendations to the shareholders
(f) to inform the Board of Directors about whether or not it is advisable to hire the external audit firm to provide non-audit
services where the audit firm is not prohibited from providing such services because the nature of the same could pose a threat
to the audit firm’s independence, and (g) any other issues indicated in the Company’s by-laws or authorized by a Shareholders’
Meeting or the Board of Directors.



The Directors’
Committee shall be comprised of three members, with at least one independent member. In the event that more than three Directors
have the right to form part of the Committee, these same Directors shall unanimously determine who shall make up the Committee.
In the event that an agreement cannot be reached, the Directors who were elected with a greater percentage of votes by shareholders
controlling or possessing less than 10% of the Company’s shares shall be given priority. If there is only one Independent
Director, this Director shall name the other members of the Committee among the other Directors who are not independent. Such other
members of the Committee shall have all of the rights associated with such position. The members of the Committee shall be compensated
for their role. The amount of their remuneration shall be set annually at the General Shareholders’ Meeting, and it may not
be less than the remuneration set for the Company Directors, plus an additional 1/3 of that amount. The General Shareholders’
Meeting shall determine a budget for the expenses of the Committee and its advisors. Such budget may not be less than the sum of
the annual remunerations of the Committee members. The Committee may need to hire professional advisory services in order to carry
out its duties in accordance with the abovementioned budget. The proposals made by the Committee to the Board of Directors that
are not accepted by the latter must be reported to the Shareholders’ Meeting prior to the vote by shareholders on the corresponding
matter or matters. In addition to the responsibilities that are associated with the position of Director, the members of the Committee
are jointly and severally liable for any damages they cause in performing their duties as such to the shareholders and to the Company.



99







Shares



Dividends
are annually distributed to the Series A and Series B shareholders of record on the fifth business day prior to the date for payment
of the dividends. The By-laws do not specify a time limit after which dividend entitlement elapses but Chilean regulations establish
that after 5 years, unclaimed dividends are to be donated to the Fire Department.



Article
5 of the Company's By-laws establishes that Series B shares may in no case exceed fifty percent of the issued, outstanding and
paid shares of SQM Series B shares have a restricted right to vote as they can only elect one Director of the Company, regardless
of their capital stock's share. Series B shares have the right to call for an Ordinary or Extraordinary Shareholders’ Meeting
when the shareholders of at least 5% of the Series B issued shares request so and for an Extraordinary Board of Directors Meeting
without the Chairman's authorization when it is requested by the Director elected by the shareholders of the Series B shares. Series
A shares have the option to exclude the Director elected by Series B shareholders from the voting process in which the Chairman
of the Board is to be elected, if there is a tie in the first voting process. However, articles 31 and 31 bis of the Company’s
By-laws establish that in General Shareholders’ Meetings each shareholder will have a right to one vote for each share he
owns or represents and (a) that no shareholder will have the right to vote for himself or on behalf of other shareholders of the
same Series A or Series B shares representing more than 37.5% of the total outstanding shares with right to vote of each Series
and (b) that no shareholder will have the right to vote for himself or on behalf of other shareholders representing more than 32%
of the total outstanding shares with a right to vote. In calculating a single shareholder's ownership of Series A or B shares,
the shareholder's stock and those pertaining to third parties related to them are to be added.



Article
5 bis of the Company's By-laws establishes that no person may directly or by means of related third persons concentrate more than
32% of the Company’s total shares with right to vote.



Each
Series A share and Series B share is entitled to share equally in the Company's profits, i.e., they have the same rights on any
dividends declared on the outstanding shares of SQM.



The Company
By-laws do not contain any provision relating to (a) redemption provisions (b) sinking funds or (c) liability to capital calls
by the Company.



As established
in article 103 of Law No. 18,046, a company subject to the supervision of the Superintendency of Securities and Insurance (SVS)
may be liquidated in the following cases:



(a) Expiration
of the duration term, if any, as established in its By-laws;

(b) All
the shares end up in the possession of one individual for more than ten continuous days;

(c) By
agreement of an Extraordinary Shareholders Meeting;

(d) By
abolition, pursuant to applicable laws, of the decree that authorized its existence;

(e) Any
other reason contemplated in its By-laws.



Article
40 of the Company's By-laws states that in the event of liquidation, the Shareholders’ Meeting will appoint a three-member
receiver committee that will have the authority to carry out the liquidation process. Any surplus will be distributed equally among
the shareholders.



The only
way to change the rights of the holders of the SQM shares is by modifying its By-laws, which can only be carried out by an Extraordinary
Shareholders’ Meeting, as set forth in article 28 of the Company By-laws.



100







Shareholders’ meetings



Article 29 of the Company's By-laws states
that the call to a Shareholders’ Meeting, either Ordinary or Extraordinary, will be by means of a highlighted public notice
that will be published at least three times, and on different days, in the newspaper of the legal address determined by the Shareholders’
Meeting, and in the way and under the conditions indicated by the regulations. Additionally, a notice will be sent by mail to each
shareholder at least fifteen days prior to the date of the Meeting, which shall include a reference of the matters to be addressed
at the meeting. However, those meetings with the full attendance of the shares with right to vote may be legally held, even if
the foregoing formal notice requirements are not met. Notice of any Shareholders’ Meeting shall be delivered to the SVS at
least fifteen days in advance of such meeting.



Any holder of Series A and/or Series B
shares registered in the Company's shareholder registry on the fifth business day prior to the date of the meeting will have a
right to participate at that meeting



Article 67 of Law No. 18,046 provides that
decisions made at Extraordinary Shareholders’ Meeting on the following matters require the approval of 2/3 of the outstanding
shares with voting rights: (1) transformation or division of the Company and its merger with another company; (2) modification
of the Company’s term of duration, if any; (3) early dissolution of the Company; (4) change of the corporate domicile; (5)
capital decrease; (6) approval of contributions and estimation of non-cash assets; (7) modification of powers reserved for Shareholders
Meetings or limitations on powers of the Board of Directors; (8) reduction in the number of members of the Board of Directors;
(9) disposal of 50% or more of the Company’s assets; formulation or modification of any business plan exceeding the above
percentage; disposal of 50% or more of an asset belonging to a subsidiary that represents at least 20% of the Company’s assets
and disposal of shares of the referred subsidiary such that the parent company would lose its position as controller of the same;
(10) method in which profits are distributed; (11) granting of real or personal guarantees as sureties for third-party obligations
that exceed 50% of the Company assets, except for subsidiaries, in which case approval of the Board of Directors shall suffice;
(12) acquisition of own shares as set forth in articles 27A and 27B of the said law; (13) other matters indicated in the By-laws;
(14) amendment of the Company By-laws as a result of errors in the constitution process and amendments in the By-laws involving
one or more of the matters stated in the preceding numbers; (15) forced sale of shares carried out by the controller who would
acquire more than 95% of the Company’s shares in a tender offer, and (16) approval or ratification of proceedings or contracts
with related parties in accordance with the provisions of articles 44 and 147 of Law No. 18,046.



Amendments
to the By-laws that are intended to create, modify, defer or suspend preferential rights shall be approved by 2/3 of the shares
of the affected Series.



The transformation
of the Company, the merger of the same, the disposal of assets referred to in number (9) above, the constitution of guarantees
set forth in number (11) above, the constitution of preferences or the increase, postponement or decrease of the existing preferences,
the reparation of formal nullities incurred in the By-laws and the possession of more than 95% of the Company’s shares and
other matters contemplated in the Law or in the By-laws, confer “withdrawal rights”.



Foreign shareholders



There
exists no restriction on ownership or share concentration, or limiting the exercise of the related right to vote, by local or foreign
shareholders other than those discussed under Item 2.B. Memorandum and Articles of Association -Shares above.



101







Change in control



The Company By-laws provide that no shareholder
may hold more than 32% of the Company’s shares, unless the By-laws are modified at an Extraordinary Shareholders’ Meeting.
Moreover, on December 12, 2000, the Chilean Government published the Ley de Oferta Pública de Acciones (“Public Share
Offering Law”) or (OPA law) that seeks to protect the interests of minority shareholders of open stock corporations in transactions
involving a change in control, by requiring that the potential new controller purchase the shares owned by the remaining shareholders
either in total or pro rata. The law applies to those transactions in which the controlling party would receive a material premium
price compared with the price that would be received by the minority shareholders.



There are three conditions that would make
it mandatory to operate under the OPA law:

| | 1) | When an investor wants to take control of a company's stock.
| | -- | ------------------------------------------------------------

| | 2) | When a controlling shareholder holds two-thirds of the company's stock. If such shareholder buys
one more share, it will be mandatory to offer to acquire the rest of the outstanding stock within 30 days of surpassing that threshold.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | 3) | When an investor wants to take control of a corporation, which, in turn, controls an open stock
corporation that represents 75% or more of the consolidated assets of the former corporation.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Parties interested in taking control of
a company must (i) notify the company of such intention in writing, and notify its controllers, the companies controlled by it,
the SVS and the markets where its stocks are traded and (ii) publish a highlighted public notice in two newspapers of national
circulation at least 10 business days prior to the date of materialization of the OPA.



Disclosure of share ownership



The Company's By-laws do not provide for
a minimum threshold at which share ownership must be disclosed.



10.C. Material
Contracts

The following summarizes the terms and
conditions of the main contracts to which SQM or any subsidiary is a party:



| | · | On February 12, 1999, SQM S.A. entered into an Electrical Energy Supply contract with Electroandina
S.A. This contract allowed for two three-year renewal options, at the option of SQM. The two options were exercised. As a result,
the contract extends through March 16, 2016. Early termination of the contract is subject to payment of non-amortized investments.
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | On March 21, 1997, SQM Salar S.A. entered into an Electricity Supply agreement with Norgener S.A.
The term of this contract extends through March 20, 2017, and early termination is subject to penalties.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | · | On January 13, 1998, SQM Nitratos S.A. entered into an Electrical Energy Supply agreement with
Norgener S.A. The term of this contract extends through January 31, 2013. Early termination of the contract is subject to payment
of non-amortized investments.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



102







| | · | On March 30, 2012, SQM S.A. entered into an Electrical Energy Supply agreement with Norgener S.A. 
The term of this contract extends through December 31, 2030.  Early termination of the contract is subject to an agreement
between both parties, or in case of Force-Majeure extended for more than 12 months.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



In addition, the Company, during the normal
course of business, has entered into different contracts, some of which have been described herein, related to its production,
commercial and legal operations. We believe all of these contracts are standard for this type of industry, and none of them is
expected to have a material effect on the Company's results of operations.



10.D. Exchange Controls

The Central Bank of Chile is responsible
for, among other things, monetary policies and exchange controls in Chile. Appropriate registration of a foreign investment in
Chile permits the investor access to the Formal Exchange Market. Foreign investments can be registered with the Foreign Investment
Committee under Decree Law No. 600 of 1974 or can be registered with the Central Bank of Chile under the Central Bank Act, Law
No 18,840 of October 1989. The Central Bank Act is an organic constitutional law requiring a "special majority" vote
of the Chilean Congress to be modified.



Our 1993, 1995 and 1998 capital increases
were carried out under and subject to the then current legal regulations, whose summary is hereafter included:



A 'Convención Capítulo
XXVI del Título I del Compendio de Normas de Cambios Internacionales' or Compendium of Foreign Exchange Regulations
of the Central Bank of Chile, "Foreign Investment Contract" was entered into and among the Central Bank of Chile, our
Company and the Depositary, pursuant to Article 47 of the Central Bank Act and to Chapter XXVI of the Compendium of Foreign Exchange
Regulations of the Central Bank of Chile, "Chapter XXVI", which addresses the issuance of ADRs by a Chilean company.
Absent the Foreign Investment Contract, under applicable Chilean exchange controls, investors would not be granted access to the
Formal Exchange Market for the purposes of converting from Chilean pesos to U.S. dollars and repatriating from Chile amounts received
in respect to deposited Series A or B shares or Series A or B shares withdrawn from deposit on surrender of ADRs (including amounts
received as cash dividends and proceeds from the sale in Chile of the underlying Series A and B shares and any rights arising therefrom).
The following is a summary of the material provisions contained in the Foreign Investment Contract. This summary does not purport
to be complete and is qualified in its entirety by reference to Chapter XXVI and the Foreign Investment Contract.



Under Chapter XXVI and the Foreign Investment
Contract, the Central Bank of Chile has agreed to grant to the Depositary, on behalf of ADR holders, and to any investor not residing
or not domiciled in Chile who withdraws Series A or Series B shares upon delivery of ADRs (such Series A and Series B shares being
referred to herein as "Withdrawn Shares") access to the Formal Exchange Market to convert Chilean pesos to U.S. dollars
(and remit such U.S. dollars outside of Chile) in respect of the Withdrawn Shares, including amounts received as (a) cash dividends,
(b) proceeds from the sale in Chile of Withdrawn Shares, or from shares distributed because of the liquidation, merger or consolidation
of the Company, subject to receipt by the Central Bank of Chile of a certificate from the holder of such shares (or from an institution
authorized by the Central Bank of Chile) that such holder's residence and domicile are outside Chile and a certificate from a Chilean
stock exchange (or from a brokerage or securities firm established in Chile) that such shares were sold on a Chilean Exchange,
(c) proceeds from the sale in Chile of preemptive rights to subscribe for additional Series A and Series B shares, (d) proceeds
from the liquidation, merger or consolidation of the Company and (e) other distributions, including without limitation those resulting
from any recapitalization, as a result of holding Withdrawn Shares. Transferees of Withdrawn Shares will not be entitled to any
of the foregoing rights under Chapter XXVI unless the Withdrawn Shares are redeposited with the Depositary. Investors receiving
Withdrawn Shares in exchange for ADRs will have the right to redeposit such shares in exchange for ADRs, provided that the conditions
to redeposit described hereunder are satisfied.



103







Chapter XXVI provided that access to the
Formal Exchange Market in connection with dividend payments will be conditioned upon certification by the Company to the Central
Bank of Chile that a dividend payment has been made and any applicable tax has been withheld. Chapter XXVI also provided that access
to the Formal Exchange Market in connection with the sale of Withdrawn Shares or distributions thereon will be conditioned upon
receipt by the Central Bank of Chile of certification by the Depositary that such shares have been withdrawn in exchange for ADRs
and receipt of a waiver of the benefit of the Foreign Investment Contract with respect thereto until such Withdrawn Shares are
redeposited.



Chapter XXVI and the Foreign Investment
Contract provide that a person who brings certain types of foreign currency into Chile, including U.S. dollars, to purchase Series
A shares and/or Series B shares with the benefit of the Foreign Investment Contract must convert it into Chilean pesos on the same
date and has 5 banking business days within which to invest in Series A shares and/or Series B shares in order to receive the benefits
of the Foreign Investment Contract. If such person decides within such period not to acquire Series A shares and/or Series B shares,
he can access the Formal Exchange Market to reacquire foreign currency, provided that the applicable request is presented to the
Central Bank within 7 banking business days of the initial conversion into Chilean pesos. Series A shares and/or Series B shares
acquired as described above may be deposited for ADRs and receive the benefits of the Foreign Investment Contract, subject to receipt
by the Central Bank of Chile of a certificate from the Depositary that such deposit has been effected and that the related ADRs
have been issued and receipt by the Custodian of a declaration from the person making such deposit waiving the benefits of the
Foreign Investment Contract with respect to the deposited Series A shares and/or Series B shares.



Access to the Formal Exchange Market under
any of the circumstances described above is not automatic. Pursuant to Chapter XXVI, such access requires approval of the Central
Bank of Chile based on a request presented through a banking institution established in Chile. The Foreign Investment Contract
will provide that if the Central Bank of Chile has not acted on such request within seven banking days, the request will be deemed
approved.



Under current Chilean law, foreign investments
abiding by the Foreign Investment Contract cannot be changed unilaterally by the Central Bank of Chile. No assurance can be given,
however, that additional Chilean restrictions applicable to the holders of ADRs, the disposition of underlying Series A shares
and/or Series B shares or the repatriation of the proceeds from such disposition could not be imposed in the future, nor can there
be any assessment of the duration or impact of such restrictions if imposed.



As of April 19, 2001, Chapter XXVI of Title
I of the Compendio de Normas de Cambios Internacionales of the Central Bank of Chile was eliminated and new investments
in ADRs by non-residents of Chile, are now governed by Chapter XIV of the Compendio de Normas de Cambios Internacionales
of the Central Bank of Chile. This was made with the purpose of simplifying and facilitating the flow of capital to and from Chile.
According to the new regulations, such investments must be carried out through Chile's Formal Exchange Market and only reported
to the Central Bank of Chile. Foreign investments may still be registered with the Foreign Investment Committee under Decree Law
600 of 1974, as amended, and obtain the benefits of the contract executed under Decree Law 600.



The Central Bank is also responsible for
controlling incurrence of loan obligations to be paid from Chile and by a Chilean borrower to banks and certain other financial
institutions outside Chile. Chapter XIV establishes what type of loans, investments, capital increases and foreign currency transactions
are subject to the current Chapter XIV framework. Foreign currency transactions related to foreign loans must be performed through
the Formal Exchange Market, and such transactions and the subsequent modifications of original loans must be properly informed
to the Central Bank. Transactions prior to April 19, 2001, will continue to be regulated by the previous legal framework, except
in cases where an express request has been presented to the Central Bank resigning previous rights to be regulated by the provisions
of Chapter XIV. This summary does not purport to be complete and is qualified in its entirety by reference to the provisions of
Chapter XIV.



104







As of December 31, 2012, we had bonds issued
in the international markets under Rule 144A/Regulation S of US$200 million and US$250 million. On April 3, 2013, we issued US$300
million 3.625% notes due 2023 the proceeds of which will be used to refinance existing debt and for general corporate purposes.
Additionally, we had outstanding bilateral loans through wholly owned subsidiaries in the amount of US$330 million, which were
fully guaranteed by us.



Any purchases of U.S. dollars in connection
with payments on these loans will occur with the Formal Exchange Market. There can be no assurance, however, that restrictions
applicable to payments in respect to the loans could not be imposed in the future, nor can there be any assessment of the duration
or impact of such restrictions if imposed.



10.E. Taxation



Chilean Tax Considerations



The following describes the material Chilean
income tax consequences of an investment in SQM ADRs by an individual who is not domiciled or resident in Chile or any legal entity
that is not organized under the laws of Chile and does not have a permanent establishment located in Chile, a ("foreign holder").
This discussion is based upon Chilean income tax laws presently in force, including Ruling No. 324 (1990) of the Chilean Internal
Revenue Service and other applicable regulations and rulings. The discussion is not intended as tax advice to any particular investor,
which can be rendered only in light of that investor's particular tax situation.



Under Chilean law, provisions contained
in statutes such as tax rates applicable to foreign holders, the computation of taxable income for Chilean purposes and the manner
in which Chilean taxes are imposed and collected may only be amended by another statute. In addition, the Chilean tax authorities
issue rulings and regulations of either general or specific application and interpret the provisions of Chilean tax law. Chilean
tax may not be assessed retroactively against taxpayers who act in good faith relying on such rulings, regulations and interpretations,
but Chilean tax authorities may change said rulings, regulations and interpretations prospectively.



Cash Dividends and Other Distributions



Cash dividends paid by the Company with
respect to the shares, including shares represented by ADRs held by a U.S. holder will be subject to a 35% Chilean withholding
tax, which is withheld and paid by the Company, the "Withholding Tax.” If the Company has paid corporate income tax,
the "First Category Tax", on the income from which the dividend is paid, a credit for the First Category Tax effectively
reduces the rate of Withholding Tax. When a credit is available, the Withholding Tax is computed by applying the 35% rate to the
pre-tax amount needed to fund the dividend and then subtracting from the tentative withholding tax so determined the amount of
First Category Tax actually paid on the pre-tax income. Under Chilean income tax law, dividends are assumed to have been paid out
of our oldest retained tax profits for purposes of determining the rate at which the First Category Tax was paid.



The effective Withholding Tax rate, after
giving effect to the credit for First Category Tax, generally is:



(Withholding Tax rate) - (First Category
Tax effective rate)
1 - (First Category Tax effective rate)



The effective rate of Withholding Tax to
be imposed on dividends paid by the Company will vary depending upon the amount of the First Category Tax paid by the Company on
the earnings to which the dividends are attributed. The company distributed an interim dividend in December 2012 corresponding
to the business year 2012. The dividend, paid in December 2012, was considered taxable, and the total tax retention rate was approximately
19.1%.



105







Dividend distributions made in property
(such as distribution of cash equivalents) would be subject to the same Chilean tax rules as cash dividends. Stock dividends are
not subject to Chilean taxation.



Capital Gains



Gains from the sale or other disposition
by a foreign holder of ADRs outside Chile will not be subject to Chilean taxation. The deposit and withdrawal of the shares in
exchange for ADRs will not be subject to any Chilean taxes.



The tax basis of the shares received in
exchange for ADRs (repatriation) will be the acquisition value of the shares. The shares exchanged for ADRs are valued at the highest
price at which they trade on the Chilean Stock Exchange on the date of the exchange or on either of the two business days preceding
the exchange. Consequently, the conversion of ADRs into the shares and the immediate sale of such shares at a price equal to or
less than the highest price for Series A shares and/or Series B shares on the Chilean Stock Exchange on such dates will not generate
a gain subject to Chilean taxation.



Gain recognized on a sale or exchange of
shares (as distinguished from sales or exchanges of ADRs representing such shares) will be subject to both the First Category Tax
and the Withholding Tax if either (i) the foreign holder has held the shares for less than one year since exchanging the ADRs for
the shares, (ii) the foreign holder acquired and disposed of the shares in the ordinary course of its business or as a regular
trader of shares, or (iii) the foreign holder and the purchaser of the shares are related parties within the meaning of Chilean
tax law. The amount of the First Category Tax may be credited against the amount of the Withholding Tax. In all other cases, gain
on the disposition of the shares will be subject only to a capital gains tax, which is assessed at the same rate as the First Category
Tax. Gain recognized in the transfer of common shares that have significant trading volumes in the stock exchange, however, is
not subject to capital gains tax in Chile, provided that the common shares are transferred in a local stock exchange authorized
by the SVS, within the process of a public tender of common shares governed by the Chilean Securities Market Act. Law No. 20,448
states that common shares must also have been acquired after April 19, 2001, either on a local stock exchange authorized by the
SVS, within the referred process of public tender of a common shares governed by the Chilean Securities Market Act, in an initial
public offer of common shares resulting from the formation of a corporation or a capital increase of the same, in an exchange of
convertible securities subject to public offer, or in the redemption of mutual funds shares. According to Ruling No. 224 (2008)
of the Chilean Internal Revenue Service, common shares received by exchange of ADRs are also considered as “acquired on a
stock exchange” if the respective ADRs have been acquired on a foreign stock exchange authorized by the SVS (i.e. London
Stock Exchange, New York Stock Exchange and Bolsa de Valores de Madrid). Common shares are considered to have a high presence in
the stock exchange when they: (a) are registered in the Securities Registry, (b) are registered in a Chilean Stock Exchange, (c)
have an adjusted presence equal to or above 25%.



As of June 19, 2001, capital gains obtained
in the sale of common shares that are publicly traded in a stock exchange are also exempt from capital gains tax in Chile when
the sale is made by "foreign institutional investors" such as mutual funds and pension funds, provided that the sale
is made in a local stock exchange authorized by the SVS, or in accordance with the provisions of the securities market law (Law
18,045). To qualify as foreign institutional investors, the referred entities must be formed outside of Chile, not have a domicile
in Chile, and they must be an "investment fund" in according with the Chilean tax law.



The exercise of preemptive rights relating
to shares will not be subject to Chilean taxation. Any gain on the sale or assignment of preemptive rights relating to shares will
be subject to both the First Category Tax and the Withholding Tax (the former being creditable against the latter).



106







Other Chilean Taxes



No Chilean inheritance, gift or succession
taxes apply to the transfer or disposition of the ADRs by a foreign holder, but such taxes generally will apply to the transfer
at death or by gift of the shares by a foreign holder. No Chilean stamp, issue, registration or similar taxes or duties apply to
foreign holders of ADRs or shares.



Withholding Tax Certificates



Upon request, the Company will provide
to foreign holders appropriate documentation evidencing the payment of Chilean withholding taxes.



United States Tax Considerations



The following discussion summarizes the
principal U.S. federal income tax consequences to beneficial owners arising from ownership and disposition of the Series A shares
and the Series B shares, together the "shares" and the ADRs. The discussion which follows is based on the United States
Internal Revenue Code of 1986, as amended, the "Code", the Treasury regulations promulgated thereunder, and judicial
and administrative interpretations thereof, all as in effect and available on the date hereof, and is subject to any changes in
these or other laws occurring after such date. In addition, the summary assumes that the depositary’s activities are clearly
and appropriately defined so as to ensure that the tax treatment of ADRs will be identical to the tax treatment of the underlying
shares.



For purposes of this summary, the term
"U.S. Holder" means a beneficial owner of shares or ADRs that is, for U.S. federal income tax purposes, (a) an individual
who is a United States citizen or resident, (b) a corporation or partnership created or organized under the laws of the United
States or any political subdivision thereof, (c) an estate, the income of which is subject to U.S. federal income tax regardless
of the source, or (d) a trust (i) that validly elects to be treated as a U.S. person for U.S. federal income tax purposes or (ii)(A)
if a court within the U.S. is able to exercise primary supervision over the administration of the trust and (B) one or more U.S.
persons have the authority to control all substantial decisions of the trust.



The term "Non-U.S. Holder" means,
for purposes of this discussion, a beneficial owner of shares or ADRs that is not a U.S. Holder.



If a partnership (or any other entity treated
as a partnership for U.S. federal income tax purposes) holds shares or ADRs, the tax treatment of the partnership and a partner
in such partnership generally will depend on the status of the partner and the activities of the partnership. Such a partner or
partnership should consult its own tax advisor as to its consequences.



The discussion that follows is not intended
as tax advice to any particular investor and is limited to investors who will hold the shares or ADRs as "capital assets"
within the meaning of Section 1221 of the Code and whose functional currency is the United States dollar. The summary does not
address the tax treatment of U.S. Holders and Non-U.S. Holders that may be subject to special U.S. federal income tax rules, such
as insurance companies, tax-exempt organizations, financial institutions, persons who are subject to the alternative minimum tax,
or persons who are broker-dealers in securities, who hold the shares or ADRs as a hedge against currency risks, as a position in
a "straddle" for tax purposes, or as part of a conversion or other integrated transaction, or who own (directly, indirectly
or by attribution) 10% or more of the total combined voting power of all classes of the Company's capital stock entitled to vote
or 10% or more of the value of the outstanding capital stock of the Company.



As of this date, there is currently no
applicable income tax treaty in effect between the United States and Chile. However, in 2010, the United States and Chile signed
an income tax treaty that will enter into force once the treaty is ratified by both countries. There can be no assurance that the
treaty will be ratified by either country. The following summary assumes that there is no applicable income tax treaty in effect
between the United States and Chile.



107







The discussion below does not address the
effect of any United States state, local, estate or gift tax law or foreign tax law on a U.S. Holder or Non-U.S. Holder of the
shares or ADRs. U.S. HOLDERS AND NON-U.S. HOLDERS OF SHARES OR ADRs SHOULD CONSULT THEIR OWN TAX ADVISORS TO DETERMINE THE PARTICULAR
CONSEQUENCES UNDER ANY SUCH LAW OF OWNING OR DISPOSING THE SHARES OR ADRs.



For purposes of applying U.S. federal income
tax law, any beneficial owner of an ADR generally will be treated as the owner of the underlying shares represented thereby.



TO ENSURE COMPLIANCE WITH U.S. TREASURY
DEPARTMENT CIRCULAR 230, INVESTORS ARE ADVISED THAT: (A) ANY DISCUSSION OF U.S. FEDERAL TAX ISSUES IN THIS FORM 20-F IS NOT INTENDED
OR WRITTEN TO BE RELIED UPON, AND CANNOT BE RELIED UPON, BY INVESTORS FOR THE PURPOSE OF AVOIDING PENALTIES THAT MAY BE IMPOSED
ON SUCH INVESTORS UNDER THE U.S. INTERNAL REVENUE CODE OF 1986, AS AMENDED; (B) SUCH DISCUSSION IS INCLUDED BY THE COMPANY IN CONNECTION
WITH THE PROMOTION OR MARKETING (WITHIN THE MEANING OF CIRCULAR 230) BY THE COMPANY OF THE TRANSACTIONS OR MATTERS ADDRESSED HEREIN;
AND (C) INVESTORS SHOULD SEEK ADVICE BASED ON THEIR PARTICULAR CIRCUMSTANCES FROM AN INDEPENDENT TAX ADVISOR.



Cash Dividends and Other Distributions



The U.S. Treasury Department has expressed
concern that depositaries for ADRs, or other intermediaries between the holders of shares of an issuer and the issuer, may be taking
actions that are inconsistent with the claiming of U.S. foreign tax credits by U.S. holders of such receipts or shares. Accordingly,
the analysis regarding the availability of a U.S. foreign tax credit for Chilean taxes and sourcing rules described below could
be affected by future actions that may be taken by the U.S. Treasury Department.



The following discussion of cash dividends
and other distributions is subject to the discussion below under “Passive Foreign Investment Company Considerations”.
The gross amount of a distribution with respect to shares or ADRs generally will be treated as a taxable dividend to the extent
of the Company's current and accumulated earnings and profits, computed in accordance with U.S. federal income tax principles.
A dividend distribution will be so included in gross income when received by (or otherwise made available to) (i) the U.S. Holder
in the case of the shares or (ii) the depositary in the case of the ADRs, and in either case will be characterized as ordinary
income for U.S. federal income tax purposes. Distributions in excess of the Company's current and accumulated earnings and profits
will be applied against and will reduce the U.S. Holder's tax basis in the shares or ADRs and, to the extent distributions exceed
such tax basis, the excess will be treated as gain from a sale or exchange of such shares or ADRs. U.S. Holders that are corporations
will not be allowed a deduction for dividends received in respect of distributions on the shares or the ADRs. For example, if the
gross amount of a distribution with respect to the shares or ADRs exceeds the Company's current and accumulated earnings and profits
by US$10.00, such excess will generally not be subject to a U.S. tax to the extent the U.S. Holder's tax basis in the shares or
ADRs equals or exceeds US$10.00. The Company does not maintain calculations of its earnings and profits under U.S. federal income
tax principles. Accordingly, U.S. Holders should assume that any cash distribution made by us will be treated as a dividend for
U.S. federal income tax purposes.



If a dividend distribution is paid in Chilean
pesos, the amount includable in income will generally be the U.S. dollar value, on the date of receipt by the U.S. Holder in the
case of the shares or by the depositary in the case of the ADRs, of the peso amount distributed, regardless of whether the payment
is actually converted into U.S. dollars. The amount of any distribution of property other than cash will be the fair market value
of such property on the date of distribution. Any gain or loss resulting from currency exchange rate fluctuations during the period
from the date the dividend is includable in the income of the U.S. Holder to the date the pesos are converted into U.S. dollars
will be treated as ordinary income or loss.



108







A dividend distribution will be treated
as foreign source income and will generally be classified as "passive category income" or in the case of certain U.S.
Holders “general category income" for U.S. foreign tax credit purposes. If Chilean withholding taxes are imposed on
a dividend, U.S. Holders will be treated as having actually received the amount of such taxes (net of any credit for the First
Category Tax) and as having paid such amount to the Chilean taxing authorities. As a result, the amount of dividend income included
in gross income by a U.S. Holder will be greater than the amount of cash actually received by the U.S. Holder with respect to such
dividend income. A U.S. Holder may be able, subject to certain generally applicable limitations, to claim a foreign tax credit
or a deduction for Chilean withholding taxes (net of any credit for the First Category Tax) imposed on dividend payments. The rules
relating to the determination of the U.S. foreign tax credit are complex and the calculation of U.S. foreign tax credits and, in
the case of a U.S. Holder that elects to deduct foreign taxes, the availability of deductions, involve the application of rules
that depend on a U.S. Holder's particular circumstances. U.S. Holders should, therefore, consult their own tax advisors regarding
the application of the U.S. foreign tax credit rules to dividend income on the shares or ADRs.



Subject to the discussion below under “Information
Reporting and Backup Withholding”, if you are a Non-U.S. Holder, you generally will not be subject to U.S. federal income
or withholding tax on dividends received by you on your shares or ADRs, unless you conduct a trade or business in the United States
and such income is effectively connected with that trade or business.



Capital Gains



A U.S. Holder will generally recognize
gain or loss on the sale, redemption or other disposition of the shares or ADRs in an amount equal to the difference between the
amount realized on the sale or exchange and the U.S. Holder's adjusted basis in such shares or ADRs. Thus, if the U.S. Holder sells
the shares for US$40.00 and such U.S. Holder's tax basis in such shares is US$30.00, such U.S. Holder will generally recognize
a gain of US$10.00 for U.S. federal income tax purposes. Subject to the discussion below under “Passive Foreign Investment
Company Considerations”, gain or loss upon the sale of the shares or ADRs will be capital gain or loss if the shares or ADRs
are capital assets in the hands of the U.S. Holder. Capital gains on the sale of capital assets held for one year or less are subject
to U.S. federal income tax at ordinary income tax rates. Net capital gains derived with respect to capital assets held for more
than one year are eligible for reduced rates of taxation. Gain or loss realized by a U.S. Holder on the sale or exchange of shares
or ADRs will be U.S.-source income. In addition, certain limitations exist on the deductibility of capital losses by both corporate
and individual taxpayers. Any tax imposed by Chile directly on the gain from such a sale would generally be eligible for the U.S.
foreign tax credit; however, because the gain would generally be U.S.-source, a U.S. Holder might not be able to use the credit
otherwise available. U.S. Holders should consult their own tax advisors regarding the foreign tax credit implications of the sale,
redemption or other disposition of a share or ADR.



Subject to the discussion below under “Information
Reporting and Backup Withholding”, a Non-U.S. Holder of ADRs or shares will not be subject to United States income or withholding
tax on gain from the sale or other disposition of ADRs or shares unless, in general (i) such gain is effectively connected with
the conduct of a trade or business within the United States or (ii) the Non-U.S. Holder is an individual who is present in the
United States for at least 183 days during the taxable year of the dispositionand certain other
conditions are met.



109







Passive Foreign Investment Company Considerations



A Non-U.S. corporation will be classified
as a “passive foreign investment company”, or a PFIC, for U.S. federal income tax purposes in any taxable year in which,
after applying certain look-through rules, either (i) at least 75% of its gross income is “passive income” or (ii)
at least 50% of the average value of its gross assets is attributable to assets that produce “passive income” or are
held for the production of passive income. Passive income for this purpose generally includes dividends, interest, royalties, rents
and gains from the sale of stock (including gains from the sale of stock of certain subsidiaries), partnership interests, securities
or commodities.



Based on certain estimates of our gross
income and gross assets and the nature of our business, the Company believes that it was not classified as a PFIC in 2012. The
Company’s status in future years will depend on its assets and activities in those years. If the Company were a PFIC for
2012 or for any prior or future taxable year during which a U.S. Holder held shares or ADRs, such U.S. Holder of shares or ADRs
generally would be subject to additional filing requirements, imputed interest charges and other disadvantageous tax treatment
(including the denial of taxation at the lower rates applicable to long-term capital gains with respect to any gain from the sale
or exchange of shares or ADRs).



Information Reporting and Backup Withholding



Payments of dividends on the shares or
ADRs and the proceeds of sale or other disposition of the shares or ADRs within the United States by holders may be subject to
U.S. information reporting and backup withholding. A U.S. Holder generally will be subject to U.S. information reporting and backup
withholding (currently at a rate of 28%) unless the recipient of such payment supplies an accurate taxpayer identification number,
as well as certain other information, or otherwise establishes an exemption, in the manner prescribed by United States law and
applicable regulations. U.S. information reporting and backup withholding of U.S. federal income tax at the same rate may also
apply to Non-U.S. Holders that are not "exempt recipients" and that fail to provide certain information as may be required
by United States law and applicable regulations. Any amount withheld under U.S. backup withholding is not an additional tax and
is generally allowable as a credit against the U.S. Holder's federal income tax liability upon furnishing the required information
to the IRS.



In addition, certain U.S. Holders, electing
nonresident aliens and residents of a U.S. possession may be required to report information with respect to their investment in
shares or, it is assumed, ADRs to the Internal Revenue Service. Investors who fail to report required information could become
subject to substantial penalties and/or an extended statute of limitations.



HOLDERS ARE URGED TO CONSULT THEIR OWN
TAX ADVISORS REGARDING THE APPLICATION OF U.S. INFORMATION REPORTING AND BACKUP WITHHOLDING RULES TO THEIR PARTICULAR CIRCUMSTANCES.



10.F. Dividends
and Paying Agents

Not applicable.



10.G. Statement
by Experts

Not applicable.



10.H. Documents
on Display

Documents referred to in this form 20-F
are available to the public at:



http://www.sec.gov/edgar/searchedgar/companysearch.html,
CIK: 909037.



10.I. Subsidiary
Information

See Item 4.C. Organizational Structure.



110







ITEM
11.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK



As explained elsewhere in this Annual Report,
we transact our businesses in more than 110 countries, thereby rendering our market risk dependent upon the fluctuations of foreign
currencies and local and international interest rates. These fluctuations may generate losses in the value of financial instruments
taken in the normal course of business.



We, from time to time and depending upon
then current market conditions, review and re-establish our financial policies to protect our operations. Management is authorized
by our Board of Directors to engage in certain derivative contracts such as forwards and swaps to specifically hedge the fluctuations
in interest rates and in currencies other than the U.S. dollar.



Derivative instruments used by us are generally
transaction-specific so that a specific debt instrument or contract determines the amount, maturity and other terms of the hedge.
We do not use derivative instruments for speculative purposes.



Interest Rate Risk. As of December 31, 2012, we had approximately
21% of our financial debt effectively priced at Libor, and therefore significant increases in the rate could impact our financial
condition.



Interest rate fluctuations, due to the uncertain future behavior
of markets, may have a material impact on our financial results.



We have short and long term debt valued at LIBOR plus a spread.
We are partially exposed to fluctuations of this rate, as we hold hedging derivative instruments to hedge a portion of our liabilities
subject to LIBOR rate fluctuations.



As of December 31, 2012, approximately 21% of our current financial
obligations were subject to LIBOR rate fluctuation and therefore, significant increases in the rate may impact our financial position.
A 100 basis points variation in this rate may trigger variations in financial expenses of approximately US$3.1 million. Notwithstanding,
this effect is significantly counter-balanced by the returns of our Company's investments that also relate to LIBOR.



In addition, as of December 31, 2012, our total financial debt
is primarily long-term, with 8% of maturities less than 12 months, which decreases the exposure to changes in the interest rates.



Exchange Rate Risk. Although the
U.S. dollar is the primary currency in which we transact our businesses, our operations throughout the world expose us to exchange
rate variations for non-U.S. dollar currencies. Therefore, fluctuations in the exchange rate of such local currencies may affect
our financial condition and results of operations. To lessen these effects, we maintain derivative contracts to protect the net
difference between our principal assets and liabilities for currencies other than the U.S. dollar. These contracts are renewed
periodically depending on the amount covered in each currency. Aside from this, we do not hedge potential future income and expenses
in currencies other than the U.S. dollar with the exception of the Euro and Chilean peso. We estimate annual sales in Euros and
expenses in Chilean pesos, and depending on the circumstances we secure the exchange difference with derivative contracts.



111







The following is a summary of the aggregate
net monetary assets and liabilities that are denominated in non-U.S. dollar currencies as of December 31, 2012, 2011 and 2010.
Figures do not include our financial hedging positions for year-end:



|                   |  | 2012   |          |   | 2011   |  |          | 2010   | 
|------------------ |  | ------ | -------- | - | ------ |  | -------- | ------ | 
|                   |  | Th US$ |          |   | Th US$ |  |          | Th US$ | 
|Chilean pesos      |  |        | (473,976 | ) |        |  | (275,756 | )      | 
|Brazilian real     |  |        | (1,421   | ) |        |  | (1,500   | )      | 
|Euro               |  |        | 45,809   |   |        |  | 56,053   |        | 
|Japanese yen       |  |        | 954      |   |        |  | 1,876    |        | 
|Mexican pesos      |  |        | 652      |   |        |  | (2,862   | )      | 
|South African rand |  |        | 25,565   |   |        |  | 19,849   |        | 
|Dirhams            |  |        | 17,044   |   |        |  | 14,615   |        | 
|Other currencies   |  |        | 19,443   |   |        |  | 16,855   |        | 
|Total, net         |  |        | (365,930 | ) |        |  | (170,650 | )      | 



We monitor and attempt to maintain our
non-dollar assets and liabilities position in balance and make use of foreign exchange contracts and other hedging instruments
aiming to minimize our exposure to the risks of changes in foreign exchange rates. As of December 31, 2012, for hedging purposes
we had open contracts to buy U.S. dollars and sell Euros for approximately US$310.1 million (EUR235million) and sell South African
rand for approximately US$30.8 million (ZAR260.5 million), as well as forward exchange contracts to sell U.S. dollars and buy Chilean
pesos for US$75.5 million (CH$36,237 million). As of this date, all of our UF and Chilean pesos bonds were hedged with cross-currency
swaps to the U.S. dollar for approximately US$ 515.2 million.



Also, we had open forward exchange contracts
to buy U.S. dollars and sell Chilean pesos to hedge our time deposits in Chilean Pesos for approximately US$245.21 million (CH$117,629
million) and forward contracts to buy U.S. dollars and sell Chilean pesos for approximately US$70.1million (CH$33,645million) hedging
our fertilizer trading business in Chile.



The information contained in Item 11. Quantitative
and Qualitative Disclosures About Market Risk, contains statements that may constitute forward-looking statements. See “Cautionary
Statement Regarding Forward-Looking Statements” in this Annual Report, for safe harbor provisions.



ITEM
12.DESCRIPTION OF SECURITIES OTHER THAN EQUITY SECURITIES



ITEM 12.A.DEBT SECURITIES



Not applicable.



ITEM 12.B. WARRANTS AND RIGHTS



Not applicable.



ITEM 12.C. OTHER SECURITIES



Not applicable.



112











ITEM 12.D. AMERICAN DEPOSITARY RECEIPTS



Depositary Fees and Charges



The Company’s American Depositary Receipts (“ADR”)
program is administered by The Bank of New York Mellon (101 Barclay St., 22 Fl.W., New York, NY 10286), as Depositary. Under the
terms of the Deposit Agreement, an ADR holder may have to pay the following service fees to the Depositary:



|Service Fees                                             |  | Fees           
|-------------------------------------------------------- |  | ---------------
|Execution and delivery of ADRs and the surrender of ADRs |  | $0.05 per share



Depositary Payments Fiscal Year 2012



The Depositary has agreed to reimburse certain expenses related
to the Company’s ADR program and incurred by the Company in connection with the program. In 2012, the Depositary reimbursed
expenses related to investor relations for a total amount of US$94,912.00.



113







PART II



ITEM
13.DEFAULTS, DIVIDEND ARREARAGES AND DELINQUENCIES



Not applicable



ITEM
14.MATERIAL MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF PROCEEDS



Not applicable.



ITEM
15.CONTROLS AND PROCEDURES



| | (a) | Disclosure Control
                                                                          and Procedures
| | --- | -----------------------------------------------------------------------------------------------------------



SQM management, with the participation of the Company's Executive management, including the Company's
Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of the design and operation of our disclosure
controls and procedures, pursuant to Exchange Act Rules 13(a)-15(b), as of the end of the period covered by this Annual Report.
Based upon that evaluation, management with the participation of the Chief Executive Officer and Chief Financial Officer have concluded
that the Company's disclosure controls and procedures are effective in providing reasonable assurance that material information
is made known to management and that financial and non-financial information is properly recorded, processed, summarized and reported.



The procedures associated with our internal
controls are designed to provide reasonable assurance that our transactions are properly authorized, assets are safeguarded against
unauthorized or improper use, and transactions are properly recorded and reported. However, through the same design and evaluation
period of the disclosure controls and procedures, the Company's management, including the Company's Chief Executive Officer and
Chief Financial Officer, recognized that there are inherent limitations to the effectiveness of any internal control system regardless
of how well designed and operated. In such a way they can provide only reasonable assurance of achieving the desired control objectives
and no evaluation can provide absolute assurance that all control issues or instances of fraud, if any, within the Company have
been detected.



There were no significant changes in our
internal controls over financial reporting that occurred during the period covered by this Annual Report that have materially
affected, or are likely to materially affect our internal control over financial reporting.



(b) Management’s Annual
Report on Internal Control Over Financial Reporting



SQM Management is responsible for establishing
and maintaining adequate internal control over financial reporting. The Company’s internal control over financial reporting
is designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of the financial
statements for external purposes in accordance with generally accepted accounting principles.



Because of its inherent limitations, internal
control over financial reporting may not necessarily prevent or detect some misstatements. It can only provide reasonable assurance
regarding financial statement preparation and presentation. Also, projections of any evaluation of effectiveness for future periods
are subject to the risk that controls may become inadequate because of changes in conditions or because the degree of compliance
with the polices or procedures may deteriorate over time.



114







Management assessed the effectiveness
of its internal control over financial reporting for the year ended December 31, 2012. The assessment was based on criteria
established in the framework “Internal Controls — Integrated Framework” issued by the Committee of Sponsoring
Organizations of the Treadway Commission (COSO). Based on the assessment, SQM management has concluded that as of December 31,
2012, the Company’s internal control over financial reporting was effective.



(c) Attestation Report of the
Registered Public Accounting Firm



PriceWaterhouseCoopers Consultores, Auditores
y Compañia Limitada (“PWC”), the independent registered public accounting firm that has audited our Consolidated
Financial Statements, has also issued an attestation report on the Company’s internal control over financial reporting as
of December 31, 2012. This attestation report appears on pages F-1 and F-2 under Item 18 Financial Statements.



(d) Changes in internal control
over Financial Reporting



There were no changes in the Company’s
internal control over financial reporting that occurred during 2012 that have materially affected, or are reasonably likely to
materially affect, the Company’s internal control over financial reporting.



ITEM
16.[Reserved]



ITEM 16A.    AUDIT
COMMITTEE FINANCIAL EXPERT



The Board of Directors has determined
that the Company does not have an audit committee financial expert within the meaning of the regulations adopted under Sarbanes-Oxley
Act of 2002.



Pursuant to Chilean regulations, the Company
has a Directors' Committee whose main duties are similar to those of an audit committee. Each of the members of the Directors'
Committee is a member of the audit committee. See 6.C. Board Practices.



Our Board believes that the members of
the Directors' Committee have the necessary expertise and experience to perform the functions of the Directors' Committee pursuant
to Chilean regulations.



ITEM 16B.    CODE
OF ETHICS



We have adopted a Code of Business Conduct
that applies to the Chief Executive Officer, the Chief Financial Officer and the Internal Auditor, as well as, to all our officers
and employees. Our Code adheres to the definition set forth in Item 16B of Form 20-F under the Exchange Act.



No waivers have been granted therefrom
to the officers mentioned above.



The full text of the code is available
on our website at http://www.sqm.comin the Investor Relations section
under “Corporate Governance”.



Amendments to, or waivers from one or
more provisions of the code will be disclosed on our website.



115







ITEM 16C.    PRINCIPAL
ACCOUNTANT FEES AND SERVICES



The table sets forth the amount of fees
billed for each of the last two fiscal years by our independent auditors, PricewaterhouseCoopers Consultores, Auditores y Compañía
Limitada (“PwC”) for the 2012 and 2011 fiscal year, in relation to audit services, audit-related services, tax and
other services provided to us (in thousands of U.S. dollars).



|                   |  | 2012 |       |  | 2011 | 
|------------------ |  | ---- | ----- |  | ---- | 
|Audit fees         |  |      | 1,365 |  |      | 
|Audit-related fees |  |      | 172   |  |      | 
|Tax fees           |  |      | 233   |  |      | 
|Other fees         |  |      | 65    |  |      | 
|Total fees         |  |      | 1,835 |  |      | 



Audit fees in the above table are the
aggregate fees billed by PwC in 2012 and 2011, in connection with the audit of our annual Consolidated Financial Statements, as
well as the review of other statutory filings.



Audit-related fees in the above table
are fees billed by PwC in 2012 and 2011 for assurance and related services that are reasonably related to the performance of the
audit or review of our financial statements and are not reported under "Audit Fees."



Total fees in the above table are fees
billed by PwC in the amount of US$1.84 million in 2012, and in the amount of US$1.18 million in 2011.



Directors' Committee Pre-Approval
Policies and Procedures

Chilean law states that public companies
are subject to "pre-approval" requirements under which all audit and non-audit services provided by the independent
auditor must be pre-approved by the Directors’ Committee. Our Directors’ Committee approves all audits, audit-related,
tax and other services provided by our auditors.



Any services provided by our auditors
that are not specifically included within the scope of the audit must be pre-approved by the Directors’ Committee prior
to any engagement.



ITEM 16D.   EXEMPTIONS
FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES



Not applicable.



ITEM 16E.   PURCHASES
OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED PURCHASERS



Not applicable.



ITEM 16F.   CHANGE
IN REGISTRANT’S CERTIFYING ACCOUNTANT



There has been no change in independent
accountants for the Company during the two most recent fiscal years or any subsequent interim period except as previously reported
in the Company’s Annual Report on Form 20-F for the fiscal year ended December 31, 2012, and there have been no
disagreements of the type required to be disclosed by Item 16F (b).



116







ITEM 16G.   CORPORATE
GOVERNANCE



For a summary of the significant differences
between our corporate governance practices and the NYSE corporate governance standards, please see "Item 6. Directors, Senior
Management and Employees-C. Board Practices".



ITEM 16H.   MINE SAFETY
AND DISCLOSURE



Not applicable.



117







PART III



ITEM
17.FINANCIAL STATEMENTS



See Item 18. Financial Statements.



ITEM
18.FINANCIAL STATEMENTS



See Item 19.(a) for a list of all financial
statements filed as part of this Form 20-F Annual Report.



ITEM
19.EXHIBITS



(a) Index to Financial Statements





|Reports of Independent Registered Public Accounting Firms                                                        | F-1 
|---------------------------------------------------------------------------------------------------------------- | ----
|Consolidated Financial Statements:                                                                               |     
|Audited Consolidated Statements of Financial Position as of December 31, 2012 and 2011                           | F-4 
|Audited Consolidated Statements of Income for each of the three years in the period ended December 31, 2012      | F-6 
|Audited Consolidated Statement of Comprehensive Income for the three years in the period ended December 31, 2012 | F-8 
|Audited Consolidated Statements of Cash Flows for each of the three years in the period ended December 31, 2012  | F-9 
|                                                                                                                 |     
|Notes to the Audited Consolidated Financial Statements                                                           | F-14
|Supplementary Schedules*                                                                                         |     



*All other schedules
have been omitted because they are not applicable or the required information is shown in the consolidated financial statements
or notes thereto.



(b) Exhibits



|ExhibitNo. |  | Exhibit                                          
|---------- |  | -------------------------------------------------
|1.1        |  | By-laws (Estatutos) of the Company**             
|8.1        |  | Significant subsidiaries of the Company          
|12.1       |  | Section 302 Chief Executive Officer Certification
|12.2       |  | Section 302 Chief Financial Officer Certification
|13.1       |  | Section 906 Chief Executive Officer Certification
|13.2       |  | Section 906 Chief Financial Officer Certification



**Incorporated by reference
to the Company’s Annual Report on Form 20-F for the year ended December 31, 2010 filed with the Securities and Exchange
Commission on June 30, 2011.



118







SIGNATURES



The registrant hereby certifies that it
meets all of the requirements for filing on Form 20-F and that it has duly caused and authorized the undersigned to sign this
annual report on its behalf.



SOCIEDAD QUIMICA Y MINERA DE CHILE S.A.



(CHEMICAL AND MINING COMPANY OF CHILE
INC.)



/s/ Ricardo Ramos



Ricardo Ramos R.

Chief Financial Officer and

Business Development Senior Vice President



Date: April 22, 2013



119







SOCIEDAD QUIMICA Y MINERA DE CHILE S.A.
AND SUBSIDIARIES



Index to Consolidated Financial Statements



Contents





|Report of Independent Registered Public Accounting Firm                                                                      | 
|---------------------------------------------------------------------------------------------------------------------------- | 
|                                                                                                                             | 
|Consolidated Financial Statements                                                                                            | 
|                                                                                                                             | 
|Audited Consolidated Statements of Financial Position as of December 31, 2012 and 2011                                       | 
|Audited Consolidated Statements
    of Income for each of the three years in the period ended December 31, 2012              | 
|Audited Consolidated Statement of
    Comprehensive Income for each of the three years in the period ended December 31, 2012 | 
|Audited Consolidated Statements
    of Cash Flows for each of the three years in the period ended December 31, 2012          | 
|Notes to the Audited Consolidated Financial Statements                                                                       | 





|Ch$   | - | Chilean pesos                                                                                                                                                                          
|----- | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
|ThCh$ | - | Thousands of Chilean pesos                                                                                                                                                             
|US$   | - | United States dollars                                                                                                                                                                  
|ThUS$ | - | Thousands of United States dollars                                                                                                                                                     
|UF    | - | The UF is an inflation-indexed, Chilean peso-denominated monetary unit. The UF rate is set daily in advance, based on
    the change in the Consumer Price Index of the previous month.



|Los Militares 4290,Las Condes, Santiago, ChileTel: (56 2)  425 2000www.sqm.com | 
|------------------------------------------------------------------------------ | 



120







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



Report of Independent Registered Public Accounting Firm



To the Board of Directors and Shareholders
of Sociedad Química y Minera de Chile S.A.



In our opinion, the accompanying consolidated
statement of financial position and the related consolidated statements of income, comprehensive income, cash flows and of changes
in equity present fairly, in all material respects, the financial position of Sociedad Química y Minera de Chile S.A. and
its subsidiaries at December 31, 2012 and December 31, 2011, and the results of their operations and their cash flows for each
of the two years in the period ended December 31, 2012 in conformity with International Financial Reporting Standards as issued
by the International Accounting Standards Board. Also in our opinion, the Company maintained, in all material respects, effective
internal control over financial reporting as of December 31, 2012, based on criteria established in Internal Control - Integrated
Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO). The Company's management
is responsible for these financial statements, for maintaining effective internal control over financial reporting and for its
assessment of the effectiveness of internal control over financial reporting, included in Management’s Report on Internal
Control Over Financial Reporting appearing under Item 15. Our responsibility is to express opinions on these financial statements
and on the Company's internal control over financial reporting based on our integrated audits. We conducted our audits in accordance
with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and
perform the audits to obtain reasonable assurance about whether the financial statements are free of material misstatement and
whether effective internal control over financial reporting was maintained in all material respects. Our audits of the financial
statements included examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing
the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation.
Our audit of internal control over financial reporting included obtaining an understanding of internal control over financial
reporting, assessing the risk that a material weakness exists, and testing and evaluating the design and operating effectiveness
of internal control based on the assessed risk. Our audits also included performing such other procedures as we considered necessary
in the circumstances. We believe that our audits provide a reasonable basis for our opinions.



F-1







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



A company’s internal control over
financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and
the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s
internal control over financial reporting includes those policies and procedures that (i) pertain to the maintenance of records
that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (ii) provide
reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with
generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance
with authorizations of management and directors of the company; and (iii) provide reasonable assurance regarding prevention
or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material
effect on the financial statements.



Because of its inherent limitations, internal
control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness
to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree
of compliance with the policies or procedures may deteriorate.



/s/ PricewaterhouseCoopers



Santiago, Chile

April 22, 2013



F-2







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



Report of Independent Registered Public
Accounting Firm



To the Shareholders and the Board of Directors
of

Sociedad Química y Minera de Chile
S.A.:



We have audited the accompanying consolidated
statement of comprehensive income of Sociedad Química y Minera de Chile S.A. comprehensive income is the responsibility
of the Company’s management. Our and subsidiaries (“the Company”) for the year ended December 31, 2010. This
consolidated statement of responsibility is to express an opinion on this consolidated financial statement based on our audit.



We conducted our audit in accordance with
the standards of the Public Company Accounting Oversight Board (United States of America). Those standards require that we plan
and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement.
An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audit provides a reasonable basis for our opinion.



In our opinion, the consolidated financial
statement referred to above present fairly, in all material respects, the consolidated results of operations of Sociedad Química
y Minera de Chile S.A. and subsidiaries for the year ended December 31, 2010, in conformity with International Financial Reporting
Standards (IFRS), as issued by the International Accounting Standards Board (“IASB”)



ERNST & YOUNG LTDA.

Santiago, Chile, March 01, 2011





F-3







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



CONSOLIDATED STATEMENT OF FINANCIAL POSITION



|                                                  |  | Note |      |  | As of December 31, 2012 |  |           | As of December 31, 2011 | 
|------------------------------------------------- |  | ---- | ---- |  | ----------------------- |  | --------- | ----------------------- | 
|                                                  |  |      |      |  | ThUS$                   |  |           | ThUS$                   | 
|ASSETS                                            |  |      |      |  |                         |  |           |                         | 
|Current assets                                    |  |      |      |  |                         |  |           |                         | 
|                                                  |  |      |      |  |                         |  |           |                         | 
|Cash and cash equivalents                         |  |      | 6.1  |  |                         |  | 324,353   |                         | 
|Current financial assets                          |  |      | 9.1  |  |                         |  | 316,103   |                         | 
|Other non-financial assets                        |  |      | 20   |  |                         |  | 67,820    |                         | 
|Trade and other accounts receivable               |  |      | 9.2  |  |                         |  | 510,616   |                         | 
|Trade receivables due from related parties        |  |      | 8.3  |  |                         |  | 101,372   |                         | 
|Inventories                                       |  |      | 7.0  |  |                         |  | 896,236   |                         | 
|Deferred tax assets                               |  |      | 23.1 |  |                         |  | 30,234    |                         | 
|Total current assets                              |  |      |      |  |                         |  | 2,246,734 |                         | 
|                                                  |  |      |      |  |                         |  |           |                         | 
|Non-current assets                                |  |      |      |  |                         |  |           |                         | 
|Non-current financial assets                      |  |      | 9.1  |  |                         |  | 29,492    |                         | 
|Other non-current non-financial assets            |  |      | 20   |  |                         |  | 17,682    |                         | 
|Trade receivables, non-current                    |  |      | 9.2  |  |                         |  | 1,311     |                         | 
|Investments accounted for using the equity method |  |      | 10.1 |  |                         |  | 70,298    |                         | 
|Intangible assets other than goodwill             |  |      | 11   |  |                         |  | 24,013    |                         | 
|Goodwill                                          |  |      | 11   |  |                         |  | 38,388    |                         | 
|Property, plant and equipment                     |  |      | 12   |  |                         |  | 1,988,290 |                         | 
|Investment property                               |  |      | 12   |  |                         |  | -         |                         | 
|Deferred tax assets                               |  |      | 23.4 |  |                         |  | 223       |                         | 
|Total non-current assets                          |  |      |      |  |                         |  | 2,169,697 |                         | 
|Total assets                                      |  |      |      |  |                         |  | 4,416,431 |                         | 



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



F-4







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



CONSOLIDATED STATEMENT OF FINANCIAL POSITION, (continued)



|                                              |  | Note |      |  | As of December 31, 2012 |  |           | As of December 31, 2011 | 
|--------------------------------------------- |  | ---- | ---- |  | ----------------------- |  | --------- | ----------------------- | 
|                                              |  |      |      |  | ThUS$                   |  |           | ThUS$                   | 
|Liabilities and Equity                        |  |      |      |  |                         |  |           |                         | 
|Liabilities                                   |  |      |      |  |                         |  |           |                         | 
|Current liabilities                           |  |      |      |  |                         |  |           |                         | 
|Current financial liabilities                 |  |      | 9.4  |  |                         |  | 152,843   |                         | 
|Trade and other accounts payable              |  |      | 9.5  |  |                         |  | 207,944   |                         | 
|Trade accounts payable due to related parties |  |      | 8.3  |  |                         |  | 19        |                         | 
|Other current provisions                      |  |      | 15.1 |  |                         |  | 18,489    |                         | 
|Current tax liabilities                       |  |      | 23.2 |  |                         |  | 23,624    |                         | 
|Current accruals for employee benefits        |  |      | 13.1 |  |                         |  | 33,974    |                         | 
|Other current non-financial liabilities       |  |      | 15.3 |  |                         |  | 172,200   |                         | 
|Total current liabilities                     |  |      |      |  |                         |  | 609,093   |                         | 
|                                              |  |      |      |  |                         |  |           |                         | 
|Non-current liabilities                       |  |      |      |  |                         |  |           |                         | 
|Non-current financial liabilities             |  |      | 9.4  |  |                         |  | 1,446,194 |                         | 
|Other non-current provisions                  |  |      | 15.1 |  |                         |  | 7,357     |                         | 
|Deferred tax liabilities                      |  |      | 23.4 |  |                         |  | 125,445   |                         | 
|Non-current accruals for employee benefits    |  |      | 13.1 |  |                         |  | 40,896    |                         | 
|Total non-current liabilities                 |  |      |      |  |                         |  | 1,619,892 |                         | 
|Total liabilities                             |  |      |      |  |                         |  | 2,228,985 |                         | 
|                                              |  |      |      |  |                         |  |           |                         | 
|Equity                                        |  |      | 14   |  |                         |  |           |                         | 
|Share capital                                 |  |      |      |  |                         |  | 477,386   |                         | 
|Retained earnings                             |  |      |      |  |                         |  | 1,676,169 |                         | 
|Other reserves                                |  |      |      |  |                         |  | (20,772   | )                       | 
|Equity attributable controlling interests     |  |      |      |  |                         |  | 2,132,783 |                         | 
|Non-controlling interest                      |  |      |      |  |                         |  | 54,663    |                         | 
|Total equity                                  |  |      |      |  |                         |  | 2,187,446 |                         | 
|Total liabilities and equity                  |  |      |      |  |                         |  | 4,416,431 |                         | 



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



F-5







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



CONSOLIDATED STATEMENT OF INCOME



|                                                                                      |  |      |      |  | Year ended December 31 | 
|------------------------------------------------------------------------------------- |  | ---- | ---- |  | ---------------------- | 
|                                                                                      |  | Note |      |  | 2012                   | 
|                                                                                      |  |      |      |  | ThUS$                  | 
|                                                                                      |  |      |      |  |                        | 
|Revenues                                                                              |  |      | 22.1 |  |                        | 
|Cost of sales                                                                         |  |      | 22.2 |  |                        | 
|Gross profit                                                                          |  |      |      |  |                        | 
|                                                                                      |  |      |      |  |                        | 
|Other income                                                                          |  |      | 22.3 |  |                        | 
|Administrative expenses                                                               |  |      | 22.4 |  |                        | 
|Other expenses                                                                        |  |      | 22.5 |  |                        | 
|Other gains (losses)                                                                  |  |      | 22.6 |  |                        | 
|Income from operating activities                                                      |  |      |      |  |                        | 
|Finance income                                                                        |  |      |      |  |                        | 
|Finance expenses                                                                      |  |      |      |  |                        | 
|Equity income of associates and joint ventures accounting for using the equity method |  |      |      |  |                        | 
|Foreign currency exchange differences                                                 |  |      | 18   |  |                        | 
|Income before income tax expense                                                      |  |      |      |  |                        | 
|Income tax expense                                                                    |  |      | 23.4 |  |                        | 
|                                                                                      |  |      |      |  |                        | 
|Profit for the year                                                                   |  |      |      |  |                        | 
|Profit attributable to                                                                |  |      |      |  |                        | 
|Controlling interests                                                                 |  |      |      |  |                        | 
|Non-controlling interests                                                             |  |      |      |  |                        | 
|Profit for the year                                                                   |  |      |      |  |                        | 



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



F-6







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



CONSOLIDATED STATEMENT OF INCOME (continued)



|                                           |  |      |    |  | Year ended December 31 | 
|------------------------------------------ |  | ---- | -- |  | ---------------------- | 
|                                           |  | Note |    |  | 2012                   | 
|                                           |  |      |    |  | US$                    | 
|Earnings per common share                  |  |      |    |  |                        | 
|                                           |  |      |    |  |                        | 
|Basic earnings per share (US$ per share)   |  |      | 17 |  |                        | 
|                                           |  |      |    |  |                        | 
|Diluted common shares                      |  |      |    |  |                        | 
|                                           |  |      |    |  |                        | 
|Diluted earnings per share (US$ per share) |  |      | 17 |  |                        | 



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



F-7







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



CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME



|                                                          |  | Year ended December 31 |        
|--------------------------------------------------------- |  | ---------------------- | -------
|                                                          |  | 2012                   |        
|                                                          |  | ThUS$                  |        
|                                                          |  |                        |        
|Statement of comprehensive income                         |  |                        |        
|                                                          |  |                        |        
|Profit for the year                                       |  |                        | 657,369
|Components of other comprehensive income before taxes     |  |                        |        
|Gain (loss) from foreign currency translation differences |  |                        | 982    
|Cash flow hedges                                          |  |                        |        
|Loss from cash flow hedges                                |  |                        | (7,872 
|Actuarial gains (losses) from defined benefit plans       |  |                        | 711    
|Other                                                     |  |                        | -      
|Comprehensive income before income tax                    |  |                        | (6,179 
|                                                          |  |                        |        
|Income taxes associated with other comprehensive income   |  |                        | 1,580  
|                                                          |  |                        |        
|Other comprehensive income (loss)                         |  |                        | (4,599 
|                                                          |  |                        |        
|Total comprehensive income                                |  |                        | 652,770
|                                                          |  |                        |        
|Comprehensive income attributable to                      |  |                        |        
|Controlling interests                                     |  |                        | 644,507
|Non-controlling interest                                  |  |                        | 8,263  
|Total comprehensive income                                |  |                        | 652,770



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



F-8







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



CONSOLIDATED STATEMENT OF CASH FLOWS



|                                                                               |  | Year ended December 31 |         
|------------------------------------------------------------------------------ |  | ---------------------- | --------
|                                                                               |  | 2012 ThUS$             |         
|                                                                               |  |                        |         
|Cash flows from operating activities                                           |  |                        |         
|                                                                               |  |                        |         
|Profit for the period                                                          |  |                        | 657,369 
|Adjustment to reconcile profit for the period                                  |  |                        |         
|                                                                               |  |                        |         
|Adjustment for decreases (increases) in inventories                            |  |                        | (167,826
|Adjustment for decreases (increases) in trade receivables                      |  |                        | (52,993 
|Adjustment for increases in other receivables from operating activities        |  |                        | (57,300 
|Adjustment for increases in trade payables                                     |  |                        | (49,025 
|Adjustment for increases in other payables from operating activities           |  |                        | (204,067
|Adjustment for depreciation and amortization                                   |  |                        | 196,158 
|Adjustment for provisions                                                      |  |                        | 33,657  
|Adjustment for income tax expense                                              |  |                        | 216,082 
|Adjustment for unrealized foreign currency translation loss                    |  |                        | 26,787  
|Adjustment for undistributed profit from associates                            |  |                        | (24,357 
|Other adjustments                                                              |  |                        | 67,044  
|                                                                               |  |                        |         
|Reconciling adjustments                                                        |  |                        | (15,840 
|                                                                               |  |                        |         
|Net cash flows provided by operating activities                                |  |                        | 641,529 
|                                                                               |  |                        |         
|Dividends received                                                             |  |                        | 15,126  
|Interest paid                                                                  |  |                        | (6,449  
|Net cash flows provided by operating activities                                |  |                        | 650,206 
|                                                                               |  |                        |         
|Cash flows used in investing activities                                        |  |                        |         
|                                                                               |  |                        |         
|Cash flows from  changes in ownership interest in subsidiaries and investments |  |                        | 961     
|Payments to acquire interest in joint ventures                                 |  |                        | (197    
|Loans to related parties                                                       |  |                        | (4,000  
|Proceeds from the sale of property, plant and equipment                        |  |                        | 2,050   
|Acquisition of property, plant and equipment                                   |  |                        | (445,984
|Cash advances and loans granted to third parties                               |  |                        | (623    
|Net (purchases) sales of short term financial assets                           |  |                        | (115,092
|Net cash used in investing activities                                          |  |                        | (562,885



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



F-9







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



CONSOLIDATED STATEMENT OF CASH FLOWS (continued)



|                                                                                                    |  |      |   |  | Year ended December 31 | 
|--------------------------------------------------------------------------------------------------- |  | ---- | - |  | ---------------------- | 
|                                                                                                    |  | Note |   |  | 2012 ThUS$             | 
|                                                                                                    |  |      |   |  |                        | 
|Cash flows used in financing activities                                                             |  |      |   |  |                        | 
|                                                                                                    |  |      |   |  |                        | 
|Proceeds from the issuance of long-term  loans                                                      |  |      |   |  |                        | 
|Repayment of loans                                                                                  |  |      |   |  |                        | 
|Dividends paid                                                                                      |  |      |   |  |                        | 
|Other cash outflows                                                                                 |  |      |   |  |                        | 
|Net cash used in financing activities                                                               |  |      |   |  |                        | 
|                                                                                                    |  |      |   |  |                        | 
|Net increase (decrease) in cash and cash equivalents before the effect of changes in exchange rates |  |      |   |  |                        | 
|                                                                                                    |  |      |   |  |                        | 
|Effects of exchange rate fluctuations on cash and costs equivalents                                 |  |      |   |  |                        | 
|Net increase (decrease) in cash and cash equivalents                                                |  |      |   |  |                        | 
|                                                                                                    |  |      |   |  |                        | 
|Cash and cash equivalents at beginning of period                                                    |  |      |   |  |                        | 
|                                                                                                    |  |      |   |  |                        | 
|Cash and cash equivalents at end of period                                                          |  |      | 6 |  |                        | 



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





F-10







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



STATEMENT OF CHANGES IN EQUITY



|                                                       |  | Share
    capital |         |  | Foreign
    currency
    translation
    difference reserves |  |        | Cash flow
    hedge
    reserves |  |  | Actuarial
    gains
    (losses)
    from defined benefit plans |   |  | Other
    reserves |        |   | Subtotal
    other reserves |  |        | Retained
    earnings |  |  | Equity
    attributable to
    owners of the Parent |   |  | Non-
    controlling interest |           |   | Total | 
|------------------------------------------------------ |  | ----------------- | ------- |  | ------------------------------------------------------------ |  | ------ | -------------------------------- |  |  | --------------------------------------------------------------- | - |  | ------------------ | ------ | - | --------------------------- |  | ------ | --------------------- |  |  | --------------------------------------------------- | - |  | ----------------------------- | --------- | - | ----- | 
|                                                       |  | ThUS$             |         |  | ThUS$                                                        |  |        | ThUS$                            |  |  | ThUS$                                                           |   |  | ThUS$              |        |   | ThUS$                       |  |        | ThUS$                 |  |  | ThUS$                                               |   |  | ThUS$                         |           |   | ThUS$ | 
|                                                       |  |                   |         |  |                                                              |  |        |                                  |  |  |                                                                 |   |  |                    |        |   |                             |  |        |                       |  |  |                                                     |   |  |                               |           |   |       | 
|Equity at January 1, 2012                              |  |                   | 477,386 |  |                                                              |  | (1,251 | )                                |  |  | (10,230                                                         | ) |  |                    | (2,954 | ) |                             |  | (1,677 | )                     |  |  | (16,112                                             | ) |  |                               | 1,351,560 |   |       | 
|                                                       |  |                   |         |  |                                                              |  |        |                                  |  |  |                                                                 |   |  |                    |        |   |                             |  |        |                       |  |  |                                                     |   |  |                               |           |   |       | 
|Profit                                                 |  |                   | -       |  |                                                              |  | -      |                                  |  |  | -                                                               |   |  |                    | -      |   |                             |  | -      |                       |  |  | -                                                   |   |  |                               | 649,167   |   |       | 
|                                                       |  |                   |         |  |                                                              |  |        |                                  |  |  |                                                                 |   |  |                    |        |   |                             |  |        |                       |  |  |                                                     |   |  |                               |           |   |       | 
|Other comprehensive income (loss)                      |  |                   | -       |  |                                                              |  | 921    |                                  |  |  | (6,292                                                          | ) |  |                    | 711    |   |                             |  | -      |                       |  |  | (4,660                                              | ) |  |                               | -         |   |       | 
|                                                       |  |                   |         |  |                                                              |  |        |                                  |  |  |                                                                 |   |  |                    |        |   |                             |  |        |                       |  |  |                                                     |   |  |                               |           |   |       | 
|Comprehensive income
    (loss)                        |  |                   | -       |  |                                                              |  | 921    |                                  |  |  | (6,292                                                          | ) |  |                    | 711    |   |                             |  | -      |                       |  |  | (4,660                                              | ) |  |                               | 649,167   |   |       | 
|                                                       |  |                   |         |  |                                                              |  |        |                                  |  |  |                                                                 |   |  |                    |        |   |                             |  |        |                       |  |  |                                                     |   |  |                               |           |   |       | 
|Dividends declared                                     |  |                   | -       |  |                                                              |  | -      |                                  |  |  | -                                                               |   |  |                    | -      |   |                             |  | -      |                       |  |  | -                                                   |   |  |                               | (324,558  | ) |       | 
|                                                       |  |                   |         |  |                                                              |  |        |                                  |  |  |                                                                 |   |  |                    |        |   |                             |  |        |                       |  |  |                                                     |   |  |                               |           |   |       | 
|Increase (decrease) in transfers and other
    changes |  |                   | -       |  |                                                              |  | -      |                                  |  |  | -                                                               |   |  |                    | -      |   |                             |  | -      |                       |  |  | -                                                   |   |  |                               | -         |   |       | 
|                                                       |  |                   |         |  |                                                              |  |        |                                  |  |  |                                                                 |   |  |                    |        |   |                             |  |        |                       |  |  |                                                     |   |  |                               |           |   |       | 
|Increase
    (decrease) in equity                      |  |                   | -       |  |                                                              |  | 921    |                                  |  |  | (6,292                                                          | ) |  |                    | 711    |   |                             |  | -      |                       |  |  | (4,660                                              | ) |  |                               | 324,609   |   |       | 
|                                                       |  |                   |         |  |                                                              |  |        |                                  |  |  |                                                                 |   |  |                    |        |   |                             |  |        |                       |  |  |                                                     |   |  |                               |           |   |       | 
|Equity as of
    December 31, 2012                     |  |                   | 477,386 |  |                                                              |  | (330   | )                                |  |  | (16,522                                                         | ) |  |                    | (2,243 | ) |                             |  | (1,677 | )                     |  |  | (20,772                                             | ) |  |                               | 1,676,169 |   |       | 



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



F-11







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



STATEMENT OF CHANGES IN EQUITY



|                                                         |  | Share
    capital |         |  | Foreign
    currency translation
    difference reserves |  |        | Cash flow
    hedge reserves |  |  | Actuarial
    gains (losses)
    from defined benefit plans |   |  | Other
    reserves |        |   | Subtotal
    other reserves |  |        | Retained
    earnings |  |  | Equity
    attributable to
    owners of the Parent |   |  | Non-
    controlling interest |           |   | Total | 
|-------------------------------------------------------- |  | ----------------- | ------- |  | -------------------------------------------------------- |  | ------ | ---------------------------- |  |  | ----------------------------------------------------------- | - |  | ------------------ | ------ | - | --------------------------- |  | ------ | --------------------- |  |  | --------------------------------------------------- | - |  | ----------------------------- | --------- | - | ----- | 
|                                                         |  | ThUS$             |         |  | ThUS$                                                    |  |        | ThUS$                        |  |  | ThUS$                                                       |   |  | ThUS$              |        |   | ThUS$                       |  |        | ThUS$                 |  |  | ThUS$                                               |   |  | ThUS$                         |           |   | ThUS$ | 
|                                                         |  |                   |         |  |                                                          |  |        |                              |  |  |                                                             |   |  |                    |        |   |                             |  |        |                       |  |  |                                                     |   |  |                               |           |   |       | 
|Equity at January 1, 2011                                |  |                   | 477,386 |  |                                                          |  | 1,530  |                              |  |  | (9,207                                                      | ) |  |                    | (2,036 | ) |                             |  | -      |                       |  |  | (9,713                                              | ) |  |                               | 1,155,131 |   |       | 
|                                                         |  |                   |         |  |                                                          |  |        |                              |  |  |                                                             |   |  |                    |        |   |                             |  |        |                       |  |  |                                                     |   |  |                               |           |   |       | 
|Profit (loss)                                            |  |                   | -       |  |                                                          |  | -      |                              |  |  | -                                                           |   |  |                    | -      |   |                             |  | -      |                       |  |  | -                                                   |   |  |                               | 545,758   |   |       | 
|                                                         |  |                   |         |  |                                                          |  |        |                              |  |  |                                                             |   |  |                    |        |   |                             |  |        |                       |  |  |                                                     |   |  |                               |           |   |       | 
|Other comprehensive income (loss)                        |  |                   | -       |  |                                                          |  | (2,781 | )                            |  |  | (1,023                                                      | ) |  |                    | (918   | ) |                             |  | (1,677 | )                     |  |  | (6,399                                              | ) |  |                               | -         |   |       | 
|                                                         |  |                   |         |  |                                                          |  |        |                              |  |  |                                                             |   |  |                    |        |   |                             |  |        |                       |  |  |                                                     |   |  |                               |           |   |       | 
|Comprehensive
    income (loss)                          |  |                   | -       |  |                                                          |  | (2,781 | )                            |  |  | (1,023                                                      | ) |  |                    | (918   | ) |                             |  | (1,677 | )                     |  |  | (6,399                                              | ) |  |                               | 545,758   |   |       | 
|                                                         |  |                   |         |  |                                                          |  |        |                              |  |  |                                                             |   |  |                    |        |   |                             |  |        |                       |  |  |                                                     |   |  |                               |           |   |       | 
|Dividends declared                                       |  |                   | -       |  |                                                          |  | -      |                              |  |  | -                                                           |   |  |                    | -      |   |                             |  | -      |                       |  |  | -                                                   |   |  |                               | (349,329  | ) |       | 
|                                                         |  |                   |         |  |                                                          |  |        |                              |  |  |                                                             |   |  |                    |        |   |                             |  |        |                       |  |  |                                                     |   |  |                               |           |   |       | 
|Increase (decrease)
    from transfers and other changes |  |                   | -       |  |                                                          |  | -      |                              |  |  | -                                                           |   |  |                    | -      |   |                             |  | -      |                       |  |  | -                                                   |   |  |                               | -         |   |       | 
|                                                         |  |                   |         |  |                                                          |  |        |                              |  |  |                                                             |   |  |                    |        |   |                             |  |        |                       |  |  |                                                     |   |  |                               |           |   |       | 
|Increase
    (decrease) in equity                        |  |                   | -       |  |                                                          |  | (2,781 | )                            |  |  | (1,023                                                      | ) |  |                    | (918   | ) |                             |  | (1,677 | )                     |  |  | (6,399                                              | ) |  |                               | 196,429   |   |       | 
|                                                         |  |                   |         |  |                                                          |  |        |                              |  |  |                                                             |   |  |                    |        |   |                             |  |        |                       |  |  |                                                     |   |  |                               |           |   |       | 
|Equity
    as of December 31, 2011                       |  |                   | 477,386 |  |                                                          |  | (1,251 | )                            |  |  | (10,230                                                     | ) |  |                    | (2,954 | ) |                             |  | (1,677 | )                     |  |  | (16,112                                             | ) |  |                               | 1,351,560 |   |       | 



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



F-12







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



STATEMENT OF CHANGES IN EQUITY



|                                                         |  | Share
    capital |         |  | Foreign
    currency translation
    difference reserves |  |       | Cash flow
    hedge reserves |  |  | Actuarial
    gains (losses)
    from defined benefit plans |   |  | Subtotal
    Other reserves |        |   | Retained
    earnings |  |        | Equity
    attributable to
    owners of the Parent |  |  | Non-
controlling
    interest |   |  | Total |          
|-------------------------------------------------------- |  | ----------------- | ------- |  | -------------------------------------------------------- |  | ----- | ---------------------------- |  |  | ----------------------------------------------------------- | - |  | --------------------------- | ------ | - | --------------------- |  | ------ | --------------------------------------------------- |  |  | ----------------------------- | - |  | ----- | ---------
|                                                         |  | ThUS$             |         |  | ThUS$                                                    |  |       | ThUS$                        |  |  | ThUS$                                                       |   |  | ThUS$                       |        |   | ThUS$                 |  |        | ThUS$                                               |  |  | ThUS$                         |   |  | ThUS$ |          
|                                                         |  |                   |         |  |                                                          |  |       |                              |  |  |                                                             |   |  |                             |        |   |                       |  |        |                                                     |  |  |                               |   |  |       |          
|Equity at January 1, 2010                                |  |                   | 477,386 |  |                                                          |  | 1,234 |                              |  |  | (7,984                                                      | ) |  |                             | (3,056 | ) |                       |  | (9,806 | )                                                   |  |  | 951,173                       |   |  |       | 1,418,753
|                                                         |  |                   |         |  |                                                          |  |       |                              |  |  |                                                             |   |  |                             |        |   |                       |  |        |                                                     |  |  |                               |   |  |       |          
|Restated
    opening balance of equity                   |  |                   | 477,386 |  |                                                          |  | 1,234 |                              |  |  | (7,984                                                      | ) |  |                             | (3,056 | ) |                       |  | (9,806 | )                                                   |  |  | 951,173                       |   |  |       | 1,418,753
|                                                         |  |                   |         |  |                                                          |  |       |                              |  |  |                                                             |   |  |                             |        |   |                       |  |        |                                                     |  |  |                               |   |  |       |          
|Profit (loss)                                            |  |                   | -       |  |                                                          |  | -     |                              |  |  | -                                                           |   |  |                             | -      |   |                       |  | -      |                                                     |  |  | 382,122                       |   |  |       | 382,122  
|                                                         |  |                   |         |  |                                                          |  |       |                              |  |  |                                                             |   |  |                             |        |   |                       |  |        |                                                     |  |  |                               |   |  |       |          
|Other comprehensive income (loss)                        |  |                   | -       |  |                                                          |  | 296   |                              |  |  | (1,223                                                      | ) |  |                             | 1,020  |   |                       |  | 93     |                                                     |  |  | -                             |   |  |       | 93       
|                                                         |  |                   |         |  |                                                          |  |       |                              |  |  |                                                             |   |  |                             |        |   |                       |  |        |                                                     |  |  |                               |   |  |       |          
|Comprehensive
    income (loss)                          |  |                   | -       |  |                                                          |  | 296   |                              |  |  | (1,223                                                      | ) |  |                             | 1,020  |   |                       |  | 93     |                                                     |  |  | 382,122                       |   |  |       | 382,215  
|                                                         |  |                   |         |  |                                                          |  |       |                              |  |  |                                                             |   |  |                             |        |   |                       |  |        |                                                     |  |  |                               |   |  |       |          
|Dividends declared                                       |  |                   | -       |  |                                                          |  | -     |                              |  |  | -                                                           |   |  |                             | -      |   |                       |  | -      |                                                     |  |  | (178,164                      | ) |  |       | (178,164 
|                                                         |  |                   |         |  |                                                          |  |       |                              |  |  |                                                             |   |  |                             |        |   |                       |  |        |                                                     |  |  |                               |   |  |       |          
|Increase (decrease)
    from transfers and other changes |  |                   | -       |  |                                                          |  | -     |                              |  |  | -                                                           |   |  |                             | -      |   |                       |  | -      |                                                     |  |  | -                             |   |  |       | -        
|                                                         |  |                   |         |  |                                                          |  |       |                              |  |  |                                                             |   |  |                             |        |   |                       |  |        |                                                     |  |  |                               |   |  |       |          
|Increase
    (decrease) in equity                        |  |                   | -       |  |                                                          |  | 296   |                              |  |  | (1,223                                                      | ) |  |                             | 1,020  |   |                       |  | 93     |                                                     |  |  | 203,958                       |   |  |       | 204,051  
|                                                         |  |                   |         |  |                                                          |  |       |                              |  |  |                                                             |   |  |                             |        |   |                       |  |        |                                                     |  |  |                               |   |  |       |          
|Equity
    as of December 31, 2010                       |  |                   | 477,386 |  |                                                          |  | 1,530 |                              |  |  | (9,207                                                      | ) |  |                             | (2,036 | ) |                       |  | (9,713 | )                                                   |  |  | 1,155,131                     |   |  |       | 1,622,804



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



.

F-13







| | Notes
    to the consolidated financial statements as of December 31, 2012
| | --------------------------------------------------------------------------



Note
1 – Identification and Activities of the Company and Subsidiaries



| | 1.1 | Historical background
| | --- | ---------------------



Sociedad Química y Minera de Chile
S.A. (the “Company” or “SQM”) is an open stock corporation organized under the laws of the Republic of
Chile, Tax Identification N° 93.007.000-9. The Company was constituted by public deed issued on June 17, 1968 by the Notary
Public of Santiago, Mr. Sergio Rodríguez Garcés. Its existence was approved by Decree No. 1,164 on June 22, 1968
by the Ministry of Finance, and it was registered on June 29, 1968 in the Registry of Commerce of Santiago, on page 4,537 N°
1,992. SQM's headquarters are located at El Trovador 4285, Fl. 6, Las Condes, Santiago, Chile. The Company's telephone number
is +56 2 425-2000.



The Company is registered with the Securities
Registry of the Chilean Superintendence of Securities and Insurance (“SVS”) under No. 0184 dated March 18. 1983 and
is subject to the inspection of the SVS.



| | 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; Administración Building w/n - Maria Elena; Administración
Building w/n Pedro de Valdivia - María Elena, Former Florencia office w/n - Sierra Gorda, Anibal Pinto 3228 - Antofagasta,
Kilometer 1378 5 Norte Highway - Antofagasta, Coya Sur Plant w/n - Maria Elena, kilometer 1760 5 Norte Highway - Pozo Almonte,
Pampa Yumbes w/n - Tal-tal.



| | 1.3 | Codes of main activities
| | --- | ------------------------



The codes of the main activities as established
by the SVS include codes:

| | - | 1700 Mining
| | - | -----------

| | - | 2200 Chemical products
| | - | ----------------------

| | - | 1300 Investment
| | - | ---------------



| | 1.4 | Description of the nature of operations and main activities
| | --- | -----------------------------------------------------------



The Company ́s products are mainly
derived from mineral deposits found in northern Chile, where the Company mine and processes caliche ore and brine deposits. The
caliche ore in northern Chile is the world’s largest commercially exploited source of natural nitrates and contains the
only known nitrate and iodine deposits in the world. The Brine deposits of the Salar de Atacama, a salt-encrusted depression within
the Atacama desert in northern Chile, contain high concentrations of lithium and potassium as well as significant concentrations
of sulfate and boron.



F-14







| | Notes
    to the consolidated financial statements as of December 31 2012
| | -------------------------------------------------------------------------



Note
1 – Identification and Activities of the Company and Subsidiaries (continued)



| | 1.4 | Description of the nature of operations and main activities,
continued
| | --- | ----------------------------------------------------------------------



From the Company ́s caliche ore deposits,
the Company produces a wide range of nitrate-based products used for specialty plant nutrients and industrial applications, as
well as iodine and iodine derivatives. At the Salar de Atacama, its extracts brines rich in potassium, lithium, sulfate and boron
in order to produce potassium chloride, potassium sulfate, lithium solutions, boric acid and bischofite (magnesium chloride).
The Company produces lithium carbonate and lithium hydroxide at our plant near the city of Antofagasta, Chile, from solutions
delivered from the Salar de Atacama. The Company markets all of these products through an established worldwide distribution network,
in more than 100 countries worldwide and generate most of its revenue from foreign countries.



The Company ́s products are divided
into six categories, which are also classified as operating segments: specialty plant nutrition, iodine and derivatives, lithium
and derivatives, industrial chemicals, potassium, and other products and services, each of which is described below.



Specialty plant nutrients:This
segment is characterized by being closely related to its customers for which we employ specialized staff who provide expert advice
in best practices for fertilization according to each type of crop, soil and climate. Within this segment, potassium derivative
products and specially potassium nitrate have a leading role in their contribution to crop development ensuring improvements in
post-crop life, in addition to improving quality, flavor and fruit color. Potassium nitrate, which is sold in multiple formats
and as a part of other specialty mixtures, is complemented by sodium nitrate, potassium sodium nitrate, and more than 200 fertilizing
mixtures.



Iodine and derivatives:The Company
is the largest producer of iodine in the world, which is a product widely used in the pharmaceutical, technology and nutrition
industries. Additionally, iodine is used as X-ray contrast media and polarizing film for LCD displays.



Lithium and derivatives:The Company’s
lithium is mainly used for manufacturing rechargeable batteries for cell phones, cameras and notebooks. Through the manufacturing
of lithium-based products, SQM provides significant materials to address challenges such as the efficient use of energy and raw
materials. Lithium is not only used for rechargeable batteries and in new technologies for electric vehicles, but is also used
in industrial applications to lower melting temperature and to help reduce energy costs.



F-15







| | Notes
    to the consolidated financial statements as of December 31 2012
| | -------------------------------------------------------------------------



Note
1 – Identification and Activities of the Company and Subsidiaries (continued)



| | 1.4 | Description of the nature of operations and main activities,
continued
| | --- | ----------------------------------------------------------------------



Industrial Chemicals:Industrial
chemicals products are used as supplies for a number of production processes. SQM has more than 30 years of experience participating
in this segment producing sodium nitrate, potassium nitrate, boric acid and potassium chloride. Industrial nitrates have increased
in importance over the last few years due to their use as storage means for thermal energy at solar energy plants, which are widely
used in countries such as Spain and the United States in their search for decreasing CO2emissions.



Potassium: Potassium is a primary
essential macro-nutrient, and even though it does not form part of the plant’s structure, has a significant role for developing
basic crop functions, improving quality, increasing post-crop life, improving flavor, its amount of vitamins and its physical
appearance. This segment also includes potassium chlorate and potassium sulfate, both extracted from the salt layer located under
the Salar de Atacama.



Other products and services: Includes
revenues from commodities, provision of services, interest, royalties and dividends.



| | 1.5 | Other background
| | --- | ----------------



Employees



As of December 31, 2012 and 2011, the
Company’s permanent employees were 5,643 and 4,902, respectively.



F-16







| | Notes
    to the consolidated financial statements as of December 31 2012
| | -------------------------------------------------------------------------



Note
1 – Identification and Activities of the Company and Subsidiaries (continued)



| | 1.5 | Other background, continued
| | --- | ---------------------------



Main
shareholders



The table below provides certain information
about the beneficial ownership of shareholder with more than 5% of outstanding which Series A and Series B shares of SQM as of
December 31, 2012 and 2011. The information below is derived from the Company ́s records and reports controlled by Central
Securities Depository and reported to the SVS and the Chilean Santiago Stock Exchange.



|Shareholders as of 12/31/2012                   |  | Number of Series A shares with ownership |            |  | % of Series A shares |  |       | Number  of Series B shares with ownership |  |  | % of Series B shares B |  |  | Total % of shares |      
|----------------------------------------------- |  | ---------------------------------------- | ---------- |  | -------------------- |  | ----- | ----------------------------------------- |  |  | ---------------------- |  |  | ----------------- | -----
|Inversiones El Boldo Limitada                   |  |                                          | 44,751,196 |  |                      |  | 31.33 | %                                         |  |  | 17,571,676             |  |  |                   | 14.60
|Sociedad de Inversiones Pampa Calichera S.A.(*) |  |                                          | 44,558,830 |  |                      |  | 31.20 | %                                         |  |  | 9,003,799              |  |  |                   | 7.48 
|The Bank of New York                            |  |                                          | -          |  |                      |  | -     |                                           |  |  | 46,559,106             |  |  |                   | 38.68
|Inversiones RAC Chile Limitada                  |  |                                          | 19,200,242 |  |                      |  | 13.44 | %                                         |  |  | 2,699,773              |  |  |                   | 2.24 
|Potasios de Chile S.A.(*)                       |  |                                          | 17,919,147 |  |                      |  | 12.55 | %                                         |  |  | -                      |  |  |                   | -    
|Inversiones Global Mining (Chile) Limitada (*)  |  |                                          | 8,798,539  |  |                      |  | 6.16  | %                                         |  |  | -                      |  |  |                   | -    
|Banco Itau on behalf of investors               |  |                                          | -          |  |                      |  | -     |                                           |  |  | 4,579,293              |  |  |                   | 3.80 
|Inversiones La Esperanza Limitada               |  |                                          | 3,693,977  |  |                      |  | 2.59  | %                                         |  |  | -                      |  |  |                   | -    
|Banco Santander on behalf of foreign  investors |  |                                          | -          |  |                      |  | -     |                                           |  |  | 3,238,105              |  |  |                   | 2.69 
|Banco de Chile for other non residents          |  |                                          | -          |  |                      |  | -     |                                           |  |  | 3,082,612              |  |  |                   | 2.56 
|                                                |  |                                          |            |  |                      |  |       |                                           |  |  |                        |  |  |                   |      



(*) Total Pampa Group 30.50%



|Shareholders as of 12/31/2011                   |  | Number of Series A shares with ownership |            |  | % of Series A shares |  |       | Number  of Series B shares 
with ownership |  |  | % of Series B shares B |  |  | Total % of shares |      
|----------------------------------------------- |  | ---------------------------------------- | ---------- |  | -------------------- |  | ----- | ------------------------------------------ |  |  | ---------------------- |  |  | ----------------- | -----
|Inversiones El Boldo Limitada                   |  |                                          | 44,751,196 |  |                      |  | 31.33 | %                                          |  |  | 17,571,676             |  |  |                   | 14.60
|Sociedad de Inversiones Pampa Calichera S.A.(*) |  |                                          | 44,758,830 |  |                      |  | 31.34 | %                                          |  |  | 12,241,799             |  |  |                   | 10.17
|The Bank of New York                            |  |                                          | -          |  |                      |  | -     |                                            |  |  | 42,036,912             |  |  |                   | 34.92
|Inversiones RAC Chile Limitada                  |  |                                          | 19,200,242 |  |                      |  | 13.44 | %                                          |  |  | 2,699,773              |  |  |                   | 2.24 
|Potasios de Chile S.A.(*)                       |  |                                          | 18,179,147 |  |                      |  | 12.73 | %                                          |  |  | 156,780                |  |  |                   | 0.13 
|Inversiones Global Mining (Chile) Limitada (*)  |  |                                          | 8,798,539  |  |                      |  | 6.16  | %                                          |  |  | -                      |  |  |                   | -    
|Banchile Corredores de Bolsa S.A.               |  |                                          | 136,919    |  |                      |  | 0.10  | %                                          |  |  | 4,890,193              |  |  |                   | 4.06 
|Corpbanca Corredores de Bolsa  S.A.             |  |                                          | 11,189     |  |                      |  | 0.01  | %                                          |  |  | 4,264,250              |  |  |                   | 3.54 
|Inversiones La Esperanza Limitada               |  |                                          | 3,693,977  |  |                      |  | 2.59  | %                                          |  |  | -                      |  |  |                   | -    
|Banco Itau on behalf of investors               |  |                                          | -          |  |                      |  | -     |                                            |  |  | 3,693,080              |  |  |                   | 3.07 



(*) Total Pampa Group 31.97%



F-17







| | Notes
    to the consolidated financial statements as of December 31 2012
| | -------------------------------------------------------------------------



Note 2 - Bases of presentation for
consolidated financial statements (continued)



| | 2.1 | Financial statements
| | --- | --------------------



The consolidated financial statements
of Sociedad Química y Minera de Chile S.A. and subsidiaries, have been prepared in accordance with International Financial
Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB).



The accounting policies used in the preparation
of these consolidated Financial Statements are described below and comply with each IFRS in force at their date of presentation.



| | 2.2 | Basis of measurement
| | --- | --------------------



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



| | - | inventories
                                                             are recorded at the lower of cost and net realizable value;
| | - | ------------------------------------------------------------------------------------------------------------------------------------

| | - | other
                                                             current and non-current financial liabilities are carried at amortized
                                                             cost;
| | - | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | - | financial
                                                             derivatives are presented at fair value; and
| | - | -------------------------------------------------------------------------------------------------------------------

| | - | staff
                                                             severance indemnities and pension commitments are recorded at actuarial
                                                             value.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-18







| | Notes
    to the consolidated financial statements as of December 31 2012
| | -------------------------------------------------------------------------



Note 2 - Bases of presentation for
consolidated financial statements (continued)



| | 2.3 | Accounting pronouncements
| | --- | -------------------------



Accounting pronouncements



At the date of these consolidated financial
statements, the following accounting pronouncements have been issued by the IASB for which term application date is not yet effective.



|        |  | Standards                                     |  | Mandatory applicationfor periods beginning:
|------- |  | --------------------------------------------- |  | -------------------------------------------
|IAS 19  |  | Employee Benefits                             |  | January 1,
    2013                        
|IAS 27  |  | Separate Financial
    Statements             |  | January 1,
    2013                        
|IAS 28  |  | Associates
    and Joint Ventures             |  | January 1,
    2013                        
|IFRS 9  |  | Financial Instruments                         |  | January 1,
    2013                        
|IFRS 10 |  | Consolidated
    financial statements         |  | January 1,
    2013                        
|IFRS 11 |  | Joint arrangements                            |  | January 1,
    2013                        
|IFRS 12 |  | Disclosure
    of Interests in Other Entities |  | January 1,
    2013                        
|IFRS 13 |  | Fair Value
    Measurement                    |  | January 1,
    2013                        



IAS 19 Revised “Employee Benefits”

Issued in June 2011, supersedes IAS 19
(1998). This revised standard amends the recognition and measurement of defined benefit plan expenses and termination benefits.
Additionally, it includes amendments to disclosures of all employee benefits.



IAS 27 “Separate Financial Statements”

Issued in May 2011, supersedes IAS 27
(2008). The scope of this standard is restricted solely to separate financial statements, given that the aspects linked to the
definition of control and consolidation were removed and included in IFRS 10. Its early adoption is allowed together with IFRS
10, IFRS 11 and IFRS 12 and the amendment to IAS 28.



IAS 28 "Associates and Joint Ventures"

Issued in May 2011, supersedes IAS 28
(2003). It includes the requirements for associates and joint ventures that have to be equity accounted following the issue of
IFRS 11.   Its early adoption is allowed together with IFRS 10, IFRS 11 and IFRS 12 and the amendment to IAS 27.



IFRS 9 “Financial Instruments”

Issued in December 2009, amends the classification
and measurement of financial assets.

Subsequently, this standard was amended
in November 2010 to include the treatment and classification of financial liabilities. Early adoption is permitted.



IFRS 10 “Consolidated Financial
Statements”

Issued in May 2011, supersedes SIC 12
“Consolidation – Special Purpose Entities” and portions of IAS 27 “Consolidated Financial Statements”.
It establishes clarifications and new parameters for the definition of control, as well as the preparation of consolidated financial
statements. Its early adoption is permitted together with IFRS 11, IFRS 12 and amendments to IAS 27 and IAS 28.



F-19







| | Notes
    to the consolidated financial statements as of December 31 2012
| | -------------------------------------------------------------------------



Note 2 - Bases of presentation for
consolidated financial statements (continued)



| | 2.3 | Accounting pronouncements, continued
| | --- | ------------------------------------



IFRS 11 “Joint Arrangements”

Issued in May 2011, supersedes IAS 31
“Interests in Joint Ventures” and SIC 13 “Joint Controlled Entities”. Its amendments include the elimination
of the concept of jointly-controlled assets and the possibility of proportional consolidation of entities under common control.
Its early adoption is permitted together with IFRS 10, IFRS 12 and amendments to IAS 27 and IAS 28.



IFRS 12 “Disclosure of Interests
in Other Entities”

Issued in May 2011, is applicable for
entities with investments in subsidiaries, joint ventures and associates. Its early adoption is permitted together with IFRS 10,
IFRS 11 and amendments to IAS 27 and IAS 28.



IFRS 13 “Fair Value Measurement”

Issued in May 2011, gathers in one single
standard the method for measuring fair value of assets and liabilities and disclosures required for this purpose and incorporates
new concepts and clarifications for measurement.



|        |  | Improvements and Amendments                            |  | Mandatoryapplication for:
|------- |  | ------------------------------------------------------ |  | -------------------------
|IAS 1   |  | Presentation of
    Financial Statements               |  | July 1, 2012             
|IFRS 7  |  | Financial Instruments:
    Information to be disclosed |  | January 1, 2013          
|IAS 32  |  | Financial Instruments:
    Presentation                |  | January 1, 2014          
|IAS 16  |  | Property, Plant
    and Equipment                      |  | January 1, 2013          
|IAS 32  |  | Financial Instruments:
    Presentation                |  | January 1, 2013          
|IAS 34  |  | Intermediate Financial
    Information                 |  | January 1, 2013          
|IFRS 10 |  | Consolidated Financial
    Statements                  |  | January 1, 2013          
|IFRS 11 |  | Joint Agreements                                       |  | January 1, 2013          
|IFRS 12 |  | Disclosures of
    participation in other entities     |  | January 1, 2013          



IAS 1 “Presentation of Financial
Statements”

Issued in June 2011, the main amendment
is that it requires that items in Other Comprehensive Income must be classified and grouped by assessing whether they will be
reclassified to subsequent periods. Early adoption of the new classification requirements is permitted.



IFRS 7 “Financial Instruments: Information
to be disclosed”

Issued in December
2011. Improves disclosures of compensation of financial assets and liabilities, in order to increase the convergence between
IFRS and Generally Accepted Accounting Principles in the United States. These disclosures are centered on quantitative
information related to financial instruments, which are included in the consolidated financial statements. Its early adoption
is permitted.



IAS 32 “Financial
Instruments: Presentation”

Issued in December 2011.
Explains the requirements for the compensation of financial assets and liabilities. Specifically, it indicates that the right
to compensation must be available as of the date of the financial statements and not dependent on a future event. The right to
compensation also must be legally binding for the counterparty in the normal course of the business, as well as in cases of non
payment, insolvency, or bankruptcy. Its early adoption is permitted.



F-20







| | Notes
    to the consolidated financial statements as of December 31 2012
| | -------------------------------------------------------------------------



Note 2 - Bases of presentation for
consolidated financial statements (continued)



IAS 16 “Property,
Plant, and Equipment”

Issued in May 2012. Clarifies
that spare parts and service equipment should be classified as Property, Plant, and Equipment, instead of inventories, whenever
it meets the definition of Property, Plant, and Equipment.



IAS 32 “Presentation
of Financial Instruments”

Issued in May 2012. Clarifies
that the treatment of income taxes related to equity distributions and transaction costs.



IAS 34 “Intermediate
Financial Information”

Issued in May 2012. Clarifies
the requirements to present assets and liabilities by segments, during interim periods, confirming the same requirements applicable
to the annual financial statements.



IFRS 10 Consolidated Financial Statements,
IFRS 11 “Joint Agreements”, IFRS 12 Disclosures of participation in other entities”

Issued in June 2012. Clarifies
that it is necessary to apply these standards on the first day of the annual period in which the regulations are adopted. Therefore,
it could be necessary to make modifications to comparative information presented in such periods, if the evaluation of control
over investments results in that recognized according to IAS 27/SIC 12.



Management is currently
evaluating the adoption of the standards, amendments and interpretations described above; however, they are not expected to have
a significant impact on the consolidated financial statements.



F-21







| | Notes
    to the consolidated financial statements as of December 31 2012
| | -------------------------------------------------------------------------



Note 2 - Basis of presentation for
consolidated financial statements (continued)



| | 2.4 | Transactions in foreign currency
| | --- | --------------------------------



| | (a) | Functional and presentation currency
| | --- | ------------------------------------



The Company’s consolidated
financial statements are presented in United States Dollars (“U.S. Dollars” or “US$”), which is the Company’s
functional and presentation currency and is the currency of the primary economic environment in which it operates.

Consequently, the term foreign
currency is defined as any currency other than the U.S. Dollar.

The conversion of the financial
statements of foreign subsidiaries with functional currency other than the U.S. Dollars is performed as follows:

| | - | Assets
                                                             and liabilities using the exchange rate prevailing on the closing
                                                             date of the consolidated financial statements.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | - | Statement
                                                             of income account items using average exchange rates for the year.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------

| | - | Equity
                                                             accounts are stated at the historical exchange rate on the transaction
                                                             date.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Foreign currency translation
differences which arise from the conversion of financial statements of subsidiaries are recorded in the account “Foreign
currency translation differences" within equity.



| | (b) | Basis of conversion
| | --- | -------------------



Domestic subsidiaries:



Assets and liabilities denominated in
Chilean Pesos and other currencies other than the U.S. Dollar as of December 31, 2012 and December 31, 2011 have been translated
to U.S. Dollars at the exchange rates prevailing on those dates. The corresponding Chilean Pesos were converted at Ch$479.96 and
Ch$519.20 per US$1.00 as of December 31, 2012 and 2011 respectively.

The values of the UF (a Chilean Peso-denominated,
inflation-indexed monetary unit) used to convert the UF denominated assets and liabilities as of December 31, 2012 amounted to
Ch$22,840.75 (US$47.59) and Ch$22,294.03 (US$42.94) as of December 31, 2012 and 2011 respectively.



F-22







| | Notes
    to the consolidated financial statements as of December 31 2012
| | -------------------------------------------------------------------------



Note 2 - Basis of presentation for
consolidated financial statements (continued)



| | 2.4 | Transactions in foreign currency, (continued)
| | --- | ---------------------------------------------



Foreign subsidiaries



The exchange rates used to translate the
monetary assets and liabilities expressed in foreign currencies at the closing date of each period in respect to the U.S. Dollar
are as follows:



|                   |  | 12/31/2012 |        |  | 12/31/2011 | 
|------------------ |  | ---------- | ------ |  | ---------- | 
|                   |  | US$        |        |  | US$        | 
|                   |  |            |        |  |            | 
|Brazilian Real     |  |            | 2.04   |  |            | 
|New Peruvian Sol   |  |            | 2.75   |  |            | 
|Argentinean Peso   |  |            | 4.92   |  |            | 
|Japanese Yen       |  |            | 86.58  |  |            | 
|Euro               |  |            | 0.76   |  |            | 
|Mexican Peso       |  |            | 12.99  |  |            | 
|Australian Dollar  |  |            | 1.05   |  |            | 
|Pound Sterling     |  |            | 0.62   |  |            | 
|South African Rand |  |            | 8.47   |  |            | 
|Ecuadorian Dollar  |  |            | 1.00   |  |            | 
|Chilean Peso       |  |            | 479.96 |  |            | 
|UF                 |  |            | 47.59  |  |            | 



| | (c) | Transactions and balances
| | --- | -------------------------



Non-monetary transactions and balances
denominated in a currency other than the U.S. Dollar are translated using the exchange rate at the transaction date. Monetary
assets and liabilities denominated in a foreign currency are translated at the exchange rate of the functional currency prevailing
at the closing date of the Consolidated Statement of Financial Position. All differences are recorded to the Statement of Income
with the exception of all monetary items that provide an effective hedge for a net investment in a foreign operation. These items
are recognized in Other Comprehensive Income upon the disposal of the investment, at which time they are recognized in the Statement
of Income. Tax charges and credits attributable to exchange differences on those monetary items are also recorded in Other Comprehensive
Income.



Non-monetary items that are measured in
terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions.
Non-monetary items measured at fair value in a foreign currency are translated using the exchange rates at the date when the fair
value is determined.



F-23







| | Notes
    to the consolidated financial statements as of December 31 2012
| | -------------------------------------------------------------------------



Note 2 - Basis of presentation for
consolidated financial statements (continued)



| | 2.4 | Transactions in foreign currency, continued
| | --- | -------------------------------------------



| | (d) | Group entities
| | --- | --------------



The profit or loss, assets and liabilities
of all entities with a functional currency other than the U.S. Dollar are translated to the presentation currency as follows:



| | - | Assets
                                                                and liabilities are translated at the closing date exchange rate
                                                                as of the date of the Consolidated Statement of Financial Position.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | - | Income
                                                                and expenses are translated at average exchange rates for the
                                                                year.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | - | All
                                                                resulting foreign currency exchange differences are recognized
                                                                in the foreign currency translation difference reserve in Equity.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



In consolidation, foreign currency exchange
differences which arise from the conversion of a net investment in foreign entities are recorded Equity (other reserves). At the
disposal date, these exchange differences are recognized in the Statement of Comprehensive Income as part of the gain or loss
from the sale.



| | 2.5 | Basis of consolidation
| | --- | ----------------------



| | (a) | Subsidiaries
| | --- | ------------



Subsidiaries are all entities over which
the Company has the ability to govern financial and operating policies generally accompanying a shareholding of more than one
half of the voting rights. The Company also assesses the existence of control where it does not have more than 50% of the voting
power but is able to govern the financial and operating policies by virtue of de-facto control. De-facto control may arise in
circumstance where the size of the group’s voting rights relative to the size and dispersion of the holdings of other shareholders
give the Company power to govern the financial and operating policies.



Subsidiaries are consolidated from the
date in which control is transferred to the Company and are excluded from consolidation on the date in which this control ceases
to exit.



Intercompany transactions, balances, income
and expenses on transactions between group companies are eliminated. Profits and losses resulting from intercompany transactions
that are recognized in assets are also eliminated. All subsidiaries apply the same accounting policies as described in Note 3.



Non-controlling interest represent the
portion of a subsidiary’s net assets and operating results not owned directly or indirectly by the parent company.



F-24





| | Notes
    to the consolidated financial statements as of December 31 2012
| | -------------------------------------------------------------------------



Note 2 - Basis of presentation for
consolidated financial statements (continued)



| | 2.5 | Basis of consolidation, continued
| | --- | ---------------------------------



Companies included in consolidation:



|           |  |                                                      |  |                 |  |            |  |  | Ownership interest |  |         |            | 
|---------- |  | ---------------------------------------------------- |  | --------------- |  | ---------- |  |  | ------------------ |  | ------- | ---------- | 
|           |  |                                                      |  | Country of      |  | Functional |  |  | 12/31/2012         |  |         | 12/31/2011 | 
|TAX ID No. |  | Subsidiaries                                         |  | Origin          |  | Currency   |  |  | Direct             |  |         | Indirect   | 
|Foreign    |  | Nitratos Naturais Do Chile Ltda.                     |  | Brazil          |  | US$        |  |  |                    |  | 0.0000  |            | 
|Foreign    |  | Nitrate Corporation Of Chile Ltd.                    |  | United Kingdom  |  | US$        |  |  |                    |  | 0.0000  |            | 
|Foreign    |  | SQM North America Corp.                              |  | USA             |  | US$        |  |  |                    |  | 40.0000 |            | 
|Foreign    |  | SQM Europe N.V.                                      |  | Belgium         |  | US$        |  |  |                    |  | 0.8600  |            | 
|Foreign    |  | Soquimich S.R.L. Argentina                           |  | Argentina       |  | US$        |  |  |                    |  | 0.0000  |            | 
|Foreign    |  | Soquimich European Holding B.V.                      |  | The Netherlands |  | US$        |  |  |                    |  | 0.0000  |            | 
|Foreign    |  | SQM Corporation N.V.                                 |  | Dutch Antilles  |  | US$        |  |  |                    |  | 0.0002  |            | 
|Foreign    |  | SQI Corporation N.V.                                 |  | Dutch Antilles  |  | US$        |  |  |                    |  | 0.0159  |            | 
|Foreign    |  | SQM Comercial De México S.A. De C.V.                 |  | Mexico          |  | US$        |  |  |                    |  | 0.0013  |            | 
|Foreign    |  | North American Trading Company                       |  | USA             |  | US$        |  |  |                    |  | 0.0000  |            | 
|Foreign    |  | Administración Y Servicios Santiago
    S.A. De C.V. |  | Mexico          |  | US$        |  |  |                    |  | 0.0000  |            | 
|Foreign    |  | SQM Perú S.A.                                        |  | Peru            |  | US$        |  |  |                    |  | 0.9800  |            | 
|Foreign    |  | SQM Ecuador S.A.                                     |  | Ecuador         |  | US$        |  |  |                    |  | 0.0040  |            | 
|Foreign    |  | SQM Nitratos Mexico S.A. De C.V.                     |  | Mexico          |  | US$        |  |  |                    |  | 0.0000  |            | 
|Foreign    |  | SQMC Holding Corporation L.L.P.                      |  | USA.            |  | US$        |  |  |                    |  | 0.1000  |            | 
|Foreign    |  | SQM Investment Corporation N.V.                      |  | Dutch Antilles  |  | US$        |  |  |                    |  | 1.0000  |            | 
|Foreign    |  | SQM Brasil Limitada                                  |  | Brazil          |  | US$        |  |  |                    |  | 2.7900  |            | 
|Foreign    |  | SQM France S.A.                                      |  | France          |  | US$        |  |  |                    |  | 0.0000  |            | 



F-25







| | Notes
    to the consolidated financial statements as of December 31 2012
| | -------------------------------------------------------------------------



Note 2 - Basis of presentation for
consolidated financial statements (continued)



| | 2.5 | Basis of consolidation, continued
| | --- | ---------------------------------



Companies included in consolidation:



|             |  |                                           |  |                 |  |            |  |  | Ownership
    interest |  |         |            | 
|------------ |  | ----------------------------------------- |  | --------------- |  | ---------- |  |  | ---------------------- |  | ------- | ---------- | 
|             |  |                                           |  | Country
    of  |  | Functional |  |  | 12/31/2012             |  |         | 12/31/2011 | 
|TAX ID No.   |  | Subsidiaries                              |  | Origin          |  | Currency   |  |  | Direct                 |  |         | Indirect   | 
|Foreign      |  | SQM Japan
    Co. Ltd.                    |  | Japan           |  | US$        |  |  |                        |  | 1.0000  |            | 
|Foreign      |  | Royal Seed Trading
    Corporation A.V.V. |  | Aruba           |  | US$        |  |  |                        |  | 1.6700  |            | 
|Foreign      |  | SQM Oceania Pty Limited                   |  | Australia       |  | US$        |  |  |                        |  | 0.0000  |            | 
|Foreign      |  | Rs Agro-Chemical
    Trading A.V.V.       |  | Aruba           |  | US$        |  |  |                        |  | 98.3333 |            | 
|Foreign      |  | SQM Indonesia S.A.                        |  | Indonesia       |  | US$        |  |  |                        |  | 0.0000  |            | 
|Foreign      |  | SQM Virginia L.L.C.                       |  | USA             |  | US$        |  |  |                        |  | 0.0000  |            | 
|Foreign      |  | SQM Italia SRL                            |  | Italy           |  | US$        |  |  |                        |  | 0.0000  |            | 
|Foreign      |  | Comercial Caimán
    Internacional S.A.   |  | Cayman Islands  |  | US$        |  |  |                        |  | 0.0000  |            | 
|Foreign      |  | SQM Africa Pty.                           |  | South Africa    |  | US$        |  |  |                        |  | 0.0000  |            | 
|Foreign      |  | SQM Lithium Specialties
    LLC           |  | USA             |  | US$        |  |  |                        |  | 0.0000  |            | 
|Foreign      |  | SQM Iberian S.A.(a)                       |  | Spain           |  | US$        |  |  |                        |  | 0.0000  |            | 
|Foreign      |  | Iodine Minera B.V.                        |  | The Netherlands |  | US$        |  |  |                        |  | 0.0000  |            | 
|Foreign      |  | SQM Agro India Pvt.
    Ltd.              |  | India           |  | US$        |  |  |                        |  | 0.0000  |            | 
|Foreign      |  | SQM Beijing Commercial
    Co. Ltd.       |  | China           |  | US$        |  |  |                        |  | 0.0000  |            | 
|96.801.610-5 |  | Comercial Hydro  S.A                      |  | Chile           |  | US$        |  |  |                        |  | 0.0000  |            | 
|96.651.060-9 |  | SQM Potasio S.A.                          |  | Chile           |  | US$        |  |  |                        |  | 99.9999 |            | 



F-26







| | Notes
    to the consolidated financial statements as of December 31 2012
| | -------------------------------------------------------------------------



Note 2 - Basis of presentation for
consolidated financial statements (continued)



| | 2.5 | Basis of consolidation, continued
| | --- | ---------------------------------



Companies included in consolidation:



|             |  |                                                                   |  |  |                |  |  |              | Ownership
    interest |            |         |  |           
|------------ |  | ----------------------------------------------------------------- |  |  | -------------- |  |  | ------------ | ---------------------- | ---------- | ------- |  | ----------
|             |  |                                                                   |  |  | Country
    of |  |  | Functional   |                        | 12/31/2012 |         |  | 12/31/2011
|TAX ID No.   |  | Foreign
    subsidiaries                                          |  |  | Origin         |  |  | Currency     |                        | Direct     |         |  | Indirect  
|96.592.190-7 |  | SQM Nitratos
    S.A.                                             |  |  | Chile          |  |  | US$          |                        |            | 99.9999 |  |           
|96.592.180-K |  | Ajay SQM Chile S.A.                                               |  |  | Chile          |  |  | US$          |                        |            | 51.0000 |  |           
|86.630.200-6 |  | SQMC Internacional  Ltda.                                         |  |  | Chile          |  |  | Chilean peso |                        |            | 0.0000  |  |           
|79.947.100-0 |  | SQM Industrial S.A.                                               |  |  | Chile          |  |  | US$          |                        |            | 99.0470 |  |           
|79.906.120-1 |  | Isapre Norte Grande
    Ltda.                                     |  |  | Chile          |  |  | Chilean peso |                        |            | 1.0000  |  |           
|79.876.080-7 |  | Almacenes y Depósitos
    Ltda.                                   |  |  | Chile          |  |  | Chilean peso |                        |            | 1.0000  |  |           
|79.770.780-5 |  | Servicios Integrales
    de Tránsitos y Transferencias S.A.       |  |  | Chile          |  |  | US$          |                        |            | 0.0003  |  |           
|79.768.170-9 |  | Soquimich Comercial
    S.A.                                      |  |  | Chile          |  |  | US$          |                        |            | 0.0000  |  |           
|79.626.800-K |  | SQM Salar S.A.                                                    |  |  | Chile          |  |  | US$          |                        |            | 18.1800 |  |           
|78.602.530-3 |  | Minera Nueva Victoria
    Ltda.(b)                                |  |  | Chile          |  |  | US$          |                        |            | -       |  |           
|78.053.910-0 |  | Proinsa Ltda.                                                     |  |  | Chile          |  |  | Chilean peso |                        |            | 0.0000  |  |           
|76.534.490-5 |  | Sociedad Prestadora
    de Servicios de Salud Cruz del Norte S.A. |  |  | Chile          |  |  | Chilean peso |                        |            | 0.0000  |  |           
|76.425.380-9 |  | Exploraciones Mineras
    S.A.                                    |  |  | Chile          |  |  | US$          |                        |            | 0.2691  |  |           
|76.064.419-6 |  | Comercial Agrorama
    Ltda. (c)                                  |  |  | Chile          |  |  | Chilean peso |                        |            | 0.0000  |  |           
|76.145.229-0 |  | Agrorama S.A. (d)                                                 |  |  | Chile          |  |  | Chilean peso |                        |            | 0.0000  |  |           



| | (a) | On December 14, 2011, Fertilizantes
                                                               Naturales S.A. changed its legal name to SQM Iberian S.A.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (b) | Effective November 30, 2012, this
                                                               entity was merged with SQM Potasio S.A.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------

| | (c) | Comercial Agrorama Ltda. is consolidated
                                                               as the Company has control through its subsidiary Soquimich Comercial
                                                               S.A.
| | --- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | (d) | This subsidiary was incorporated
                                                               on April 7, 2011.
| | --- | -----------------------------------------------------------------------------------------------------------------





F-27







| | Notes
    to the consolidated financial statements as of December 31 2012
| | -------------------------------------------------------------------------



Note 2 - Basis of presentation for
consolidated financial statements (continued)



| | 2.5 | Basis of consolidation, continued
| | --- | ---------------------------------



| | (b) | Equity accounted investments
| | --- | ----------------------------



Interests in companies in which control
is exercised together with another company (joint ventures) or in which the Company has significant influence (associated companies)
are accounted for using the equity method. Significant influence is assumed to exist when the Company has interest exceeding 20%
of the investee's equity. Under the equity method, the investment is initially recognize at cost, and the carrying amount is increased
or decreased to recognize the Company’s share of the profit or loss of the investee after the acquisition date. The Company’s
investments include goodwill identified upon acquisition.



The Company’s share of post acquisition
profit or loss is recognized in the Statement of Income. When the Company’s share of losses in an investee equals or exceeds
its interest, the Company does not recognize further losses unless it has incurred a legal or constructive obligations or made
payments on behalf of the investee.



The Company determines at each reporting
date whether there is any objective evidence that the investments are impaired. If impaired, the Company recognizes an impairment
loss in the Statement of Income as the difference between the recoverable amount of the investee and its carrying value.



Unrealized profits and losses resulting
from transactions with investees are recognized in the consolidated financial statements to the extent of unrelated investor’s
interest in the investee. Unrealized losses are eliminated unless the transaction provides evidence of loss from impairment of
the assets transferred. The reporting dates and accounting policies of the investees are consistent with those adopted by the
Company.



| | 2.6 | Segment reporting
| | --- | -----------------



Operating segments are reported in a manner
consistent with the internal reporting provided to the chief operating decision maker “CODM”. The CODM, who is responsible
for allocating reserves and assessing performance of the operating segments, has been identified as a committee comprised of the
Chief Executive Officer, and the Executive Vice President & Chief Operating Officer. The following operating segments are
based on the information provided to the CODM and the organizational structure of the Company:



| | - | Specialty
plant nutrients
| | - | -------------------------

| | - | Industrial
chemicals
| | - | --------------------

| | - | Iodine
and derivatives
| | - | ----------------------

| | - | Lithium
and derivatives
| | - | -----------------------

| | - | Potassium
| | - | ---------

| | - | Other
products and services
| | - | ---------------------------



| | 2.7 | Significant accounting judgments, estimates and assumptions
| | --- | -----------------------------------------------------------



Significant accounting judgments, estimates and assumptions
by management to prepare these consolidated financial statements include:



F-28







| | Notes
    to the consolidated financial statements as of December 31 2012
| | -------------------------------------------------------------------------



| | - | The
                                                                useful lives of tangible and intangible assets and their residual
                                                                values.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | - | Impairment
                                                                evaluations of certain assets, including trade and other accounts
                                                                receivables.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | - | Assumptions
                                                                used for impairment the actuarial calculation of liabilities for
                                                                employee pensions and staff severance indemnities.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | - | Inventory
                                                                provisions allowances on slow-moving obsolete in inventories.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------

| | - | Future
                                                                costs for and the timing of the closure of mining facilities.
| | - | ------------------------------------------------------------------------------------------------------------------------------------

| | - | The
                                                                determination of the fair value of certain financial and non-financial
                                                                assets and derivative financial instruments.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | - | The
                                                                determination and allocation of fair values in business combinations.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------



Although
these estimates have been made considering information available as of the date of preparation of these consolidated financial
statements, it is possible that future events may require their modification. Changes would be recorded prospectively, recognizing
the effects of any changes in estimates in future consolidated financial statements. There have been no significant changes in
the methodology or assumptions used in these estimates.





F-29









| | Notes
    to the consolidated financial statements as of December 31 2012
| | -------------------------------------------------------------------------



Note 3 – Significant accounting
policies



| | 3.1 | Cash and cash equivalents
| | --- | -------------------------



Cash equivalents consist of short-term,
highly liquid investments that are readily convertible into known amounts of cash and are subject to low risk of change in value,
with original maturities of three months or less from the date of acquisition.



| | 3.2 | Financial assets
| | --- | ----------------



The Company classifies its financial assets
under the following categories: at fair value through profit or loss, loans and trade receivables, financial assets held-to-maturity
and financial assets available-for-sale. The classification depends on the purpose for which financial assets were acquired. Management
determines the classification of its financial assets at the time of initial recognition.



At each reporting date management assesses
whether there is any objective evidence that a financial asset or a group of financial assets is impaired. A financial asset or
a group of assets is deemed to be impaired if and only if there is objective evidence of impairment as a result of one or more
events that has occurred after the initial recognition of the asset or group of assets (a “loss event”) and that loss
event or events has an impact on the estimated future cash flows of the financial asset or the group of financial assets that
can be reliably estimated.



| | (a) | Financial assets at fair value through profit or loss
| | --- | -----------------------------------------------------



Financial assets at fair value through
profit or loss are financial assets held for trading. A financial asset is classified in this category if it is acquired mainly
for the purpose of being sold in the short-term. Derivatives are also classified as acquired for trading unless they are designated
as hedges. Assets under this category are classified as current assets if expected to be settled within 12 months, and their changes
in fair value are directly recognized in profit or loss.



| | (b) | Loans and trade receivables
| | --- | ---------------------------



Loans and trade receivables are non-derivative
financial assets with fixed or determinable payments not quoted in any active market. These are included in current assets, except
for maturities greater than 12 months from the end of the reporting period, which are classified as non-current assets. The Company’s
loans and receivables consist of “trade and other accounts receivable” and “cash and cash equivalents”
in the Statement of Financial Position (notes 6.1 and 9.2).



| | (c) | Financial assets held to maturity
| | --- | ---------------------------------



Financial assets held-to-maturity are
non-derivative financial assets with fixed or determinable payments and fixed maturities which management has the positive intention
and ability of holding to maturity. If a significant amount of financial assets held to maturity were to be sold, the full category
would be reclassified as available for sale. Assets in this category are stated at amortized cost.



F-30







| | Notes
    to the consolidated financial statements as of December 31 2012
| | -------------------------------------------------------------------------



Note 3 – Significant accounting
policies (continued)



| | 3.3 | Financial derivatives and
                                                                   hedge transactions
| | --- | ---------------------------------------------------------------------------------------------------------------



Derivatives are recognized initially at
fair value as of the date in which the derivative contract is entered into and subsequently remeasured at fair value. The method
for recognizing the resulting gain or loss depends on whether the derivative has been designated as a hedge instrument and if
so, the nature of the item being hedged. The Company designates certain derivatives as either:



| | (a) | Fair value hedges of recognized assets
                                                            and liabilities or firm commitments (fair value hedges).
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | Hedging a forecasted risk associated
                                                            with a recognized asset or liability or a highly possible forecasted
                                                            transaction (cash flow hedge).
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



At hedge inception, the Company documents
the relationship between hedging instruments and hedged items, as well as their risk management objectives, and the strategy for
undertaking different hedging transactions. The Company also documents its evaluation both at hedge inception and at each reporting
period, whether derivatives used in hedging transactions are highly effective in offsetting changes in fair values or in cash
flows of hedged items.



The fair value of derivative instruments
used for hedging purposes is shown in Note 10.3. (Hedge assets). Movements in the cash flow hedge reserve are classified as a
non-current asset or liability if the remaining hedged item is more than 12 months, and as a current asset or liability if the
remaining maturity of the hedged item is less than 12 months. Other derivatives are classified as a current asset or current liability,
with the change in their fair value recognized directly in profit or loss.



| | (a) | Fair value hedge
| | --- | ----------------



Changes in the fair value derivatives
that are designated and qualify as fair value hedges are recorded to profit or loss, as applicable. The change in the fair value
of the hedged asset or liability attributable to hedged risk is also recognized in profit or loss.



For fair value hedges related to assets
or liabilities recorded at amortized cost, the adjustment of the fair value is amortized against profit or loss during the period
through maturity. Any adjustment to the carrying value of a hedged financial instrument for which the effective rate is used is
amortized to profit or loss at its fair value attributable to the hedged risk.



F-31







| | Notes to the consolidated financial statements as of December 31 2012
| | ---------------------------------------------------------------------



Note 3 – Significant accounting
policies (continued)



If the hedge no longer meets the criteria
for hedge accounting, the fair value not amortized is immediately recognized in profit or loss.



| | (b) | Cash flow hedges
| | --- | ----------------



The effective portion of changes in the
fair value of derivatives that are designated and qualify as cash flow hedges is recognized in other reserves within equity. The
gain or loss related to the ineffective portion is immediately recognized in profit or loss.



Amounts accumulated in equity are reclassified
to profit or loss in periods when the hedged item affects profit or loss, such as when the hedged interest income or expense is
recognized, or when a forecasted transaction occurs. When the hedged item is the cost of a non-financial asset or liability, amounts
recorded in equity are transferred to the initial carrying value of the non-financial asset or liability.



Should the expected firm transaction or
commitment no longer be expected to occur, amounts previously recognized in equity are transferred to profit or loss. If a hedge
instrument expires or is sold, or when a hedge no longer meets the criteria for hedge accounting, any amounts previously recognized
in equity are maintained in equity until the expected firm transaction is ultimately recognized in profit or loss.



| | 3.4 | Trade and other receivables
| | --- | ---------------------------



Trade and other receivables relate to non-derivative
financial assets with fixed and determinable payments and are not quoted in any active market. These receivables arise from sales
involving products and services to customers.



These assets are initially recognized at
their fair value, which is equivalent to their face value, and subsequently at amortized cost according to the effective interest
rate method less a provision for impairment loss. An allowance for impairment loss is established for trade receivables when there
is objective evidence that the Company will not be able to collect amounts which are owed to it according to the original terms
of receivables.



| | 3.5 | Inventory
| | --- | ---------



Inventories are stated at the lower of
cost and net realizable value. Cost is determined based on the weighted average method. The cost of finished goods and products-in-process
includes direct costs of materials, direct labor, and other direct costs and related overheads incurred to transform raw materials
into finished products, including expenses incurred in transporting inventories to their current location and condition. Net realizable
value represents is the estimated sales price in the ordinary course of business less all estimated costs expected to be incurred
in the sales and distribution process.



The Company evaluates the net realizable
value of inventories at the end of each reporting period, recording a provision with a charge to income when circumstances are
warranted. When the circumstances previously causing the reserve cease to exist, or when there is



F-32







| | Notes to the consolidated financial statements as of December 31 2012
| | ---------------------------------------------------------------------



Note 3 – Significant accounting
policies (continued)



clear evidence of an increase in the net
realizable value due to a change in the economic circumstances or prices, the previous estimate is modified accordingly. Provisions
on the Company's inventories are made based on a technical studies covering the different variables affecting finished products
such as density and humidity, among other factors.



Raw materials, and supplies for production
inventories are recorded at the lower of acquisition cost or market value. Acquisition cost is calculated according to the weighted
average cost method.



| | 3.6 | Intangible assets
| | --- | -----------------



Intangible assets consist of goodwill,
water rights, rights of ways related to electric lines, and computer software licenses.



| | (a) | Goodwill
| | --- | --------



Goodwill represents the excess of the consideration
transferred over the net fair value of assets acquired and liabilities assumed in the acquisition of subsidiaries.



For purposes of impairment testing, goodwill
acquired in a business combination is allocated to each cash generating unit “CGU”, which is expected to benefit from
the synergies of the combination. Each CGU to which goodwill is allocated represents the lowest level within the entity at which
the goodwill is monitored for internal management purposes.



Goodwill impairment reviews are conducted
annually, or more frequently if events or changes in circumstances indicate a potential for impairment. The carrying value of goodwill
is compared to its recoverable amount, which is the higher of value in use and the fair valueless cost to sell. Any impairment
is recognized immediately as an expense and is not subsequently reversed.



| | (b) | Water rights
| | --- | ------------



Acquired water rights represent water from
natural sources and are recorded at acquisition cost. Depending on the contractual terms, water rights can be granted on a perpetual
basis or be subject to a fixed term. Water rights with a contractual fixed term are amortized over the life of the agreement. Water
rights granted on a perpetual basis are not amortized; however, they are subject to an annual impairment assessment.



| | (c) | Right of way for electric lines
| | --- | -------------------------------



As required for the operation of industrial
plants, the Company acquires rights of ways in order to install wires for electric lines on third party land. Amounts paid are
capitalized and charged to income according to their contractual lives.



F-33







| | Notes to the consolidated financial statements as of December 31 2012
| | ---------------------------------------------------------------------



Note 3 – Significant accounting
policies (continued)



| | (d) | Computer software
| | --- | -----------------



Acquired computer software licenses are
capitalized based on initial acquisition costs and costs incurred to prepare them for their intended use. These costs are amortized
over their estimated useful lives.



Expenses related to internally developed
IT programs are recognized when incurred. Costs directly attributable to the development of unique and identifiable IT programs
are recognized as intangible assets to the extent such IT will generate future economic benefits. IT development costs are amortized
over their estimated useful lives, which does generally not exceed three years.



| | 3.7 | Property, plant and equipment
| | --- | -----------------------------



Property, plant and equipment assets are
stated at acquisition cost, net of accumulated depreciation, amortization and impairment losses that they might have experienced.
Acquisition cost includes the following when applicable:

| | (a) | Interest expense incurred during the construction period directly attributable to the acquisition,
construction or production of qualifying assets, includes those that require a substantial period prior to being ready for their
intended use. The interest rate used to capitalize interest corresponds to the project’s specific financing or, should this
not exist, the average borrowing rate of Company. Interest expenses are not capitalized for periods which exceed the normal term
of acquisition, construction or installation of the asset, such as in the case of delays, interruptions, or temporary suspension
of the project due to technical, financial, or other issues.
| | --- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (b) | Future costs the Company will incur related to the closure of its facilities at the end of their
useful life are recorded at the present value of expected future disbursements required to settle the obligation.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



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



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



Property, plant and equipment components
are depreciated using the straight-line method over estimated useful lives. When components of property, plant and equipment have
different useful lives, these components are recorded and depreciated separately. The useful lives are reviewed annually and revised
as necessary. The useful lives used for the depreciation and amortization of assets included in property, plant and equipment are
presented below.



F-34







| | Notes to the consolidated financial statements as of December 31 2012
| | ---------------------------------------------------------------------



Note
3 – Significant accounting policies (continued)



|Types of property, plant and equipment |  | Life 
minimum |   |  | Life 
maximum | 
|-------------------------------------- |  | ------------- | - |  | ------------- | 
|                                       |  |               |   |  |               | 
|Buildings                              |  |               | 3 |  |               | 
|Plant and equipment                    |  |               | 3 |  |               | 
|Information technology equipment       |  |               | 3 |  |               | 
|Fixtures and fittings                  |  |               | 3 |  |               | 
|Moto vehicles                          |  |               | 5 |  |               | 
|Other property, plant and equipment    |  |               | 2 |  |               | 



Gains or losses 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 net sales value and its carrying value.



The Company obtains property rights and
mining concessions from the Chilean Ministry of Mining. Property rights are generally obtained through payment of mining licenses
and minor registration expenses, along with annual license fees. Annual license fees are recorded as prepaid expenses and amortized
over their twelve month effective period. Amounts attributable to mining concessions acquired from third parties, which are not
from the Chilean State, are recorded at their acquisition cost.



| | 3.8 | Impairment of non-financial assets
| | --- | ----------------------------------



Assets subject to depreciation and amortization
are reviewed for impairment whenever events or changes circumstances indicate that the carrying value may not be recoverable. For
purposes of assessing impairment, assets are grouped at the lowest level for which there are separately identifiable cash flows.
An impairment loss is recognized for the excess of the carrying value of the asset over its recoverable amount. The recoverable
amount of an asset is the higher between the fair value of an asset or CGU, less selling costs and its value in use.Assets
other than goodwill, that suffered an impairment are reviewed for possible reversal of the impairment at each reporting date.



| | 3.9 | Financial liabilities
| | --- | ---------------------



The Company
classifies its financial liabilities under the following categories: at fair value through profit or loss, trade payables, interest-bearing
loans, or derivatives designated as hedging instruments.Management determines the classification
of its financial liabilities at the time of initial recognition.



Financial debt obligations are recorded
at face value and as non-current when their maturity is greater than 12 months and as current when maturity is less than twelve
months. Interest expenses is recognized in profit and loss when incurred.



Financial liabilities are derecognized
when the obligation is repaid, settled or expires.



F-35







| | Notes to the consolidated financial statements as of December 31 2012
| | ---------------------------------------------------------------------



Note
3 – Significant accounting policies (continued)



| | (a) | Financial liabilities at fair value through profit or
loss
| | --- | ----------------------------------------------------------



Financial liabilities are classified at
fair value when these are held for trading or designated in their initial recognition at fair value through profit or loss. This
category includes derivative instruments not designated for hedge accounting.



| | (b) | Trade payables
| | --- | --------------



Trade payables are obligations to pay for
goods or services that have been acquired in the ordinary course of business from suppliers. Trade payables are initially recognized
at fair value and are subsequently stated at their amortized cost using the effective interest rate method.



| | (c) | Interest-bearing loans
| | --- | ----------------------



Loans are initially recognized at fair
value and are subsequently stated at amortized cost using the effective interest rate method. Amortized cost is calculated considering
any premium or discount from the acquisition and includes transaction costs which are an integral part of the effective interest
rate.



| | 3.10 | Current and deferred taxes
| | ---- | --------------------------



Corporate income tax for the year is determined
as the aggregate of current taxes from all of the consolidated companies. Current taxes are calculated on the basis of the tax
laws enacted or substantively enacted as of the Statement of Financial Position in the countries where the Company and its subsidiaries
operate and generate taxable income.



Deferred tax is recognized using the liability
method on temporary differences arising between the tax basis for assets and liabilities and their carrying amounts in the consolidated
financial statements. Deferred income taxes are calculated using the tax rates expected to be applicable when the assets are realized
or the liabilities are settled.



In conformity with current Chilean 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.



Tax on companies and variations in deferred
tax assets or liabilities that are not the result of business combinations are recorded in statement of income accounts or equity
accounts in the Consolidated Statement of Financial Position, considering the origin of the gains or losses which have generated
them.



F-36







| | Notes to the consolidated financial statements as of December 31 2012
| | ---------------------------------------------------------------------



Note
3 – Significant accounting policies (continued)



The carrying value of deferred tax assets
has been reviewed and reduced to the extent there will not be sufficient taxable income to allow the recovery of all or a portion
of the deferred tax assets. Likewise, deferred tax assets that are not recognized were evaluated and not recognized if it was not
more likely than not, that future taxable income will not allow for recovery of the deferred tax asset.



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.



Deferred tax assets and liabilities are
offset if there is a legally enforceable right to offset tax assets against tax liabilities and the deferred tax is related to
the same tax entity and authority, and there is intention to settle the balances on a net basis.



| | 3.11 | Obligations related to employee termination benefits and pension commitments
| | ---- | ----------------------------------------------------------------------------





Obligations to the Company’s employees
are established in accordance with agreements in force and formalized through collective employment agreements and individual employment
contracts. In the case of certain United States employees, benefit obligations are in accordance with a defined benefit pension
plan, which was terminated in 2002. Liabilities for these obligations are recognized in the Statement of Financial Position using
values established by actuarial calculations, which consider various assumptions including mortality rates, employee turnover,
interest rates, retirement dates, future salary increases, and inflation.



Actuarial gains and losses generated by
changes in previously defined obligations are directly recorded in profit or loss for the year. Actuarial gains and losses and
gains resulting from differences between the estimate and actual behavior of the actuarial assumptions are recorded in equity in
other comprehensive in the period in which they arise.



| | 3.12 | Share based payments
| | ---- | --------------------



The Company has a cash settled shared based
payment plan whereby executives and senior management receive cash payments based on changes in the Company’s share price
over a vesting period. The fair value of the vested portion of the awards is recorded as a liability and premeasured each reporting
period using a Black Scholes model. Changes in the fair value of the awards are recorded directly to profit and loss for the period.



F-37







| | Notes to the consolidated financial statements as of December 31 2012
| | ---------------------------------------------------------------------



Note
3 – Significant accounting policies (continued)



| | 3.13 | Other provisions
| | ---- | ----------------



Provisions are recognized for environmental restoration, legal
claims and other matters when the Company has a present legal or constructive obligation as the result of a past event; its probable
that resources must be used to settle the obligation; and a reliable estimate can be made of the amount of the obligation.



Provisions are measured at the present
value of the expenditures expected to required to settle the obligation using pretax discount rate that reflects the liability’s
specific risks The increase in the provision over time is recognized as a finance cost.



| | 3.14 | Revenue recognition
| | ---- | -------------------



Revenue includes the fair value of considerations
received or receivable for the sale of goods and services. Revenue is presented net of value added tax and rebates and discounts.
Revenue is recognized when its amount can be reliably measured, it is probable that the future economic benefits will flow to the
Company, and the specific conditions for each type of revenue related activity have been met, as follows:



| | (a) | Sale of goods
| | --- | -------------



Sales of goods are recognized when the
Company has delivered products to the customer, the customer has total discretion on the distribution channel and the price at
which products are sold 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 customers when the related
risks of obsolescence and loss have been transferred to the customer and the customer has accepted products in accordance with
the conditions established in the sale, the acceptance period has ended, or 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 other credits 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) | Sales of services
| | --- | -----------------



Revenue associated with the rendering of
services consist primary of rental income and related services provided, and is recognized considering the degree of completion
of the service as of each reporting date provided that the results can be reliably estimated.



F-38







| | Notes to the consolidated financial statements as of December 31 2012
| | ---------------------------------------------------------------------



Note
3 – Significant accounting policies (continued)



| | 3.15 | Exploration expenses
| | ---- | --------------------



Exploration expenses are capitalized pending
determination of the economic viability. Exploration expenses related to non economically minable reserves are charged to expense.
Exploration expenses associated with the future development of economically mineable mineral reserves are capitalized as other
non-financial assets until such time as mined. Expenses associated with mineral reserves in development are reclassified to Inventory
and amortized according to the estimated mineral content.



| | 3.16 | Research and development costs
| | ---- | ------------------------------



Research and development costs are expensed
in the period incurred, with the exception of property, plant and equipment acquired for use in research and development activities.



| | 3.17 | Environmental expenditures
| | ---- | --------------------------



Amounts incurred for environmental protection
and improvement as recorded as environmental expenses in profit and loss. The cost of facilities, machinery and equipment used
for the same purpose are considered property, plant and equipment and capitalized as such.



| | 3.18 | Minimum dividend
| | ---- | ----------------



According to the Chilean Corporations Act,
a publicly traded corporation must pay dividends according to the policy decided at the General Shareholders' Meeting each year,
with a minimum of 30% of the net income for the year if the corporation does not have unabsorbed accumulated deficit from prior
years, unless it otherwise decided by unanimous vote of the shareholders.



| | 3.19 | Earnings per share
| | ---- | ------------------



Basic earnings per share is calculated
by dividing profit attributable to equity holders of the Company by the weighted average number of ordinary shares outstanding
during the year. The Company has not conducted any type of operation, which would give rise to a potential dilutive effect on its
earnings per share.



There have been no significant changes
in accounting policies during 2012.



F-39







| | Notes to the consolidated financial statements as of December 31 2012
| | ---------------------------------------------------------------------



Note 4 – Financial risk management



| | 4.1 | Risk Management Policy
| | --- | ----------------------



The Financial Risk Management Policy of
the Company is oriented towards safeguarding the stability and sustainability of Sociedad Química y Minera de Chile S.A.
and subsidiaries in relation to all such relevant financial uncertainty.



The operations of the Company are subject
to certain financial risk factors that may affect the financial position results of operations or cash flow. Among these risks,
the most relevant are market risk, liquidity risk, foreign exchange rate risk, bad debt risk, and interest rate risk.



There may be additional unknown risks or other known risks that
might also affect the commercial operations, the business, the financial position or the results of the Company, but the Company
believes at this time they are not significant.



The financial risk management structure
includes identifying, determining, analyzing, quantifying, measuring and controlling these events. Management, in particular Finance
Management, is responsible for constantly assessing the financial risk. The Company uses derivatives to hedge a significant portion
of these risks.



| | 4.2 | Risk Factors
| | --- | ------------



| | 4.2.1 | Market Risk
| | ----- | -----------



Market risks are those uncertainties associated with fluctuations
of market variables that affect the assets and liabilities of the Company, such as:



| | a) | Country risk
| | -- | ------------



The economic position of the countries where the
Company has a presence may affect its financial position. For example, the sales carried out in emerging markets expose SQM to
risks related to economic conditions and trends in those countries. On the other hand, inventories may also be affected by the
economic situation of these countries and/ or the global economy, amongst other probable economic impacts.



| | b) | Price volatility risk
| | -- | ---------------------



The prices of the products of the Company are affected
by the fluctuations of international prices of fertilizers and chemical products and changes in productive capacities or market
demand, all of which might affect the Company’s business, financial condition and operational results.



F-40







| | Notes to the consolidated financial statements as of December 31 2012
| | ---------------------------------------------------------------------



Note
4 – Financial Risk Management (Continued)



| | c) | Commodities price risk
| | -- | ----------------------



The Company
is exposed to changes in the prices of raw materials and energy which may have an impact on its production costs, thus giving rise
to instability in the results.



At present,
the Company has direct annual expenses of approximately US$130 million related to oil related products, natural gas and equivalents,
and approximately US$60 million for electricity. Variations of 10% in the prices of energy the Company requires to operate would
involve in the short term movement of costs amounting to US$19 million.



| | 4.2.2 | Uncollectible Accounts Risks
| | ----- | ----------------------------



A contraction of the global economy and
the potentially negative effects in the financial position of the Company ́s clients may extend the accounts receivable collection
time for SQM, increasing the Company bad debt exposure. While measures have been taken in order to minimize this risk, the global
economy may trigger losses that might have a material adverse effect on the business, financial position or the results of the
Company’s operations.



To mitigate these risks, SQM actively controls
debt collections and uses measures such as, credit insurance, letters of credit, and prepayments with regard to certain accounts
receivable.



| | 4.2.3 | Foreign Exchange Risk
| | ----- | ---------------------



As a result of its influence in the determination
of prices, its relationship with costs of sales, and since a significant part of our business is carried out in U.S. Dollars, the
functional currency of SQM is the U.S. Dollar. However, the global business activities of the Company expose it to foreign exchange
fluctuations of several currencies with respect to the U.S. Dollar. Therefore, SQM has derivate contracts to mitigate the exposure
of its main balance mismatches (net assets) in currencies other than the U.S. Dollar against foreign exchange fluctuations. Those
contracts are periodically updated depending upon the mismatch amount to be covered in these currencies.



A significant portion of the costs of the
Company, particularly wages, is related to the Chilean Peso. Therefore, an increase or decrease in the exchange rate against the
U.S. Dollar would affect the net income of SQM. At December 31, 2012, approximately US$440 million of the costs of the Company
are related to the Chilean Peso. A significant portion of the effect of such obligations in the balance is covered derivatives
that hedge the mismatch of balance in this currency.



At December 31, 2011, the Company had outstanding
derivative instruments designated as hedging currency and interest rate risks associated with all Chilean Peso and UFdenominated
bond obligations, with a fair value of US$ 56.1 million. As of December 31, 2012, the fair value was US$100.6 million, in each
case in favor of SQM.



F-41







| | Notes to the consolidated financial statements as of December 31 2012
| | ---------------------------------------------------------------------



Note
4 – Financial Risk Management, Objectives and Policies (continued)



On December 31, 2012, the Chilean Peso to U.S. Dollar exchange
rate was Ch$ 479.96 for US$ 1.00 and at December 31, 2011 it was Ch$ 519.20 for US$ 1.00.



| | 4.2.4 | Interest rate risk
| | ----- | ------------------



Interest rate fluctuations, due to the
uncertain future behavior of markets, may have a material impact on the financial results of the Company.



The Company has short and long term debts
valued at LIBOR plus a spread. The Company is partially exposed to fluctuations of this rate, as SQM currently holds derivative
instruments to hedge a portion of its liabilities subject to LIBOR rate fluctuations.



As of December 31, 2012, approximately
21% of the Company’s current financial obligations were subject to LIBOR rate fluctuation and therefore, significant increases
in the rate may impact its financial position. A 100 basis points variation in this rate may trigger variations in financial expenses
of approximately US$3.1 million. Notwithstanding, this effect is significantly counter-balanced by the returns of the Company’s
investments that also relate to LIBOR.



In addition, as of December 31, 2012, the
Company's total financial debt is primarily long-term, with 8% of maturities less than 12 months, which decreases the exposure
to changes in the interest rates.



F-42







| | Notes to the consolidated financial statements as of December 31 2012
| | ---------------------------------------------------------------------



Note 4 – Financial
Risk Management, Objectives and Policies (continued)



| | 4.2.5 | Liquidity Risk
| | ----- | --------------



Liquidity risk relates to funding requirements
to comply with payment obligations. The Company ́s objective is to keep financial flexibility by comfortably balancing funding
requirements and cash flows from the regular business conduct, bank loans, public bonds, short term investments, and negotiable
instruments, among others.



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



On the other hand, world financial markets
go through contraction and expansion periods that are not foreseeable in the long term and may affect SQM’s access to financial
resources. These factors may have a material adverse impact on the business, financial position, and operational results of the
Company.



SQM constantly monitors that its obligations
and investments match, taking care as part of its financial risk management strategy of the obligations and investments maturities
from a conservative perspective. As of December 31, 2012, the Company had non-committed and available working capital bank credit
lines for a total of US$530 million.



The position in other cash and cash equivalents
generated by the Company is invested in highly liquid mutual funds which have an AAA risk rating.



| | 4.3 | Risk Measurement
| | --- | ----------------



The Company has methods to measure the
effectiveness and efficiency of corporate risk strategies, both prospectively and retrospectively.



Note 5 – Background of consolidated companies



| | 5.1 | Parent’s separate assets and liabilities
| | --- | ----------------------------------------



The assets and liabilities of the legal
entity Sociedad Química y Minera de Chile S.A. before the effects of consolidation consists of the following:



|            |  | 12/31/2012 |            |   | 12/31/2011 | 
|----------- |  | ---------- | ---------- | - | ---------- | 
|            |  | ThUS$      |            |   | ThUS$      | 
|            |  |            |            |   |            | 
|Assets      |  |            | 3,908,259  |   |            | 
|Liabilities |  |            | (1,775,476 | ) |            | 
|Total       |  |            | 2,132,783  |   |            | 



| | 5.2 | Controlling entity
| | --- | ------------------



In accordance with the Company’s
By-Laws, no shareholder can control more than 32% of the Company’s voting shares; therefore, there is no controlling shareholder.



F-43







| | Notes to the consolidated financial statements as of December 31 2012
| | ---------------------------------------------------------------------



Note 5 – Background of consolidated companies (continued)



| | 5.3 | Joint arrangements of the controlling interest
| | --- | ----------------------------------------------



Sociedad de Inversiones Pampa Calichera
S.A., Potasios de Chile S.A. and Global Mining Investments (Chile) S.A. together form the Pampa Group, and are the owners of 30.50%
of SQM ’s issued, subscribed and fully-paid shares as of December 31 2012. Additionally, Kowa Company Ltd., Inversiones La
Esperanza (Chile) Limitada. Kochi S.A. and La Esperanza Delaware Corporation, together the Kowa Group, are the owners of 2.08%
of SQM S.A.’s currently issued, subscribed and fully-paid shares as of December 31, 2012.



In December 2006, the Pampa and Kowa groups
entered into a joint venture agreement in regards to the management of their ownership of the Company’s shares. However,
both the Pampa Group and the Kowa Group have informed SQM, the SVS, and the relevant stock markets in Chile and the United States
that they are not currently, nor have they ever been, related parties between themselves. Therefore, neither the Pampa Group, nor
the Kowa Group individually control more than 32% of the voting right shares of SQM S.A.



Detail of effective concentration



|Tax ID Number     |  | Name                                         |  | Ownership interest % |      
|----------------- |  | -------------------------------------------- |  | -------------------- | -----
|96.511.530-7      |  | Sociedad de Inversiones Pampa Calichera S.A. |  |                      | 20.35
|96.863.960-9      |  | Global Mining Investments (Chile) S.A.       |  |                      | 3.34 
|76.165.311-5      |  | Potasios de Chile S.A.                       |  |                      | 6.81 
|Total Pampa Group |  |                                              |  |                      | 30.50
|                  |  |                                              |  |                      |      
|79.798.650-k      |  | Inversiones la Esperanza (Chile) Ltda.       |  |                      | 1.40 
|59.046.730-8      |  | Kowa Co Ltd.                                 |  |                      | 0.30 
|96.518.570-4      |  | Kochi S.A.                                   |  |                      | 0.29 
|59.023.690-k      |  | La Esperanza Delaware Corporation            |  |                      | 0.09 
|Total Kowa Group  |  |                                              |  |                      | 2.08 



F-44







| | Notes to the consolidated financial statements as of December 31 2012
| | ---------------------------------------------------------------------



Note 5 – Background of consolidated companies (continued)



| | 5.4 | Information on consolidated subsidiaries
| | --- | ----------------------------------------



Financial information as of December 31,
2012 of the companies in which the group exerts control and significant influence is as follows:



|12/31/2012                                                   
|-------------------------------------------------------------
|                                                             
|Subsidiary                                                   
|SQM Nitratos S.A.                                            
|Proinsa Ltda.                                                
|SQMC Internacional Ltda.                                     
|SQM Potasio S.A.                                             
|Serv. Integrales de Tránsito y Transf. S.A.                  
|Isapre Norte Grande Ltda.                                    
|Ajay SQM Chile S.A.                                          
|Almacenes y Depósitos Ltda.                                  
|SQM Salar S.A.                                               
|SQM Industrial S.A.                                          
|Exploraciones Mineras S.A.                                   
|Sociedad Prestadora de Servicios de Salud Cruz del Norte S.A.
|Soquimich Comercial S.A.                                     
|Comercial Agrorama Ltda.                                     
|Comercial Hydro S.A.                                         
|Agrorama S.A.                                                
|SQM North America Corp.                                      



F-45







| | Notes to the consolidated financial statements as of December 31 2012
| | ---------------------------------------------------------------------



Note 5 – Background of consolidated companies (continued)



| | 5.4 | Information on consolidated subsidiaries, continued
| | --- | ---------------------------------------------------



|12/31/2012                          
|------------------------------------
|                                    
|Subsidiary                          
|RS Agro Chemical Trading A.V.V.     
|Nitratos Naturais do Chile Ltda.    
|Nitrate Corporation of Chile Ltd.   
|SQM Corporation N.V.                
|SQM Perú S.A.                       
|SQM Ecuador S.A.                    
|SQM Brasil Ltda.                    
|SQI Corporation N.V.                
|SQMC Holding Corporation L.L.P.     
|SQM Japan Co. Ltd.                  
|SQM Europe N.V.                     
|SQM Italia SRL                      
|SQM Indonesia S.A.                  
|North American Trading Company      
|SQM Virginia LLC                    
|SQM Comercial de México S.A. de C.V.



F-46







| | Notes to the consolidated financial statements as of December 31 2012
| | ---------------------------------------------------------------------



Note 5 – Background of consolidated companies (continued)



| | 5.4 | Information on consolidated subsidiaries, continued
| | --- | ---------------------------------------------------



|12/31/2012                                      
|------------------------------------------------
|                                                
|Subsidiary                                      
|SQM investment Corporation N.V.                 
|Royal Seed Trading Corporation A.V.V.           
|SQM Lithium Specialties LLP                     
|Soquimich SRL Argentina                         
|Comercial Caimán Internacional S.A.             
|SQM France S.A.                                 
|Administración y Servicios Santiago S.A. de C.V.
|SQM Nitratos México S.A. de C.V.                
|Soquimich European Holding B.V.                 
|SQM Iberian S.A                                 
|Iodine Minera B.V.                              
|SQM Africa Pty Ltd.                             
|SQM Oceania Pty Ltd.                            
|SQM  Agro India Pvt. Ltd.                       
|SQM Beijing Commercial Co. Ltd.                 
|                                                
|Total                                           



F-47







| | Notes to the consolidated financial statements as of December 31 2012
| | ---------------------------------------------------------------------



Note 5 – Background of consolidated companies (continued)



| | 5.4 | Information on consolidated subsidiaries, continued
| | --- | ---------------------------------------------------



|12/31/2011                                                   
|-------------------------------------------------------------
|                                                             
|Subsidiary                                                   
|SQM Nitratos S.A.                                            
|Proinsa Ltda.                                                
|SQMC Internacional Ltda.                                     
|SQM Potasio S.A.                                             
|Serv. Integrales de Tránsito y Transf. S.A.                  
|Isapre Norte Grande Ltda.                                    
|Ajay SQM Chile S.A.                                          
|Almacenes y Depósitos Ltda.                                  
|SQM Salar S.A.                                               
|SQM Industrial S.A.                                          
|Minera Nueva Victoria S.A..                                  
|Exploraciones Mineras S.A.                                   
|Sociedad Prestadora de Servicios de Salud Cruz del Norte S.A.
|Soquimich Comercial S.A.                                     
|Comercial Agrorama Ltda.                                     
|Comercial Hydro S.A.                                         
|Agrorama S.A.                                                
|SQM North America Corp.                                      



F-48







| | Notes to the consolidated financial statements as of December 31 2012
| | ---------------------------------------------------------------------



Note 5 – Background of consolidated companies (continued)



| | 5.4 | Information on consolidated subsidiaries, continued
| | --- | ---------------------------------------------------



|12/31/2011                          
|------------------------------------
|                                    
|Subsidiary                          
|RS Agro Chemical Trading A.V.V.     
|Nitratos Naturais do Chile Ltda.    
|Nitrate Corporation of Chile Ltd.   
|SQM Corporation N.V.                
|SQM Perú S.A.                       
|SQM Ecuador S.A.                    
|SQM Brasil Ltda.                    
|SQI Corporation N.V.                
|SQMC Holding Corporation L.L.P.     
|SQM Japan Co. Ltd.                  
|SQM Europe N.V.                     
|SQM Italia SRL                      
|SQM Indonesia S.A.                  
|North American Trading Company      
|SQM Virginia LLC                    
|SQM Comercial de México S.A. de C.V.



F-49







| | Notes to the consolidated financial statements as of December 31 2012
| | ---------------------------------------------------------------------



Note 5– Background of consolidated companies (continued)



| | 5.4 | Information on consolidated subsidiaries, continued
| | --- | ---------------------------------------------------



|12/31/2011                                      
|------------------------------------------------
|                                                
|Subsidiary                                      
|SQM investment Corporation N.V.                 
|Royal Seed Trading Corporation A.V.V.           
|SQM Lithium Specialties LLP                     
|Soquimich SRL Argentina                         
|Comercial Caimán Internacional S.A.             
|SQM France S.A.                                 
|Administración y Servicios Santiago S.A. de C.V.
|SQM Nitratos México S.A. de C.V.                
|Soquimich European Holding B.V.                 
|SQM Iberian S.A                                 
|Iodine Minera B.V.                              
|SQM Africa Pty Ltd.                             
|SQM Venezuela S.A.                              
|SQM Oceania Pty Ltd.                            
|SQM  Agro India Pvt. Ltd.                       
|SQM Beijing Commercial Co. Ltd.                 
|                                                
|Total                                           





F-50







| | Notes to the consolidated financial statements as of December 31 2012
| | ---------------------------------------------------------------------



Note 5 – Background of consolidated companies (continued)



| | 5.5 | Detail of transactions between consolidated companies
| | --- | -----------------------------------------------------



| | a) | Transactions conducted in 2012
| | -- | ------------------------------



On November 30, 2012, SQM transferred its
99% ownership interest in Minera Nueva Victoria Limitada to SQM Potasio S.A., which resulted in SQM Potasio S.A. owning 100% of
the outstanding shares in this entity. Subsequent to this transaction, the assets and liabilities of Minera Nueva Victoria Limitada
were absorbed into SQM Potasio S.A. resulting in the legal dissolution of Minera Victoria Limitada.



| | b) | Transactions conducted in 2011
| | -- | ------------------------------



On April 7, 2011, Agrorama S.A. was incorporated
with an ownership interest of Soquimich Comercial S.A. of 99.999% and by Sociedad Productora de Insumos Agrícolas Ltda.
of 0.001%.  This new company will have share capital of ThCh$100.000 (ThUS$211), its lifespan will be indefinite and its line
of business will be the trading and distribution of fertilizers, pesticides and agricultural products or supplies.



In August and September of 2011, SQM Industrial
S.A. made capital contributions totaling ThUS$22,017 in its subsidiary SQMC Mexico S.A. de CV. increasing its ownership interest
to 99.8739% .



In September 2011, Soquimich European Holding
B.V., acquired from its associate, Nutrisi Holding N.V. a 66.6% ownership interest in Fertilizantes Naturales S.A. for ThUS$3,179.



In December, 2011, Comercial Agrorama Callegari
Ltda. changed its name to “Comercial Agrorama Limitada” and Fertilizantes Naturales S.A. changed its name to “SQM
Iberian S.A.”



In December 2011, Soquimich European Holding
B.V. sold its 50% ownership interest in Nutrisi Holding N.V. for ThUS$5,736.



F-51







| | Notes to the consolidated financial statements as of December 31 2012
| | ---------------------------------------------------------------------



Note 6 – Cash and cash equivalents



| | 6.1 | Cash and cash equivalents
| | --- | -------------------------



Cash and cash equivalents consist of the
following:



| | a) | Cash
| | -- | ----



|                      |  | 12/31/2012 |        |  | 12/31/2011 | 
|--------------------- |  | ---------- | ------ |  | ---------- | 
|                      |  | ThUS$      |        |  | ThUS$      | 
|                      |  |            |        |  |            | 
|Cash on hand          |  |            | 90     |  |            | 
|Cash in banks         |  |            | 41,541 |  |            | 
|Other demand deposits |  |            | 833    |  |            | 
|Total cash            |  |            | 42,464 |  |            | 



| | b) | Cash equivalents
| | -- | ----------------



|                                |  | 12/31/2012 |         |  | 12/31/2011 | 
|------------------------------- |  | ---------- | ------- |  | ---------- | 
|                                |  | ThUS$      |         |  | ThUS$      | 
|                                |  |            |         |  |            | 
|Short-term deposits             |  |            | 139,943 |  |            | 
|Short-term investments          |  |            | 141,946 |  |            | 
|Total cash equivalents          |  |            | 281,889 |  |            | 
|                                |  |            |         |  |            | 
|Total cash and cash equivalents |  |            | 324,353 |  |            | 



| | 6.2 | Short-term investments, classified as cash equivalents
| | --- | ------------------------------------------------------



Short-term investments consist of the following
investments in USD short-term fixed rate liquidity funds:



|Institution                                              |  | 12/31/2012 ThUS$ |         |  | 12/31/2011 ThUS$ | 
|-------------------------------------------------------- |  | ---------------- | ------- |  | ---------------- | 
|Legg Mason - Western Asset Institutional Liquid Reserves |  |                  | 47,408  |  |                  | 
|BlackRock - Institutional cash series PLC                |  |                  | 47,490  |  |                  | 
|JP Morgan USD Dollar Liquidity Fund Institutional        |  |                  | 47,048  |  |                  | 
|Total                                                    |  |                  | 141,946 |  |                  | 



F-52







| | Notes to the consolidated financial statements as of December 31 2012
| | ---------------------------------------------------------------------



Note 6 – Cash and cash equivalents (continued)



| | 6.3 | Information on cash and cash equivalents by currency
| | --- | ----------------------------------------------------



Cash and cash equivalents classified by
currency consist of the following:



|                   |  | 12/31/2012 |         |  | 12/31/2011 | 
|------------------ |  | ---------- | ------- |  | ---------- | 
|Original currency  |  | ThUS$      |         |  | ThUS$      | 
|U.S. Dollar        |  |            | 234,166 |  |            | 
|Chilean Peso (*)   |  |            | 76,712  |  |            | 
|South African Rand |  |            | 7,421   |  |            | 
|Euro               |  |            | 3,601   |  |            | 
|All other          |  |            | 2,453   |  |            | 
|Total              |  |            | 324.353 |  |            | 



(*) The Company maintains financial derivative policies to convert
CLP (Chilean Peso) term deposits in into U.S. Dollars.



| | 6.4 | Amount of significant restricted or (unavailable) cash
balances
| | --- | ---------------------------------------------------------------



Cash on hand and in current bank accounts
are available resources, and their carrying value is equal to their fair value.



Except as disclosed in note 9.8, there
were no significant cash balances with any type of restriction at December 31, 2012 and 2011.



F-53







| | Notes to the consolidated financial statements as of December 31 2012
| | ---------------------------------------------------------------------



Note 6 – Cash and cash equivalents (continued)



6.5 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
    ThUS$ |  |        | Interest accrued
    to-date ThUS |  |  | 12/31/2012 
    ThUS$ |  |  | 12/31/2011
    ThUS$ |       
|--------------------------- |  | --------------- |  | ----------------- |  | ------------- | ---- |  | -------------- | ---------- | --------------- | ---------- | ------------------- |  | ------ | --------------------------------- |  |  | --------------------- |  |  | -------------------- | ------
|Banco Crédito e Inversiones |  | Fixed term      |  | Chilean peso      |  |               | 0,49 |  |                | 12/10/2012 |                 | 01/17/2013 |                     |  | 25.290 |                                   |  |  | 87                    |  |  |                      | 25.377
|Banco Crédito e Inversiones |  | Fixed term      |  | Chilean peso      |  |               | 0,50 |  |                | 12/07/2012 |                 | 02/07/2013 |                     |  | 12.299 |                                   |  |  | 49                    |  |  |                      | 12.348
|Banco Crédito e Inversiones |  | -               |  | -                 |  |               | -    |  |                | -          |                 | -          |                     |  | -      |                                   |  |  | -                     |  |  |                      | -     
|Banco Crédito e Inversiones |  | -               |  | -                 |  |               | -    |  |                | -          |                 | -          |                     |  | -      |                                   |  |  | -                     |  |  |                      | -     
|Banco Crédito e Inversiones |  | -               |  | -                 |  |               | -    |  |                | -          |                 | -          |                     |  | -      |                                   |  |  | -                     |  |  |                      | -     
|Banco Crédito e Inversiones |  | -               |  | -                 |  |               | -    |  |                | -          |                 | -          |                     |  | -      |                                   |  |  | -                     |  |  |                      | -     
|Banco Crédito e Inversiones |  | -               |  | -                 |  |               | -    |  |                | -          |                 | -          |                     |  | -      |                                   |  |  | -                     |  |  |                      | -     
|Banco Santander-Santiago    |  | Fixed term      |  | Chilean peso      |  |               | 0,49 |  |                | 12/06/2012 |                 | 0103/2013  |                     |  | 11.609 |                                   |  |  | 47                    |  |  |                      | 11.656
|Banco Santander-Santiago    |  | Fixed term      |  | Chilean peso      |  |               | 0,49 |  |                | 12/06/2012 |                 | 01/03/2013 |                     |  | 7.493  |                                   |  |  | 30                    |  |  |                      | 7.523 
|Banco Santander-Santiago    |  | Fixed term      |  | Chilean peso      |  |               | 0,45 |  |                | 12/28/2012 |                 | 01/10/2013 |                     |  | 6.252  |                                   |  |  | 3                     |  |  |                      | 6.255 
|Banco Santander-Santiago    |  | Fixed term      |  | US$               |  |               | 1,12 |  |                | 12/07/2012 |                 | 02/07/2013 |                     |  | 8.005  |                                   |  |  | 6                     |  |  |                      | 8.011 
|Banco Santander-Santiago    |  | Fixed term      |  | US$               |  |               | 0,70 |  |                | 12/21/2012 |                 | 01/07/2013 |                     |  | 3.500  |                                   |  |  | 1                     |  |  |                      | 3.501 
|Banco Santander Santiago    |  | Fixed term      |  | US$               |  |               | 0,70 |  |                | 12/21/2012 |                 | 01/07/2013 |                     |  | 3.500  |                                   |  |  | 1                     |  |  |                      | 3.501 
|Citibank New – York         |  | Overnight       |  | US$               |  |               | 0,01 |  |                | 12/31/2012 |                 | 12/01/2013 |                     |  | 20.146 |                                   |  |  | -                     |  |  |                      | 20.146
|Citibank New – York         |  | Overnight       |  | US$               |  |               | 0,01 |  |                | 12/31/2012 |                 | 01/01/2013 |                     |  | 1.181  |                                   |  |  | -                     |  |  |                      | 1.181 
|Citibank New – York         |  | Overnight       |  | US$               |  |               | 0,01 |  |                | 12/31/2012 |                 | 01/01/2013 |                     |  | 17.256 |                                   |  |  | -                     |  |  |                      | 17.256
|Citibank New – York         |  | Overnight       |  | US$               |  |               | 0,01 |  |                | 12/31/2012 |                 | 01/03/2013 |                     |  | 10.605 |                                   |  |  | -                     |  |  |                      | 10.605
|Citibank New – York         |  | Overnight       |  | US$               |  |               | 0,01 |  |                | 12/31/2012 |                 | 01/02/2013 |                     |  | 2.582  |                                   |  |  | -                     |  |  |                      | 2.582 
|Corpbanca                   |  | Fixed term      |  | Chilean peso      |  |               | 0,53 |  |                | 12/26/2012 |                 | 02/01/2013 |                     |  | 9.990  |                                   |  |  | -                     |  |  |                      | 9.999 
|Corpbanca                   |  | -               |  | -                 |  |               | -    |  |                | -          |                 | -          |                     |  | -      |                                   |  |  | -                     |  |  |                      | -     
|Corpbanca                   |  | -               |  | -                 |  |               | -    |  |                | -          |                 | -          |                     |  | -      |                                   |  |  | -                     |  |  |                      | -     
|Corpbanca                   |  | -               |  | -                 |  |               | -    |  |                | -          |                 | -          |                     |  | -      |                                   |  |  | -                     |  |  |                      | -     
|IDBI Bank                   |  | -               |  | -                 |  |               | -    |  |                | -          |                 | -          |                     |  | -      |                                   |  |  | -                     |  |  |                      | -     
|Banco BBVA Chile            |  | Fixed term      |  | Indian rupee      |  |               | -    |  |                | 12/31/2012 |                 | 01/31/2013 |                     |  | 2      |                                   |  |  | -                     |  |  |                      | 2     



F-54







| | Notes to the consolidated financial statements as of December 31 2012
| | ---------------------------------------------------------------------



Note 6 – Cash and cash equivalents (continued)



6.5 Short-term deposits, classified
as cash equivalents, continued



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 ThUS$ |  |        | Interest accrued to-date
    ThUS$ |  |  | 12.31.2012 ThUS$ |  |  | 12.31.2011 ThUS$ |        
|----------------------- |  | ----------------- |  | ----------------- |  | ------------- | ---- |  | -------------- | ---------- | --------------- | ---------- | --------------- |  | ------ | ---------------------------------- |  |  | ---------------- |  |  | ---------------- | -------
|Corpbanca               |  | Fixed term        |  | US Dollar         |  |               | 1.30 |  |                | 10/18/2011 |                 | 01/11/2012 |                 |  | 16,000 |                                    |  |  | 43               |  |  |                  | -      
|Corpbanca               |  | Fixed term        |  | US Dollar         |  |               | 2.60 |  |                | 12/20/2011 |                 | 01/19/2012 |                 |  | 20,000 |                                    |  |  | 16               |  |  |                  | -      
|Corpbanca               |  | Fixed term        |  | US Dollar         |  |               | 2.75 |  |                | 12/21/2011 |                 | 01/25/2012 |                 |  | 10,024 |                                    |  |  | 8                |  |  |                  | -      
|Corpbanca               |  | Fixed term        |  | US Dollar         |  |               | 2.75 |  |                | 12/21/2011 |                 | 01/25/2012 |                 |  | 10,000 |                                    |  |  | 8                |  |  |                  | -      
|IDBI Bank               |  | Fixed term        |  | Rupia Hindú       |  |               | -    |  |                | 12/31/2011 |                 | 01/31/2012 |                 |  | 2      |                                    |  |  | -                |  |  |                  | -      
|Total                   |  |                   |  |                   |  |               |      |  |                |            |                 |            |                 |  |        |                                    |  |  |                  |  |  |                  | 139,943



F-55







| | Notes to the consolidated financial statements as of December 31 2012
| | ---------------------------------------------------------------------



Note 7 - Inventory



Inventory consists of the following:



|Type of inventory       |  | 12/31/2012 ThUS$ |         |  | 12/31/2011 ThUS$ | 
|----------------------- |  | ---------------- | ------- |  | ---------------- | 
|                        |  |                  |         |  |                  | 
|Raw materials           |  |                  | 8,675   |  |                  | 
|Supplies for production |  |                  | 37,919  |  |                  | 
|Products-in-progress    |  |                  | 411,039 |  |                  | 
|Finished products       |  |                  | 438,603 |  |                  | 
|Total                   |  |                  | 896,236 |  |                  | 



Inventory reserves recognized as of December
31, 2012 and 2011 amounted to ThUS$72,687 and ThUS$58,220, respectively. Inventory reserves have been made based on a technical
studies covering different variables affecting products in stock such as density, humidity, and others. Reserves are also recognized
for lower of cost or market assessments, and for differences that arise from inventory counts.



Reserves by inventory class are as follows:



|Type of inventory                |  | 12/31/2012 ThUS$ |        |  | 12/31/2011 ThUS$ | 
|-------------------------------- |  | ---------------- | ------ |  | ---------------- | 
|                                 |  |                  |        |  |                  | 
|Raw material reserves            |  |                  | 93     |  |                  | 
|Supplies for production reserves |  |                  | 500    |  |                  | 
|Products-in-progress reserves    |  |                  | 46,635 |  |                  | 
|Finished product reserves        |  |                  | 25,459 |  |                  | 
|                                 |  |                  |        |  |                  | 
|Total                            |  |                  | 72,687 |  |                  | 



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



F-56







| | Notes to the consolidated financial statements as of December 31 2012
| | ---------------------------------------------------------------------



Note 8 – Related party disclosures



| | 8.1 | 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. The Company has not recorded any impairment in accounts
receivable related to amounts owed by related parties based on evaluations conducted each reporting period through an examination
of the financial position of the related party in the market in which they operate.



| | 8.2 | Detailed identification of the link between the company and its related parties
| | --- | -------------------------------------------------------------------------------



Details of the Company’s
related parties is as follows:



|Tax ID no.   |  | Name                                                |  | Country oforigin          |  | Functional currency  |  | Nature                                 
|------------ |  | --------------------------------------------------- |  | ------------------------- |  | -------------------- |  | ---------------------------------------
|77.557.430-5 |  | Sales de Magnesio Ltda.                             |  | Chile                     |  | Chilean peso         |  | Associate                              
|Foreign      |  | Abu Dhabi Fertilizer
    Industries WWL             |  | United  Arab
    Emirates |  | Arab Emirates dirham |  | Associate                              
|Foreign      |  | Doktor Tarsa Tarim
    Sanayi AS                    |  | Turkey                    |  | Turkish lira         |  | Associate                              
|Foreign      |  | Ajay North America                                  |  | United States             |  | US$                  |  | Associate                              
|Foreign      |  | Ajay Europe SARL                                    |  | France                    |  | Euro                 |  | Associate                              
|Foreign      |  | SQM Eastmed Turkey                                  |  | Turkey                    |  | Euro                 |  | Associate                              
|Foreign      |  | SQM Thailand Co. Ltd.                               |  | Thailand                  |  | Bath Tailandés       |  | Associate                              
|Foreign      |  | Sichuan SQM Migao Chemical
    Fertilizers Co Ltda. |  | China                     |  | US$                  |  | Joint business                         
|Foreign      |  | Coromandel SQM                                      |  | India                     |  | Indian rupee         |  | Joint business                         
|Foreign      |  | SQM Vitas Fzco.                                     |  | United  Arab
    Emirates |  | Arab Emirates dirham |  | Joint business                         
|Foreign      |  | SQM  Star Qingdao
    Crop Nutrition Co., Ltd.      |  | China                     |  | US$                  |  | Joint business                         
|Foreign      |  | Kowa Company Ltd.                                   |  | Japan                     |  | US$                  |  | Other related parties                  
|96.511.530-7 |  | Sociedad de Inversiones
    Pampa Calichera         |  | Chile                     |  | US$                  |  | Other related parties                  
|79.049.778-9 |  | Callegari Agricola S.A.                             |  | Chile                     |  | Chilean peso         |  | Other related parties                  
|Foreign      |  | Coromandel Internacional                            |  | India                     |  | Indian rupee         |  | Other related parties                  
|Foreign      |  | Vitas Roullier SAS                                  |  | France                    |  | Euro                 |  | Other related parties                  
|Foreign      |  | SQM Vitas Brasil Agroindustria                      |  | Brazil                    |  | US$                  |  | Joint business or significant influence
|Foreign      |  | SQM Vitas Perú
    S.A.C.                           |  | Peru                      |  | US$                  |  | Joint business or significant influence
|Foreingn     |  | SQM Vitas Southem Africa
    Pty.                   |  | South Africa              |  | US$                  |  | Joint business or significant influence
|Foreign      |  | Misr Speciality Fertilizers(*)                      |  | Egypt                     |  | Egyptian pound       |  | Associate                              
|Foreign      |  | NU3 N.V. (a)                                        |  | Belgium                   |  | Euro                 |  | Associate                              
|Foreign      |  | NU3 B.V. (a)                                        |  | The Netherlands           |  | Euro                 |  | Associate                              



A detail listing of the Company’s subsidiaries is provided
in note 5.4.



F-57







| | Notes to the consolidated financial statements as of December 31 2012
| | ---------------------------------------------------------------------



Note 8 – Related party disclosures (continued)



| | 8.2 | Detail of related parties and transactions with related parties
| | --- | ---------------------------------------------------------------



Transactions between the Parent (SQM S.A)
and its subsidiaries 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. In addition, these have been eliminated in consolidation and are not detailed in this note.



Maturity terms for each case vary by virtue
of the transaction giving rise to them.



As of December 31, 2012, 2011 and 2010,
there were no allowances for doubtful accounts related to balances pending of transactions with related parties as there was no
impairment to them.



Set forth below are the transactions with
related parties as of December 31, 2012, 2011 and 2010.



|Tax ID No. |  | Company                             |  | Nature    |  | Country of origin    |  | Transaction      |  | 12/31/2012 ThUS$ |        |  | 12/31/2011
ThUS$ |  |        |  | 12/31/2010
ThUS$ | 
|---------- |  | ----------------------------------- |  | --------- |  | -------------------- |  | ---------------- |  | ---------------- | ------ |  | ---------------- |  | ------ |  | ---------------- | 
|Foreign    |  | Doktor Tarsa Tarim Sanayi As        |  | Associate |  | Turkey               |  | Sale of products |  |                  | 9,587  |  |                  |  | 26,748 |  |                  | 
|Foreign    |  | Ajay Europe S.A.R.L.                |  | Associate |  | France               |  | Sale of products |  |                  | 37,232 |  |                  |  | 27,743 |  |                  | 
|Foreign    |  | Ajay Europe S.A.R.L.                |  | Associate |  | France               |  | Dividends        |  |                  | 3,564  |  |                  |  | 824    |  |                  | 
|Foreign    |  | Ajay North America LLC.             |  | Associate |  | United States        |  | Sale of products |  |                  | 42,081 |  |                  |  | 47,501 |  |                  | 
|Foreign    |  | Ajay North America LLC.             |  | Associate |  | United States        |  | Dividends        |  |                  | 10,175 |  |                  |  | 1,499  |  |                  | 
|Foreign    |  | Abu Dhabi Fertilizer Industries WWL |  | Associate |  | United Arab Emirates |  | Sale of products |  |                  | 6,285  |  |                  |  | 8,234  |  |                  | 
|Foreign    |  | Abu Dhabi Fertilizer Industries WWL |  | Associate |  | United Arab Emirates |  | Dividends        |  |                  | 525    |  |                  |  | -      |  |                  | 
|Foreign    |  | NU3 B.V.                            |  | Associate |  | The Netherlands      |  | Sale of products |  |                  | -      |  |                  |  | 15,708 |  |                  | 
|Foreign    |  | NU3 B.V.                            |  | Associate |  | The Netherlands      |  | Services sales   |  |                  | -      |  |                  |  | -      |  |                  | 
|Foreign    |  | NU3 N.V.                            |  | Associate |  | Belgium              |  | Sale of products |  |                  | -      |  |                  |  | 9,993  |  |                  | 
|Foreign    |  | SQM Thailand Co. Ltd.               |  | Associate |  | Thailand             |  | Sale of products |  |                  | 10,203 |  |                  |  | 7,355  |  |                  | 
|Foreign    |  | Misr Speciality Fertilizers         |  | Associate |  | Egypt                |  | Sale of products |  |                  | -      |  |                  |  | -      |  |                  | 



F-58







| | Notes to the consolidated financial statements as of December 31 2012
| | ---------------------------------------------------------------------



Note 8 – Related party disclosures (continued)



| | 8.2 | Detail of related parties and transactions with related parties, continued
| | --- | --------------------------------------------------------------------------



|Tax ID No.   |  | Company                                         |  | Nature                                 |  | Country of origin    |  | Transaction      |  | 12/31/2012 ThUS$ |         |  | 12/31/2011
ThUS$ |  |         | 12/31/2010
ThUS$ | 
|------------ |  | ----------------------------------------------- |  | -------------------------------------- |  | -------------------- |  | ---------------- |  | ---------------- | ------- |  | ---------------- |  | ------- | ---------------- | 
|Foreign      |  | SQM Thailand Co. Ltd.                           |  | Associate                              |  | Thailand             |  | Dividends        |  |                  | 11      |  |                  |  | -       |                  | 
|77.557.430-5 |  | Sales de Magnesio Ltda.                         |  | Associate                              |  | Chile                |  | Sale of products |  |                  | 1,472   |  |                  |  | -       |                  | 
|77.557.430-5 |  | Sales de Magnesio Ltda.                         |  | Associate                              |  | Chile                |  | Dividends        |  |                  | 1,052   |  |                  |  | 491     |                  | 
|77.557.430-5 |  | Sales de Magnesio Ltda.                         |  | Associate                              |  | Chile                |  | Services sales   |  |                  | -       |  |                  |  | -       |                  | 
|Foreign      |  | Kowa Company Ltd.                               |  | Other related parties                  |  | Japan                |  | Sale of products |  |                  | 123,581 |  |                  |  | 138,818 |                  | 
|78.062.420-5 |  | Minera Saskatchewan Ltda. (PCS)                 |  | Other related parties                  |  | Chile                |  | Services sales   |  |                  | -       |  |                  |  | -       |                  | 
|Foreign      |  | SQM Vitas Brasil Agroindustria                  |  | Joint control or significant influence |  | Brazil               |  | Sale of products |  |                  | 40,518  |  |                  |  | 34,514  |                  | 
|Foreign      |  | SQM Vitas Perú S.A.C.                           |  | Joint control or significant influence |  | Peru                 |  | Sale of products |  |                  | 26,123  |  |                  |  | 13,608  |                  | 
|Foreign      |  | SQM Vitas Southern Africa Pty.                  |  | Joint control or significant influence |  | South Africa         |  | Sale of products |  |                  | 10,930  |  |                  |  | 2,287   |                  | 
|Foreign      |  | SQM Vitas Fzco.                                 |  | Joint venture                          |  | United Arab Emirates |  | Sale of products |  |                  | 120     |  |                  |  | 1,562   |                  | 
|Foreing      |  | Sichuan SQM Migao Chemical Fertilizers Co Ltda. |  | Joint Venture                          |  | China                |  | Services sales   |  |                  | 62      |  |                  |  | -       |                  | 
|Foreing      |  | Coromandel SQM                                  |  | Joint Venture                          |  | India                |  | Sale of products |  |                  | 2,300   |  |                  |  | -       |                  | 



F-59







| | Notes to the consolidated financial statements as of December 31 2012
| | ---------------------------------------------------------------------



Note 8 – Related party disclosures (continued)



| | 8.3 | Trade receivables due from related parties, current:
| | --- | ----------------------------------------------------



|Tax ID No.    |  | Name                                            |  | Nature                    |  | Country of origin    |  | Currency     |  | 12/31/2012 ThUS$ |         |  | 12/31/2011 ThUS$ | 
|------------- |  | ----------------------------------------------- |  | ------------------------- |  | -------------------- |  | ------------ |  | ---------------- | ------- |  | ---------------- | 
|77.557.430-5  |  | Sales de Magnesio Ltda.                         |  | Associate                 |  | Chile                |  | Chilean peso |  |                  | 303     |  |                  | 
|Foreign       |  | SQM Thailand Co. Ltd.                           |  | Associate                 |  | Thailand             |  | US$          |  |                  | 6,098   |  |                  | 
|Foreign       |  | Doktor Tarsa Tarim Sanayi AS                    |  | Associate                 |  | Turkey               |  | US$          |  |                  | -       |  |                  | 
|Foreign       |  | Ajay Europe S.A.R. L.                           |  | Associate                 |  | France               |  | US$          |  |                  | 4,775   |  |                  | 
|Foreign       |  | Ajay North America LLC.                         |  | Associate                 |  | United States        |  | US$          |  |                  | 4,633   |  |                  | 
|Foreign       |  | Abu Dhabi Fertilizer Industries WWL             |  | Associate                 |  | United Arab Emirates |  | US$          |  |                  | 1,805   |  |                  | 
|Foreign       |  | Misr Speciality Fertilizers                     |  | Associate                 |  | Egypt                |  | US$          |  |                  | -       |  |                  | 
|Foreign       |  | Kowa Company Ltd.                               |  | Jointly controlled entity |  | Japan                |  | US$          |  |                  | 29,929  |  |                  | 
|96.511.530-7  |  | Soc.de Inversiones Pampa Calichera              |  | Jointly controlled entity |  | Chile                |  | US$          |  |                  | 8       |  |                  | 
|Foreign       |  | SQM Star Qingdao Corp Nutrition Co. Ltd         |  | Joint venture             |  | China                |  | US$          |  |                  | 27      |  |                  | 
|Foreign       |  | SQM Vitas Brasil Agroindustria                  |  | Joint venture             |  | Brazil               |  | US$          |  |                  | 27,903  |  |                  | 
|Foreign       |  | SQM Vitas Perú S.A.C.                           |  | Joint venture             |  | Peru                 |  | US$          |  |                  | 18,143  |  |                  | 
|Foreign       |  | SQM Vitas Southern Africa PTY                   |  | Joint venture             |  | South Africa         |  | US$          |  |                  | 1,478   |  |                  | 
|Foreign       |  | Coromandel SQM                                  |  | Joint venture             |  | India                |  | Indian rupee |  |                  | 756     |  |                  | 
|Foreign       |  | Sichuan SQM Migao Chemical Fertilizers Co Ltda. |  | Joint venture             |  | China                |  | US$          |  |                  | 4,000   |  |                  | 
|79.049.778-9  |  | Callegari Agrícola S.A.                         |  | Other related parties     |  | Chile                |  | Chilean peso |  |                  | 844     |  |                  | 
|Foreing       |  | Coromandel Internacional                        |  | Other related parties     |  | India                |  | Indian rupee |  |                  | 670     |  |                  | 
|Total to-date |  |                                                 |  |                           |  |                      |  |              |  |                  | 101,372 |  |                  | 



F-60







| | Notes to the consolidated financial statements as of December 31 2012
| | ---------------------------------------------------------------------



Note 8 – Related party disclosures (continued)



| | 8.3 | Trade payables due to related parties, current:
| | --- | -----------------------------------------------



|Tax ID No.    |  | Name           |  | Nature        |  | Country of origin    |  | Currency             |  | 12/31/2012 ThUS$ |    |  | 12/31/2011 ThUS$ | 
|------------- |  | -------------- |  | ------------- |  | -------------------- |  | -------------------- |  | ---------------- | -- |  | ---------------- | 
|Foreign       |  | SQM Vitas Fzco |  | Joint venture |  | United Arab Emirates |  | Arab Emirates dirham |  |                  | 19 |  |                  | 
|Total to-date |  |                |  |               |  |                      |  |                      |  |                  | 19 |  |                  | 



F-61







| | Notes
    to the consolidated financial statements as of December 31 2012
| | -------------------------------------------------------------------------



Note 8 – Related party disclosures (continued)



| | 8.4 | Board of directors and senior management
| | --- | ----------------------------------------



| | 1) | Board of directors
| | -- | ------------------



The Company is managed by a Board of Directors
which is composed of eight regular directors who are elected for a three-year period. The present Board of Directors was elected
by the shareholders at the Ordinary Shareholders' Meeting of April 28, 2011.



As of December 31, 2012, the Company has
an Audit Committee made up of three members of the Board of Directors. This Committee performs those duties provided in Article
50 bis of Law No. 18,046 of the Chilean Corporation Act.



During the periods covered by these financial
statements, there were no pending balances receivable and payable 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.



| | 2) | Directors’ Compensation
| | -- | -----------------------



For the years ended December 31, 2012 and
2011, Directors’ compensation was as follows:



| | a) | A payment of a monthly fixed gross amount of UF 300 to the Chairman of the Company’s Board
of Directors and UF 50 in favor of the seven remaining board members regardless of their attendance at Board meetings or the number
of meetings attended during the related month.
| | -- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | b) | A payment in domestic currency in favor of the Chairman of the Company’s Board of Directors
consisting of a variable and gross amount equivalent to 0.35% of profit for the period effectively earned by the Company during
each fiscal year.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | c) | A payment in domestic currency in favor of each Company’s directors excluding the Chairman
of the Board, consisting of a variable and gross amount equivalent to 0.04% of profit for the period effectively earned by the
Company during each fiscal year.
| | -- | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | d) | The fixed and variable amounts indicated above will not be subject to any charge between them,
and those expressed as a percentage will be paid immediately after the shareholders at the respective Annual General Shareholders’
Meeting of the Company approve the consolidated financial statements, the annual report, the report by the account inspectors and
the report of external auditors for each fiscal year.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-62







| | Notes
    to the consolidated financial statements as of December 31 2012
| | -------------------------------------------------------------------------



Note 8 – Related party disclosures (continued)



| | 8.4 | Board of directors and senior management, continued
| | --- | ---------------------------------------------------



The remuneration of the Audit Committee is detailed as follows:



| | a) | A payment of a monthly, fixed and gross amount of UF 17 in favor of each of the three Directors
who are a part of the Company’s Audit Committee regardless of the number of meetings conducted during the respective month.
| | -- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | b) | A payment in domestic currency and in favor of each of the three Directors of a variable and gross
amount equivalent to 0.013% of the Company’s profit for the period effectively earned by the Company during fiscal years
2012 and 2011.
| | -- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 3) | The remunerations and profit sharing paid to members of the Board of Directors and Audit Committee
during 2012 and 2011 amount to ThUS$3,973 and ThUS$3,030, respectively.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 4) | As of December 31, 2012 and 2011, the global compensation paid to the 120 top executives amounted
to ThUS$32,888 and ThUS$22,509, respectively. This includes monthly fixed salary and variable performance bonuses.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 5) | Additionally, the Company has retention bonuses for the Company’s executives. The amount
of these bonuses is linked to the price of the Company’s shares and is payable in cash between 2012 and 2016 (See note 15).
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 6) | No guarantees have been constituted in favor of the Company’s management.
| | -- | -------------------------------------------------------------------------



| | 7) | The Company’s Directors and senior managment do not receive or have not received any benefit
during the period ended December 31, 2012 and 2011 or compensation related to pensions, life insurance, paid time off, profit sharing,
incentives, or benefits due to disability other than those mentioned in the preceding paragraphs.
| | -- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 8) | One of the Company’s Board of Directors is member of the Ultramar Group. Operations with
between the Company and the Ultramar Group consisted of approximately ThUS$22,577 and ThUS$13,751 for the years ended December
31, 2012 and 2011, respectively.
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 9) | No guarantees have been constituted in favor of the directors.
| | -- | --------------------------------------------------------------



F-63







| | Notes
    to the consolidated financial statements as of December 31 2012
| | -------------------------------------------------------------------------



Note 9 – Financial instruments



Financial assets in conformity with IAS 39 are detailed as follows:



| | 9.1 | Types of other financial assets
| | --- | -------------------------------



|Types of other financial assets          |  | 12/31/2012 ThUS$ |         |  | 12/31/2011 ThUS$ | 
|---------------------------------------- |  | ---------------- | ------- |  | ---------------- | 
|                                         |  |                  |         |  |                  | 
|Other current financial assets (1)       |  |                  | 244,161 |  |                  | 
|Derivatives (2)                          |  |                  | 680     |  |                  | 
|Hedging assets, current                  |  |                  | 71,262  |  |                  | 
|Total other current financial assets     |  |                  | 316,103 |  |                  | 
|                                         |  |                  |         |  |                  | 
|Other non-current financial assets (3)   |  |                  | 107     |  |                  | 
|Hedging assets, non-current              |  |                  | 29,385  |  |                  | 
|Total other non-current financial assets |  |                  | 29,492  |  |                  | 



| | (1) | Term deposits with maturities exceeding 90 days from the investment date.
| | --- | -------------------------------------------------------------------------



| | (2) | Forwards and options that are not classified as hedging instruments (see detail in note 9.3).
| | --- | ---------------------------------------------------------------------------------------------



| | (3) | Guarantees delivered for the lease of offices and investments in Sociedad Garantizadora de Pensiones
(ownership interest of 3%).
| | --- | --------------------------------------------------------------------------------------------------------------------------------



Detail of other current financial assets



|Institution                    |  | 12/31/2012 ThUS$ |         |  | 12/31/2011 ThUS$ | 
|------------------------------ |  | ---------------- | ------- |  | ---------------- | 
|Banco Santander                |  |                  | 41,691  |  |                  | 
|BBVA                           |  |                  | 31,579  |  |                  | 
|Banco de Crédito e Inversiones |  |                  | 82,145  |  |                  | 
|Banco de Chile                 |  |                  | 42,992  |  |                  | 
|Corpbanca                      |  |                  | 10,499  |  |                  | 
|Banco Scotiabank               |  |                  | 25,141  |  |                  | 
|Banco Itau                     |  |                  | 10,114  |  |                  | 
|Total                          |  |                  | 244,161 |  |                  | 



| | 9.2 | Trade and other receivables, current and non-current
| | --- | ----------------------------------------------------



|                                  |  | 12/31/2012 |         |  | 12/31/2011   | 
|--------------------------------- |  | ---------- | ------- |  | ------------ | 
|                                  |  | Current    |         |  | Non- current | 
|                                  |  | ThUS$      |         |  | ThUS$        | 
|                                  |  |            |         |  |              | 
|Trade receivables                 |  |            | 490,770 |  |              | 
|Prepayments                       |  |            | 14,046  |  |              | 
|Other receivables                 |  |            | 5,800   |  |              | 
|Total trade and other receivables |  |            | 510,616 |  |              | 



F-64







| | Notes
    to the consolidated financial statements as of December 31 2012
| | -------------------------------------------------------------------------



Note 9 – Financial instruments, (continued)



| | 9.2 | Trade and other receivables, continued
| | --- | --------------------------------------



|                                                  |  | 12/31/2012               |         |  | 12/31/2011                               | 
|------------------------------------------------- |  | ------------------------ | ------- |  | ---------------------------------------- | 
|                                                  |  | Assets before allowances |         |  | Allowance for doubtful trade receivables | 
|                                                  |  | ThUS$                    |         |  | ThUS$                                    | 
|Receivables related to credit operations, current |  |                          | 507,562 |  |                                          | 
|                                                  |  |                          |         |  |                                          | 
|Trade receivables, current                        |  |                          | 507,562 |  |                                          | 
|                                                  |  |                          |         |  |                                          | 
|Prepayments, current                              |  |                          | 14,046  |  |                                          | 
|Other receivables, current                        |  |                          | 7,801   |  |                                          | 
|                                                  |  |                          |         |  |                                          | 
|Trade and other receivables, current              |  |                          | 529,409 |  |                                          | 
|                                                  |  |                          |         |  |                                          | 
|Other receivables, non-current                    |  |                          | 1,311   |  |                                          | 
|                                                  |  |                          |         |  |                                          | 
|Non-current receivables                           |  |                          | 1,311   |  |                                          | 
|                                                  |  |                          |         |  |                                          | 
|Total trade and other receivables                 |  |                          | 530,720 |  |                                          | 



F-65







| | Notes
    to the consolidated financial statements as of December 31 2012
| | -------------------------------------------------------------------------



Note 9 – Financial instruments (continued)

| | 9.2 | Trade and other receivables, continued
| | --- | --------------------------------------



Portfolio stratification, continued



The Company’s policy is to require
guarantees (such as letters of credit, guarantee clauses and others) and/or maintaining insurance policies for certain accounts
as deemed necessary by management.



Unsecuritized portfolio



As of December 31, 2012 and December 31, 2011, the detail of
the unsecuritized portfolio is as follows:



|12/31/2012                                         
|---------------------------------------------------
|                                                   
|                                                   
|Number of customers, non-renegotiated
    portfolio
|Non-renegotiated portfolio, gross                  
|Number of customers, renegotiated portfolio        
|                                                   
|Renegotiated portfolio, gross                      
|                                                   
|Total portfolio,
    gross                         



|12/31/2011                                         
|---------------------------------------------------
|                                                   
|                                                   
|Number of customers, non-renegotiated
    portfolio
|Non-renegotiated portfolio, gross                  
|Number of customers, renegotiated portfolio        
|                                                   
|Renegotiated
    portfolio, gross                  
|                                                   
|Total portfolio,
    gross                         



F-66







| | Notes
    to the consolidated financial statements as of December 31 2012
| | -------------------------------------------------------------------------



Note 9 – Financial instruments (continued)

| | 9.2 | Trade and other receivables, continued
| | --- | --------------------------------------



The detail of allowance is as follows:



|Allowance and write-offs                 |  | 12/31/2012 ThUS$ |        |   | 12/31/2011 ThUS$ |  |        | 12/31/2010 ThUS$ | 
|---------------------------------------- |  | ---------------- | ------ | - | ---------------- |  | ------ | ---------------- | 
|                                         |  |                  |        |   |                  |  |        |                  | 
|Allowance for non-renegotiated portfolio |  |                  | 20,191 |   |                  |  | 21,961 |                  | 
|Write-offs for the period                |  |                  | (1,398 | ) |                  |  | (3,288 | )                | 
|Total                                    |  |                  | 18,793 |   |                  |  | 18,673 |                  | 



| | a) | Credit risk concentration
| | -- | -------------------------



Credit risk concentrations with respect
to trade receivables are reduced due to the large number of entities included in the Company’s client database and their
distribution throughout the world.



| | 9.3 | Hedging assets and liabilities
| | --- | ------------------------------



The balance represents derivative instruments
measured at fair value which have been classified as hedges from exchange and interest rate risks related to the total obligations
relating to bonds of the Company in Chilean Pesos and UF (and the exchange risk in Chilean Pesos of the Company’s investment
plans). As of December 31, 2012. The face value of cash flows in Cross Currency Swap contracts agreed upon in U.S. Dollars amounted
to ThUS$515,156 as of December 31, 2011 such contracts amounted to ThUS$ 405,486, and as of December 31, 2010 such contracts amounted
to ThUS$ 410,618.



|Hedging assets    |  | Derivative instruments (CCS) |         |  | Effect on profit or loss for the year, derivative instruments |  |         | Hedging reserve in gross equity |  |  | Deferred tax hedging reserve in equity |   |  | Hedging reserve in equity |      
|----------------- |  | ---------------------------- | ------- |  | ------------------------------------------------------------- |  | ------- | ------------------------------- |  |  | -------------------------------------- | - |  | ------------------------- | -----
|                  |  | ThUS$                        |         |  | ThUS$                                                         |  |         | ThUS$                           |  |  | ThUS$                                  |   |  | ThUS$                     |      
|                  |  |                              |         |  |                                                               |  |         |                                 |  |  |                                        |   |  |                           |      
|December 31, 2012 |  |                              | 100,647 |  |                                                               |  | 49,853  |                                 |  |  | (18,419                                | ) |  |                           | 3,684
|                  |  |                              |         |  |                                                               |  |         |                                 |  |  |                                        |   |  |                           |      
|December 31, 2011 |  |                              | 56,108  |  |                                                               |  | (39,718 | )                               |  |  | (12,184                                | ) |  |                           | 2,104
|                  |  |                              |         |  |                                                               |  |         |                                 |  |  |                                        |   |  |                           |      
|December 31, 2010 |  |                              | 97,553  |  |                                                               |  | 46,936  |                                 |  |  | (11,093                                | ) |  |                           | 1,886



|Hedging liabilities |  | Derivative instruments (IRS) |       |  | Effect on profit or loss for the year, derivative instruments |  |      | Hedging reserve in gross equity |  |  | Deferred tax hedging reserve in equity |   |  | Hedging reserve in equity |  
|------------------- |  | ---------------------------- | ----- |  | ------------------------------------------------------------- |  | ---- | ------------------------------- |  |  | -------------------------------------- | - |  | ------------------------- | -
|                    |  | ThUS$                        |       |  | ThUS$                                                         |  |      | ThUS$                           |  |  | ThUS$                                  |   |  | ThUS$                     |  
|                    |  |                              |       |  |                                                               |  |      |                                 |  |  |                                        |   |  |                           |  
|December 31, 2012   |  |                              | 1,879 |  |                                                               |  | 27   |                                 |  |  | (1,786                                 | ) |  |                           | -
|                    |  |                              |       |  |                                                               |  |      |                                 |  |  |                                        |   |  |                           |  
|December 31, 2011   |  |                              | 270   |  |                                                               |  | (120 | )                               |  |  | (150                                   | ) |  |                           | -
|                    |  |                              |       |  |                                                               |  |      |                                 |  |  |                                        |   |  |                           |  
|December 31, 2010   |  |                              | -     |  |                                                               |  | -    |                                 |  |  | -                                      |   |  |                           | -



Amounts recorded in the effect on profit
or loss column consider the mark - market effects of the contracts in force as of December 31, 2012, 2011 and 2010.



F-67







| | Notes
    to the consolidated financial statements as of December 31 2012
| | -------------------------------------------------------------------------



Note 9 – Financial instruments (continued)



| | 9.3 | Hedging assets and liabilities, continued
| | --- | -----------------------------------------



Derivative contract maturities are detailed
as follows:



|Series |   |  | Contract amount ThUS$ |  |         | Currency |  | Maturity date
|------ | - |  | --------------------- |  | ------- | -------- |  | -------------
|       | C |  |                       |  | 71,841  |          |  | UF           
|       | G |  |                       |  | 33,673  |          |  | Chilean peso 
|       | H |  |                       |  | 146,360 |          |  | UF           
|       | I |  |                       |  | 56,041  |          |  | UF           
|       | J |  |                       |  | 92,440  |          |  | Chilean peso 
|       | M |  |                       |  | 46,463  |          |  | UF           
|       | O |  |                       |  | 68,338  |          |  | UF           



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 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 Chilean
Pesos and UF. Likewise, hedging contracts are denominated in the same currencies and have the same expiration dates of bond principal
and interest payments.



Hedge Accounting



The Company classifies derivative instruments
as hedging that may include derivative or embedded derivatives either as fair value hedge derivative instruments, cash flow hedge
derivative instruments, or hedge derivative instruments.



a) Fair value hedge



Changes in fair values of derivative instruments
classified as fair value hedge derivative instruments are accounted for in gains and losses immediately along with any change in
the fair value of the hedged item that is attributable to the risk being hedged.



The Company documents the relationship
between hedge instruments and the hedged item along with the objectives of its risk management and strategy to carry out different
hedging transactions. In addition, upon commencement of the period hedged and then on a quarterly basis the Company documents whether
hedge instruments have been efficient and met the objective of hedging market fluctuations for the purpose of which we use the
effectiveness test. A hedge instrument is deemed effective if the effectiveness test result is between 80% to 120%.



The hedge instruments are classified as
effective or not effective on the basis of the effectiveness test results. This note includes the detail of fair values of derivatives
classified as hedging instruments.



F-68







| | Notes
    to the consolidated financial statements as of December 31 2012
| | -------------------------------------------------------------------------



Note 9 - Financial instruments (continued)



| | 9.3 | Hedging assets and liabilities, continued
| | --- | -----------------------------------------



b) Cash flow hedges



Cash flow hedges cover exposure to the
cash flow variations attributable to a risk associated with a specific transaction that is very likely to be executed, that may
have material effects on the results of the Company.



| | 9.4 | Financial liabilities
| | --- | ---------------------



Other current and non-current financial liabilities



As of December 31, 2012 and 2011, the detail is as follows:



|                                            |  | 12/31/2012 |         |  | 12/31/2011   | 
|------------------------------------------- |  | ---------- | ------- |  | ------------ | 
|                                            |  | Current    |         |  | Non- current | 
|                                            |  | ThUS$      |         |  | ThUS$        | 
|                                            |  |            |         |  |              | 
|Bank loans                                  |  |            | 122,373 |  |              | 
|Obligations with the public (bonds payable) |  |            | 20,135  |  |              | 
|Other financial liabilities                 |  |            | 10,335  |  |              | 
|Total                                       |  |            | 152,843 |  |              | 



| | 9.4 | Financial liabilities
| | --- | ---------------------



Other current and non-current financial liabilities



The detail of current and non-current loans
assumed



|                                                        |  | 12/31/2012 |         |  | 12/31/2011 | 
|------------------------------------------------------- |  | ---------- | ------- |  | ---------- | 
|                                                        |  | ThUS$      |         |  | ThUS$      | 
|                                                        |  |            |         |  |            | 
|Long-term loans                                         |  |            | 379,119 |  |            | 
|                                                        |  |            |         |  |            | 
|Short-term loans                                        |  |            | 120,921 |  |            | 
|Current portion of long-term loans                      |  |            | 1,452   |  |            | 
|Short-term loans and current portion of long-term loans |  |            | 122,373 |  |            | 
|Total loans assumed                                     |  |            | 501,492 |  |            | 



F-69







| | Notes
    to the consolidated financial statements as of December 31 2012
| | -------------------------------------------------------------------------



Note 9 - Financial instruments (continued)



| | 9.4 | Financial liabilities, continued
| | --- | --------------------------------



| | a) | Bank loans, current are as follows:
| | -- | -----------------------------------



|Debtor          |  | Creditor                              |  | Currency |  |              |  |                                                   |  |                |  |                         |  | 12/31/2012 Current
    maturities | 
|--------------- |  | ------------------------------------- |  | -------- |  | ------------ |  | ------------------------------------------------- |  | -------------- |  | ----------------------- |  | --------------------------------- | 
|Tax ID No.      |  | Subsidiary                            |  | Country  |  | Tax ID No.   |  | Financial institution                             |  | Country        |  | or
    adjustment index |  | Amortization                      | 
|93.007.000-9    |  | SQM.S.A.                              |  | Chile    |  | 97.030.000-7 |  | Banco Estado                                      |  | Chile          |  | US$                     |  | Upon maturity                     | 
|93.007.000-9    |  | SQM.S.A.                              |  | Chile    |  | 97.030.000-7 |  | Banco Estado                                      |  | Chile          |  | US$                     |  | Upon maturity                     | 
|93.007.000-9    |  | SQM S.A.                              |  | Chile    |  | Foreign      |  | Banco Estado NY Branch                            |  | United States  |  | US$                     |  | Upon maturity                     | 
|79.626.800-K    |  | SQM Salar S.A.                        |  | Chile    |  | 97.032.000-8 |  | Banco BBVA Chile                                  |  | Chile          |  | US$                     |  | Upon maturity                     | 
|79.626.800-K    |  | SQM Salar S.A.                        |  | Chile    |  | 97.018.000-1 |  | Scotiabank Sud Americano                          |  | Chile          |  | US$                     |  | Upon maturity                     | 
|Foreign         |  | Royal Seed Trading Corporation A.V.V. |  | Aruba    |  | Foreign      |  | Bank of America                                   |  | United States  |  | US$                     |  | Upon maturity                     | 
|Foreign         |  | Royal Seed Trading Corporation A.V.V. |  | Aruba    |  | Foreign      |  | Export Development Canada                         |  | Canada         |  | US$                     |  | Upon maturity                     | 
|Foreign         |  | Royal Seed Trading Corporation A.V.V. |  | Aruba    |  | Foreign      |  | Scotiabank & Trust (Cayman) Ltd.                  |  | Cayman Islands |  | US$                     |  | Upon maturity                     | 
|Foreign         |  | Royal Seed Trading Corporation A.V.V. |  | Aruba    |  | Foreign      |  | Scotiabank & Trust (Cayman) Ltd.                  |  | Cayman Islands |  | US$                     |  | Upon maturity                     | 
|Foreign         |  | Royal Seed Trading Corporation A.V.V. |  | Aruba    |  | Foreign      |  | The Bank of Tokyo-Mitsubishi UFJ, Lda. (New York) |  | United States  |  | US$                     |  | Upon maturity                     | 
|79.947.100-0    |  | SQM Industrial S.A.                   |  | Chile    |  | 97.030.000-7 |  | Banco Estado                                      |  | Chile          |  | US$                     |  | Upon maturity                     | 
|79.947.100-0    |  | SQM Industrial S.A.                   |  | Chile    |  | 97.018.000-1 |  | Scotiabank Sud Americano                          |  | Chile          |  | US$                     |  | Upon maturity                     | 
|Total           |  |                                       |  |          |  |              |  |                                                   |  |                |  |                         |  |                                   | 
|Borrowing costs |  |                                       |  |          |  |              |  |                                                   |  |                |  |                         |  |                                   | 
|Total           |  |                                       |  |          |  |              |  |                                                   |  |                |  |                         |  |                                   | 



F-70







| | Notes
    to the consolidated financial statements as of December 31 2012
| | -------------------------------------------------------------------------



Note 9 - Financial instruments (continued)



| | 9.4 | Financial liabilities, continued
| | --- | --------------------------------



|Debtor          |  | Creditor                              |  | Currency |  |              |  |                                                   |  |                |  |                             |  | 12/31/2011 Current
    maturities | 
|--------------- |  | ------------------------------------- |  | -------- |  | ------------ |  | ------------------------------------------------- |  | -------------- |  | --------------------------- |  | --------------------------------- | 
|Tax ID No.      |  | Subsidiary                            |  | Country  |  | Tax ID No.   |  | Financial institution                             |  | Country        |  | or
    adjustment
    index |  | Amortization                      | 
|93.007.000-9    |  | SQM.S.A.                              |  | Chile    |  | 97.032.000-8 |  | Banco BBVA Chile                                  |  | United States  |  | US$                         |  | Upon maturity                     | 
|93.007.000-9    |  | SQM.S.A.                              |  | Chile    |  | 97.030.000-7 |  | Banco Estado                                      |  | United States  |  | US$                         |  | Upon maturity                     | 
|93.007.000-9    |  | SQM S.A.                              |  | Chile    |  | Foreign      |  | Banco Estado NY Branch                            |  | United States  |  | US$                         |  | Upon maturity                     | 
|79.626.800-K    |  | SQM Salar S.A.                        |  | Chile    |  | 97.030.000-7 |  | Banco Estado                                      |  | Chile          |  | US$                         |  | Upon maturity                     | 
|79.626.800-K    |  | SQM Salar S.A.                        |  | Chile    |  | 97.004.000-5 |  | Banco de  Chile                                   |  | Chile          |  | US$                         |  | Upon maturity                     | 
|79.626.800-K    |  | SQM Salar S.A.                        |  | Chile    |  | 97.018.000-1 |  | Scotiabank Sud Americano                          |  | Chile          |  | US$                         |  | Upon maturity                     | 
|Foreign         |  | Royal Seed Trading Corporation A.V.V. |  | Aruba    |  | Foreign      |  | Bank of America                                   |  | United States  |  | US$                         |  | Upon maturity                     | 
|Foreign         |  | Royal Seed Trading Corporation A.V.V. |  | Aruba    |  | Foreign      |  | Export Development Canada                         |  | United States  |  | US$                         |  | Upon maturity                     | 
|Foreign         |  | Royal Seed Trading Corporation A.V.V. |  | Aruba    |  | Foreign      |  | Scotiabank & Trust (Cayman) Ltd.                  |  | Cayman Islands |  | US$                         |  | Upon maturity                     | 
|Foreign         |  | Royal Seed Trading Corporation A.V.V. |  | Aruba    |  | Foreign      |  | The Bank of Tokyo-Mitsubishi UFJ, Lda. (New York) |  | United States  |  | US$                         |  | Upon maturity                     | 
|79.947.100-0    |  | SQM Industrial S.A.                   |  | Chile    |  | 97.004.000-5 |  | Banco de Chile                                    |  | Chile          |  | US$                         |  | Upon maturity                     | 
|79.947.100-0    |  | SQM Industrial S.A.                   |  | Chile    |  | 97.018.000-1 |  | Scotiabank Sud Americano                          |  | Chile          |  | US$                         |  | Upon maturity                     | 
|Total           |  |                                       |  |          |  |              |  |                                                   |  |                |  |                             |  |                                   | 
|Borrowing costs |  |                                       |  |          |  |              |  |                                                   |  |                |  |                             |  |                                   | 
|Total           |  |                                       |  |          |  |              |  |                                                   |  |                |  |                             |  |                                   | 



F-71







| | Notes
    to the consolidated financial statements as of December 31 2012
| | -------------------------------------------------------------------------



Note 9 - Financial instruments (continued)



| | 9.4 | Financial liabilities, continued
| | --- | --------------------------------



| | b) | Unsecured obligations, current:
| | -- | -------------------------------



The detail of current unsecured interest-bearing
obligations is composed of promissory notes and bonds, as follows:



Bonds



|Debtor       |  |            |  |         |  |                                                    |                                                                                                                                                                                                                                                                                              |  |        |        | Periodicity   |            |                               |     |                     |             |           |               | 12/31/2012 Current
    maturities | 
|------------ |  | ---------- |  | ------- |  | -------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------ | ------ | ------------- | ---------- | ----------------------------- | --- | ------------------- | ----------- | --------- | ------------- | --------------------------------- | 
|TAX ID No.   |  | Subsidiary |  | Country |  | Number of registration
    or ID of the instrument |                                                                                                                                                                                                                                                                                              |  | Series |        | Maturity date |            | Adjustment index for the bond |     | Payment of interest |             | Repayment |               | Effective rate                    | 
|             |  |            |  |         |  |                                                    |                                                                                                                                                                                                                                                                                              |  |        |        |               |            |                               |     |                     |             |           |               |                                   | 
|93.007.000-9 |  | SQM S.A    |  | Chile   |  |                                                    | -                                                                                                                                                                                                                                                                                            |  |        | Single |               | 04/15/2013 |                               | US$ |                     | Semi-annual |           | Upon maturity |                                   | 
|93.007.000-9 |  | SQM S.A    |  | Chile   |  |                                                    | -                                                                                                                                                                                                                                                                                            |  |        | Single |               | 04/21/2013 |                               | US$ |                     | Semi-annual |           | Upon maturity |                                   | 
|93.007.000-9 |  | SQM S.A    |  | Chile   |  |                                                    | 446                                                                                                                                                                                                                                                                                          |  |        | C      |               | 06/01/2013 |                               | UF  |                     | Semi-annual |           | Semi-annual   |                                   | 
|93.007.000-9 |  | SQM S.A    |  | Chile   |  |                                                    | 563                                                                                                                                                                                                                                                                                          |  |        | G      |               | 01/05/2013 |                               | Ch$ |                     | Semi-annual |           | Upon maturity |                                   | 
|93.007.000-9 |  | SQM S.A    |  | Chile   |  |                                                    | 564                                                                                                                                                                                                                                                                                          |  |        | H      |               | 01/05/2013 |                               | UF  |                     | Semi-annual |           | Semi-annual   |                                   | 
|93.007.000-9 |  | SQM S.A    |  | Chile   |  |                                                    | 563                                                                                                                                                                                                                                                                                          |  |        | I      |               | 04/01/2013 |                               | UF  |                     | Semi-annual |           | Upon maturity |                                   | 
|93.007.000-9 |  | SQM S.A    |  | Chile   |  |                                                    | 563                                                                                                                                                                                                                                                                                          |  |        | J      |               | 04/01/2013 |                               | Ch$ |                     | Semi-annual |           | Upon maturity |                                   | 
|93.007.000-9 |  | SQM S.A.   |  | Chile   |  |                                                    | 700                                                                                                                                                                                                                                                                                          |  |        | M      |               | 02/01/2013 |                               | UF  |                     | Semi-annual |           | Upon maturity |                                   | 
|93.007.000-9 |  | SQM S.A.   |  | Chile   |  |                                                    | 699                                                                                                                                                                                                                                                                                          |  |        | O      |               | 02/01/2013 |                               | UF  |                     | Semi-annual |           | Upon maturity |                                   | 
|             |  |            |  |         |  |                                                    | Total                                                                                                                                                                                                                                                                                        |  |        |        |               |            |                               |     |                     |             |           |               |                                   | 
|             |  |            |  |         |  |                                                    | Bond
                                                                                                                                      issue
                                                                                                                                      costs |  |        |        |               |            |                               |     |                     |             |           |               |                                   | 
|             |  |            |  |         |  |                                                    | Total                                                                                                                                                                                                                                                                                        |  |        |        |               |            |                               |     |                     |             |           |               |                                   | 



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



F-72







| | Notes
    to the consolidated financial statements as of December 31 2012
| | -------------------------------------------------------------------------



Note 9 - Financial instruments (continued)



| | 9.4 | Financial liabilities, continued
| | --- | --------------------------------



|Debtor       |  |            |  |         |  |                                                    |                                                                                                                                                                                                                                                                                              |  |        |        | Periodicity   |            |                               |     |                     |             |           |               | 12/31/2011 Current
    maturities | 
|------------ |  | ---------- |  | ------- |  | -------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------ | ------ | ------------- | ---------- | ----------------------------- | --- | ------------------- | ----------- | --------- | ------------- | --------------------------------- | 
|Tax ID No.   |  | Subsidiary |  | Country |  | Number of registration
    or ID of the instrument |                                                                                                                                                                                                                                                                                              |  | Series |        | Maturity date |            | Adjustment index for the bond |     | Payment of interest |             | Repayment |               | Effective rate                    | 
|             |  |            |  |         |  |                                                    |                                                                                                                                                                                                                                                                                              |  |        |        |               |            |                               |     |                     |             |           |               |                                   | 
|93.007.000-9 |  | SQM S.A    |  | Chile   |  |                                                    | -                                                                                                                                                                                                                                                                                            |  |        | Single |               | 04/15/2012 |                               | US$ |                     | Semi-annual |           | Upon maturity |                                   | 
|93.007.000-9 |  | SQM S.A    |  | Chile   |  |                                                    | -                                                                                                                                                                                                                                                                                            |  |        | Single |               | 04/21/2012 |                               | US$ |                     | Semi-annual |           | Upon maturity |                                   | 
|93.007.000-9 |  | SQM S.A    |  | Chile   |  |                                                    | 446                                                                                                                                                                                                                                                                                          |  |        | C      |               | 06/01/2012 |                               | UF  |                     | Semi-annual |           | Semi-annual   |                                   | 
|93.007.000-9 |  | SQM S.A    |  | Chile   |  |                                                    | 563                                                                                                                                                                                                                                                                                          |  |        | G      |               | 01/05/2012 |                               | Ch$ |                     | Semi-annual |           | Upon maturity |                                   | 
|93.007.000-9 |  | SQM S.A    |  | Chile   |  |                                                    | 564                                                                                                                                                                                                                                                                                          |  |        | H      |               | 01/05/2012 |                               | UF  |                     | Semi-annual |           | Semi-annual   |                                   | 
|93.007.000-9 |  | SQM S.A    |  | Chile   |  |                                                    | 563                                                                                                                                                                                                                                                                                          |  |        | I      |               | 04/01/2012 |                               | UF  |                     | Semi-annual |           | Upon maturity |                                   | 
|93.007.000-9 |  | SQM S.A    |  | Chile   |  |                                                    | 563                                                                                                                                                                                                                                                                                          |  |        | J      |               | 04/01/2012 |                               | Ch$ |                     | Semi-annual |           | Upon maturity |                                   | 
|             |  |            |  |         |  |                                                    | Total                                                                                                                                                                                                                                                                                        |  |        |        |               |            |                               |     |                     |             |           |               |                                   | 
|             |  |            |  |         |  |                                                    | Bond
                                                                                                                                      issue
                                                                                                                                      costs |  |        |        |               |            |                               |     |                     |             |           |               |                                   | 
|             |  |            |  |         |  |                                                    | Total                                                                                                                                                                                                                                                                                        |  |        |        |               |            |                               |     |                     |             |           |               |                                   | 



F-73







| | Notes
    to the consolidated financial statements as of December 31 2012
| | -------------------------------------------------------------------------



Note 9 - Financial instruments (continued)



9.4	Financial liabilities, continued



| | c) | Types of non-current interest-bearing loans
| | -- | -------------------------------------------



Non-current interest-bearing loans as of December 31, 2012 and
December 31, 2011 are detailed as follows:



Non-current interest-bearing bank loans

|Debtor       |  | Creditor                              |  |         |  |            |  |                                                      |  |                |  |          |  | 12/31/2012
    Years to maturity |  |                |      |  
|------------ |  | ------------------------------------- |  | ------- |  | ---------- |  | ---------------------------------------------------- |  | -------------- |  | -------- |  | -------------------------------- |  | -------------- | ---- | -
|Tax ID No.   |  | Subsidiary                            |  | Country |  | Tax ID No. |  | Financial institution                                |  | Country        |  | Currency |  | Repayment                        |  | Effective rate |      |  
|93.007.000-9 |  | SQM S.A.                              |  | Chile   |  | Foreign    |  | Banco Estado NY Branch                               |  | United States  |  |          |  |                                  |  |                |      |  
|Foreign      |  | Royal Seed Trading Corporation A.V.V. |  | Aruba   |  | Foreign    |  | Scotiabank & Trust (Cayman) Ltd.                     |  | Cayman Islands |  | US$      |  | Upon maturity                    |  |                | 1.60 | %
|Foreign      |  | Royal Seed Trading Corporation A.V.V. |  | Aruba   |  | Foreign    |  | Scotiabank & Trust (Cayman) Ltd.                     |  | Cayman Islands |  | US$      |  | Upon maturity                    |  |                | 1.92 | %
|Foreign      |  | Royal Seed Trading Corporation A.V.V. |  | Aruba   |  | Foreign    |  | Bank of America                                      |  | United States  |  | US$      |  | Upon maturity                    |  |                | 1.83 | %
|Foreign      |  | Royal Seed Trading Corporation A.V.V. |  | Aruba   |  | Foreign    |  | Export Development Canada                            |  | Canada         |  | US$      |  | Upon maturity                    |  |                | 1.81 | %
|Foreign      |  | Royal Seed Trading Corporation A.V.V. |  | Aruba   |  | Foreign    |  | The Bank of Tokyo-Mitsubishi UFJ, Ltd (New
    York) |  | United States  |  | US$      |  | Upon maturity                    |  |                | 1.49 | %
|Total        |  |                                       |  |         |  |            |  |                                                      |  |                |  |          |  |                                  |  |                |      |  
|             |  | Borrowing costs                       |  |         |  |            |  |                                                      |  |                |  |          |  |                                  |  |                |      |  
|Total        |  |                                       |  |         |  |            |  |                                                      |  |                |  |          |  |                                  |  |                |      |  



F-74







| | Notes
    to the consolidated financial statements as of December 31 2012
| | -------------------------------------------------------------------------



Note 9 - Financial instruments (continued)



| | 9.4 | Financial liabilities, continued
| | --- | --------------------------------



|Debtor       |  | Creditor                              |  |         |  |             |  |                                                      |  |                |  |          |  | 12/31/2011 Years to
    maturity |  |                     |      |  
|------------ |  | ------------------------------------- |  | ------- |  | ----------- |  | ---------------------------------------------------- |  | -------------- |  | -------- |  | -------------------------------- |  | ------------------- | ---- | -
|Tax ID No.   |  | Subsidiary                            |  | Country |  | Tax ID 
No. |  | Financial institution                                |  | Country        |  | Currency |  | Repayment                        |  | Effective 
    rate |      |  
|93.007.000-9 |  | SQM S.A.                              |  | Chile   |  | Foreign     |  | Banco Estado NY Branch                               |  | United States  |  | US$      |  | Upon maturity                    |  |                     | 3.02 | %
|Foreign      |  | Royal Seed Trading Corporation A.V.V. |  | Aruba   |  | Foreign     |  | Scotiabank & Trust (Cayman) Ltd.                     |  | Cayman Islands |  | US$      |  | Upon maturity                    |  |                     | 1.74 | %
|Foreign      |  | Royal Seed Trading Corporation A.V.V. |  | Aruba   |  | Foreign     |  | Bank of America                                      |  | United States  |  | US$      |  | Upon maturity                    |  |                     | 2.56 | %
|Foreign      |  | Royal Seed Trading Corporation A.V.V. |  | Aruba   |  | Foreign     |  | Export Development                                   |  | Cayman Islands |  | US$      |  | Upon maturity                    |  |                     | 2.36 | %
|Foreign      |  | Royal Seed Trading Corporation A.V.V. |  | Aruba   |  | Foreign     |  | The Bank of Tokyo-Mitsubishi UFJ, Ltd (New
    York) |  | United States  |  | US$      |  | Upon maturity                    |  |                     | 2.17 | %
|Total        |  |                                       |  |         |  |             |  |                                                      |  |                |  |          |  |                                  |  |                     |      |  
|             |  | Borrowing costs                       |  |         |  |             |  |                                                      |  |                |  |          |  |                                  |  |                     |      |  
|Total        |  |                                       |  |         |  |             |  |                                                      |  |                |  |          |  |                                  |  |                     |      |  



| | d) | Non-current unsecured interest-bearing bonds
| | -- | --------------------------------------------



The breakdown of non-current unsecured
interest-bearing bonds as of December 31, 2012 and 2011 is detailed as follows:



|Debtor       |  |            |  |         |  |                                                    |                                                                                                                                                                                                                                                                                                  |  |        |        | Periodicity   |            |          |     |                     |             |           |               |                |  |      | 12/31/2012 Current
    maturities | 
|------------ |  | ---------- |  | ------- |  | -------------------------------------------------- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |  | ------ | ------ | ------------- | ---------- | -------- | --- | ------------------- | ----------- | --------- | ------------- | -------------- |  | ---- | --------------------------------- | 
|Tax ID No.   |  | Subsidiary |  | Country |  | Number of registration
    or ID of the instrument |                                                                                                                                                                                                                                                                                                  |  | Series |        | Maturity date |            | Currency |     | Payment of interest |             | Repayment |               | Effective rate |  |      | Nominal rate                      | 
|             |  |            |  |         |  |                                                    |                                                                                                                                                                                                                                                                                                  |  |        |        |               |            |          |     |                     |             |           |               |                |  |      |                                   | 
|93.007.000-9 |  | SQM S.A    |  | Chile   |  |                                                    | -                                                                                                                                                                                                                                                                                                |  |        | Single |               | 04/15/2016 |          | US$ |                     | Semi-annual |           | Upon maturity |                |  | 6.32 | %                                 | 
|93.007.000-9 |  | SQM S.A    |  | Chile   |  |                                                    | -                                                                                                                                                                                                                                                                                                |  |        | Single |               | 04/21/2020 |          | US$ |                     | Semi-annual |           | Upon maturity |                |  | 5.70 | %                                 | 
|93.007.000-9 |  | SQM S.A    |  | Chile   |  |                                                    | 446                                                                                                                                                                                                                                                                                              |  |        | C      |               | 12/01/2026 |          | UF  |                     | Semi-annual |           | Semi-annual   |                |  | 4.44 | %                                 | 
|93.007.000-9 |  | SQM S.A    |  | Chile   |  |                                                    | 564                                                                                                                                                                                                                                                                                              |  |        | H      |               | 01/05/2030 |          | UF  |                     | Semi-annual |           | Semi-annual   |                |  | 7.50 | %                                 | 
|93.007.000-9 |  | SQM S.A    |  | Chile   |  |                                                    | 563                                                                                                                                                                                                                                                                                              |  |        | G      |               | 01/05/2014 |          | Ch$ |                     | Semi-annual |           | Upon maturity |                |  | 5.10 | %                                 | 
|93.007.000-9 |  | SQM S.A    |  | Chile   |  |                                                    | 563                                                                                                                                                                                                                                                                                              |  |        | I      |               | 04/01/2014 |          | UF  |                     | Semi-annual |           | Upon maturity |                |  | 3.35 | %                                 | 
|93.007.000-9 |  | SQM S.A    |  | Chile   |  |                                                    | 563                                                                                                                                                                                                                                                                                              |  |        | J      |               | 04/01/2014 |          | Ch$ |                     | Semi-annual |           | Upon maturity |                |  | 6.23 | %                                 | 
|93.007.000-9 |  | SQM S.A.   |  | Chile   |  |                                                    | 700                                                                                                                                                                                                                                                                                              |  |        | M      |               | 02/01/2017 |          | UF  |                     | Semi-annual |           | Upon maturity |                |  | 3.62 | %                                 | 
|93.007.000-9 |  | SQM S.A.   |  | Chile   |  |                                                    | 699                                                                                                                                                                                                                                                                                              |  |        | O      |               | 02/01/2033 |          | UF  |                     | Semi-annual |           | Upon maturity |                |  | 3.95 | %                                 | 
|             |  |            |  |         |  |                                                    | Total                                                                                                                                                                                                                                                                                            |  |        |        |               |            |          |     |                     |             |           |               |                |  |      |                                   | 
|             |  |            |  |         |  |                                                    | Bond
                                                                                                                                        issue
                                                                                                                                        costs |  |        |        |               |            |          |     |                     |             |           |               |                |  |      |                                   | 
|             |  |            |  |         |  |                                                    | Total                                                                                                                                                                                                                                                                                            |  |        |        |               |            |          |     |                     |             |           |               |                |  |      |                                   | 



Note 9 - Financial instruments (continued)



F-75







| | Notes
    to the consolidated financial statements as of December 31 2012
| | -------------------------------------------------------------------------



| | 9.4 | Financial liabilities, continued
| | --- | --------------------------------



|Debtor       |  |            |  |         |  |                                                    |                                                                                                                                                                                                                                                                                              |  |        |        | Periodicity   |            |          |     |                     |             |           |               |                |  |      | 12/31/2011 Current
    maturities | 
|------------ |  | ---------- |  | ------- |  | -------------------------------------------------- | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------- |  | ------ | ------ | ------------- | ---------- | -------- | --- | ------------------- | ----------- | --------- | ------------- | -------------- |  | ---- | --------------------------------- | 
|Tax ID No.   |  | Subsidiary |  | Country |  | Number of registration
    or ID of the instrument |                                                                                                                                                                                                                                                                                              |  | Series |        | Maturity date |            | Currency |     | Payment of interest |             | Repayment |               | Effective rate |  |      | Nominal rate                      | 
|             |  |            |  |         |  |                                                    |                                                                                                                                                                                                                                                                                              |  |        |        |               |            |          |     |                     |             |           |               |                |  |      |                                   | 
|93.007.000-9 |  | SQM S.A    |  | Chile   |  |                                                    | -                                                                                                                                                                                                                                                                                            |  |        | Single |               | 04/15/2016 |          | US$ |                     | Semi-annual |           | Upon maturity |                |  | 6,32 | %                                 | 
|93.007.000-9 |  | SQM S.A    |  | Chile   |  |                                                    | -                                                                                                                                                                                                                                                                                            |  |        | Single |               | 04/21/2020 |          | US$ |                     | Semi-annual |           | Upon maturity |                |  | 5,70 | %                                 | 
|93.007.000-9 |  | SQM S.A    |  | Chile   |  |                                                    | 446                                                                                                                                                                                                                                                                                          |  |        | C      |               | 12/01/2026 |          | UF  |                     | Semi-annual |           | Semi-annual   |                |  | 4,44 | %                                 | 
|93.007.000-9 |  | SQM S.A    |  | Chile   |  |                                                    | 564                                                                                                                                                                                                                                                                                          |  |        | H      |               | 01/05/2030 |          | UF  |                     | Semi-annual |           | Semi-annual   |                |  | 7,50 | %                                 | 
|93.007.000-9 |  | SQM S.A    |  | Chile   |  |                                                    | 563                                                                                                                                                                                                                                                                                          |  |        | G      |               | 01/05/2014 |          | Ch$ |                     | Semi-annual |           | Upon maturity |                |  | 5,10 | %                                 | 
|93.007.000-9 |  | SQM S.A    |  | Chile   |  |                                                    | 563                                                                                                                                                                                                                                                                                          |  |        | I      |               | 04/01/2014 |          | UF  |                     | Semi-annual |           | Upon maturity |                |  | 3,35 | %                                 | 
|93.007.000-9 |  | SQM S.A    |  | Chile   |  |                                                    | 563                                                                                                                                                                                                                                                                                          |  |        | J      |               | 04/01/2014 |          | Ch$ |                     | Semi-annual |           | Upon maturity |                |  | 6.23 | %                                 | 
|             |  |            |  |         |  |                                                    | Total                                                                                                                                                                                                                                                                                        |  |        |        |               |            |          |     |                     |             |           |               |                |  |      |                                   | 
|             |  |            |  |         |  |                                                    | Bond
                                                                                                                                      issue
                                                                                                                                      costs |  |        |        |               |            |          |     |                     |             |           |               |                |  |      |                                   | 
|             |  |            |  |         |  |                                                    | Total                                                                                                                                                                                                                                                                                        |  |        |        |               |            |          |     |                     |             |           |               |                |  |      |                                   | 



F-76







| | Notes
    to the consolidated financial statements as of December 31 2012
| | -------------------------------------------------------------------------



Note 9 - Financial instruments (continued)



| | 9.4 | Financial liabilities, continued
| | --- | --------------------------------



| | e) | Additional information
| | -- | ----------------------



Bonds



As of December 31, 2012 and 2011, ThUS$20,135
and ThUS$17,129, respectively are presented as short-term related to principal, current portion plus interest accrued at that date,
not including bond issue costs. The non-current portion, consisting of ThUS$1,067,075 and ThUS$907,877 as of December 31, 2012
and 2011, respectively, related to principal installments of Series C bonds, Single Series bonds, Series G bonds, Series H bonds,
Series I bonds, Series J bonds and Single series Second Issue bonds.

The details of each issue are as follows



Series “C” bonds



In January 2006, the Company placed Series
C bonds for UF 3,000,000 (ThUS$101,918) at an annual rate of 4.00%.

The Company has made the following payments
towards the Series C bonds:



|Payments made |  | 12/31/2012 |       |  | 12/31/2011 |  |       | 12/31/2010 | 
|------------- |  | ---------- | ----- |  | ---------- |  | ----- | ---------- | 
|              |  | ThUS$      |       |  | ThUS$      |  |       | ThUS$      | 
|Principal     |  |            | 6,858 |  |            |  | 6,678 |            | 
|Interest      |  |            | 4,004 |  |            |  | 4,169 |            | 



Single Series bonds



In April 2006, the Company placed Single
Series bonds for ThUS$200,000 at an annual rate of 6.125% under Rule 144 and Regulation S of the U.S. Securities Act of 1933.

The Company has made no principal payments
and interest payments amounting to ThUS$12,250 for the years ending December 31, 2012 and 2011, respectively on these bonds



F-77







| | Notes
    to the consolidated financial statements as of December 31 2012
| | -------------------------------------------------------------------------



Note 9 - Financial instruments (continued)



| | 9.4 | Financial liabilities, continued
| | --- | --------------------------------



Series “G” and “H”
bonds



In January 2009, the Company placed two
bond series in the domestic market, Series H for UF 4,000,000 (ThUS$139,216) at an annual interest rate of 4.9% and a term of 21
years with payment of principal beginning in 2019 and Series G for ThCh$ 21,000,000 (ThUS$34,146), which was placed at a term of
5 years with a single payment upon maturity and an annual interest rate of 7%.

The Company has made the following payments
on the Series G and H bonds:

|                                    |  | 12/31/2012 ThUS$ |       |  | 12/31/2011 ThUS$ |  |       | 12/31/2010 ThUS$ | 
|----------------------------------- |  | ---------------- | ----- |  | ---------------- |  | ----- | ---------------- | 
|Payment of interest, Series G bonds |  |                  | 2,845 |  |                  |  | 3,094 |                  | 
|Payment of interest, Series H bonds |  |                  | 8,565 |  |                  |  | 8,989 |                  | 



Series “J” and “I” bonds



In May 8, 2009, the Company placed two
bond series in the domestic market, Series J for ThCh$52,000,000 (ThUS$92,456) which was placed at a term of 5 years with single
payment at maturity and annual interest rate of 5.5% and Series I for UF 1,500,000 (ThUS$56,051) which was placed at a term of
5 years with single payment upon maturity and an annual interest rate of 3.00%.

The Company has made the following payments
on the Series J and I bonds:



|                                    |  | 12/31/2012 ThUS$ |       |  | 12/31/2011 ThUS$ |  |       | 12/31/2010 ThUS$ | 
|----------------------------------- |  | ---------------- | ----- |  | ---------------- |  | ----- | ---------------- | 
|Payment of interest, Series J bonds |  |                  | 5,879 |  |                  |  | 5,665 |                  | 
|Payment of interest, Series I bonds |  |                  | 2,100 |  |                  |  | 1,954 |                  | 



F-78







| | Notes
    to the consolidated financial statements as of December 31 2012
| | -------------------------------------------------------------------------



Note 9 - Financial instruments (continued)



| | 9.4 | Financial liabilities, continued
| | --- | --------------------------------



Single series bonds, second issue



In April 2010, the Company informed the
SVS of its placement in international markets of an unsecured bond of ThUS$250,000 with a maturity of 10 years beginning on the
aforementioned date with annual interest rate of 5.5% which was used to refinance other long-term liabilities.



For the years ended December 31, 2012 and
2011, the Company has made interest payments totaling ThUS$13,750 and ThUS$13,750, respectively.



Series “M” and “O” bonds



In April 2012 the company placed two series
of bonds in the national market. The “series M” of UF 1,000,000 (ThUS$46,601) was placed at a period of 5 years, with
a sole amortization when the term ends and with an annual interest rate of 3.3%, and the “series O” of UF 1,500,000
(ThUS$69,901) that was placed at a term of 21 years, with a sole amortization when the term expires and with an annual interest
rate of 3.80%.



For the year ended December 31 2012, the
Company paid interest of ThUS$765 on Series M bonds and ThUS$1,320 on Series O bonds.



Promissory notes with middle-term maturities

On April 2, 2009 the Company issued promissory notes in the
local market for an amount of ThCH$ 15,000,000 (ThUS$ 25,770) identified as line 47, Series 1-B, with a maturity of 10 years. The
maximum amount to be issued is UF 1,500,000. In 2010, the Company paid ThUS$29,040 in full settlement of these notes.



F-79







| | Notes
    to the consolidated financial statements as of December 31 2012
| | -------------------------------------------------------------------------



Note 9 - Financial instruments (continued)



| | 9.5 | Trade and other payables
| | --- | ------------------------



Current trade and other payables consists of the following:



|                       |  | 12/31/2012 |         |  | 12/31/2011 | 
|---------------------- |  | ---------- | ------- |  | ---------- | 
|                       |  | Current    |         |  | Current    | 
|                       |  | ThUS$      |         |  | ThUS$      | 
|                       |  |            |         |  |            | 
|Accounts payable       |  |            | 207,429 |  |            | 
|Retained  (or accrued) |  |            | 515     |  |            | 
|Total                  |  |            | 207,944 |  |            | 



The Company had no long-term trade and
other payables as of December 31, 2012 and 2011, respectively.



Purchase commitments held by the Company
are recognized as liabilities when the goods and services are received by the Company. As of December 31, 2012 the Company had
open purchase orders amounting to ThUS$127,484 (ThUS$79,045, as of December 31, 2011).



F-80









| | Notes to the consolidated financial statements as of December
31 2012
| | ---------------------------------------------------------------------





Note 9 - Financial instruments (continued)



| | 9.6 | Financial liabilities at fair value through profit or loss
| | --- | ----------------------------------------------------------



Derivative instruments measured
at their fair value through profit or loss consists of the following:



|Financial liabilities at fair
    value through profit or loss |  | 12/31/2012 |        |  | Effect on profit
    or loss as of 12/31/2012 |  |        | 12/31/2011 |  |  | Effect on profit
    or loss as of 12/31/2011 |  |  | 12/31/2010 |        |   | Effect on profit
    or loss as of 12/31/2010 | 
|-------------------------------------------------------------- |  | ---------- | ------ |  | --------------------------------------------- |  | ------ | ---------- |  |  | --------------------------------------------- |  |  | ---------- | ------ | - | --------------------------------------------- | 
|                                                               |  | ThUS$      |        |  | ThUS$                                         |  |        | ThUS$      |  |  | ThUS$                                         |  |  | ThUS$      |        |   | ThUS$                                         | 
|Current                                                        |  |            |        |  |                                               |  |        |            |  |  |                                               |  |  |            |        |   |                                               | 
|Derivative instruments (forward)                               |  |            | 5,612  |  |                                               |  | (4,559 | )          |  |  | 1,053                                         |  |  |            | (1,053 | ) |                                               | 
|Derivative instruments (options)                               |  |            | 2,492  |  |                                               |  | (1,456 | )          |  |  | 1,036                                         |  |  |            | (1,036 | ) |                                               | 
|Derivative instruments (Swaps)                                 |  |            | 2,231  |  |                                               |  | (240   | )          |  |  | 354                                           |  |  |            | (150   | ) |                                               | 
|                                                               |  |            | 10,335 |  |                                               |  | (6,255 | )          |  |  | 2,443                                         |  |  |            | (2,239 | ) |                                               | 



F-81











| | Notes to the consolidated financial statements as of December
31 2012
| | ---------------------------------------------------------------------



Note 9 - Financial instruments (continued)



| | 9.7 | Financial asset and liability categories
| | --- | ----------------------------------------



| | a) | Financial Assets
| | -- | ----------------



|                                                                                              |  | 12/31/2012       |         |  | 12/31/2011       | 
|--------------------------------------------------------------------------------------------- |  | ---------------- | ------- |  | ---------------- | 
|                                                                                              |  | Current          |         |  | Non-current      | 
|Description of financial assets                                                               |  | Amount
    ThUS$ |         |  | Amount
    ThUS$ | 
|                                                                                              |  |                  |         |  |                  | 
|Financial assets at fair value through profit or loss,
    classified as held-for-trading     |  |                  | 244,161 |  |                  | 
|Financial assets at fair value through profit
    or loss, mandatorily measured at fair value |  |                  | 680     |  |                  | 
|Financial
    assets at fair value through profit or loss                                     |  |                  | 244,841 |  |                  | 
|Investments held to maturity                                                                  |  |                  | -       |  |                  | 
|Loans and receivables                                                                         |  |                  | 510,616 |  |                  | 
|Financial assets at fair value through other
    comprehensive income                         |  |                  | 71,261  |  |                  | 
|Total financial
    assets                                                                    |  |                  | 826,718 |  |                  | 



F-82











| | Notes to the consolidated financial statements as of December
31 2012
| | ---------------------------------------------------------------------





Note 9 - Financial instruments (continued)



| | 9.7 | Financial asset and liability categories (continued)
| | --- | ----------------------------------------------------



| | b) | Financial liabilities
| | -- | ---------------------



|                                                                                                        |  | 12/31/2012       |         |  | 12/31/2011       | 
|------------------------------------------------------------------------------------------------------- |  | ---------------- | ------- |  | ---------------- | 
|                                                                                                        |  | Current          |         |  | Non-current      | 
|Description of financial liabilities at fair value through profit or loss                               |  | Amount
    ThUS$ |         |  | Amount
    ThUS$ | 
|                                                                                                        |  |                  |         |  |                  | 
|Financial liabilities at fair value
    through profit or loss, designed as such at initial recognition |  |                  | 10,335  |  |                  | 
|Financial liabilities at
    fair value through profit or loss                                          |  |                  | 10,335  |  |                  | 
|                                                                                                        |  |                  |         |  |                  | 
|Financial liabilities measured
    at amortized cost                                                    |  |                  | 350,452 |  |                  | 
|Total financial
    liabilities                                                                         |  |                  | 360,787 |  |                  | 



F-83











| | Notes to the consolidated financial statements as of December
31 2012
| | ---------------------------------------------------------------------





Note 9 - Financial instruments (continued)



| | 9.8 | Financial assets pledged as guarantee
| | --- | -------------------------------------



On November 4, 2004, the Company’s
subsidiary Isapre Norte Grande maintains a guarantee equivalent to the total amount owed to its members and healthcare providers,
which is managed and maintained by Banco de Chile. Assets, in the form of restricted cash pledged as guarantees as of December
31, 2012 and 2011 were ThUS$571 and ThUS$428, respectively.



| | 9.9 | Estimated fair value of financial instruments and financial derivatives
| | --- | -----------------------------------------------------------------------



Although inputs used to estimate the fair
value of financial assets and liabilities represent Management's best estimate, they are subjective in nature and involve assumptions
related to the current economic and market conditions, as well as underlying risk features. The methodologies and assumptions used
to value each financial instrument depend on the risk profile and underlying characteristics of instrument as follows:



| | - | Cash equivalent approximates fair value
due to the short-term maturities of these instruments.
| | - | ----------------------------------------------------------------------------------------------

| | - | Other current financial liabilities are
considered at fair value equal to their carrying values.
| | - | ------------------------------------------------------------------------------------------------

| | - | Interest-bearing liabilities with original
maturity of more than a year, fair values are calculated at discounting contractual cash flows at their original current market
values with similar terms.
| | - | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------

| | - | Forward and swap contracts fair value
is determined using quoted market prices of financial instruments with similar characteristics.
| | - | -------------------------------------------------------------------------------------------------------------------------------------



F-84











| | Notes to the consolidated financial statements as of December
31 2012
| | ---------------------------------------------------------------------



Note 9 - Financial instruments (continued)



| | 9.9 | Estimated fair value of financial instruments and financial derivatives, continued
| | --- | ----------------------------------------------------------------------------------



Details of the carrying values and estimated fair values of
the Company’s financial instruments is as follows:



|                                               |  | 12/31/2012     |           |  | 12/31/2011 | 
|---------------------------------------------- |  | -------------- | --------- |  | ---------- | 
|                                               |  | Carrying value |           |  | Fair value | 
|                                               |  | ThUS$          |           |  | ThUS$      | 
|Cash and cash equivalents                      |  |                | 324,353   |  |            | 
|Current trade and other receivables            |  |                | 510,616   |  |            | 
|Other current financial assets:                |  |                |           |  |            | 
|- Time deposits                                |  |                | 244,161   |  |            | 
|- Derivative instruments                       |  |                | 680       |  |            | 
|- Current hedging assets                       |  |                | 71,262    |  |            | 
|Total other current financial assets           |  |                | 316,103   |  |            | 
|Other non-current financial assets:            |  |                | 107       |  |            | 
|Non-current hedging assets                     |  |                | 29,385    |  |            | 
|Total other non-current financial assets       |  |                | 29,492    |  |            | 
|Other current financial liabilities:           |  |                |           |  |            | 
|- Bank loans                                   |  |                | 122,373   |  |            | 
|- Derivative instruments                       |  |                | 8,456     |  |            | 
|- Hedging liabilities                          |  |                | 1,879     |  |            | 
|- Unsecured obligations                        |  |                | 20,135    |  |            | 
|Total other current financial liabilities      |  |                | 152,843   |  |            | 
|Current and non-current accounts payable       |  |                | 207,944   |  |            | 
|Other non-current financial liabilities:       |  |                |           |  |            | 
|- Bank loans                                   |  |                | 379,119   |  |            | 
|- Unsecured obligations                        |  |                | 1,067,075 |  |            | 
|Total other non-current financial liabilities: |  |                | 1,446,194 |  |            | 



Fair value hierarchies are as follows:



| | - | Level 1: Quoted prices (unadjusted) in active markets for identical assets and liabilities.
| | - | -------------------------------------------------------------------------------------------

| | - | Level 2:Inputs other than quoted prices that are observable for the asset or liability
either directly (prices) or indirectly (derived from prices).
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------

| | - | Level 3: Inputs for the asset or liability that are not based on observable market data,
or unobservable inputs.
| | - | ----------------------------------------------------------------------------------------------------------------



The valuation techniques used to determine
the fair value of our hedging instruments are those indicated in level 2.



F-85











| | Notes to the consolidated financial statements as of December
31 2012
| | ---------------------------------------------------------------------



Note 9 - Financial instruments (continued)



| | 9.10 | Nature and scope of risks arising from financing instruments
| | ---- | ------------------------------------------------------------



Disclosure of information associated with
the nature and scope of risks arising from financial instruments is presented in note 4.



Note 10 – Equity-accounted investees



| | 10.1 | Investment in associates recognized according to the
equity method of accounting
| | ---- | --------------------------------------------------------------------------------



Equity accounted investments and joint
ventures consist of the following:



|                 |  |          |  | Investment       |        |  | Share on profit (loss)
    of equity-accounted investees | 
|---------------- |  | -------- |  | ---------------- | ------ |  | -------------------------------------------------------- | 
|                 |  | Note No. |  | 12/31/2012 ThUS$ |        |  | 12/31/2011 ThUS$                                         | 
|                 |  |          |  |                  |        |  |                                                          | 
|Equity-accounted |  | 10.1     |  |                  | 50,955 |  |                                                          | 
|investees        |  | 10.3     |  |                  |        |  |                                                          | 
|Joint ventures   |  | 10.4     |  |                  | 19,343 |  |                                                          | 
|                 |  |          |  |                  |        |  |                                                          | 
|Total            |  |          |  |                  | 70,298 |  |                                                          | 



F-86











| | Notes to the consolidated financial statements as of December
31 2012
| | ---------------------------------------------------------------------





Note 10 – Equity-accounted investees (continued)



| | 10.2 | Assets, liabilities, revenue and expenses of associates
| | ---- | -------------------------------------------------------



|12-31-2012  
|------------
|Tax ID No.  
|77.557.430-5
|Foreign     
|Foreign     
|Foreign     
|Foreign     
|Foreign     
|Foreign     
|            



|12-31-2011  
|------------
|Tax ID No.  
|77.557.430-5
|Foreign     
|Foreign     
|Foreign     
|Foreign     
|Foreign     
|Foreign     
|Foreign     
|            



|12-31-2010  
|------------
|Tax ID No.  
|77.557.430-5
|Foreign     
|Foreign     
|Foreign     
|Foreign     
|Foreign     
|Foreign     
|Foreign     
|Foreign     
|            



F-87











| | Notes to the consolidated financial statements as of December
31 2012
| | ---------------------------------------------------------------------



Note 10 – Equity-accounted investees
(continued)



| | 10.3 | Detail of investments in associates
| | ---- | -----------------------------------



The Company’s ownership in its associates
is detailed as follows:



|Associate                                  |  | Main activities of the associate                                                        |  | Ownership % |         |   | Investment |  |        | Investment | 
|------------------------------------------ |  | --------------------------------------------------------------------------------------- |  | ----------- | ------- | - | ---------- |  | ------ | ---------- | 
|                                           |  |                                                                                         |  |             |         |   | 12/31/2012 |  |        | 12/31/2011 | 
|                                           |  |                                                                                         |  |             |         |   | ThUS$      |  |        | ThUS$      | 
|Sales de Magnesio Ltda.                    |  | Commercialization of magnesium salts.                                                   |  |             | 50      | % |            |  | 1,656  |            | 
|Abu Dhabi Fertilizer Industries Co. W.W.L. |  | Distribution and commercialization of specialty plant
    nutrients in the Middle East. |  |             | 50      | % |            |  | 9,890  |            | 
|Ajay North America L.L.C                   |  | Production and commercialization of iodine derivatives.                                 |  |             | 49      | % |            |  | 15,357 |            | 
|Doktor Tarsa Tarim Sanayi AS               |  | Distribution and commercialization of specialty plant
    nutrients in Turkey.          |  |             | 50      | % |            |  | 15,346 |            | 
|Nutrisi Holding N.V.                       |  | Holding company                                                                         |  |             | 50      | % |            |  | -      |            | 
|Ajay Europe SARL                           |  | Production and distribution of iodine and iodine derivatives.                           |  |             | 50      | % |            |  | 8,495  |            | 
|Misr Specialty Fertilizers S.A.E.          |  | Production and commercialization of liquid specialty
    plant nutrients for Egypt.     |  |             | 47.4857 | % |            |  | -      |            | 
|SQM Eastmed Turkey                         |  | Production and commercialization of specialty products.                                 |  |             | 50      | % |            |  | 85     |            | 
|SQM Thailand Co. Ltd.                      |  | Distribution and commercialization
    of specialty plant nutrients.                    |  |             | 40      | % |            |  | 126    |            | 
|Total                                      |  |                                                                                         |  |             |         |   |            |  | 50,955 |            | 



|Associate                                  |  | Main activities of the associate                                                        |  | Ownership
    % |       |   | Share on profit (loss) of equity-accounted
    investees | 
|------------------------------------------ |  | --------------------------------------------------------------------------------------- |  | --------------- | ----- | - | -------------------------------------------------------- | 
|                                           |  |                                                                                         |  |                 |       |   | 12/31/2012                                               | 
|                                           |  |                                                                                         |  |                 |       |   | ThUS$                                                    | 
|Sales de Magnesio Ltda.                    |  | Commercialization of magnesium salts.                                                   |  |                 | 50    | % |                                                          | 
|Abu Dhabi Fertilizer Industries Co. W.W.L. |  | Distribution and commercialization of specialty plant
    nutrients in the Middle East. |  |                 | 50    | % |                                                          | 
|Ajay North America L.L.C                   |  | Production and commercialization of iodine derivatives.                                 |  |                 | 49    | % |                                                          | 
|Doktor Tarsa Tarim Sanayi AS               |  | Distribution and commercialization of specialty plant
    nutrients in Turkey.          |  |                 | 50    | % |                                                          | 
|Nutrisi Holding N.V.                       |  | Holding company                                                                         |  |                 | 50    | % |                                                          | 
|Ajay Europe SARL                           |  | Production and distribution of iodine and iodine derivatives.                           |  |                 | 50    | % |                                                          | 
|Misr Specialty Fertilizers S.A.E.          |  | Production and commercialization of liquid specialty
    plant nutrients for Egypt.     |  |                 | 47.49 | % |                                                          | 
|SQM Eastmed Turkey                         |  | Production and commercialization of specialty products.                                 |  |                 | 50    | % |                                                          | 
|SQM Thailand Co. Ltd.                      |  | Distribution and commercialization
    of specialty plant nutrients.                    |  |                 | 40    | % |                                                          | 
|Total                                      |  |                                                                                         |  |                 |       |   |                                                          | 



The Company has no participation in unrecognized
losses in investments in associates.



F-88











| | Notes to the consolidated financial statements as of December
31 2012
| | ---------------------------------------------------------------------



Note 10 - Equity-accounted investees (continued)



| | 10.4 | Detail of assets, liabilities and profit or loss of significant investments in joint ventures by company:
| | ---- | ---------------------------------------------------------------------------------------------------------



|12/31/2012
|----------
|          
|Tax ID No.
|Foreign   
|Foreign   
|Foreign   
|Foreign   
|          



|31/12/2011
|----------
|          
|Tax ID No.
|Foreign   
|Foreign   
|Foreign   
|Foreign   
|          



|31/12/2010
|----------
|          
|Tax ID No.
|Foreign   
|Foreign   
|Foreign   
|Foreign   
|          



F-89











| | Notes to the consolidated financial statements as of December
31 2012
| | ---------------------------------------------------------------------





Note 10 - Equity-accounted investees (continued)



| | 10.5 | Detail of investments in joint ventures:
| | ---- | ----------------------------------------



|Joint venture                                   |  | Main activities of the joint venture                                                                 |  | Ownership % |    |   | Investment
    12/31/2012 ThUS$ |  |        | Investment
    12/31/2011 ThUS$ | 
|----------------------------------------------- |  | ---------------------------------------------------------------------------------------------------- |  | ----------- | -- | - | ------------------------------- |  | ------ | ------------------------------- | 
|                                                |  |                                                                                                      |  |             |    |   |                                 |  |        |                                 | 
|Coromandel SQM                                  |  | Production and distribution of potassium nitrate.                                                    |  |             | 50 | % |                                 |  | 683    |                                 | 
|Sichuan SQM Migao Chemical Fertilizer Co. Ltda. |  | Production and distribution of soluble fertilizers.                                                  |  |             | 50 | % |                                 |  | 10,428 |                                 | 
|SQM Vitas Fzco.                                 |  | Production and commercialization of specialty plant
    and animal nutrition and industrial hygiene. |  |             | 50 | % |                                 |  | 7,153  |                                 | 
|SQM Quindao-Star Co. Ltda.                      |  | Production and distribution
    of nutrient plant solutions with specialties NPK soluble             |  |             | 50 | % |                                 |  | 1,079  |                                 | 
|Total                                           |  |                                                                                                      |  |             |    |   |                                 |  | 19,343 |                                 | 



F-90











| | Notes to the consolidated financial statements as of December
31 2012
| | ---------------------------------------------------------------------



Note 11 - Intangible assets and goodwill



11.1 Balances



|                                      |  | 12/31/2012 |        |  | 12/31/2011 | 
|------------------------------------- |  | ---------- | ------ |  | ---------- | 
|Balances                              |  | ThUS$      |        |  | ThUS$      | 
|                                      |  |            |        |  |            | 
|Intangible assets other than goodwill |  |            | 24,013 |  |            | 
|Goodwill                              |  |            | 38,388 |  |            | 
|                                      |  |            |        |  |            | 
|Total                                 |  |            | 62,401 |  |            | 



11.2 Disclosures on intangible assets and goodwill



Intangible assets relate to goodwill, water
rights, trademarks, industrial patents, rights of way and software.



|                                      |  |             |  | 12/31/2012         |       
|------------------------------------- |  | ----------- |  | ------------------ | ------
|Intangible assets and goodwill        |  | Useful life |  | Gross amount ThUS$ |       
|                                      |  |             |  |                    |       
|Trademarks                            |  | Finite      |  |                    | 3,821 
|Software                              |  | Finite      |  |                    | 3,765 
|Rights of way and water rights        |  | Finite      |  |                    | 1,198 
|Rights of way and water rights        |  | Indefinite  |  |                    | 22,612
|Other intangible assets               |  | Indefinite  |  |                    | 1,512 
|Intangible assets other than goodwill |  |             |  |                    | 32,908
|                                      |  |             |  |                    |       
|Goodwill                              |  | Indefinite  |  |                    | 40,178
|                                      |  |             |  |                    |       
|Total intangible assets and goodwill  |  |             |  |                    | 73,086





F-91











| | Notes to the consolidated financial statements as of December
31 2012
| | ---------------------------------------------------------------------



Note 11 - Intangible assets and goodwill (continued)



11.2 Disclosures on intangible assets and goodwill (continued)



|                                      |  |             |  | 12/31/2011         |       
|------------------------------------- |  | ----------- |  | ------------------ | ------
|Intangible assets and goodwill        |  | Useful life |  | Gross amount ThUS$ |       
|                                      |  |             |  |                    |       
|Trademarks                            |  | Finite      |  |                    | 3,821 
|Software                              |  | Finite      |  |                    | 3,476 
|Rights of way and water rights        |  | Finite      |  |                    | 1,198 
|Rights of way and water rights        |  | Indefinite  |  |                    | 3,536 
|Other intangible assets               |  | Indefinite  |  |                    | 548   
|Intangible assets other than goodwill |  |             |  |                    | 12,579
|                                      |  |             |  |                    |       
|Goodwill                              |  | Indefinite  |  |                    | 40,178
|                                      |  |             |  |                    |       
|Total intangible assets and goodwill  |  |             |  |                    | 52,757



F-92











| | Notes to the consolidated financial statements as of December
31 2012
| | ---------------------------------------------------------------------



Note 11 - Intangible assets and goodwill (continued)



11.2 Disclosures on intangible assets and goodwill, continued



The estimated useful life for
software is 3 years. For other finite useful life assets, the amortization period corresponds to their contractually defined period. Indefinite useful life intangible assets primarily consist of water rights and rights of
way, which do not expire.



The minimum and maximum useful lives of intangible assets are
as follows:



|Estimated useful lives or amortization rate |  | Minimum life or rate |  | Maximum life or rate
|------------------------------------------- |  | -------------------- |  | --------------------
|                                            |  |                      |  |                     
|Rights of way and water rights              |  | Indefinite           |  | Indefinite          
|Other intangible assets                     |  | Indefinite           |  | Indefinite          
|Rights of way and water rights              |  | 1 year               |  | 16 years            
|Trademarks                                  |  | 1 year               |  | 5 years             
|Software                                    |  | 2 years              |  | 3 years             



The Company has no internally generated intangible assets.



F-93











| | Notes to the consolidated financial statements as of December
31 2012
| | ---------------------------------------------------------------------



Note 11 - Intangible assets and goodwill
(continued)



11.2 Disclosures on intangible assets and goodwill, continued



| | a) | Movements in identifiable intangible assets as of December 31, 2012:
| | -- | --------------------------------------------------------------------



|Movements in identifiable intangible assets |  | Trademarks Net ThUS$ |   |  | Software, Net ThUS$ |  |       | Water rights and rights of
    way- finited life, Net ThUS$ |  |  | Water rights and rights of
    way-indefinite life, Net ThUS$ |   |  | Other intangible assets, Net
    ThUS$ |        |  | Goodwill, 
Net    ThUS$ |  |       | Identifiable intangible assets, Net 
    ThUS$ | 
|------------------------------------------- |  | -------------------- | - |  | ------------------- |  | ----- | ----------------------------------------------------------- |  |  | ------------------------------------------------------------- | - |  | -------------------------------------- | ------ |  | ----------------------- |  | ----- | ---------------------------------------------- | 
|                                            |  |                      |   |  |                     |  |       |                                                             |  |  |                                                               |   |  |                                        |        |  |                         |  |       |                                                | 
|Opening balance                             |  |                      | - |  |                     |  | 1,938 |                                                             |  |  | 440                                                           |   |  |                                        | 1,542  |  |                         |  | 396   |                                                | 
|Additions                                   |  |                      | - |  |                     |  | 501   |                                                             |  |  | -                                                             |   |  |                                        | 19,080 |  |                         |  | 964   |                                                | 
|Amortization                                |  |                      | - |  |                     |  | (789  | )                                                           |  |  | (62                                                           | ) |  |                                        | -      |  |                         |  | -     |                                                | 
|Other increases (decreases)                 |  |                      | - |  |                     |  | -     |                                                             |  |  | -                                                             |   |  |                                        | 3      |  |                         |  | -     |                                                | 
|                                            |  |                      |   |  |                     |  |       |                                                             |  |  |                                                               |   |  |                                        |        |  |                         |  |       |                                                | 
|Final balance                               |  |                      | - |  |                     |  | 1,650 |                                                             |  |  | 378                                                           |   |  |                                        | 20,625 |  |                         |  | 1,360 |                                                | 



| | b) | Movements in identifiable intangible assets as of December 31, 2011:
| | -- | --------------------------------------------------------------------



|Movements in identifiable intangible assets |  | Trademarks Net ThUS$ |    |   | Software, Net ThUS$ |  |       | Water rights and rights of
    way- finited life, Net ThUS$ |  |  | Water rights and rights of
    way-indefinite life, Net ThUS$ |   |  | Other intangible assets, Net ThUS$ |       |   | Goodwill, 
Net    ThUS$ |  |     | Identifiable intangible assets, Net 
    ThUS$ | 
|------------------------------------------- |  | -------------------- | -- | - | ------------------- |  | ----- | ----------------------------------------------------------- |  |  | ------------------------------------------------------------- | - |  | ---------------------------------- | ----- | - | ----------------------- |  | --- | ---------------------------------------------- | 
|                                            |  |                      |    |   |                     |  |       |                                                             |  |  |                                                               |   |  |                                    |       |   |                         |  |     |                                                | 
|Opening balance                             |  |                      | 4  |   |                     |  | 823   |                                                             |  |  | 501                                                           |   |  |                                    | 1,546 |   |                         |  | 396 |                                                | 
|Additions                                   |  |                      | -  |   |                     |  | 1,812 |                                                             |  |  | -                                                             |   |  |                                    | -     |   |                         |  | -   |                                                | 
|Amortization                                |  |                      | (4 | ) |                     |  | (697  | )                                                           |  |  | (61                                                           | ) |  |                                    | -     |   |                         |  | -   |                                                | 
|Other increases (decreases)                 |  |                      | -  |   |                     |  | -     |                                                             |  |  | -                                                             |   |  |                                    | (4    | ) |                         |  | -   |                                                | 
|                                            |  |                      |    |   |                     |  |       |                                                             |  |  |                                                               |   |  |                                    |       |   |                         |  |     |                                                | 
|Final balance                               |  |                      | -  |   |                     |  | 1,938 |                                                             |  |  | 440                                                           |   |  |                                    | 1,542 |   |                         |  | 396 |                                                | 



F-94











| | Notes to the consolidated financial statements as of December
31 2012
| | ---------------------------------------------------------------------



Note 12 - Property, plant and equipment



| | 12.1 | Classes of property, plant and equipment
| | ---- | ----------------------------------------



The details of property, plant and equipment is as follows:



|Description of classes of property, plant and equipment |  | 12/31/2012 ThUS$ |           |  | 12/31/2011 ThUS$ | 
|------------------------------------------------------- |  | ---------------- | --------- |  | ---------------- | 
|Property, plant and equipment, net                      |  |                  |           |  |                  | 
|                                                        |  |                  |           |  |                  | 
|Land                                                    |  |                  | 109,060   |  |                  | 
|Buildings                                               |  |                  | 169,731   |  |                  | 
|Machinery                                               |  |                  | 438,331   |  |                  | 
|Transport equipment                                     |  |                  | 88,954    |  |                  | 
|Furniture and fixtures                                  |  |                  | 6,736     |  |                  | 
|Office equipment                                        |  |                  | 5,249     |  |                  | 
|Constructions in progress                               |  |                  | 423,184   |  |                  | 
|Other property, plant and equipment                     |  |                  | 747,045   |  |                  | 
|Total                                                   |  |                  | 1,988,290 |  |                  | 
|Property, plant and equipment, gross                    |  |                  |           |  |                  | 
|                                                        |  |                  |           |  |                  | 
|Land                                                    |  |                  | 109,060   |  |                  | 
|Buildings                                               |  |                  | 329,397   |  |                  | 
|Machinery                                               |  |                  | 1,065,641 |  |                  | 
|Transport equipment                                     |  |                  | 224,462   |  |                  | 
|Furniture and fixtures                                  |  |                  | 22,667    |  |                  | 
|Office equipment                                        |  |                  | 36,215    |  |                  | 
|Constructions in progress                               |  |                  | 423,184   |  |                  | 
|Other property, plant and equipment                     |  |                  | 1,336,991 |  |                  | 
|Total                                                   |  |                  | 3,547,617 |  |                  | 



F-95











| | Notes to the consolidated financial statements as of December
31 2012
| | ---------------------------------------------------------------------



Note 12 - Property, plant and equipment (continued)



| | 12.1 | Classes of property, plant and equipment, continued
| | ---- | ---------------------------------------------------



|                                                                                      |  | 12/31/2012 ThUS$ |           |  | 12/31/2011 ThUS$ | 
|------------------------------------------------------------------------------------- |  | ---------------- | --------- |  | ---------------- | 
|Accumulated depreciation and value impairment of property, plant and equipment, total |  |                  |           |  |                  | 
|Accumulated depreciation and value impairment  of buildings                           |  |                  | 159,666   |  |                  | 
|Accumulated depreciation and value impairment  of machinery                           |  |                  | 627,310   |  |                  | 
|Accumulated depreciation and value impairment  of transport equipment                 |  |                  | 135,508   |  |                  | 
|Accumulated depreciation and value impairment  of furniture and fixtures              |  |                  | 15,931    |  |                  | 
|Accumulated depreciation and value impairment  of office equipment                    |  |                  | 30,966    |  |                  | 
|Accumulated depreciation and value impairment  of other property, plant and equipment |  |                  | 589,946   |  |                  | 
|Total                                                                                 |  |                  | 1,559,327 |  |                  | 



F-96











| | Notes to the consolidated financial statements as of December
31 2012
| | ---------------------------------------------------------------------



Note 12 - Property, plant and equipment (continued)



| | 12.2 | Reconciliation of changes in property, plant and equipment
by class as of December 31, 2012 and December 31, 2011:
| | ---- | ------------------------------------------------------------------------------------------------------------------



|Reconciliation entries of changes in
    property, plant and equipment by class as of December 31, 2012 |  | Land  |         |  | Buildings, net |  |         | Machinery, net |  |  | Transport equipment, net |   |  | Furniture and fixtures, net |         |   | Office equipment, net |  |        | Construction in progress |  |  | Other property, plant and
    equipment, net |   |  | Property, plant
and equipment
net |         
|------------------------------------------------------------------------------------------------------- |  | ----- | ------- |  | -------------- |  | ------- | -------------- |  |  | ------------------------ | - |  | --------------------------- | ------- | - | --------------------- |  | ------ | ------------------------ |  |  | -------------------------------------------- | - |  | --------------------------------- | --------
|                                                                                                        |  | ThUS$ |         |  | ThUS$          |  |         | ThUS$          |  |  | ThUS$                    |   |  | ThUS$                       |         |   | ThUS$                 |  |        | ThUS$                    |  |  | ThUS$                                        |   |  | ThUS$                             |         
|                                                                                                        |  |       |         |  |                |  |         |                |  |  |                          |   |  |                             |         |   |                       |  |        |                          |  |  |                                              |   |  |                                   |         
|Opening balance                                                                                         |  |       | 108,992 |  |                |  | 146,532 |                |  |  | 424,460                  |   |  |                             | 82,822  |   |                       |  | 5,015  |                          |  |  | 5,312                                        |   |  |                                   | 297,996 
|                                                                                                        |  |       |         |  |                |  |         |                |  |  |                          |   |  |                             |         |   |                       |  |        |                          |  |  |                                              |   |  |                                   |         
|Changes                                                                                                 |  |       |         |  |                |  |         |                |  |  |                          |   |  |                             |         |   |                       |  |        |                          |  |  |                                              |   |  |                                   |         
|Additions                                                                                               |  |       | 36      |  |                |  | -       |                |  |  | 1,092                    |   |  |                             | 34      |   |                       |  | 70     |                          |  |  | 323                                          |   |  |                                   | 443,349 
|Divestitures                                                                                            |  |       | -       |  |                |  | -       |                |  |  | (115                     | ) |  |                             | -       |   |                       |  | (67    | )                        |  |  | (12                                          | ) |  |                                   | (2,936  
|Depreciation expense                                                                                    |  |       | -       |  |                |  | (14,800 | )              |  |  | (79,534                  | ) |  |                             | (18,400 | ) |                       |  | (1,858 | )                        |  |  | (1,857                                       | ) |  |                                   | -       
|Increase(decrease) in foreign currency exchange                                                         |  |       | 32      |  |                |  | (1      | )              |  |  | 5                        |   |  |                             | 15      |   |                       |  | -      |                          |  |  | (13                                          | ) |  |                                   | -       
|Reclassifications                                                                                       |  |       | -       |  |                |  | 37,916  |                |  |  | 92,441                   |   |  |                             | 24,535  |   |                       |  | 3,576  |                          |  |  | 1,478                                        |   |  |                                   | (287,291
|Other increases (decreases) (*)                                                                         |  |       | -       |  |                |  | 84      |                |  |  | (18                      | ) |  |                             | (52     | ) |                       |  | -      |                          |  |  | 18                                           |   |  |                                   | (27,934 
|                                                                                                        |  |       |         |  |                |  |         |                |  |  |                          |   |  |                             |         |   |                       |  |        |                          |  |  |                                              |   |  |                                   |         
|Total changes                                                                                           |  |       | 68      |  |                |  | 23,199  |                |  |  | 13,871                   |   |  |                             | 6,132   |   |                       |  | 1,721  |                          |  |  | (63                                          | ) |  |                                   | 125,188 
|                                                                                                        |  |       |         |  |                |  |         |                |  |  |                          |   |  |                             |         |   |                       |  |        |                          |  |  |                                              |   |  |                                   |         
|Ending balance                                                                                          |  |       | 109,060 |  |                |  | 169,731 |                |  |  | 438,331                  |   |  |                             | 88,954  |   |                       |  | 6,736  |                          |  |  | 5,249                                        |   |  |                                   | 423,184 



(*) The net balance of Other increases
(decreases) corresponds to: 1) investment plan expenses recorded to profit or loss (forming part of cost of sales and other expenses
per function, as appropriate), 2) the change representing the purchase and use of materials and spare parts and 3) projects corresponding
mainly to exploration expenditures.



F-97











| | Notes to the consolidated financial statements as of December
31 2012
| | ---------------------------------------------------------------------



Note 12 - Property, plant and equipment (continued)



| | 12.2 | Reconciliation of changes in property, plant and equipment by class as of December 31, 2012 and December 31, 2011, continued:
| | ---- | -----------------------------------------------------------------------------------------------------------------------------



|Reconciliation entries of changes in
    property, plant and equipment by class as of December 31, 2011 |  | Land  |         |   | Buildings, net |  |         | Machinery, net |  |  | Transport equipment, net |   |  | Furniture and fixtures, net |         |   | Office equipment, net |  |        | Construction in progress |  |  | Other property, plant and
    equipment, net |   |  | Property, plant
and equipment
net |         
|------------------------------------------------------------------------------------------------------- |  | ----- | ------- | - | -------------- |  | ------- | -------------- |  |  | ------------------------ | - |  | --------------------------- | ------- | - | --------------------- |  | ------ | ------------------------ |  |  | -------------------------------------------- | - |  | --------------------------------- | --------
|                                                                                                        |  | ThUS$ |         |   | ThUS$          |  |         | ThUS$          |  |  | ThUS$                    |   |  | ThUS$                       |         |   | ThUS$                 |  |        | ThUS$                    |  |  | ThUS$                                        |   |  | ThUS$                             |         
|                                                                                                        |  |       |         |   |                |  |         |                |  |  |                          |   |  |                             |         |   |                       |  |        |                          |  |  |                                              |   |  |                                   |         
|Opening balance                                                                                         |  |       | 107,869 |   |                |  | 88,320  |                |  |  | 295,467                  |   |  |                             | 48,936  |   |                       |  | 4,450  |                          |  |  | 5,706                                        |   |  |                                   | 356,551 
|                                                                                                        |  |       |         |   |                |  |         |                |  |  |                          |   |  |                             |         |   |                       |  |        |                          |  |  |                                              |   |  |                                   |         
|Changes                                                                                                 |  |       |         |   |                |  |         |                |  |  |                          |   |  |                             |         |   |                       |  |        |                          |  |  |                                              |   |  |                                   |         
|Additions                                                                                               |  |       | 1,251   |   |                |  | 178     |                |  |  | 424                      |   |  |                             | 558     |   |                       |  | 39     |                          |  |  | 302                                          |   |  |                                   | 474,042 
|Divestitures                                                                                            |  |       | (85     | ) |                |  | (1,371  | )              |  |  | (64                      | ) |  |                             | (451    | ) |                       |  | -      |                          |  |  | -                                            |   |  |                                   | -       
|Depreciation expense                                                                                    |  |       | -       |   |                |  | (11,477 | )              |  |  | (97,046                  | ) |  |                             | (14,902 | ) |                       |  | (1,281 | )                        |  |  | (2,053                                       | ) |  |                                   | -       
|Increase(decrease) in foreign currency exchange                                                         |  |       | (42     | ) |                |  | -       |                |  |  | 1                        |   |  |                             | (23     | ) |                       |  | -      |                          |  |  | 122                                          |   |  |                                   | -       
|Reclassifications                                                                                       |  |       |         |   |                |  | 69,410  |                |  |  | 228,116                  |   |  |                             | 48,717  |   |                       |  | 1,805  |                          |  |  | 1,442                                        |   |  |                                   | (546,769
|Other increases (decreases) (*)                                                                         |  |       | (1      | ) |                |  | 1,472   |                |  |  | (2,438                   | ) |  |                             | (13     | ) |                       |  | 2      |                          |  |  | (205                                         | ) |  |                                   | 14,172  
|                                                                                                        |  |       |         |   |                |  |         |                |  |  |                          |   |  |                             |         |   |                       |  |        |                          |  |  |                                              |   |  |                                   |         
|Total changes                                                                                           |  |       | 1,123   |   |                |  | 58,212  |                |  |  | 128,993                  |   |  |                             | 33,886  |   |                       |  | 565    |                          |  |  | (394                                         | ) |  |                                   | (58,555 
|                                                                                                        |  |       |         |   |                |  |         |                |  |  |                          |   |  |                             |         |   |                       |  |        |                          |  |  |                                              |   |  |                                   |         
|Ending balance                                                                                          |  |       | 108,992 |   |                |  | 146,532 |                |  |  | 424,460                  |   |  |                             | 82,822  |   |                       |  | 5,015  |                          |  |  | 5,312                                        |   |  |                                   | 297,996 



(*) The net balance of Other increases
(decreases) corresponds to: 1) investment plan expenses recorded to profit or loss (forming part of cost of sales and other expenses
per function, as appropriate), 2) the change representing the purchase and use of materials and spare parts and 3) projects corresponding
mainly to exploration expenditures.



F-98











| | Notes to the consolidated financial statements as of December
31 2012
| | ---------------------------------------------------------------------





Note 12 - Property, plant and equipment (continued)



| | 12.3 | Detail of property, plant and equipment pledged as guarantee
| | ---- | ------------------------------------------------------------



There are no title restrictions
or guarantees associated with property, plant and equipment.



| | 12.4 | Additional Information
| | ---- | ----------------------



| | 1) | Leased property, plant and equipment
| | -- | ------------------------------------

| |  | 
| |  | 

At December 31, 2012 and 2011,
the Company had no leased assets.

| | 2) | Interest capitalized in construction in-progress
| | -- | ------------------------------------------------

| |  | 
| |  | 

| | - | The cost of capitalized interest is determined by applying the average or weighted average of all
financing costs incurred by the Company to the month end balances of construction in progress. The effective interest rate used
to capitalize interest on construction in progress was 7% for the years ended December 31, 2012 and 2011.
| | - | -------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | - | For the years ended December 31, 2012 and 2011, capitalized interest amounted to ThUS$14,156 and
ThUS$22,249, respectively.
| | - | ---------------------------------------------------------------------------------------------------------------------------



Note 13 – Employee benefits



| | 13.1 | Provisions for employee benefits
| | ---- | --------------------------------



Provisions for employee benefits consists of the following:



|                           |  | 12/31/2012 |        |  | 12/31/2011 |  |        | 12/31/2010 | 
|-------------------------- |  | ---------- | ------ |  | ---------- |  | ------ | ---------- | 
|                           |  | ThUS$      |        |  | ThUS$      |  |        | ThUS$      | 
|Current                    |  |            |        |  |            |  |        |            | 
|Profit sharing and bonuses |  |            | 33,974 |  |            |  | 30,074 |            | 
|Total                      |  |            | 33,974 |  |            |  | 30,074 |            | 
|                           |  |            |        |  |            |  |        |            | 
|Non-current                |  |            |        |  |            |  |        |            | 
|Profit sharing and bonuses |  |            | 6,056  |  |            |  | 4,083  |            | 
|Severance indemnities      |  |            | 34,431 |  |            |  | 28,188 |            | 
|Pension Plan               |  |            | 409    |  |            |  | 1,413  |            | 
|Total                      |  |            | 40,896 |  |            |  | 33,684 |            | 



F-99









| | Notes to the consolidated financial statements as of December
31 2012
| | ---------------------------------------------------------------------



Note 13 Employee benefits (continued)



| | 13.2 | Policies on employee benefits
| | ---- | -----------------------------



Short-term
benefits for active employees are represented by salaries, social welfare benefits, paid time-off, sickness, other leaves of absence,
profit sharing and incentives, and non-monetary benefits such as healthcare, housing, and subsidized or free goods or services.
These benefits will be paid in a term which does not exceed twelve months. The Company only
provides compensation and benefits to active employees, with the exemption of SQM North America as described in Note 13.5 below.



Bonuses paid to the Company’s employees
are disbursement in the first quarter of the following year, which is calculated based on profit for each reporting period in consideration
of the employee appraisal process.



Benefits related to vacations are provided
in accordance with the Labor Code which indicates that employees with more than a year of service will be entitled to annual holidays
for a period not lower than fifteen paid business days per year. The Company provides the benefit of two additional vacation days
per year.



Staff severance indemnities represent payments
due to employees upon their separation from the Company including for retirement, involuntary and voluntary termination, disability,
or death. Actual payments made to employees at the time of separation are calculated based on years of service and a percentage
of employees final year ́s salary as stipulated in established agreements between the Company and
its employees and in accordance with local obligations. The Company recognizes a liability for severance indemnities using
an actuarial model on an employee by employee basis considering the terms of individual employee contracts.



| | 13.3 | Other long-term benefits
| | ---- | ------------------------



Other long-term benefits relate to staff
severance indemnities and defined benefit pension obligations and are recorded at their actuarial value and consist of the following



|                                               |  | 12/31/2012 |        |  | 12/31/2011 | 
|---------------------------------------------- |  | ---------- | ------ |  | ---------- | 
|Staff severance indemnities at actuarial value |  | ThUS$      |        |  | ThUS$      | 
|Staff severance indemnities, Chile             |  |            | 33,731 |  |            | 
|Other obligations in companies elsewhere       |  |            | 700    |  |            | 
|Total other non-current liabilities            |  |            | 34,431 |  |            | 
|                                               |  |            |        |  |            | 
|SQM North America’s pensions plan              |  |            | 409    |  |            | 
|Total post employment obligations              |  |            | 409    |  |            | 



F-100









| | Notes to the consolidated financial statements as of December
31 2012
| | ---------------------------------------------------------------------



Note 13 - Employee benefits (continued)



| | 13.4 | Chilean staff severance indemnities
| | ---- | -----------------------------------



The change in severance indemnities calculated
at the actuarial value are as follows:



|                         |  | 2012 ThUS$ |         |   | 2011 ThUS$ | 
|------------------------ |  | ---------- | ------- | - | ---------- | 
|Opening balance          |  |            | (28,188 | ) |            | 
|Current cost of service  |  |            | (8,087  | ) |            | 
|Interest cost            |  |            | (1,037  | ) |            | 
|Actuarial gain/loss      |  |            | 40      |   |            | 
|Exchange rate difference |  |            | (2,237  | ) |            | 
|Contributions paid       |  |            | 5,078   |   |            | 
|Balance                  |  |            | (34,431 | ) |            | 



The liability for staff severance indemnities
in accordance with an actuarial model , use the following significant assumptions:



|                                         |  | 12/31/2012 |           |   | 12/31/2011 | 
|---------------------------------------- |  | ---------- | --------- | - | ---------- | 
|                                         |  |            |           |   |            | 
|Mortality rate                           |  |            | RV - 2011 |   |            | 
|Actual annual interest rate              |  |            | 6         | % |            | 
|Annual voluntary turnover rotation rate: |  |            |           |   |            | 
|Men                                      |  |            | 0,9       | % |            | 
|Women                                    |  |            | 1,53      | % |            | 
|Average annual salary increase           |  |            | 3,0       | % |            | 
|Retirement age (years):                  |  |            |           |   |            | 
|Men                                      |  |            | 65        |   |            | 
|Women                                    |  |            | 60        |   |            | 



The methodology followed to determine the
accrual for all employees considereds RV-2010 turnover and mortality rates established by the Chilean Superintendence of Securities
and Insurance to calculate pension-related life insurance reserves in Chile according to the Accumulated Benefit Valuation or Accrued
Cost of Benefit Method, which is an established methodology in IAS 19 Retirement Benefit Costs.



The discount rate of 6% is based on the
Company’s long-term borrowing rates.



The Company retains the full obligation
for the payment of staff severance indemnities upon separation without establishing a separate fund or restriction of assets for
payment of such obligations, which is typically referred to as an unfunded plan.



F-101







| | Notes to the consolidated financial statements as of December 31 2012
| | ---------------------------------------------------------------------



Note 13 - Employee benefits (continued)



| | 13.5 | Defined benefit pension obligations
| | ---- | -----------------------------------



SQM North America had a defined pension
plan the SQM North America Retirement Income Plan, which was terminated in 2002 and replaced with a 401K plan, that does not generate
future obligations to the Company. The obligations under this terminated plan are calculated measuring the expected future forecasted
staff severance indemnity obligation using a net salary gradual rate of restatements for inflation, mortality and turnover assumptions
discounting the resulting amounts to their present values.



The table below establishes the status
of amounts recognized in the Consolidated Statement of Financial Position:



|                                                                       |  | 2012  |        |   | 2011  |  |        | 2010  | 
|---------------------------------------------------------------------- |  | ----- | ------ | - | ----- |  | ------ | ----- | 
|                                                                       |  | ThUS$ |        |   | ThUS$ |  |        | ThUS$ | 
|Variation in projected benefit obligation (liability):                 |  |       |        |   |       |  |        |       | 
|Benefit liability at the beginning of year                             |  |       | 6,620  |   |       |  | 6,548  |       | 
|Cost of service                                                        |  |       | 1      |   |       |  | 1      |       | 
|Interest cost                                                          |  |       | 406    |   |       |  | 413    |       | 
|Actuarial loss                                                         |  |       | (236   | ) |       |  | (46    | )     | 
|Benefits paid                                                          |  |       | (309   | ) |       |  | (297   | )     | 
|Benefit obligation (liability) at year-end                             |  |       | 6,482  |   |       |  | 6,619  |       | 
|                                                                       |  |       |        |   |       |  |        |       | 
|Change in the plan’s assets:                                           |  |       |        |   |       |  |        |       | 
|Fair value of the plan’s assets at beginning of year                   |  |       | 5,206  |   |       |  | 5,847  |       | 
|Contributions by the employer                                          |  |       | 436    |   |       |  | 189    |       | 
|Actual return (loss) on plan assets                                    |  |       | 740    |   |       |  | (533   | )     | 
|Benefits paid                                                          |  |       | (309   | ) |       |  | (297   | )     | 
|Fair value of the plan’s assets at year-end                            |  |       | 6,073  |   |       |  | 5,206  |       | 
|                                                                       |  |       |        |   |       |  |        |       | 
|Accrued liability pension plan                                         |  |       | (409   | ) |       |  | (1,413 | )     | 
|Items not yet recognized as net regular pension-related cost elements: |  |       |        |   |       |  |        |       | 
|Net actuarial loss at the beginning of year                            |  |       | (2,954 | ) |       |  | (2,111 | )     | 
|Amortization during the period                                         |  |       | 131    |   |       |  | 84     |       | 
|Net gain or loss during the period                                     |  |       | 580    |   |       |  | (927   | )     | 
|Adjustment made to recognize the minimum pension-related liability     |  |       | (2,243 | ) |       |  | (2,954 | )     | 



F-102







| | Notes to the consolidated financial statements as of December 31 2012
| | ---------------------------------------------------------------------



Note 13 - Employee benefits (continued)



The change in the defined benefit obligation
over the years is as follows:



|                                                       |  | 2012  |      |   | 2011  |  |      | 2010  | 
|------------------------------------------------------ |  | ----- | ---- | - | ----- |  | ---- | ----- | 
|                                                       |  | ThUS$ |      |   | ThUS$ |  |      | ThUS$ | 
|                                                       |  |       |      |   |       |  |      |       | 
|Costs or benefits of services earned during the period |  |       | 2    |   |       |  | 1    |       | 
|Cost of interest in benefit liability                  |  |       | 406  |   |       |  | 413  |       | 
|Actual return in plan’s assets                         |  |       | 739  |   |       |  | (532 | )     | 
|Amortization of loss from prior periods                |  |       | 131  |   |       |  | 84   |       | 
|Net gain for the period                                |  |       | (344 | ) |       |  | 973  |       | 
|Net regular pension-related expense                    |  |       | 142  |   |       |  | 57   |       | 



| | 13.6 | Shared based compensation
| | ---- | -------------------------



The Company maintains a share based compensation
plan to encourage retention of its top 40 executives. Individuals receive annual cash payments based on changes in SQM ́s
share price. Compensation for each individual is calculated as the differential between the average prices of the SQM ́s Series
B shares as traded on the Santiago Stock Exchange during April of each year compared to a base price of US$50 per share. Individuals
are awarded a fixed number of shares over a five year vesting period through 2016.



Share based award activities are as following:



|Movement for the period              |  | 2012 |           |  | 2011 |    
|------------------------------------ |  | ---- | --------- |  | ---- | ---
|Shares outstanding as of January 1   |  |      | 2,340,000 |  |      |    
|Grants                               |  |      | 103,500   |  |      |    
|Forfeitures                          |  |      | 103,500   |  |      |    
|Exercised  during the fiscal year    |  |      | 139,500   |  |      |    
|Shares outstanding as of December 31 |  |      | 2,200,500 |  |      |    
|Average contractual life             |  |      | 40 months |  |      |    
|December 31 share price              |  | US$  | 57.93     |  |      | US$



Compensation expense under the plan amount
to ThUS$3,142 and ThUS$11,200 for the years ended December 31, 2012 and 2011, respectively.



F-103







| | Notes to the consolidated financial statements as of December 31 2012
| | ---------------------------------------------------------------------



Note 14 - Disclosures on equity



| | 14.1 | Capital management
| | ---- | ------------------



The Company’s primary capital management
object is to administer the financial debt and capital of SQM and its subsidiaries, ensure continuing operations and long term
business continuity, ensure financing of new investments in order to maintain steady growth, have an adequate capital structure
in accordance with economic cycles that have an impact on the business and the nature of the industry, and maximize the value of
SQM and its subsidiaries over the medium the mid and long term.



Capital management adheres to the limits
specified in the Financial Policy approved at the General Ordinary Shareholders Meeting, which established a maximum level of consolidated
leverage of 1.5 times equity. This limit can only be exceeded to the extent that Management has previously been granted express
authorization at the previous Shareholders Meeting.



Additionally, capital management must meet
external capital requirements (or covenants) established in SQM ́s financial obligations, which regulates the debt limit to
1.4 times equity.



Together with the overall debt level the
Company seeks to maintain a reasonable maturity profile of its financial obligations, ensure financial ratios between short-term
and long-term maturities, and the relationship they maintain with the distribution of the Company ́s assets. Consequently,
the Company has maintained in recent periods current ratio levels in exess of 3.0.



F-104







| | Notes to the consolidated financial statements as of December 31 2012
| | ---------------------------------------------------------------------



Note 14 – Equity
Disclosures (continued)



Management reviews overall



Capital management objectives are measured in accordance with
the following ratios:



|Capital Management                 |  | 31/12/2012 |         |   | 31/12/2011 |  |         | Description (1) |  | Calculation (1)                                                                                              
|---------------------------------- |  | ---------- | ------- | - | ---------- |  | ------- | --------------- |  | -------------------------------------------------------------------------------------------------------------
|Net Financial Debt ThUS$           |  |            | 929,197 |   |            |  | 753,410 |                 |  | Financial Debt  - Financial Resources                                                                        
|Current Ratio                      |  |            | 3.69    |   |            |  | 3.11    |                 |  | Current  Assets divided by Current Liabilities                                                               
|Net Financial Debt/ Capitalization |  |            | 0.30    |   |            |  | 0.29    |                 |  | Net Financial Debt divided by Equity                                                                         
|ROE                                |  |            | 30.1    | % |            |  | 29.7    | %               |  | Net Income divided by Equity                                                                                 
|ROA                                |  |            | 25.1    | % |            |  | 24.1    | %               |  | EBITDA – Depreciation divided by total assets of financial resources minus investments in related enterprises
|Leverage                           |  |            | 1.02    |   |            |  | 1.08    |                 |  | Total Liability divided by Equity                                                                            



(1) Assumes absolute value of various accounts



The Company ́s capital requirements
vary depending on:  working capital requirements, financing of new investments and dividends, among others. SQM manages its
capital structure and makes adjustments based on prevailing economic conditions, in order to mitigate the risks associated
with adverse market conditions and to take advantage of opportunities to improve overall liquidity.



There have been no changes in the capital
management objectives or policies within the years covered by these consolidated financial statements.



F-105







| | Notes to the consolidated financial statements as of December 31 2012
| | ---------------------------------------------------------------------



Note 14 – Equity
Disclosures (continued)



| | 14.2 | Disclosures on preferred share capital
| | ---- | --------------------------------------



Issued share capital is divided
into 263,196,524 fully paid and subscribed shares with no par value composed of 142,819,552 Series "A" shares and 120,376,972
Series “B” shares.



The voting rights for each
series are detailed as follows:



Series “A”:

If the election of the Company’s
President results in a tie vote, the Company's directors may vote once again, without the vote of the director elected by the Series
B shareholders.



Series “B”:

A general or extraordinary
shareholders' meeting may be called at the request of shareholders representing 5% of the Company's Series B shares.

Extraordinary meeting of the
Board of Directors may be called with or without the agreement of the Company's President, at the request of the director elected
by Series B shareholders.



As of December 31, 2012 and
2011, the Company did not hold any shares in the parent either directly or through its companies in which it has investments.



F-106







| | Notes to the consolidated financial statements as of December 31 2012
| | ---------------------------------------------------------------------



Note 14 – Disclosures on equity (continued)



| | 14.3 | Disclosures on preferred share capital (continued)
| | ---- | --------------------------------------------------



Capital in preference shares consist of the following:



|Type of capital in preferred shares                |  | 12/31/2012 |             |  | 12/31/2011 | 
|-------------------------------------------------- |  | ---------- | ----------- |  | ---------- | 
|Description of type of capital in preferred shares |  | Series A   |             |  | Series B   | 
|Number of authorized shares                        |  |            | 142,819,552 |  |            | 
|Number of fully subscribed and paid shares         |  |            | 142,819,552 |  |            | 
|Par value of shares in ThUS$                       |  |            | 0,9435      |  |            | 
|Number of current shares                           |  |            | 142,819,552 |  |            | 
|Capital amount in shares ThUS$                     |  |            | 134,750     |  |            | 
|Total number of subscribed shares, total           |  |            | 142,819,552 |  |            | 



During the years ended December 31, 2012 and 2011 the Company
did not issue any new shares.



F-107







| | Notes to the consolidated financial statements as of December 31 2012
| | ---------------------------------------------------------------------



Note 14 - Disclosures on equity (continued)



| | 14.4 | Disclosures on reserves in equity
| | ---- | ---------------------------------



Reserves for currency exchange conversion

This balance reflects retained earnings
for changes due to the translation of subsidiaries financial statements into U.S. Dollars.



Reserve for cash flow hedges

This balance reflects changes in the fair
value of derivative financial instruments classified as hedging changes in cash flows associated with UF-and Chilean Peso-denominated
debt obligations.



Reserve for actuarial gains or losses
in defined benefit plans

This balance reflects changes in the actuarial
gains and losses in the calculation of defined benefit obligations, refer to Note 13.5.



Other reserves

Other reserves correspond to the acquisition
of the remaining interest in SQM Iberian S.A., which was already controlled by the Company upon the acquisition date of the additional
interest.



Changes in these reserves consist of the
following:



|                                                               |  | 12/31/2012 ThUS$ |         |   | 12/31/2011 ThUS$ |  |         | 12/31/2010 ThUS$ | 
|-------------------------------------------------------------- |  | ---------------- | ------- | - | ---------------- |  | ------- | ---------------- | 
|Reserve for currency exchange conversion                       |  |                  | (330    | ) |                  |  | (1,251  | )                | 
|Reserve for cash flow hedge                                    |  |                  | (16,522 | ) |                  |  | (10,230 | )                | 
|Reserve for actuarial gains or losses in defined benefit plans |  |                  | (2,243  | ) |                  |  | (2,954  | )                | 
|Other reserves                                                 |  |                  | (1,677  | ) |                  |  | (1,677  | )                | 
|                                                               |  |                  |         |   |                  |  |         |                  | 
|Total other reserves                                           |  |                  | (20,772 | ) |                  |  | (16,112 | )                | 



F-108







| | Notes to the consolidated financial statements as of December 31 2012
| | ---------------------------------------------------------------------



Note 14 - Disclosures on equity (continued)



| | 14.5 | Dividend policies
| | ---- | -----------------



As required by Article 79 of the Chilean
Companies Act, the Company is required to distribute a cash dividend in an amount equal to at least 30% of its consolidated profit
for the period for year unless and except to the extent it has a deficit in retained earnings (losses not absorbed in prior years),
or as otherwise determined by a unanimous vote of shareholders.



The dividend policy defined by the Shareholders’
General Meeting is:



| | - | Distribution and payment in favor of each shareholder of a final dividend which will be equivalent
to 50% of profit for the period.
| | - | -----------------------------------------------------------------------------------------------------------------------------------



| | - | Distribution and payment, if possible during the year, of a provisional dividend which will be
recorded against the aforementioned final dividend, This provisional dividend will normally be paid during the last quarter of
the year and its amount can not exceed 50% of the retained earnings for distribution obtained during the year, which are reflected
in the Company’s financial statements as of September 30 of each year.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | - | The distribution and payment by the Company of the remaining balance of the final dividend related
to profit for the year in up to two installments, which must be paid prior to June 30 of the following year.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | - | An amount equivalent to the remaining 50% of the Company’s profit for the year will be retained
and used to finance operations and one or more of the Company’s investment projects with no prejudice of the possible future
capitalization of this investment.
| | - | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | - | The Board of Directors does not consider the payment of any additional or interim dividends.
| | - | --------------------------------------------------------------------------------------------



| | - | The application of the Company ́s dividend policy is dependent upon final profit for the year,
and in future, to the Company’s regular forecasts and the existence of conditions or events that could affect them. Any significant
change in the Company ́s dividend policy or in events and conditions that may affect the Company ́s dividend policy will
be timely communicated to all shareholders.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | 14.6 | Provisional dividends
| | ---- | ---------------------



On November 20, 2012, the Company reported
to the SVS, that the Company’s Board of Directors agreed to pay and distribute a provisional dividend of approximately US$0.94986
per share. The dividend was paid on December 12, 2012 from accumulated profits during the first nine months of 2012, in favor of
all Shareholders registered in SQM Shareholders Register as of December 5, 2012. The dividend was paid in equivalent Chilean Pesos,
based on U.S. Dollar exchange rate as published in the Official Gazette on December 5, 2012.



F-109







| | Notes to the consolidated financial statements as of December 31 2012
| | ---------------------------------------------------------------------



Note 14 - Disclosures on equity (continued)



On April 26, 2012, in the Thirty-Seventh
General Ordinary Shareholders’ Meeting, the payment of a definite dividend of US$1,03679 per share was approved because of
the net profit obtained during the 2011’s commercial exercise, to that dividend, should be discounted US$0.73329 per share
that has already been paid on account of provisory dividend and the remainder, then amounting to US$0.30350 per share, will be
paid and distributed in favor of SQM’s shareholders who are registered in the corresponding Record, during the fifth working
day before the date when this will be paid, such last amount, in case that correspond, will be paid in its equivalent in CLP (Chilean
Peso) according to the value of “Dólar Observado” or “U.S. Dollar” published in the Official Gazette
of April 26, 2012.



On November 22, 2011, it was reported to
the Superintendence of Securities and Insurance that the Board of Directors of Sociedad Química y Minera de Chile S.A.,
in its meeting on November 22, 2011, unanimously agreed to pay and distribute the provisional dividend referred to in SQM’s
current “2011 Dividends Policy” which was informed to SQM’s General Annual Ordinary Shareholders Meeting that
was held on April 28 of this year, this, for the essential purpose of being able to pay and distribute as of December 19, 2011,
a provisional dividend of US$0.73329 per share –and which is approximately equivalent to the total amount of US$193 million
and the latter corresponds to 50% of the distributable net income of the fiscal year 2011 that has been accrued at September 30,
2011, the above, is charged against the net income of said fiscal year, in favor of the Shareholders who appeared registered in
SQM’s Shareholders Registry by the 5 working day prior to December 19, 2011, and in its equivalent in Chilean pesos according
to the value of the “Observed dollar” or “USA dollar” that appears published in the Official Gazette on
December 13, 2011.



At the Annual Board of Directors meeting
held on April 28, 2011, the Directors unanimously agreed to pay a final dividend of US$0.7259 per share in relation to net profit
for the year, notwithstanding the above, US$0.41794 per share was already paid as an interim dividend, and this amount should be
subtracted from the final dividend detailed above, line with this, the balance, amounting to US$0.30798 per share, will be paid
and distributed among shareholders of the Company who are registered with their respective shareholders registry as of the fifth
business day prior to the day in which this dividend will be paid.



Dividends presented deducted from equity
are:



|                                                |  | 12/31/2012 ThUS$ |         |  | 12/31/2011 ThUS$ |  |         | 12/31/2010 ThUS$ | 
|----------------------------------------------- |  | ---------------- | ------- |  | ---------------- |  | ------- | ---------------- | 
|Dividends attributable to controlling interests |  |                  | 253,438 |  |                  |  | 270,915 |                  | 
|Dividends payable                               |  |                  | 76,267  |  |                  |  | 82,120  |                  | 



F-110







| | Notes to the consolidated financial statements as of December 31 2012
| | ---------------------------------------------------------------------



Note 15 – Provisions and other non-financial liabilities



| | 15.1 | Classes of provisions
| | ---- | ---------------------



|                                                                |  | 12/31/2012 |        |  | 12/31/2011   |  |       |       | 
|--------------------------------------------------------------- |  | ---------- | ------ |  | ------------ |  | ----- | ----- | 
|                                                                |  | Current    |        |  | Non-
current |  |       | Total | 
|                                                                |  | ThUS$      |        |  | ThUS$        |  |       | ThUS$ | 
|                                                                |  |            |        |  |              |  |       |       | 
|Legal provision                                                 |  |            | 5,567  |  |              |  | 3,000 |       | 
|Provision for dismantling, restoration and rehabilitation costs |  |            | -      |  |              |  | 4,357 |       | 
|Other provisions                                                |  |            | 12,922 |  |              |  | -     |       | 
|Total                                                           |  |            | 18,489 |  |              |  | 7,357 |       | 



(*) Legal provisions consists primarily
of estimated obligations related to certain legal claims brought against the Company’s subsidiaries in Brazil and United
States (see note 16.1).



F-111









| | Notes to the consolidated financial statements as of December
31 2012
| | ---------------------------------------------------------------------



Note 15 - Provisions and other non-financial liabilities
(continued)



| | 15.2 | Description of other provisions
| | ---- | -------------------------------



|Description of other provisions                                           |  | 12/31/2012 ThUS$ |        |  | 12/31/2011 ThUS$ | 
|------------------------------------------------------------------------- |  | ---------------- | ------ |  | ---------------- | 
|Current provisions                                                        |  |                  |        |  |                  | 
|Provision for tax loss in fiscal litigation                               |  |                  | 1,606  |  |                  | 
|Royalties, agreement with CORFO (the Chilean Economic Development Agency) |  |                  | 7,712  |  |                  | 
|Closure of Toco operations                                                |  |                  | -      |  |                  | 
|Fines payable in Brazil                                                   |  |                  | 2,500  |  |                  | 
|Miscellaneous provisions                                                  |  |                  | 1,104  |  |                  | 
|Total                                                                     |  |                  | 12,922 |  |                  | 
|Long-term provisions                                                      |  |                  |        |  |                  | 
|Mine closure                                                              |  |                  | 4,357  |  |                  | 
|Indemnity obligation to Yara South Africa                                 |  |                  | -      |  |                  | 
|Total                                                                     |  |                  | 4,357  |  |                  | 



| | 15.3 | Other non-financial liabilities, current
| | ---- | ----------------------------------------



|Description of other liabilities                 |  | 12/31/2012 ThUS$ |         |  | 12/31/2011 ThUS$ | 
|------------------------------------------------ |  | ---------------- | ------- |  | ---------------- | 
|                                                 |  |                  |         |  |                  | 
|Tax withholdings                                 |  |                  | 11,887  |  |                  | 
|VAT payable                                      |  |                  | 16,481  |  |                  | 
|Guarantees received                              |  |                  | 872     |  |                  | 
|Accrual for dividend                             |  |                  | 76,267  |  |                  | 
|Monthly tax provisional payments                 |  |                  | 22,073  |  |                  | 
|Deferred income                                  |  |                  | 16,291  |  |                  | 
|Withholdings from employees and salaries payable |  |                  | 7,546   |  |                  | 
|Accrued vacations                                |  |                  | 20,710  |  |                  | 
|Other current liabilities                        |  |                  | 73      |  |                  | 
|Total                                            |  |                  | 172,200 |  |                  | 



F-112









| | Notes to the consolidated financial statements as of December
31 2012
| | ---------------------------------------------------------------------



Note 15 - Provisions and other non-financial liabilities
(continued)



| | 15.4 | Changes in provisions for the year ending December 31, 2012:
| | ---- | ------------------------------------------------------------



|Description of items that gave rise to variations   |  | Legal complaints |       |   | Provision for dismantling, restoration and rehabilitation cost |  |       | Other provisions |  |  | Total   |  
|--------------------------------------------------- |  | ---------------- | ----- | - | -------------------------------------------------------------- |  | ----- | ---------------- |  |  | ------- | -
|                                                    |  | ThUS$            |       |   | ThUS$                                                          |  |       | ThUS$            |  |  | ThUS$   |  
|                                                    |  |                  |       |   |                                                                |  |       |                  |  |  |         |  
|Total provisions, initial balance                   |  |                  | 7,571 |   |                                                                |  | 3,724 |                  |  |  | 14,237  |  
|                                                    |  |                  |       |   |                                                                |  |       |                  |  |  |         |  
|Changes in provisions:                              |  |                  |       |   |                                                                |  |       |                  |  |  |         |  
|                                                    |  |                  |       |   |                                                                |  |       |                  |  |  |         |  
|Additional provisions                               |  |                  | 1,000 |   |                                                                |  | 633   |                  |  |  | 8,863   |  
|                                                    |  |                  |       |   |                                                                |  |       |                  |  |  |         |  
|Provision used                                      |  |                  | (4    | ) |                                                                |  | -     |                  |  |  | (10,061 | )
|Increase (decrease) in foreign currency translation |  |                  | -     |   |                                                                |  | -     |                  |  |  | (117    | )
|                                                    |  |                  |       |   |                                                                |  |       |                  |  |  |         |  
|Total provisions, final balance                     |  |                  | 8,567 |   |                                                                |  | 4,357 |                  |  |  | 12,922  |  



F-113









| | Notes to the consolidated financial statements as of December
31 2012
| | ---------------------------------------------------------------------



Note 15- Provisions and other non-financial liabilities (continued)



| | 15.4 | Changes in provisions for the year ending December 31, 2011:
| | ---- | ------------------------------------------------------------



|Description of items that gave rise to variations   |  | Legal complaints |       |   | Provision for dismantling, restoration and rehabilitation cost |  |       | Other provisions |  |  | Total   |  
|--------------------------------------------------- |  | ---------------- | ----- | - | -------------------------------------------------------------- |  | ----- | ---------------- |  |  | ------- | -
|                                                    |  | ThUS$            |       |   | ThUS$                                                          |  |       | ThUS$            |  |  | ThUS$   |  
|                                                    |  |                  |       |   |                                                                |  |       |                  |  |  |         |  
|Total provisions, initial balance                   |  |                  | 4,590 |   |                                                                |  | 3,500 |                  |  |  | 12,424  |  
|                                                    |  |                  |       |   |                                                                |  |       |                  |  |  |         |  
|Changes in provisions:                              |  |                  |       |   |                                                                |  |       |                  |  |  |         |  
|                                                    |  |                  |       |   |                                                                |  |       |                  |  |  |         |  
|Additional provisions                               |  |                  | 3,000 |   |                                                                |  | 224   |                  |  |  | 13,076  |  
|                                                    |  |                  |       |   |                                                                |  |       |                  |  |  |         |  
|Provision used                                      |  |                  | (19   | ) |                                                                |  | -     |                  |  |  | (11,080 | )
|Increase (decrease) in foreign currency translation |  |                  | -     |   |                                                                |  | -     |                  |  |  | (183    | )
|                                                    |  |                  |       |   |                                                                |  |       |                  |  |  |         |  
|Total provisions, final balance                     |  |                  | 7,571 |   |                                                                |  | 3,724 |                  |  |  | 14,237  |  



F-114









| | Notes to the consolidated financial statements as of December
31 2012
| | ---------------------------------------------------------------------



Note 15 - Provisions and other non-financial liabilities
(continued)



| | 15.4 | Changes in provisions for the year ending December 31, 2010
| | ---- | -----------------------------------------------------------



|Description of items that gave rise to variations   |  | Legal complaints |       |  | Provision for dismantling, restoration and rehabilitation cost |  |       | Other provisions |  |  | Total   |  
|--------------------------------------------------- |  | ---------------- | ----- |  | -------------------------------------------------------------- |  | ----- | ---------------- |  |  | ------- | -
|                                                    |  | ThUS$            |       |  | ThUS$                                                          |  |       | ThUS$            |  |  | ThUS$   |  
|                                                    |  |                  |       |  |                                                                |  |       |                  |  |  |         |  
|Total provisions, initial balance                   |  |                  | 590   |  |                                                                |  | 3,500 |                  |  |  | 15,852  |  
|                                                    |  |                  |       |  |                                                                |  |       |                  |  |  |         |  
|Changes in provisions:                              |  |                  |       |  |                                                                |  |       |                  |  |  |         |  
|                                                    |  |                  |       |  |                                                                |  |       |                  |  |  |         |  
|Additional provisions                               |  |                  | 4,000 |  |                                                                |  | -     |                  |  |  | 16,081  |  
|                                                    |  |                  |       |  |                                                                |  |       |                  |  |  |         |  
|Provision used                                      |  |                  | -     |  |                                                                |  | -     |                  |  |  | (19,583 | )
|Increase (decrease) in foreign currency translation |  |                  | -     |  |                                                                |  | -     |                  |  |  | 74      |  
|                                                    |  |                  |       |  |                                                                |  |       |                  |  |  |         |  
|Total provisions, final balance                     |  |                  | 4,590 |  |                                                                |  | 3,500 |                  |  |  | 12,424  |  



F-115









| | Notes to the consolidated financial statements as of December
31 2012
| | ---------------------------------------------------------------------



Note 15 - Provisions and other non-financial liabilities
(continued)



| | 15.5 | Detail of main classes of provisions
| | ---- | ------------------------------------



Legal expenses:Provision
for legal claims brought against the Company’s subsidiaries in Brazil and the United States.



Tax accrual in tax litigation:This accrual relates to lawsuits pending resolution of taxes claims in Brazil for SQM Brazil and NNC.



CORFO royalties agreement:
Relates to the commercialization of mining properties payable from SQM Salar S.A. to CORFO on a quarterly basis. The royalty is
calculated based on sales of products extracted from the Salar de Atacama.



Provisions are updated each
reporting period based on changes in the facts and circumstances of each obligation.



There are no significant uncertainties
with respect to the timing or amount of an specific provision.



F-116









| | Notes to the consolidated financial statements as of December
31 2012
| | ---------------------------------------------------------------------



Note 16 - Contingencies and restrictions



| | 16.1 | Lawsuits and other relevant events
| | ---- | ----------------------------------



|1. | Plaintiffs   | : | JB Comércio de Fertilizantes e Defensivos Agrícolas Ltda. (JB)                                                                                
|-- | ------------ | - | ----------------------------------------------------------------------------------------------------------------------------------------------
|   | Defendant    | : | Nitratos Naturais do Chile Ltda. (NNC)                                                                                                        
|   | Date         | : | December 1995                                                                                                                                 
|   | Court        | : | MM 1a, Vara Civel de Comarca de Barueri, Brazil,                                                                                              
|   | Reason:      |   | Compensation claim filed by JB against NNC for having appointed a distributor in a territory of Brazil for which JB had an exclusive contract,
|   | Status       | : | Lower court ruling against Nitratos Naturais do Chile Ltda, and recourse of  appeal pending resolution                                        
|   | Claim amount | : | ThUS$1,800                                                                                                                                    



|2. | Plaintiff    | : | Nancy Erika Urra Muñoz                                                      
|-- | ------------ | - | ----------------------------------------------------------------------------
|   | Defendants   | : | Fresia Flores Zamorano, Duratec-Vinilit S,A, and SQM S,A, and their insurers
|   | Date         | : | December 2008                                                               
|   | Court        | : | 1st Civil Court of Santiago                                                 
|   | Reason       | : | Labor Accident                                                              
|   | Status       | : | Evidence                                                                    
|   | Claim amount | : | ThUS$550                                                                    



|3. | Plaintiffs   | : | Eduardo Fajardo Nuñez, Ana Maria Canales Poblete, Raquel Beltran Parra, Eduardo Fajardo Beltran and Martina Fajardo Beltran
|-- | ------------ | - | ---------------------------------------------------------------------------------------------------------------------------
|   | Defendants   | : | SQM Salar S.A. and insured parties                                                                                         
|   | Date         | : | November 2009                                                                                                              
|   | Court        | : | 20th Civil Court in Santiago                                                                                               
|   | Reason       | : | Labor accident                                                                                                             
|   | Status       | : | Summons to hear the judgement                                                                                              
|   | Claim amount | : | ThUS$1,880                                                                                                                 



|4. | Plaintiff | : | City of Pomona, California USA                                                                                                   
|-- | --------- | - | ---------------------------------------------------------------------------------------------------------------------------------
|   | Defendant | : | SQM North America Corp (SQM NA)                                                                                                  
|   |           |   | The lawsuit also was filed against Sociedad Química y Minera de Chile S.A. however the Company has not yet been formally notified
|   | Date      | : | December 2010                                                                                                                    
|   | Court     | : | United States District Court for the Central District of California                                                              



F-117









| | Notes to the consolidated financial statements as of December
31 2012
| | ---------------------------------------------------------------------



Note 16 - Contingencies and restrictions
(continued)



16.1 Lawsuits and other relevant events,
continued



| | Reason       | : | Expenses and related damages to treat and remove perchlorate from groundwater  alledegely caused by the Company’s fertilizer products
| | ------------ | - | -------------------------------------------------------------------------------------------------------------------------------------
| | Status       | : | Pending appeal by the the plaintiff, who lost in the first instance.                                                                 
| | Claim amount | : | Not possible to determine                                                                                                            



|5. | Plaintiff   | : | City of Lindsay, California USA                                                                                                     
|-- | ----------- | - | ------------------------------------------------------------------------------------------------------------------------------------
|   | Defendant   | : | SQM North America Corp (SQM NA)                                                                                                     
|   |             |   | The lawsuit also was filed against Sociedad Química y Minera de Chile S.A. this lawsuit has not yet been notified to the Company    
|   | Date        | : | December 2010                                                                                                                       
|   | Court       | : | United States District Court for the Eastern District of California                                                                 
|   | Reason      | : | Expenses and related damages to treat and remove perchlorate from groundwater alledegely caused by the Company’s fertilizer products
|   | Status      | : | Claim, Procedure suspended                                                                                                          
|   | Claim value | : | Not possible to determine                                                                                                           



|6. | Plaintiff   | : | Metalúrgica FAT Limitada                                                                  
|-- | ----------- | - | ------------------------------------------------------------------------------------------
|   | Defendant   | : | SQM Salar S.A.                                                                            
|   | Date        | : | August  2011                                                                              
|   | Court       | : | 9th Civil Court in Santiago                                                               
|   | Reason      | : | Compensation for early termination of supply contract and installation of metal structures
|   | Status      | : | Evidence gathering                                                                        
|   | Claim value | : | ThUS$200                                                                                  



|7. | Plaintiff   | : | Angelina Castillo Figueroa and others                                                                     
|-- | ----------- | - | ----------------------------------------------------------------------------------------------------------
|   | Defendant   | : | SQM Nitratos S,A, and its assurers                                                                        
|   | Date        | : | June 2012                                                                                                 
|   | Court       | : | 2nd Civil Court of Santiago                                                                               
|   | Reason      | : | Demand for damages related to a 2010 explosion near Baquedano, that resulted in the death of six employees
|   | Status      | : | Evidence gathering                                                                                        
|   | Claim value | : | ThUS$9,400                                                                                                



F-118







| | Notes to the consolidated financial statements as of December
31 2012
| | ---------------------------------------------------------------------



Note 16 - Contingencies and restrictions
(continued)



| | 16.1 | Lawsuits and other relevant events, continued
| | ---- | ---------------------------------------------



|8. | Plaintiff   | : | Nilda Ester Muñoz Muñoz y otros                                                                                                 
|-- | ----------- | - | --------------------------------------------------------------------------------------------------------------------------------
|   | Defendant   | : | Alejandro Reyes R., Transportes Transerik Limitada, Contructora Excon S.A., y SQM Salar S.A. and their inssurers                
|   | Date        | : | July 2012                                                                                                                       
|   | Court       | : | 15th Civil Court of Santiago                                                                                                    
|   | Reason      | : | Claim for damages for an accident occurring in 2010 at our Salar de Atacama facility causing the death of Mr. Daniel Opazo Muñoz
|   | Status      | : | Answer to the complaint                                                                                                         
|   | Claim value | : | ThUS$2,400                                                                                                                      



|9. | Plaintiff   | : | Sociedad industrial Seguel y Ortiz Limitada                                                  
|-- | ----------- | - | ---------------------------------------------------------------------------------------------
|   | Defendant   | : | SQM Salar S.A.                                                                               
|   | Date        | : | August 2012                                                                                  
|   | Court       | : | Arbitral                                                                                     
|   | Reason      | : | Indemnity for supposed damages derived from anticipated end of contract for services rendered
|   | Status      | : | Answer to the complaint                                                                      
|   | Claim value | : | ThUS$3,500                                                                                   



|10. | Plaintiff    | : | María Angélica Alday Fuentes                           
|--- | ------------ | - | -------------------------------------------------------
|    | Defendant    | : | Vladimir Roco Alvarez, Compass Catering S.A. y SQM S.A.
|    | Date         | : | August 2012                                            
|    | Court        | : | 1st Civil Court Antofagasta                            
|    | Reason       | : | Damages related to attempted sexual abuse              
|    | Status       | : | Answer to the complaint                                
|    | Claim amount | : | ThUS$200                                               



The Company has only registered a provision
for estimated losses in those lawsuits described above in which the probability of loss is considered to be more likely than not.



The Company and its subsidiaries have been
involved and will likely continue to be involved either as plaintiffs or defendants in certain judicial proceedings that have been
and will be heard by the Arbitral or Ordinary Courts of Justice who will make the final decision. Those proceedings governed by
the appropriate legal regulations are intended to exercise or oppose certain actions or exceptions related to specific mining claims
either granted or to be granted and that do not or will not have an adverse affect on the development of the Company and its subsidiaries.



F-119









| | Notes to the consolidated financial statements as of December
31 2012
| | ---------------------------------------------------------------------



Note 16 - Contingencies and restrictions
(continued)



| | 16.1 | Lawsuits and other relevant events, continued
| | ---- | ---------------------------------------------



Soquimich Comercial S.A. has been involved
and will probably continue being involved either as plaintiff or defendant in certain judicial proceedings through which it intends
to collect and receive the amounts owed, the total claim value of which is approximately ThUS$700.



The Company has made efforts and continues
making efforts to obtain payment of certain amounts that are still owed. Such amounts will continue required using judicial or
non-judicial means by the plaintiffs, until the actions and exercise related to these actions are currently in full force and effect.



The Company and its subsidiaries have not
received legal notice of any claims other than those mentioned above. The claims detailed above seek to annul certain mining claims
that were purchased by SQM and it subsidiaries, the proportional purchase value of which, with respect to the portion affected
by the superimposition, exceeds the nominal and approximate amount of ThUS$150. The claims seek payment of certain amounts allegedly
owed by the Company due to its own activities, which exceed the approximate, nominal and individual amount of ThUS$150.



| | 16.2 | Restrictions to the management or financial limits
| | ---- | --------------------------------------------------



Credit Agreements executed by the Company
and its subsidiaries with national and foreign banks and international bonds outstanding, require the Company comply with the following
consolidated financial ratios:



| | - | Maintain a minimum Net Worth of ThUS$900,000.
| | - | ---------------------------------------------



| | - | Maintain a Net Financial Debt to EBITDA ratio no greater than 3.00:1.00.
| | - | ------------------------------------------------------------------------



| | - | Maintain a Leverage ratio no greater than 1.40:1.00.
| | - | ----------------------------------------------------



| | - | Maintain an Operating Subsidiaries’ Interest Indebtedness ratio, defined as the sum of SQM
Salar S.A. and SQM Industrial S.A. financial debt over Total Current Assets, no greater than 0.30:1.00.
| | - | --------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The calculated ratios mentioned above are
as follows:



|Indicator                                         |  | 12/31/2012 |           |  | 12/31/2011 | 
|------------------------------------------------- |  | ---------- | --------- |  | ---------- | 
|Net Worth ThUS$                                   |  |            | 2,187,446 |  |            | 
|Net Financial Debt/EBITDA                         |  |            | 0.83      |  |            | 
|Leverage                                          |  |            | 1.02      |  |            | 
|Debt SQM Industrial  and SQM Salar/Current Assets |  |            | 0.04      |  |            | 



F-120









| | Notes to the consolidated financial statements as of December
31 2012
| | ---------------------------------------------------------------------



Note 16 - Contingencies and restrictions
(continued)



Covenants included in notes issued outside
of Chile require that the Company will not consolidate with or merge into any other entity or convey
or substantially transfer its properties and assets to another entity, unless (i) the successor entity will be an enity existing
under the laws of the United States (or any State thereof or the District of Columbia) or Chile and will assume, by a supplemental
indenture, the due and punctual payment of the principal, premium, if any related, and interest in respect of all the outstanding
notes and the performance of every covenant in the indenture on the part ofthe Company to
be performed or observed, (ii) immediately after giving effect to such transaction, no event of default, and no event which, after
notice or lapse of time, or both, would become an event of default, will have happened and be continuing; and (iii)the
Companywill have delivered to the Trustee an officer’s certificate and opinion of counsel stating
that such consolidation, merger, conveyance or transfer and such supplemental indenture comply with the foregoing provisions relating
to such transaction. In case of any such consolidation, merger conveyance or transfer (other than a lease), such successor entity
will succeed to and be substituted forthe Company as obligor on the notes, with the same effect
as if it had been named in the Indenture as such obligor.



In addition, SQM is required
to provide quarterly financial information.



The Company and its subsidiaries
are in full compliance with all limitations, restrictions and obligations mentioned above.



| | 16.3 | Commitments
| | ---- | -----------



The SQM Salar S.A. entered into a royalty
agreement with the CORFO which requires annual payments to CORFO for the commercialization of certain mining properties owned by
CORFO and the related products produced from these mining properties. Annual royalties are calculated based on the sales of each
type of product. The contract expires in 2030. Royalties amounted to ThUS$27,193 and ThUS$23,951 for the years ended December 31,
2012 and 2011, respectively.



| | 16.4 | Restricted or pledged cash
| | ---- | --------------------------



Isapre Norte Grande Ltda, in compliance
with requirements established by the Chilean Superintendence of Healthcare, which regulates the running of pension-related health
institutions, maintains a guarantee of financial instruments, delivered in the form of deposits, in the custody and administration
of Banco de Chile. This guarantee, according to the regulations issued by the Chilean Superintendence of Healthcare is the equivalent
of the total amounts owed to its members and medical providers. Banco de Chile reports the present value of the guarantee to the
Chilean Superintendence of Healthcare and Isapre Norte Grande Ltda, on a daily basis. As of December 31, 2012 and 2011, the guarantee
amounted to ThUS$571 and ThUS$428, respectively.



F-121









| | Notes to the consolidated financial statements as of December
31 2012
| | ---------------------------------------------------------------------



Note
16 - Contingencies and restrictions (continued)



| | 16.5 | Securities obtained from third parties
| | ---- | --------------------------------------



Security received from third parties (distributors)
to guarantee Soquimich Comercial S.A.’s compliance with contractual obligations derived from the distribution and sale of
fertilizers amounted to ThUS$4,126 and ThUS$4,467 as of December 31, 2012 and 2011, respectively. The following entities have provided
securities:



|Entity name                    |  | 12/31/2012 ThUS$ |       |  | 12/31/2011 ThUS$ | 
|------------------------------ |  | ---------------- | ----- |  | ---------------- | 
|                               |  |                  |       |  |                  | 
|Llanos y Wammes Soc, Com, Ltda |  |                  | 2,084 |  |                  | 
|Fertglobal Chile Ltda,.        |  |                  | 1,042 |  |                  | 
|Tattersall Agroinsumos S,A,    |  |                  | 1,000 |  |                  | 



F-122









| | Notes to the consolidated financial statements as of December
31 2012
| | ---------------------------------------------------------------------



Nota 16 - Contingencies and restrictions (continued)



| | 16.6 | Indirect guarantees
| | ---- | -------------------



Guarantees issued in which there is no current balance, reflect
indirect guarantees in force and approved by the Company's Board of Directors and have not been drawn upon by the respective subsidiary.



|                                      |  |                                  |  |              |  | Pending balances as of the
    closing date of the financial statements | 
|------------------------------------- |  | -------------------------------- |  | ------------ |  | ----------------------------------------------------------------------- | 
|                                      |  | Debtor                           |  | Type of      |  | 12/31/2012                                                              | 
|Creditor of the guarantee             |  | Name                             |  | Relationship |  | guarantee                                                               | 
|Australian and New Zealand Bank       |  | SQM North America  Corp          |  | Subsidiary   |  | Bond                                                                    | 
|Australian and New Zealand Bank       |  | SQM Europe N.V                   |  | Subsidiary   |  | Bond                                                                    | 
|Generale Bank                         |  | SQM North America  Corp          |  | Subsidiary   |  | Bond                                                                    | 
|Generale Bank                         |  | SQM Europe N.V.                  |  | Subsidiary   |  | Bond                                                                    | 
|Kredietbank                           |  | SQM North America  Corp          |  | Subsidiary   |  | Bond                                                                    | 
|Kredietbank                           |  | SQM Europe N.V.                  |  | Subsidiary   |  | Bond                                                                    | 
|Banks and financial institutions      |  | SQM Investment Corp. N.V.        |  | Subsidiary   |  | Bond                                                                    | 
|Banks and financial institutions      |  | SQM Europe N.V.                  |  | Subsidiary   |  | Bond                                                                    | 
|Banks and financial institutions      |  | SQM North America  Corp          |  | Subsidiary   |  | Bond                                                                    | 
|Banks and financial institutions      |  | Nitratos Naturais do Chile Ltda. |  | Subsidiary   |  | Bond                                                                    | 
|Banks and financial institutions      |  | SQM México S.A. de C.V.          |  | Subsidiary   |  | Bond                                                                    | 
|Banks and financial institutions      |  | SQM Brasil Ltda.                 |  | Subsidiary   |  | Bond                                                                    | 
|“BNP”                                 |  | SQM Investment Corp. N.V.        |  | Subsidiary   |  | Bond                                                                    | 
|Sociedad Nacional de Mineria A,G,     |  | SQM Potasio S.A.                 |  | Subsidiary   |  | Bond                                                                    | 
|ING Capital LLC                       |  | Royal Seed Trading A.V.V.        |  | Subsidiary   |  | Bond                                                                    | 
|Scotiabank & Trust (Cayman) Ltd,      |  | Royal Seed Trading A.V.V.        |  | Subsidiary   |  | Bond                                                                    | 
|Scotiabank & Trust (Cayman) Ltd,      |  | Royal Seed Trading A.V.V.        |  | Subsidiary   |  | Bond                                                                    | 
|Bank of America                       |  | Royal Seed Trading A.V.V.        |  | Subsidiary   |  | Bond                                                                    | 
|Export Development Canada             |  | Royal Seed Trading A.V.V.        |  | Subsidiary   |  | Bond                                                                    | 
|The Bank of Tokyo-Mitsubishi UFJ Ltd, |  | Royal Seed Trading A.V.V.        |  | Subsidiary   |  | Bond                                                                    | 
|JP Morgan Chase Bank                  |  | SQM Industrial S.A.              |  | Subsidiary   |  | Bond                                                                    | 
|The Bank of Nova Scotia               |  | SQM Investment Corp. N.V.        |  | Subsidiary   |  | Bond                                                                    | 
|Morgan Stanley Capital Services       |  | SQM Investment Corp. N.V.        |  | Subsidiary   |  | Bond                                                                    | 
|The Bank of Tokyo-Mitsubishi UFJ Ltd, |  | SQM Investment Corp. N.V.        |  | Subsidiary   |  | Bond                                                                    | 
|HSBC                                  |  | SQM Investment Corp. N.V.        |  | Subsidiary   |  | Bond                                                                    | 
|Deutsche Bank AG                      |  | SQM Investment Corp. N.V.        |  | Subsidiary   |  | Bond                                                                    | 
|Credit Suisse International           |  | SQM Investment Corp. N.V.        |  | Subsidiary   |  | Bond                                                                    | 



F-123









| | Notes to the consolidated financial statements as of December
31 2012
| | ---------------------------------------------------------------------



Note 17 - Earnings per Share



Basic earnings per share are calculated
by dividing net income attributable to the Company’s shareholders by the weighted average of the number of shares outstanding
during that period,

As expressed, earnings per share are detailed
as follows:



|Basic earnings per share                      |  | 12/31/2012 ThUS$ |             |  | 12/31/2011 ThUS$ |  |             | 12/31/2010 ThUS$ | 
|--------------------------------------------- |  | ---------------- | ----------- |  | ---------------- |  | ----------- | ---------------- | 
|                                              |  |                  |             |  |                  |  |             |                  | 
|Earnings attributable to owners of the parent |  |                  | 649,167     |  |                  |  | 545,758     |                  | 
|                                              |  |                  |             |  |                  |  |             |                  | 
|Number of common shares in circulation        |  |                  | 263,196,524 |  |                  |  | 263,196,524 |                  | 
|                                              |  |                  |             |  |                  |  |             |                  | 
|Basic earnings per share (US$ per share)      |  |                  | 2.47        |  |                  |  | 2.07        |                  | 



The Company has not entered into any operation
or issued any securities or financial instruments with a potential dilutive effect. Therefore diluted earnings per share is the
same as basic earnings per share.



F-124









| | Notes to the consolidated financial statements as of December
31 2012
| | ---------------------------------------------------------------------



Note 18 - Effect of fluctuations on the foreign currency
exchange rates



| | a) | Foreign currency exchange differences recognized in profit or loss except for financial instruments
measured at fair value through profit or loss:
| | -- | --------------------------------------------------------------------------------------------------------------------------------------------------



|                                                                                             |  | 12/31/2012 ThUS$ |         |   | 12/31/2011 ThUS$ |  |         | 12/31/2010 ThUS$ | 
|-------------------------------------------------------------------------------------------- |  | ---------------- | ------- | - | ---------------- |  | ------- | ---------------- | 
|                                                                                             |  |                  |         |   |                  |  |         |                  | 
|Conversion foreign exchange gains (losses) recognized in the result of the year              |  |                  | (26,787 | ) |                  |  | (25,307 | )                | 
|Conversion of foreign exchange reserves attributable to the owners of the controlling entity |  |                  | 921     |   |                  |  | (2,781  | )                | 
|Conversion of foreign exchange reserves attributable to the non-controlling entity           |  |                  | 61      |   |                  |  | (109    | )                | 



| | b) | Reserves for foreign currency exchange differences:
| | -- | ---------------------------------------------------



Foreign currency exchange differences are
detailed as follows:



|Detail                                                 |  | 12/31/2012 ThUS$ |        |   | 12/31/2011 ThUS$ |  |        | 12/31/2010 ThUS$ | 
|------------------------------------------------------ |  | ---------------- | ------ | - | ---------------- |  | ------ | ---------------- | 
|                                                       |  |                  |        |   |                  |  |        |                  | 
|Changes in equity generated through the equity method: |  |                  |        |   |                  |  |        |                  | 
|Comercial Hydro S.A.                                   |  |                  | 937    |   |                  |  | 937    |                  | 
|SQMC Internacional Ltda.                               |  |                  | 36     |   |                  |  | 23     |                  | 
|Proinsa Ltda.                                          |  |                  | 27     |   |                  |  | 17     |                  | 
|Agrorama Callegari Ltda.                               |  |                  | 152    |   |                  |  | 102    |                  | 
|Isapre Cruz del Norte Ltda.                            |  |                  | 89     |   |                  |  | 55     |                  | 
|Almacenes y Depósitos Ltda.                            |  |                  | 103    |   |                  |  | 57     |                  | 
|Sales de Magnesio Ltda.                                |  |                  | 177    |   |                  |  | 48     |                  | 
|Sociedad de Servicios de Salud S.A.                    |  |                  | 33     |   |                  |  | 24     |                  | 
|Agrorama S.A.                                          |  |                  | (11    | ) |                  |  | (11    | )                | 
|Doktor Tarsa                                           |  |                  | (1,035 | ) |                  |  | (1,964 | )                | 
|Nutrisi Holding                                        |  |                  | (42    | ) |                  |  | (42    | )                | 
|SQM Vitas Fzco                                         |  |                  | (318   | ) |                  |  | (159   | )                | 
|Ajay Europe                                            |  |                  | (275   | ) |                  |  | (176   | )                | 
|Misr Specialty Ferti                                   |  |                  | (39    | ) |                  |  | (39    | )                | 
|SQM Eastmed Turkey                                     |  |                  | (42    | ) |                  |  | (40    | )                | 
|Charlee SQM (Thailand) Co. Lta.                        |  |                  | (32    | ) |                  |  | (52    | )                | 
|Coromandel SQM India                                   |  |                  | (118   | ) |                  |  | (31    | )                | 
|SQM Italia SRL                                         |  |                  | 28     |   |                  |  | -      |                  | 
|Total                                                  |  |                  | (330   | ) |                  |  | (1,251 | )                | 



| | c) | Functional and presentation currency
| | -- | ------------------------------------



The functional currency in these companies
corresponds to the currency of the country of origin of each entity, and its presentation currency is the U.S. Dollar.



F-125









| | Notes to the consolidated financial statements as of December
31 2012
| | ---------------------------------------------------------------------



Note 18 - Effect of fluctuations on the foreign currency
exchange rates (continued)



| | d) | Reasons to use one presentation currency and a different functional currency
| | -- | ----------------------------------------------------------------------------



| | - | The total revenues of these subsidiaries are associated
with the local currency.
| | - | --------------------------------------------------------------------------------

| | - | The commercialization cost structure of these companies is affected by the local currency.
| | - | ------------------------------------------------------------------------------------------

| | - | The equities of these companies are expressed in local
currency (Chilean peso).
| | - | -------------------------------------------------------------------------------



Note 19 - Environment



| | 19.1 | Disclosures of disbursements related to the environment
| | ---- | -------------------------------------------------------



The Company is concerned with protecting
the environment both in its production processes and with respect to products manufactured. This commitment is supported by the
principles indicated in the Company’s Sustainable Development Policy. The Company is currently operating under an Environmental
Management System (EMS) that has allowed it to strengthen its environmental performance through the effective application of the
Company’s Sustainable Development Policy.



Operations that use caliche as a raw material
are carried out in desert areas with climatic conditions that are favorable for drying solids and evaporating liquids using solar
energy. Operations involving the open-pit extraction of minerals, due to their low waste-to-mineral ratio, generate remaining deposits
that slightly alter the environment. A portion of the ore extracted is crushed, a process in which the emission of particulates.
Currently this operation is only conducted at the Company ́s Pedro de Valdivia operations.



Many of the Company’s products are
shipped in bulk at the Port of Tocopilla, Chile. In 2007, the city of Tocopilla was declared a zone saturated with MP10 particles
mainly due to the emissions from electric power plants that operate in that city. In October 2010 the Decontamination Plan for
Tocopilla was put in place. Accordingly, the Company has committed to taking several measures to mitigate the effects derived from
bulk product movements in the port. These measures have been successfully implemented since 2007.



The Company carries out environmental monitoring
plans based on specialized scientific studies, Within this context, the Company entered into a contract with the National Forestry
Corporation (CONAF) aimed at researching the activities of flamingo groups that live in the Salar de Atacama lagoons. Such research
includes a population count of the birds, as well as breeding research. Environmental monitoring activities carried out by the
Company at the Salar de Atacama and other systems in which it operates are supported by a number of studies that have integrated
diverse scientific efforts from prestigious research centers, including Dictuc from the Pontificia Universidad Católica
in Santiago and the School of Agricultural Science of the Universidad de Chile.



F-126









| | Notes to the consolidated financial statements as of December
31 2012
| | ---------------------------------------------------------------------



Note 19 - Environment (continued)



| | 19.1 | Disclosures of disbursements related to the environment (continued)
| | ---- | -------------------------------------------------------------------



Furthermore, within the framework of the
environmental studies that the Company is conducting, the Company performs significant activities in relation to the recording
of Pre-Columbian and historical cultural heritage, as well as the protection of heritage sites, in accordance with current Chilean
laws. These activities have been specifically performed in the areas surrounding our Maria Elena and Nueva Victoria plants. This
effort is being accompanied by cultural initiatives within the community and the organization of exhibits in local and regional
museums.



As emphasized in its Sustainable Development
Policy, the Company strives to maintain positive relationships with the communities surrounding the locations in which it carries
out its operations, as well as to participate in communities’ development by supporting joint projects and activities which
help to improve the quality of life for residents. For this purpose, the Company has focused its efforts on activities involving
the rescue of historical heritage, education and culture, as well as development, and in order to do so, it acts both individually
and in conjunction with private and public entities.



| | 19.2 | Detail of information on disbursements related to the environment
| | ---- | -----------------------------------------------------------------



Cumulative disbursements as of December
31, 2012 in related to investments in production processes, verification and control of compliance with environmental ordinances
and laws relative to industrial processes and facilities, amounted to ThUS$23,207 and are detailed as follows:



F-127









| | Notes to the consolidated financial statements as of December
31 2012
| | ---------------------------------------------------------------------



Note 19- Environment (continued)



| | 19.2 | Detail of information on disbursements related to the environment, continued
| | ---- | ----------------------------------------------------------------------------



Accumulated expenses as of December 31, 2012



|Identification of the Parentor subsidiary |  | Name of the project with which the disbursement isassociated                            |  | Concept for which thedisbursement was madeor will be made |  | Asset /Expense |  | Description ofthe asset orexpense Item |  | Amount ofdisbursementfor the PeriodThUS$ |  | Actual or estimateddate on whichdisbursements were orwill be made
|----------------------------------------- |  | --------------------------------------------------------------------------------------- |  | --------------------------------------------------------- |  | -------------- |  | -------------------------------------- |  | ---------------------------------------- |  | -----------------------------------------------------------------
|SQM Industrial S,A,                       |  | Environmental Management (Expense as of December 2012)                                  |  | Not classified                                            |  | Expense        |  | Not classified                         |  | 1,808                                    |  | 12-31-2012                                                       
|SQM Industrial S,A,                       |  | IQ8G – Improvement of Bureau of Exchange, offices
    and facilities                    |  | Sustainability                                            |  | Asset          |  | Not classified                         |  | 72                                       |  | 12-31-2012                                                       
|SQM Industrial S,A,                       |  | JQEZ – Change of Berrtrams Prilling Boiler CS                                           |  | Sustainability: Replacement of equipment                  |  | Asset          |  | Development                            |  | 235                                      |  | 12-31-2012                                                       
|SQM Industrial S,A,                       |  | JQH9 – Purchase of Bertrams Boiler                                                      |  | Sustainability: Replacement of equipment                  |  | Asset          |  | Development                            |  | 600                                      |  | 12-31-2012                                                       
|SQM Industrial S,A,                       |  | MNYS - Measures of Technological Change Cultural Heritage
    Dissemination Maria Elena |  | Sustainability: Environment and Risk prevention           |  | Expense        |  | Not classified                         |  | 37                                       |  | 12-31-2012                                                       
|SQM Industrial S,A,                       |  | MP5W - TK's Fuel Standards                                                              |  | Sustainability                                            |  | Asset          |  | Not classified                         |  | 841                                      |  | 12-31-2012                                                       
|SQM Industrial S,A,                       |  | MPQU - Construction of Hazardous Chemical Supplies
    warehouse                        |  | Sustainability: Environment and Risk prevention           |  | Asset          |  | Development                            |  | 211                                      |  | 12-31-2012                                                       
|SQM Industrial S,A,                       |  | MQ8M - Reconditioning monitoring station ME                                             |  | Sustainability: Renovation                                |  | Expense        |  | Not classified                         |  | 8                                        |  | 12-31-2012                                                       
|SQM Industrial S,A,                       |  | MQA8 – Normalization gas systems peripheral
    casinos  (stage 1 of project)           |  | Not classified                                            |  | Expense        |  | Not classified                         |  | 106                                      |  | 12-31-2012                                                       
|SQM Industrial S,A,                       |  | MQAJ - Improvements to Camp Water and Sewage (P Contesse
    commitment to DDSS)        |  | Not classified                                            |  | Expense        |  | Not classified                         |  | 8                                        |  | 12-31-2012                                                       
|SQM Industrial S,A,                       |  | MQBM - Archaeological Digging Deployment Maria Elena
    - Toco                         |  | Sustainability: Environment and Risk prevention           |  | Expense        |  | Not classified                         |  | 7                                        |  | 12-31-2012                                                       
|SQM Industrial S,A,                       |  | MQHF-  Pilas ME Maintenance                                                             |  | Sustainability                                            |  | Asset          |  | Not classified                         |  | 161                                      |  | 12-31-2012                                                       
|SQM Industrial S,A,                       |  | MQK2- Elimination of PCBs I                                                             |  | Not classified                                            |  | Expense        |  | Not classified                         |  | 16                                       |  | 12-31-2012                                                       



F-128









| | Notes to the consolidated financial statements as of December
31 2012
| | ---------------------------------------------------------------------



Note 19 - Environment (continued)



| | 19.2 | Detail of information on disbursements related to the environment, continued
| | ---- | ----------------------------------------------------------------------------



Accumulated expenses as of December 31, 2012, continued



|Identification of the Parentor subsidiary |  | Name of the project with which the disbursement isassociated                                                 |  | Concept for which thedisbursement was madeor will be made |  | Asset /Expense |  | Description ofthe asset orexpense Item |  | Amount ofdisbursementfor the PeriodThUS$ |  | Actual or estimateddate on whichdisbursements were orwill be made
|----------------------------------------- |  | ------------------------------------------------------------------------------------------------------------ |  | --------------------------------------------------------- |  | -------------- |  | -------------------------------------- |  | ---------------------------------------- |  | -----------------------------------------------------------------
|SQM Industrial S,A,                       |  | PPC1 - Remove switches park OCB sub 3 and 1/12 Pedro de Valdivia                                             |  | Sustainability: Replacement of equipment                  |  | Expense        |  | Not classified                         |  | 147                                      |  | 12-31-2012                                                       
|SQM Industrial S,A,                       |  | PPNK - Management of Ammonia PV stoppage plant                                                               |  | Sustainability: Environment and Risk prevention           |  | Asset  Expense |  | Not classified                         |  | 193                                      |  | 12-31-2012                                                       
|SQM Industrial S,A,                       |  | PPZU - Standardize and certify Plant Fuel Tanks                                                              |  | Sustainability: Environment and Risk prevention           |  | Asset          |  | Not classified                         |  | 1,763                                    |  | 12-31-2012                                                       
|SQM Industrial S,A,                       |  | SQ7X - Reach 2011-2013                                                                                       |  | Sustainability                                            |  | Expense        |  | Not classified                         |  | 199                                      |  | 12-31-2012                                                       
|SQM Industrial S,A,                       |  | TQA2 – Improvement sewage Villa Prat                                                                         |  | Not classified                                            |  | Expense        |  | Not classified                         |  | 16                                       |  | 12-31-2012                                                       
|SQM Industrial S,A,                       |  | JQ8K – DIA Line 4  Floor Drying ,
    Coya Sur (Project: Drying Line 4)                                      |  | Environmental procedure                                   |  | Asset          |  | Not classified                         |  | 32                                       |  | 12-31-2012                                                       
|SQM Industrial S,A,                       |  | FP55 - FPXA - Zone Mine EIS PB - PB Expansion EIS
    (Projects: Pampa Blanca Saltwater - Saltwater Stage I) |  | Environmental procedure                                   |  | Asset          |  | Not classified                         |  | 1,425                                    |  | 12-31-2012                                                       
|SQM Industrial S,A,                       |  | JQB6 - NPTIV (DIA Planta  NPT4, Coya Sur)                                                                    |  | Environmental procedure                                   |  | Asset          |  | No Clasificado                         |  | 65                                       |  | 12-31-2012                                                       
|SQM Industrial S,A,                       |  | PQLV- Mine PV New Area (DIA Pedro de Valdivia Mine)                                                          |  | Ambient procedure                                         |  | Expense        |  | Not classified                         |  | 131                                      |  | 12-31-2012                                                       
|SQM Industrial S,A,                       |  | CQLX-Yard for Hazrdous Waste – S. del Carmen
    and Lagarto                                                 |  | Sustainability                                            |  |                |  | Not classified                         |  | 47                                       |  | 12-31-2012                                                       
|SQM S,A,                                  |  | MQLQ- Gas Washing System                                                                                     |  | Sustainability: Risk Prevention and Environment           |  | Asset          |  | Development                            |  | 324                                      |  | 12-31-2012                                                       
|SQM S,A,                                  |  | AQ0A - Well Drilling 4 Uptake Change Point Tamarugal
    Pampa                                               |  | Sustainability: Natural Resources                         |  | Asset          |  | Development                            |  | 534                                      |  | 12-31-2012                                                       



F-129









| | Notes to the consolidated financial statements as of December
31 2012
| | ---------------------------------------------------------------------



Note 19 - Environment (continued)



| | 19.2 | Detail of information on disbursements related to the environment, continued
| | ---- | ----------------------------------------------------------------------------



Accumulated expenses as of December 31, 2012, continued



|Identification of the Parentor subsidiary |  | Name of the project with which the disbursement isassociated                 |  | Concept for which thedisbursement was made orwill be made |  | Asset /Expense |  | Description ofthe asset orexpense Item |  | Amount ofdisbursementfor the PeriodThUS$ |  | Actual or estimateddate on whichdisbursements were orwill be made
|----------------------------------------- |  | ---------------------------------------------------------------------------- |  | --------------------------------------------------------- |  | -------------- |  | -------------------------------------- |  | ---------------------------------------- |  | -----------------------------------------------------------------
|SQM S,A,                                  |  | IPFT - Cultural Heritage Region I                                            |  | Sustainability: Environment and Risk prevention           |  | Expense        |  | Not classified                         |  | 166                                      |  | 12-31-2012                                                       
|SQM S,A,                                  |  | IPXE - Environmental Monitoring Plan Llamara Salt
    flat                   |  | Sustainability: Environment and Risk prevention           |  | Expense        |  | Not classified                         |  | 872                                      |  | 12-31-2012                                                       
|SQM S,A,                                  |  | IPXF - Environmental Monitoring Plan Tamarugal Pampa                         |  | Sustainability: Environment and Risk prevention           |  | Expense        |  | Not classified                         |  | 881                                      |  | 12-31-2012                                                       
|SQM S,A,                                  |  | IQ08 - PSA Llamara & Pampa Tamarugal                                         |  | Sustainability: Natural Resources                         |  | Asset          |  | Development                            |  | 1,759                                    |  | 12-31-2012                                                       
|SQM S,A,                                  |  | IQ0C - Mine Area Enhancement NV                                              |  | Sustainability: Environment and Risk prevention           |  | Expense        |  | Not classified                         |  | 66                                       |  | 12-31-2012                                                       
|SQM S,A,                                  |  | IQ1K - Construction of 3 observation wells in Sur
    Viejo                  |  | Sustainability: Natural Resources                         |  | Asset          |  | Development                            |  | 195                                      |  | 12-31-2012                                                       
|SQM S,A,                                  |  | IQ1M - PSA Re-injection of water to Puquios Llamara                          |  | Not classified                                            |  | Asset          |  | Not classified                         |  | 1,653                                    |  | 12-31-2012                                                       
|SQM S,A,                                  |  | IQ3S - Hazardous Materials Management Standardization                        |  | Sustainability: Environment and Risk prevention           |  | Expense        |  | Not classified                         |  | 251                                      |  | 12-31-2012                                                       
|SQM S,A,                                  |  | IQ52 - New Victoria Environment Office                                       |  | Not classified                                            |  | Expense        |  | Not classified                         |  | 29                                       |  | 12-31-2012                                                       
|SQM S,A,                                  |  | IQ53 - Cultural heritage route Soronal adduction (Pampa
    Hermosa)         |  | Sustainability: Environment and Risk prevention           |  | Expense        |  | Not classified                         |  | 24                                       |  | 12-31-2012                                                       
|SQM S,A,                                  |  | IQ54 - Cultural heritage Pampa Hermosa                                       |  | Sustainability: Environment and Risk prevention           |  | Expense        |  | Not classified                         |  | 500                                      |  | 12-31-2012                                                       
|SQM S,A,                                  |  | IQ9V - Project Quillagua                                                     |  | Not classified                                            |  | Expense        |  | Not classified                         |  | 788                                      |  | 12-31-2012                                                       
|SQM S,A,                                  |  | IQOW-
        Equipping deposit for heritage interest at
        Humberstone |  | Sustainability: Environment and Risk prevention           |  | Expense        |  | Not classified                         |  | 1                                        |  | 12-31-2012                                                       
|SQM S,A,                                  |  | IQPJ- Cultural Heritage Measures in Mina Etapa                               |  | Sustainability                                            |  | Expense        |  | Not classified                         |  | 61                                       |  | 12-31-2012                                                       



F-130









| | Notes to the consolidated financial statements as of December
31 2012
| | ---------------------------------------------------------------------



Note 19 - Environment (continued)



| | 19.2 | Detail of information on disbursements related to the environment, continued
| | ---- | ----------------------------------------------------------------------------



Accumulated expenses as of December 31, 2012, continued



|Identification of theParent or subsidiary |  | Name of the project with which the disbursement isassociated                                                                 |  | Concept for which thedisbursement was made orwill be made |  | Asset /Expense  |  | Description ofthe asset orexpense Item |  | Amount ofdisbursementfor the PeriodThUS$ |  | Actual or estimated dateon which disbursementswere or will be made
|----------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------------------------- |  | --------------- |  | -------------------------------------- |  | ---------------------------------------- |  | ------------------------------------------------------------------
|SQM S,A,                                  |  | PQB9 - Change of exhaust SO2 gas                                                                                             |  | Sustainability                                            |  | Asset           |  | Not classified                         |  | 178                                      |  | 12-31-2012                                                        
|SQM S,A,                                  |  | IQ6M/ IQ6N - DIA Expansion Nueva Victoria Sur Mine
    (Projects: Exploration NVS7 2011 and Exploration Nva, Victoria Oeste) |  | Environmental procedure                                   |  | Expense         |  | Not classified                         |  | 115                                      |  | 12-31-2012                                                        
|SQM S,A,                                  |  | IP83 - DIA Expansion TLN-15 (Projects: Management
    Administration Expenses SQM Nueva Victoria)                            |  | Not classified                                            |  | Expense         |  | Not classified                         |  | 23                                       |  | 12-31-2012                                                        
|SQM Salar S,A                             |  | LQFD- Changing Houses                                                                                                        |  | Sustainability                                            |  | Asset           |  | Not classified                         |  | 160                                      |  | 12-31-2012                                                        
|SQM Salar S,A,                            |  | CQ4M – Regularization of Contractor facilities                                                                               |  | Sustainability: Environment and Risk prevention           |  | Asset           |  | Not classified                         |  | 17                                       |  | 12-31-2012                                                        
|SQM Salar S,A,                            |  | CQ8U - New Changing Room CL - HL                                                                                             |  | Capacity Upgrade                                          |  | Asset           |  | Not classified                         |  | 242                                      |  | 12-31-2012                                                        
|SQM Salar S,A,                            |  | LP82 - Project for the Promotion of Agricultural Activity
    in Communities of the Salt deposit                             |  | Sustainability                                            |  | Expense         |  | Development                            |  | 1,126                                    |  | 12-31-2012                                                        
|SQM Salar S,A,                            |  | LPTF – Environmental study and exploration 2010                                                                              |  | Sustainability                                            |  | Expense         |  | Not classified                         |  | 398                                      |  | 12-31-2012                                                        
|SQM Salar S,A,                            |  | LPTJ - Improvements Sanitary Works                                                                                           |  | Sustainability                                            |  | Asset           |  | Not classified                         |  | 206                                      |  | 12-31-2012                                                        
|SQM Salar S,A,                            |  | LQDM – Certification of tanks                                                                                                |  | Sustainability                                            |  | Asset - Expense |  | Not classified                         |  | 146                                      |  | 12-31-2012                                                        
|SQM Salar S,A                             |  | LQI6- Surveys and Ambient Prospections  2011
    (EIA Operation Actualization in Salar de Atacama)                           |  | Ambient Procedure                                         |  | Asset           |  | Not classified                         |  | 358                                      |  | 12-31-2012                                                        
|SQM Salar S,A                             |  | LQNI-DIA Expansion of drying plant and compacted KCL
    facility                                                            |  | Ambient Procedure                                         |  | Asset           |  | Not classified                         |  | 19                                       |  | 12-31-2012                                                        
|SIT S,A,                                  |  | TQNA- Meteorological station
        Tocopilla
        (Decontamination plan
        system Tocopilla)                       |  | Sustainability: Risk and Environment Prevention           |  | Asset           |  | Not classified                         |  | 15                                       |  | 12-31-2012                                                        
|SIT S,A,                                  |  | MQ6Y - Maintenance and repair and bureau of exchange
    Tocopilla ME                                                        |  | Sustainability: Environment and Risk prevention           |  | Expense         |  | Not classified                         |  | 20                                       |  | 12-31-2012                                                        





F-131













| | Notes to the consolidated financial statements as of December
31 2012
| | ---------------------------------------------------------------------





Note 19 - Environment (continued)



| | 19.2 | Detail of information on disbursements related to the environment, continued
| | ---- | ----------------------------------------------------------------------------



Accumulated expenses as of December 31, 2012, continued







|Identification
    of theParent or subsidiary |  | Name of
    the project with which the disbursement isassociated                   |  | Concept
    for which thedisbursement was made orwill be made |  | Asset
    / 
Expense |  | Description
    ofthe asset orexpense Item |  | Amount
    ofdisbursementfor the PeriodThUS$ |  | Actual
    or estimated dateon which disbursementswere or will be made
|--------------------------------------------- |  | ---------------------------------------------------------------------------------- |  | ------------------------------------------------------------- |  | -------------------- |  | ------------------------------------------ |  | -------------------------------------------- |  | ----------------------------------------------------------------------
|SIT S,A,                                      |  | TQM2 – Capsulation Project
    charge/ discharge Fields 1 and 8                    |  | Costs Reduction                                               |  | Expense              |  | Not classified                             |  | 8                                            |  | 12-31-2012                                                            
|SIT S,A,                                      |  | TPR8 - Disposal of liquid waste
    generation by aspiration                       |  | Sustainability: Environment
    and Risk prevention           |  | Expense              |  | Not classified                             |  | 64                                           |  | 12-31-2012                                                            
|SIT S,A,                                      |  | TPYX – Equipping of dust  collector
    of the cradle and seal - Field 3 Tocopilla |  | Sustainability: Environment
    and Risk prevention           |  | Asset - Expense      |  | Development                                |  | 1,658                                        |  | 12-31-2012                                                            
|SIT S,A,                                      |  | TQAP - Paving Field No, 3 and
    No, 4                                            |  | Capacity Upgrade                                              |  | Expense              |  | Not classified                             |  | 13                                           |  | 12-31-2012                                                            
|SIT S,A,                                      |  | TQAV - Paving paths IV                                                             |  | Sustainability: Environment
    and Risk prevention           |  | Expense              |  | Development                                |  | 3                                            |  | 12-31-2012                                                            
|SIT S,A,                                      |  | TQLY-Dust Extractor for packing line N°1                                           |  | Ambient Procedure                                             |  | Expense              |  | Not classified                             |  | 25                                           |  | 12-31-2012                                                            
|SIT S,A,                                      |  | TQQ5- Environental Divisions
    yard N°8                                          |  | Sustainability: Environment
    and Risk prevention           |  | Expense              |  | Not classified                             |  | 22                                           |  | 12-31-2012                                                            
|SQM Potasio S,A,                              |  | IQ4C - Camp Development (Osmosis
    and Others)                                   |  | Capacity Upgrade                                              |  | Asset                |  | Not classified                             |  | 1,987                                        |  | 12-31-2012                                                            
|SQM Nitratos S,A,                             |  | IQDN- Storage Rises –
    Maintenance of Mine NV                                   |  | Sustainability: Risk Prev,,
    and Environment               |  | Asset                |  | Not classified                             |  | 26                                           |  | 12-31-2012                                                            
|SQM Nitratos S,A,                             |  | PQI9 – Mine waste water
    treatment plant                                        |  | Sustainability: Environment
    and Risk prevention           |  | Asset                |  | Not classified                             |  | 47                                           |  | 12-31-2012                                                            
|SQM Nitratos S,A                              |  | IQMH-Operation Standardization
    NV mine                                         |  | Sustainability: Environment
    and Risk prevention           |  | Asset                |  | Not classified                             |  | 99                                           |  | 12-31-2012                                                            
|                                              |  |                                                                                    |  |                                                               |  |                      |  | Total                                      |  | 23,207                                       |  |                                                                       





F-132











| | Notes to the consolidated financial statements as of December
31 2012
| | ---------------------------------------------------------------------



Note 19 - Environment
(continued)



| | 19.2 | Detail of information on disbursements related to the environment, continued
| | ---- | ----------------------------------------------------------------------------



Future expenses as of December 31, 2012



|Identification of the Parentor subsidiary |  | Name of the project with which the disbursement isassociated                            |  | Concept for which thedisbursement was made orwill be made |  | Asset /Expense  |  | Description ofthe asset orexpense Item |  | Amount ofdisbursementfor the PeriodThUS$ |  | Actual or estimated dateon which disbursementswere or will be made
|----------------------------------------- |  | --------------------------------------------------------------------------------------- |  | --------------------------------------------------------- |  | --------------- |  | -------------------------------------- |  | ---------------------------------------- |  | ------------------------------------------------------------------
|SQM Industrial S,A,                       |  | Environment management  (Budget 2012 Available
    at IV Quarter 2012)                  |  | Not classified                                            |  | Expense         |  | Not classified                         |  | 2,027                                    |  | 12-31-2013                                                        
|SQM Industrial S,A,                       |  | MNYS - Measures of Technological Change Cultural Heritage
    Dissemination Maria Elena |  | Sustainability: Environment and Risk prevention           |  | Asset           |  | Not classified                         |  | 68                                       |  | 12-31-2013                                                        
|SQM Industrial S,A,                       |  | MP5W - TK's Fuel Standards                                                              |  | Sustainability                                            |  | Asset           |  | Not classified                         |  | 1,600                                    |  | 12-31-2013                                                        
|SQM Industrial S,A,                       |  | MPQU - Construction of Hazardous Chemical Supplies
    warehouse                        |  | Sustainability: Environment and Risk prevention           |  | Asset           |  | Development                            |  | 152                                      |  | 06-30-2013                                                        
|SQM Industrial S,A,                       |  | MQBM - Archaeological Digging Deployment Maria Elena
    - Toco                         |  | Sustainability: Environment and Risk prevention           |  | Asset - Expense |  | Not classified                         |  | 49                                       |  | 03-31-2013                                                        
|SQM Industrial S,A,                       |  | MQHF – Sustaining of batteries ME                                                       |  | Sustainability                                            |  | Asset - Expense |  | Not classified                         |  | 16                                       |  | 08-01-2013                                                        
|SQM Industrial S,A,                       |  | MQK2 – Elimination of PCBs I                                                            |  | Not classified                                            |  | Asset - Expense |  | Not classified                         |  | 554                                      |  | 03-31-2014                                                        
|SQM Industrial S,A,                       |  | PPC1 - Remove switches park OCB sub 3 and 1/12 Pedro de Valdivia                        |  | Sustainability: Replacement of equipment                  |  | Asset - Expense |  | Not classified                         |  | 44                                       |  | 12-31-2013                                                        
|SQM Industrial S,A,                       |  | PPZU - Standardize and certify Plant Fuel Tanks                                         |  | Sustainability: Environment and Risk prevention           |  | Asset - Expense |  | Not classified                         |  | 1,315                                    |  | 12-31-2013                                                        
|SQM Industrial S,A,                       |  | SQ7X - Reach 2011-2013                                                                  |  | Sustainability                                            |  | Expense         |  | Not classified                         |  | 20                                       |  | 01-31-2014                                                        
|SQM Industrial S,A,                       |  | TQA2 - Drainage Improvement Villa Prat                                                  |  | Not classified                                            |  | Asset - Expense |  | Not classified                         |  | 104                                      |  | 06-30-2013                                                        
|SQM Industrial S,A,                       |  | CQLX- Yard for Dangerous Residue -     S,
    Carmen y Lagarto                          |  | Sustainability: Risk Prevention and  Environment          |  | Asset - Expense |  | Not classified                         |  | 53                                       |  | 03-31-2013                                                        
|SQM Industrial S,A                        |  | JQL7- Engineering and Project for the reception of
    prilado and dried dust, KNO3     |  | Capacity Upgrade                                          |  | Expense         |  | Research                               |  | 200                                      |  | 08-01-2013                                                        



F-133









| | Notes to the consolidated financial statements as of December
31 2012
| | ---------------------------------------------------------------------



Note 19- Environment
(continued)



| | 19.2 | Detail of information on disbursements related to the environment, continued
| | ---- | ----------------------------------------------------------------------------



Future expenses as of December 31, 2012



|Identification of the Parentor subsidiary |  | Name of the project with which the disbursement isassociated                                                                 |  | Concept for which thedisbursement was made orwill be made |  | Asset /Expense |  | Description ofthe asset orexpense Item |  | Amount ofdisbursementfor the PeriodThUS$ |  | Actual or estimated date onwhich disbursements wereor will be made
|----------------------------------------- |  | ---------------------------------------------------------------------------------------------------------------------------- |  | --------------------------------------------------------- |  | -------------- |  | -------------------------------------- |  | ---------------------------------------- |  | ------------------------------------------------------------------
|SQM Industrial S,A,                       |  | FP55 - FPXA - EIA Expansion
(Projects: Pampa Blanca Saltwater - Saltwater Stage I)                                           |  | Sustainability                                            |  | Asset          |  | Development                            |  | 135                                      |  | 08-31-2013                                                        
|SQM Industrial S,A                        |  | JQB6 – NPTIV (DIA Planta NPT4, Coya Sur)                                                                                     |  | Ambient Procedure                                         |  | Asset          |  | Not classified                         |  | 5                                        |  | 11-30-2013                                                        
|SQM Industrial S,A                        |  | PQLV – New Area of Mine PV (DIA Pedro de Valdivia
    Mine)                                                                  |  | Ambient Procedure                                         |  | Asset          |  | Not classified                         |  | 243                                      |  | 09-30-2013                                                        
|SQM S,A,                                  |  | IPFT - Cultural Heritage Region I                                                                                            |  | Sustainability: Environment and Risk prevention           |  | Expense        |  | Not classified                         |  | 17                                       |  | 03-31-2013                                                        
|SQM S,A,                                  |  | IPXE - Environmental Monitoring Plan Llamara Salt
    flat                                                                   |  | Sustainability: Environment and Risk prevention           |  | Expense        |  | Not classified                         |  | 87                                       |  | 03-31-2013                                                        
|SQM S,A,                                  |  | IPXF - Environmental Monitoring Plan Tamarugal Pampa                                                                         |  | Sustainability: Environment and Risk prevention           |  | Expense        |  | Not classified                         |  | 168                                      |  | 06-30-2013                                                        
|SQM S,A,                                  |  | IQ1M - PSA Re-injection of water to Puquios Llamara                                                                          |  | Not classified                                            |  | Asset          |  | Not classified                         |  | 441                                      |  | 12-31-2013                                                        
|SQM S,A,                                  |  | IQ3S - Hazardous Materials Management Standardization                                                                        |  | Sustainability: Environment and Risk prevention           |  | Asset          |  | Not classified                         |  | 148                                      |  | 12-31-2013                                                        
|SQM S,A,                                  |  | IQ54 - Cultural heritage Pampa Hermosa                                                                                       |  | Sustainability: Environment and Risk prevention           |  | Asset          |  | Not classified                         |  | 219                                      |  | 12-31-2013                                                        
|SQM S,A,                                  |  | MQLQ – Fumes Washing System                                                                                                  |  | Sustainability: Risk Prevention and Environment           |  | Asset          |  | Development                            |  | 288                                      |  | 06-30-2013                                                        
|SQM S,A,                                  |  | IQOW- Equipping deposit of patrimony Humberstone                                                                             |  | Sustainability: Risk and Environment Prevention           |  | Expense        |  | Not classified                         |  | 38                                       |  | 03-31-2013                                                        
|SQM S,A,                                  |  | IQ6M/ IQ6N - DIA Expansion Nueva Victoria Sur Mine
    (Projects: Exploration NVS7 2011 and Exploration Nva, Victoria Oeste) |  | Sustainability: Natural Resources                         |  | Asset          |  | Not classified                         |  | 2                                        |  | 03-31-2013                                                        
|SQM Salar S,A                             |  | LQDM – Certification of tanks                                                                                                |  | Sustainability                                            |  | Expense        |  | Not classified                         |  | 600                                      |  | 12-31-2013                                                        
|SQM Salar S,A                             |  | LQI6 –EIA Update: operation in the Salar de
    Atacama                                                                      |  | Ambient Procedure                                         |  | Asset          |  | Not classified                         |  | 265                                      |  | 06-30-2013                                                        





F-134









| | Notes to the consolidated financial statements as of December
31 2012
| | ---------------------------------------------------------------------



Note 19 - Environment
(continued)



| | 19.2 | Detail of information on disbursements related to the environment, continued
| | ---- | ----------------------------------------------------------------------------



Future expenses as of December 31, 2012



|Identification of the Parentor subsidiary |  | Name of the project with which the disbursement isassociated                  |  | Concept for which thedisbursement was made orwill be made |  | Asset /Expense  |  | Description ofthe asset orexpense Item |  | Amount ofdisbursementfor the PeriodThUS$ |  | Actual or estimated date onwhich disbursements wereor will be made
|----------------------------------------- |  | ----------------------------------------------------------------------------- |  | --------------------------------------------------------- |  | --------------- |  | -------------------------------------- |  | ---------------------------------------- |  | ------------------------------------------------------------------
|SQM Salar S,A                             |  | LQNI-DIA Expansion of drying plant and compacted KCL
    facility             |  | Ambient Procedure                                         |  | Asset           |  | Not classified                         |  | 16                                       |  | 08-31-2013                                                        
|SQM Salar S,A                             |  | LQG8 – Waste room  Toconao Campsite                                           |  | Not classified                                            |  | Asset - Expense |  | Not classified                         |  | 16                                       |  | 03-31-2013                                                        
|SIT S,A,                                  |  | TPYX - Enabling the dust collector of the crib and
    court seal 3 Tocopilla |  | Sustainability: Environment and Risk prevention           |  | Asset           |  | Development                            |  | 40                                       |  | 12-31-2013                                                        
|SIT S,A,                                  |  | TQAV - Paving paths IV                                                        |  | Sustainability: Environment and Risk prevention           |  | Expense         |  | Development                            |  | 162                                      |  | 12-31-2013                                                        
|SIT S,A,                                  |  | TQQ5- Environental Divisions yard N°8                                         |  | Sustainability: Environment and Risk prevention           |  | Expense         |  | Not classified                         |  | 30                                       |  | 04-27-2013                                                        
|SQM Nitratos S,A                          |  | IQMH-Normalización
        Operaciones área mina NV                           |  | Sustainability: Environment and Risk prevention           |  | Asset           |  | Not classified                         |  | 157                                      |  | 03-31-2013                                                        
|                                          |  |                                                                               |  |                                                           |  |                 |  | Total                                  |  | 9,279                                    |  |                                                                   



F-135









| | Notes to the consolidated financial statements as of December
31 2012
| | ---------------------------------------------------------------------



Note 19 - Environment
(continued)



| | 19.2 | Detail of information on disbursements related to the environment, continued
| | ---- | ----------------------------------------------------------------------------



Accumulated expenses, as of December 31, 2011



|Identification of the Parent orsubsidiary |  | Name of the project with which the disbursement isassociated                                                    |  | Concept for which thedisbursement was made orwill be made |  | Asset /Expense |  | Description of theasset or expenseItem |  | Amount ofdisbursement forthe Period ThUS$ |  | Certain or estimated dateon which disbursementswere or will be made
|----------------------------------------- |  | --------------------------------------------------------------------------------------------------------------- |  | --------------------------------------------------------- |  | -------------- |  | -------------------------------------- |  | ----------------------------------------- |  | -------------------------------------------------------------------
|SQM Industrial S,A,                       |  | Environment Management (2010 Expense)                                                                           |  | Not classified                                            |  | Expense        |  | Not classified                         |  | 1,868                                     |  | 12-31-2011                                                         
|SQM Industrial S,A,                       |  | SQ7X - Reach 2011-2013                                                                                          |  | Sustainability                                            |  | Expense        |  | Not classified                         |  | 59                                        |  | 01-31-2014                                                         
|SQM Industrial S,A,                       |  | ANMI -  Infrastructure consulting for the
    storage of dangerous chemical substances                          |  | Sustainability: Environment and Risk prevention           |  | Asset          |  | Development                            |  | 46                                        |  | 06-30-2011                                                         
|SQM Industrial S,A,                       |  | FNWR EID Discard field Pampa Blanca                                                                             |  | Sustainability: Environment and Risk prevention           |  | Expense        |  | Development                            |  | 30                                        |  | 12-31-2011                                                         
|SQM Industrial S,A,                       |  | FP55 - FPXA - Mine Area EIS PB - PB Expansion EIS (Projects: Pampa
    Blanca Saltwater - Saltwater Stage I)    |  | Sustainability                                            |  | Asset          |  | Development                            |  | 945                                       |  | 12-31-2012                                                         
|SQM Industrial S,A,                       |  | JNTU - Assessment of waters at San Isidro                                                                       |  | Sustainability: Environment and Risk prevention           |  | Asset          |  | Not classified                         |  | 556                                       |  | 12-31-2011                                                         
|SQM Industrial S,A,                       |  | JPX9 - Enhanced Ground Granulated EID-Prilado Coya
    Sur (Project: Pilot Plant TD and Pilot Testing of Resin) |  | Sustainability: Research and Development                  |  | Asset          |  | Research                               |  | 11                                        |  | 06-30-2011                                                         
|SQM Industrial S,A,                       |  | MNYS - Measures of Technological Change Cultural Heritage
    Dissemination Maria Elena                         |  | Sustainability: Environment and Risk prevention           |  | Asset          |  | Not classified                         |  | 29                                        |  | 12-01-2011                                                         
|SQM Industrial S,A,                       |  | MP17 - Standardization Water Chlorination ME / CS
    / PV                                                      |  | Sustainability                                            |  | Asset          |  | Not classified                         |  | 7                                         |  | 06-30-2011                                                         
|SQM Industrial S,A,                       |  | MP5W - TK's Fuel Standards                                                                                      |  | Sustainability                                            |  | Asset          |  | Not classified                         |  | 613                                       |  | 12-31-2011                                                         
|SQM Industrial S,A,                       |  | MPIS - Stabilization of streets and sidewalks dust
    suppression                                              |  | Sustainability                                            |  | Asset          |  | Development                            |  | 736                                       |  | 06-30-2011                                                         
|SQM Industrial S,A,                       |  | MPL5 - Repair sanitary and electrical services                                                                  |  | Sustainability                                            |  | Asset          |  | Development                            |  | 184                                       |  | 06-30-2011                                                         
|SQM Industrial S,A,                       |  | MPLS - Automation and Alarm Monitoring Station Hospital
    information                                         |  | Not classified                                            |  | Asset          |  | Not classified                         |  | 10                                        |  | 06-30-2011                                                         





F-136







| | Notes to the consolidated financial statements as of December
31 2012
| | ---------------------------------------------------------------------





Note 19 - Environment
(continued)



| | 19.2 | Detail of information on disbursements related to the environment, continued
| | ---- | ----------------------------------------------------------------------------



Accumulated expenses, as of December 31, 2011, continued



|Identification of the Parent orsubsidiary |  | Name of the project with which the disbursement isassociated                     |  | Concept for which thedisbursement was made orwill be made |  | Asset /Expense  |  | Description of theasset or expenseItem |  | Amount ofdisbursement forthe Period ThUS$ |  | Certain or estimated dateon which disbursementswere or will be made
|----------------------------------------- |  | -------------------------------------------------------------------------------- |  | --------------------------------------------------------- |  | --------------- |  | -------------------------------------- |  | ----------------------------------------- |  | -------------------------------------------------------------------
|SQM Industrial S,A,                       |  | MQ51 -Terms
    of Reference Project ME equity measures                          |  | Sustainability: Environment and Risk prevention           |  | Expense         |  | Not classified                         |  | 2                                         |  | 12-31-2011                                                         
|SQM Industrial S,A,                       |  | PPNK - Management of Ammonia PV stoppage plant                                   |  | Sustainability: Environment and Risk prevention           |  | Asset           |  | Not classified                         |  | 22                                        |  | 12-31-2011                                                         
|SQM Industrial S,A,                       |  | PPZU - Standardize and certify Plant Fuel Tanks                                  |  | Sustainability: Environment and Risk prevention           |  | Asset - Expense |  | Not classified                         |  | 785                                       |  | 12-01-2011                                                         
|SQM Industrial S,A,                       |  | JQ8K – DIA Line 4  Floor Drying ,
    Coya Sur (Project: Drying Line 4)          |  | Capacity Upgrade                                          |  | Asset           |  | Development                            |  | 17                                        |  | 09-01-2012                                                         
|SQM Industrial S,A,                       |  | IQ8G – Improvement of Bureau of Exchange, offices
    and facilities             |  | Sustainability                                            |  | Asset           |  | Not classified                         |  | 45                                        |  | 12-31-2011                                                         
|SQM Industrial S,A,                       |  | MQ7P - ME Village sewer lids change                                              |  | Sustainability                                            |  | Expense         |  | Not classified                         |  | 19                                        |  | 12-31-2011                                                         
|SQM Industrial S,A,                       |  | JQB6 - EID Ground NPT4, Coya Sur (Project: NPTIV)                                |  | Capacity Upgrade                                          |  | Asset           |  | Development                            |  | 5                                         |  | 04-30-2012                                                         
|SQM Industrial S,A,                       |  | TQ78 - motorized sweepers                                                        |  | Sustainability: Replacement of equipment                  |  | Asset           |  | Development                            |  | 206                                       |  | 12-31-2011                                                         
|Minera Nueva Victoria Ltda,               |  | IPMN - Capacity Expansion Sanitary Iris                                          |  | Capacity upgrade                                          |  | Asset           |  | Development                            |  | 85                                        |  | 06-30-2011                                                         
|SQM Industrial S,A,                       |  | MPQU - Construction of Hazardous Chemical Supplies
    warehouse                 |  | Sustainability: Environment and Risk prevention           |  | Asset           |  | Development                            |  | 199                                       |  | 12-31-2011                                                         
|SQM Industrial S,A,                       |  | PPC1 - Remove switches park OCB sub 3 and 1/12 Pedro de Valdivia                 |  | Sustainability: Replacement of equipment                  |  | Asset – Expense |  | Not classified                         |  | 68                                        |  | 12-31-2012                                                         
|SQM Industrial S,A,                       |  | MQ8M - Reconditioning monitoring station ME                                      |  | Sustainability: Renovation                                |  | Asset           |  | Not classified                         |  | 7                                         |  | 12-31-2011                                                         
|SQM Industrial S,A,                       |  | MQAJ - Improvements to Camp Water and Sewage (P Contesse
    commitment to DDSS) |  | Not classified                                            |  | Asset           |  | Not classified                         |  | 3                                         |  | 12-31-2011                                                         



F-137









| | Notes to the consolidated financial statements as of December
31 2012
| | ---------------------------------------------------------------------



Note 19 - Environment
(continued)



| | 19.2 | Detail of information on disbursements related to the environment, continued
| | ---- | ----------------------------------------------------------------------------



Accumulated expenses, as of December 31, 2011, continued



|Identification of the Parent orsubsidiary |  | Name of the project with which the disbursement isassociated                  |  | Concept for which thedisbursement was made orwill be made |  | Asset /Expense  |  | Description of theasset or expenseItem |  | Amount ofdisbursement forthe Period ThUS$ |  | Certain or estimated dateon which disbursementswere or will be made
|----------------------------------------- |  | ----------------------------------------------------------------------------- |  | --------------------------------------------------------- |  | --------------- |  | -------------------------------------- |  | ----------------------------------------- |  | -------------------------------------------------------------------
|Minera Nueva Victoria Ltda,               |  | IPNW - Improvements Halls C / D / B Iris                                      |  | Sustainability                                            |  | Asset           |  | Not classified                         |  | 44                                        |  | 08-31-2011                                                         
|Minera Nueva Victoria Ltda,               |  | IQ4C - Development Camp (Osmosis and Others)                                  |  | Capacity Upgrade                                          |  | Asset           |  | Not classified                         |  | 1,630                                     |  | 12-31-2012                                                         
|SIT S,A,                                  |  | TPLR - Implementation sewage pumping system to sewer                          |  | Sustainability: Environment and Risk prevention           |  | Asset           |  | Not classified                         |  | 68                                        |  | 06-30-2011                                                         
|SIT S,A,                                  |  | TPM7 – Environmental nets field 3 and 4                                       |  | Not classified                                            |  | Asset - Expense |  | Not classified                         |  | 524                                       |  | 06-30-2011                                                         
|SIT S,A,                                  |  | TPR8 - Disposal of liquid waste generation by aspiration                      |  | Sustainability: Environment and Risk prevention           |  | Asset - Expense |  | Not classified                         |  | 64                                        |  | 12-31-2011                                                         
|SIT S,A,                                  |  | TPYX - Enabling the dust collector of the crib and
    court seal 3 Tocopilla |  | Sustainability: Environment and Risk prevention           |  | Asset           |  | Development                            |  | 1,496                                     |  | 12-31-2011                                                         
|SIT S,A,                                  |  | TQAV - Paving paths IV                                                        |  | Sustainability: Environment and Risk prevention           |  | Expense         |  | Development                            |  | 3                                         |  | 12-01-2011                                                         
|SIT S,A,                                  |  | TQAP - Paving Field No, 3 and No, 4                                           |  | Capacity Upgrade                                          |  | Expense         |  | Not classified                         |  | 4                                         |  | 10-30-2012                                                         
|SQM Nitratos S,A                          |  | IP6W - Treatment Plant Riles                                                  |  | Sustainability: Environment and Risk prevention           |  | Asset           |  | Not classified                         |  | 39                                        |  | 06-30-2011                                                         
|SQM Nitratos S,A                          |  | PP0V - Environmental Medium Maintenance Projects ME-PV-NV-PB                  |  | Sustainability: Environment and Risk prevention           |  | Asset – Expense |  | Development                            |  | 82                                        |  | 06-30-2011                                                         
|SQM S,A,                                  |  | AQ0A - Well Drilling 4 Uptake Change Point Tamarugal
    Pampa                |  | Sustainability: Natural Resources                         |  | Asset           |  | Development                            |  | 534                                       |  | 12-31-2011                                                         
|SQM S,A,                                  |  | IPFT - Cultural Heritage Region I                                             |  | Sustainability: Environment and Risk prevention           |  | Expense         |  | Not classified                         |  | 127                                       |  | 12-31-2011                                                         
|SQM S,A,                                  |  | IPXE - Environmental Monitoring Plan Llamara Salt
    flat                    |  | Sustainability: Environment and Risk prevention           |  | Expense         |  | Not classified                         |  | 465                                       |  | 12-31-2012                                                         



F-138









| | Notes to the consolidated financial statements as of December
31 2012
| | ---------------------------------------------------------------------



Note 19 - Environment
(continued)



| | 19.2 | Detail of information on disbursements related to the environment, continued
| | ---- | ----------------------------------------------------------------------------



Accumulated expenses, as of December 31, 2011, continued



|Identification of the Parent orsubsidiary |  | Name of the project with which the disbursement isassociated         |  | Concept for which thedisbursement was made orwill be made |  | Asset /Expense |  | Description of theasset or expenseItem |  | Amount ofdisbursement forthe Period ThUS$ |  | Certain or estimated dateon which disbursementswere or will be made
|----------------------------------------- |  | -------------------------------------------------------------------- |  | --------------------------------------------------------- |  | -------------- |  | -------------------------------------- |  | ----------------------------------------- |  | -------------------------------------------------------------------
|SQM S,A,                                  |  | IPXF - Environmental Monitoring Plan Tamarugal Pampa                 |  | Sustainability: Environment and Risk prevention           |  | Expense        |  | Not classified                         |  | 230                                       |  | 12-31-2012                                                         
|SQM S,A,                                  |  | IQ08 - PSA Llamara & Pampa Tamarugal                                 |  | Sustainability: Natural Resources                         |  | Expense        |  | Development                            |  | 1,740                                     |  | 12-31-2011                                                         
|SQM S,A,                                  |  | IQ0C - Mine Area Enhancement NV                                      |  | Sustainability: Environment and Risk prevention           |  | Expense        |  | Not classified                         |  | 65                                        |  | 12-31-2011                                                         
|SQM S,A,                                  |  | IQ1K - Construction of 3 observation wells in Sur
    Viejo          |  | Sustainability: Natural Resources                         |  | Asset          |  | Development                            |  | 195                                       |  | 12-31-2011                                                         
|SQM S,A,                                  |  | IQ1M - PSA Re-injection of water to Puquios Llamara                  |  | Not classified                                            |  | Asset          |  | Not classified                         |  | 962                                       |  | 12-31-2011                                                         
|SQM S,A,                                  |  | IQ3S - Hazardous Materials Management Standardization                |  | Sustainability: Environment and Risk prevention           |  | Asset          |  | Not classified                         |  | 100                                       |  | 12-31-2012                                                         
|SQM S,A,                                  |  | IQ52 - New Victoria Environment Office                               |  | Not classified                                            |  | Asset          |  | Not classified                         |  | 29                                        |  | 12-31-2011                                                         
|SQM S,A,                                  |  | IQ53 - Cultural heritage route Soronal adduction (Pampa
    Hermosa) |  | Sustainability: Environment and Risk prevention           |  | Asset          |  | Not classified                         |  | 9                                         |  | 12-31-2011                                                         
|SQM S,A,                                  |  | IQ54 - Cultural heritage Pampa Hermosa                               |  | Sustainability: Environment and Risk prevention           |  | Asset          |  | Not classified                         |  | 188                                       |  | 12-31-2012                                                         
|SQM S,A,                                  |  | SCI6 - Environmental Studies - Project Region I                      |  | Not classified                                            |  | Asset          |  | Not classified                         |  | 2,376                                     |  | 12-31-2011                                                         
|SQM S,A,                                  |  | IQ6M - DIA Expansion Nueva Victoria Sur Mine                         |  | Sustainability: Natural Resources                         |  | Asset          |  | Not classified                         |  | 262                                       |  | 01-31-2011                                                         
|SQM S,A,                                  |  | IQ9V – Quillagua Project                                             |  | Not classified                                            |  | Asset          |  | Not classified                         |  | 323                                       |  | 12-31-2014                                                         
|SQM Salar S,A                             |  | CPTP - Installing emergency showers drinking water                   |  | Sustainability                                            |  | Asset          |  | Not classified                         |  | 26                                        |  | 12-31-2011                                                         





F-139









| | Notes to the consolidated financial statements as of December
31 2012
| | ---------------------------------------------------------------------



Note 19 - Environment
(continued)



| | 19.2 | Detail of information on disbursements related to the environment, continued
| | ---- | ----------------------------------------------------------------------------



Accumulated expenses, as of December 31, 2011, continued



|Identification of the Parent orsubsidiary |  | Name of the project with which the disbursement isassociated                                     |  | Concept for which thedisbursement was made orwill be made |  | Asset /Expense  |  | Description of theasset or expenseItem |  | Amount ofdisbursement forthe Period ThUS$ |  | Certain or estimated dateon which disbursementswere or will be made
|----------------------------------------- |  | ------------------------------------------------------------------------------------------------ |  | --------------------------------------------------------- |  | --------------- |  | -------------------------------------- |  | ----------------------------------------- |  | -------------------------------------------------------------------
|SQM Salar S,A                             |  | CPZH - Management of Descartes Filter Presses Hydroxide                                          |  | Sustainability: Environment and Risk prevention           |  | Expense         |  | Not classified                         |  | 39                                        |  | 12-31-2011                                                         
|SQM Salar S,A                             |  | LP5J - Water Recharge Study Atacama Salt flat                                                    |  | Sustainability: Environment and Risk prevention           |  | Expense         |  | Research                               |  | 105                                       |  | 12-31-2011                                                         
|SQM Salar S,A                             |  | LP82 - Project for the Promotion of Agricultural Activity
    in Communities of the Salt deposit |  | Sustainability                                            |  | Expense         |  | Development                            |  | 761                                       |  | 12-31-2014                                                         
|SQM Salar S,A                             |  | LPTF – Environmental study and exploration 2010                                                  |  | Sustainability                                            |  | Expense         |  | Not classified                         |  | 370                                       |  | 12-31-2011                                                         
|SQM Salar S,A                             |  | LPTJ - Improvements Sanitary Works                                                               |  | Sustainability                                            |  | Asset           |  | Not classified                         |  | 206                                       |  | 12-31-2011                                                         
|SQM Salar S,A                             |  | LQ38 - Field Drying Sludge                                                                       |  | Sustainability: Environment and Risk prevention           |  | Asset - Expense |  | Not classified                         |  | 26                                        |  | 12-31-2011                                                         
|SQM Salar S,A                             |  | CQ8U - New Changing Room CL - HL                                                                 |  | Capacity Upgrade                                          |  | Asset           |  | Not classified                         |  | 238                                       |  | 12-31-2011                                                         
|SQM Salar S,A                             |  | LQAK - garbage rooms MOP and  SOP                                                                |  | Sustainability                                            |  | Expense         |  | Not classified                         |  | 25                                        |  | 12-31-2011                                                         
|                                          |  |                                                                                                  |  |                                                           |  |                 |  | Total                                  |  | 19,912                                    |  |                                                                    



F-140









| | Notes to the consolidated financial statements as of December
31 2012
| | ---------------------------------------------------------------------



Note 19 - Environment
(continued)



| | 19.2 | Detail of information on disbursements related to the environment, continued
| | ---- | ----------------------------------------------------------------------------



Future Expenses, as of December 31, 2011:



|Identification of the Parent orsubsidiary |  | Name of the project with which the disbursement isassociated                                                 |  | Concept for which thedisbursement was made orwill be made |  | Asset /Expense  |  | Description of theasset or expenseItem |  | Amount ofdisbursement forthe Period ThUS$ |  | Certain or estimated dateon which disbursementswere or will be made
|----------------------------------------- |  | ------------------------------------------------------------------------------------------------------------ |  | --------------------------------------------------------- |  | --------------- |  | -------------------------------------- |  | ----------------------------------------- |  | -------------------------------------------------------------------
|SQM Industrial S,A,                       |  | Environment management (Budget 2011- Expense to March
    2011)                                              |  | Not classified                                            |  | Expense         |  | Not classified                         |  | 2,243                                     |  | 12-31-2011                                                         
|SQM Industrial S,A,                       |  | SQ7X - Reach 2011-2013                                                                                       |  | Sustainability                                            |  | Expense         |  | Not classified                         |  | 551                                       |  | 01-31-2014                                                         
|SQM Industrial S,A,                       |  | FP55 - FPXA - Mine Area EIS PB - PB Expansion EIS (Projects: Pampa
    Blanca Saltwater - Saltwater Stage I) |  | Sustainability                                            |  | Asset           |  | Development                            |  | 800                                       |  | 12-31-2012                                                         
|SQM Industrial S,A,                       |  | MNYS - Measures of Technological Change Cultural Heritage
    Dissemination Maria Elena                      |  | Sustainability: Environment and Risk prevention           |  | Asset           |  | Not classified                         |  | 107                                       |  | 12-01-2011                                                         
|SQM Industrial S,A,                       |  | MP5W - TK's Fuel Standards                                                                                   |  | Sustainability                                            |  | Asset           |  | Not classified                         |  | 487                                       |  | 12-31-2011                                                         
|SQM Industrial S,A,                       |  | MPQU - Construction of Hazardous Chemical Supplies
    warehouse                                             |  | Sustainability: Environment and Risk prevention           |  | Asset           |  | Development                            |  | 264                                       |  | 12-31-2011                                                         
|SQM Industrial S,A,                       |  | PPC1 - Remove switches park OCB sub 3 and 1/12 Pedro de Valdivia                                             |  | Sustainability: Replacement of equipment                  |  | Asset - Expense |  | Not classified                         |  | 122                                       |  | 12-31-2012                                                         
|SQM Industrial S,A,                       |  | PPNK - Management of Ammonia PV stoppage plant                                                               |  | Sustainability: Environment and Risk prevention           |  | Asset           |  | Not classified                         |  | 178                                       |  | 12-31-2011                                                         
|SQM Industrial S,A,                       |  | PPZU - Standardize and certify Plant Fuel Tanks                                                              |  | Sustainability: Environment and Risk prevention           |  | Asset - Expense |  | Not classified                         |  | 2,715                                     |  | 12-01-2011                                                         
|SQM Industrial S,A,                       |  | JQ8K – DIA Line 4  Floor Drying ,
    Coya Sur (Project: Drying Line 4)                                      |  | Capacity Upgrade                                          |  | Asset           |  | Development                            |  | 13                                        |  | 09-01-2012                                                         
|SQM Industrial S,A,                       |  | IQ8G – Improvement of Bureau of Exchange, offices
    and facilities                                         |  | Sustainability                                            |  | Asset           |  | Not classified                         |  | 30                                        |  | 12-31-2011                                                         
|SQM Industrial S,A,                       |  | JQB6 - EID Ground NPT4, Coya Sur (Project: NPTIV)                                                            |  | Capacity Upgrade                                          |  | Asset           |  | Development                            |  | 50                                        |  | 04-30-2012                                                         
|SQM Industrial S,A,                       |  | TQA2 - Drainage Improvement Villa Prat                                                                       |  | Not classified                                            |  | Asset           |  | Not classified                         |  | 170                                       |  | 12-30-2011                                                         



F-141









| | Notes to the consolidated financial statements as of December
31 2012
| | ---------------------------------------------------------------------



Note 19 - Environment
(continued)



| | 19.2 | Detail of information on disbursements related to the environment, continued
| | ---- | ----------------------------------------------------------------------------



Future Expenses, as of December 31, 2011 (continued):



|Identification of the Parent orsubsidiary |  | Name of the project with which the disbursement isassociated                     |  | Concept for which thedisbursement was made orwill be made |  | Asset /Expense  |  | Description of theasset or expenseItem |  | Amount ofdisbursement forthe Period ThUS$ |  | Certain or estimated dateon which disbursementswere or will be made
|----------------------------------------- |  | -------------------------------------------------------------------------------- |  | --------------------------------------------------------- |  | --------------- |  | -------------------------------------- |  | ----------------------------------------- |  | -------------------------------------------------------------------
|SQM Industrial S,A,                       |  | MQAJ - Improvements to Camp Water and Sewage (P Contesse
    commitment to DDSS) |  | Not classified                                            |  | Asset           |  | Not classified                         |  | 297                                       |  | 12-31-2011                                                         
|SQM Industrial S,A,                       |  | MQA8 - Normalization gas system, external cafeterias
    (Stage 1: projects)     |  | Not classified                                            |  | Asset           |  | Not classified                         |  | 150                                       |  | 12-30-2011                                                         
|SQM Industrial S,A,                       |  | MQBM - Archaeological Digging Deployment Maria Elena
    - Toco                  |  | Sustainability: Environment and Risk prevention           |  | Expense         |  | Not classified                         |  | 56                                        |  | 12-31-2011                                                         
|Minera Nueva Victoria Ltda,               |  | IQ4C - Camp Development (Osmosis and Others)                                     |  | Capacity Upgrade                                          |  | Asset           |  | Not classified                         |  | 1,370                                     |  | 12-31-2012                                                         
|SIT S,A,                                  |  | TPR8 - Disposal of liquid waste generation by aspiration                         |  | Sustainability: Environment and Risk prevention           |  | Asset - Expense |  | Not classified                         |  | 86                                        |  | 12-31-2011                                                         
|SIT S,A,                                  |  | TPYX - Enabling the dust collector of the crib and
    court seal 3 Tocopilla    |  | Sustainability: Environment and Risk prevention           |  | Asset           |  | Development                            |  | 204                                       |  | 12-31-2011                                                         
|SIT S,A,                                  |  | MQ6Y - Maintenance and repair and bureau of exchange
    Tocopilla ME            |  | Sustainability: Environment and Risk prevention           |  | Asset           |  | Not classified                         |  | 20                                        |  | 12-30-2011                                                         
|SIT S,A,                                  |  | TQAV - Paving paths IV                                                           |  | Sustainability: Environment and Risk prevention           |  | Expense         |  | Development                            |  | 297                                       |  | 12-01-2011                                                         
|SQM Nitratos S,A                          |  | IQDN - Storage Rises – Maintenance of Mine NV                                    |  | Sustainability: Environment and Risk prevention           |  | Asset           |  | Not classified                         |  | 40                                        |  | 07-30-2012                                                         
|SQM S,A,                                  |  | IPFT - Cultural Heritage Region I                                                |  | Sustainability: Environment and Risk prevention           |  | Expense         |  | Not classified                         |  | 96                                        |  | 12-31-2011                                                         
|SQM S,A,                                  |  | IPXE - Environmental Monitoring Plan Llamara Salt
    flat                       |  | Sustainability: Environment and Risk prevention           |  | Expense         |  | Not classified                         |  | 1,276                                     |  | 12-31-2012                                                         
|SQM S,A,                                  |  | IPXF - Environmental Monitoring Plan Tamarugal Pampa                             |  | Sustainability: Environment and Risk prevention           |  | Expense         |  | Not classified                         |  | 1,836                                     |  | 12-31-2012                                                         
|SQM S,A,                                  |  | IQ08 - PSA Llamara & Pampa Tamarugal                                             |  | Sustainability: Natural Resources                         |  | Expense         |  | Development                            |  | 27                                        |  | 12-31-2011                                                         



F-142









| | Notes to the consolidated financial statements as of December
31 2012
| | ---------------------------------------------------------------------



Note 19- Environment
(continued)



| | 19.2 | Detail of information on disbursements related to the environment, continued
| | ---- | ----------------------------------------------------------------------------



Future Expenses, as of December 31, 2011 (continued):



|Identification of the Parent orsubsidiary |  | Name of the project with which the disbursement isassociated                                     |  | Concept for which thedisbursement was made orwill be made |  | Asset /Expense  |  | Description of theasset or expenseItem |  | Amount ofdisbursement forthe Period ThUS$ |  | Certain or estimated dateon which disbursementswere or will be made
|----------------------------------------- |  | ------------------------------------------------------------------------------------------------ |  | --------------------------------------------------------- |  | --------------- |  | -------------------------------------- |  | ----------------------------------------- |  | -------------------------------------------------------------------
|SQM S,A,                                  |  | IQ0C - Mine Area Enhancement NV                                                                  |  | Sustainability: Environment and Risk prevention           |  | Expense         |  | Not classified                         |  | 11                                        |  | 12-31-2011                                                         
|SQM S,A,                                  |  | IQ1K - Construction of 3 observation wells in Sur
    Viejo                                      |  | Sustainability: Natural Resources                         |  | Asset           |  | Development                            |  | 2                                         |  | 12-31-2011                                                         
|SQM S,A,                                  |  | IQ1M - PSA Re-injection of water to Puquios Llamara                                              |  | Not classified                                            |  | Asset           |  | Not classified                         |  | 783                                       |  | 12-31-2011                                                         
|SQM S,A,                                  |  | IQ3S - Hazardous Materials Management Standardization                                            |  | Sustainability: Environment and Risk prevention           |  | Asset           |  | Not classified                         |  | 300                                       |  | 12-31-2012                                                         
|SQM S,A,                                  |  | IQ52 - New Victoria Environment Office                                                           |  | Not classified                                            |  | Asset           |  | Not classified                         |  | 1                                         |  | 12-31-2011                                                         
|SQM S,A,                                  |  | IQ53 - Cultural heritage route Soronal adduction (Pampa
    Hermosa)                             |  | Sustainability: Environment and Risk prevention           |  | Asset           |  | Not classified                         |  | 15                                        |  | 12-31-2011                                                         
|SQM S,A,                                  |  | IQ54 - Cultural heritage Pampa Hermosa                                                           |  | Sustainability: Environment and Risk prevention           |  | Asset           |  | Not classified                         |  | 764                                       |  | 12-31-2012                                                         
|SQM S,A,                                  |  | IQ9V – Quillagua Project                                                                         |  | Not classified                                            |  | Asset – Expense |  | Not classified                         |  | 849                                       |  | 12-31-2014                                                         
|SQM S,A,                                  |  | PQB9 - Change of exhaust SO2 gas                                                                 |  | Sustainability                                            |  | Asset           |  | Not classified                         |  | 178                                       |  | 12-01-2011                                                         
|SQM Salar S,A                             |  | CQ4M – Regularization of Contractor facilities                                                   |  | Sustainability: Environment and Risk prevention           |  | Asset           |  | Not classified                         |  | 26                                        |  | 12-31-2012                                                         
|SQM Salar S,A                             |  | LP82 - Project for the Promotion of Agricultural Activity
    in Communities of the Salt deposit |  | Sustainability                                            |  | Expense         |  | Development                            |  | 822                                       |  | 12-31-2014                                                         
|SQM Salar S,A                             |  | CQ8U - New Changing Room CL - HL                                                                 |  | Capacity Upgrade                                          |  | Asset           |  | Not classified                         |  | 102                                       |  | 12-31-2011                                                         
|                                          |  |                                                                                                  |  |                                                           |  |                 |  | Total                                  |  | 17,338                                    |  |                                                                    





F-143









| | Notes to the consolidated financial statements as of December
31 2012
| | ---------------------------------------------------------------------



Note 19 - Environment
(continued)



| | 19.3 | Description of each project, indicating whether they are in process or have been completed
| | ---- | ------------------------------------------------------------------------------------------



SQM Industrial S.A.



IQ8G:Improvement of restrooms,
expanding their capacity, and improving water storage. The project is in process.

JQEZ:Purchasing and installing
Bertrams Boilers in Coya Sur Prill in order to improve the level of combustion, and decreasing and controlling the emission of
fumes into the environment. The project is in process.



JQH9:Purchasing Bertram’s
boilers in order to improve the combustion levels, decreasing and controlling the emission of fumes to the environment. The project
is in process.



MNYS:Preparation and execution
of geoglyphs conservation; editing and publishing a related book, implementing a learning center, and construction of a collection
deposit. These are compensation measures of the Technological Change Maria Elena project. The project is in process.

MP5W: Normalization of fuel storage
and distribution system in SQM installations. The project is in process.

MPQU:Construction of warehouses
for dangerous chemicals in order to comply with current regulations and decrease the chance of high risk accidents.

MQ8M:Performing maintenance to
structures and closing monitoring stations in Maria Elena. The project is in process.

MQA8:Standardization of the gas
network in peripheral casinos;stage 1: projects include: CS, Lagarto, Yodo, PV, Toco and Rancho 6. The project is in process.



MQAJ: Improving the water and sewer
network in Maria Elena to improve operations. The project is in process.

MQBM: Implementing archeological
measures in Maria Elena – Toco site, such as the archeological registry, analysis of lithic materials, and generating reports,
among others. The project is in process.



MQHF: To equip a sewage plant in
Toco according to DS 594, including a changing room for operators and contractors, among other improvements. The project is in
process.

MQK2: Decontaminating equipment
and other items contaminated with PCBs in accordance with applicable regulations. The project is in process.

PPC1:Purchasing and replacing equipment
contaminated with PCB and obsolete equipment without spare parts. The project is in process.



Note 19 - Environment (continued)



PPNK:Control of the ammonia gas
in the crystal plant stoppage. The project is in process.

PPZU:Normalize and certify fuel
tanks in the María Elena, Coya Sur and Pedro de Valdivia plants. The project is in process.

SQ7X: Obtaining and recording information
of components and finished products of SQM in the ECHA database to comply with the requirements of REACH regulation of the European
Union. The project is in process.

TQA2:Improving the Villa Prat sewage
system. The project is in process.



CQLX:Construction in each place
a field of approximately 145 m2. The project is in process.



JQL7:Improve product recovery and
to control emissions. The Project is in process.



F-144









| | Notes to the consolidated financial statements as of December
31 2012
| | ---------------------------------------------------------------------



JQ8K:Building a new drying plant
in Coya Sur. The project is in process.

FP55 – FPXA:These 2 projects
have a final objective consisting in the installation of a sea water sucking system of 87 km from the Mejillones area to the SQM
facilities located in Pampa Blanca. The projected expenses correspond only to the filing of the EIA of the PB mine zone and the
EIA of the PB expansion. Both projects are in process.



JQB6:Preparation and filing of
the EID of projectNPT4 of Coya Sur, which increases the salt production capacity. The project is in process.

PQLV: Elaboration of the DIA Pedro
de Valdivia Mine. The project is in process.

SQM S.A.



AQ0A:To enable the use of water
rights granted in several wells in theConaf Pampa del Tamarugal reservation and to move them outside of the Tamarugo Forest
and the reservation to reduce the environmental impact of its development. The project is in process.

IPFT: Implementing measures committed
in various projects related to the Nueva Victoria mine, and updating Nueva Victoria’s operations, including evaporation ponds
in the Iris. The project is in process.

IPXE:To implement the environment
follow-up plan of Project Pampa Hermosa in Salar de Llamara. The project is in process.

IPXF:To implement the environment
follow-up of plan of Project Pampa Hermosa in Pampa del Tamarugal. The project is in process.

IQ08:Various projects associated
with water reservoirs in Pampa del Tamarugal and Salar de Llamara, including constructing and enabling observation and monitoring
wells, pumping tests, and construction of roads over the hard sand terrain of the Salar crust. The project is in process.



F-145









| | Notes to the consolidated financial statements as of December
31 2012
| | ---------------------------------------------------------------------



Note 19 - Environment (continued)



IQ0C:Improving the area adjacent
to Route 5, enabling the development of a self-guided tour of the Cantón de Lagunas area to understand the Salar’s
history. The project has been completed.

IQ1K:Construction of the observation
wells in Sur Viejo to comply with the environmental commitments proposed in the EIS of Pampa Hermosa and to be able to monitor
the water reservoir adjacent to these wells. The project has been completed.

IQ1M: To implement various environmental
commitments included in the EIS project “Pampa Hermosa” to safeguard the puquíos zone that is in the Salar de
Llamara water reservoir. The project is in process.

IQ3S:Improving the storage installations
of dangerous raw materials in Nueva Victoria. The project is in process.

IQ52:Enabling and expansion of
environment offices in Nueva Victoria. The project is in process.

IQ53:To perform a survey for the
new location of the Soronal abduction trace in Project Pampa Hermosa (RCA N° 890/2010). The project is in process.

IQ54:Implementing various environmental
commitments acquired through the environment assessment of the project Pampa Hermosa (RCA N°890/2010). The project is in process.

IQ9V:To support the development
of agriculture and tourism industries in the location of Quillagua, through productive measures, technical assistance and marketing.
The project is in process.

PQB9: Installing two larger SO2
extractors at the end of the process. The project is in process.



IQLR:Updaing the design, implementation
and operation of mitigation measures in the puquíos at Salar Llamara. The project is in progress.

MQLQ: Design and implement a fumes
scrubbing system to mitigate SO2 emissions, aligned with our Sustainable Development Policy. The project is in progress.

IQ6M – IQ6N:Preparation and
filing of the EID of the Project “Nueva Victoria Mine Expansion.” The projected expenses only include filing the EID.
The project is in process.

IP83:Preparation and filing of
the EID of the Project “Extension TLN-15”. The projected expenses only include the environment document filing. The
project is in process.



IQOW: Enable a heritage interest
deposit in Humberstone Historic Saltpeter Office to store materials of cultural interest recovered in the site from project under
execution ZMNV.



IQPJ:The project consists of the
implementation of the cultural measures compromised in the Environmental Evaluation for the mining areas. The measures will be
implemented depending on the requirements of the Mining Operation of the VPONV, project in execution.



Note 19 - Environment (continued)



SQM Salar S.A.



LQFD:Construction ofexchangeoffices for the comfort for our employees. The project is in process.

LQG8: Increase the capacity of the
garbage facilities at the Toconao Camp to avoid problems associated with gathering and handling garbage. The project is in process.



LQ38:Compliance with the current
regulations and observations raised by SEREMI. The project is in process.

LQAK:Construction of garbage facilities
in the MOP and SOP lunchrooms to increase waste capacity. The project is in process.

CQ4M:Regulating electrical facilities
including changing of cables, and electric and illumination control panels, as well as installing restrooms with showers for permanent
contractor personnel. The project is in process.



F-146









| | Notes to the consolidated financial statements as of December
31 2012
| | ---------------------------------------------------------------------



CQ8U:Improving the condition and
capacity of the exchange rooms in Salar del Carmen. The project is in process.

LP82:Support development of demonstration
fields and provide technical assistance agriculture improvements such as watering practices. The project is in process.

LPTF:Perform required semi-annual
reports to present improvements and optimizations at environmental control points, and the knowledge of improvements in geologic
and hydrogeologic variables near Salar de Atacama. The project is in process.

LPTJ: Acquisition of equipment to
ensure the operating continuity of the TAS and OR plants, the change in the current control system of TK's drinking water, wastewater,
and wastewater elevation chambers. The project has been completed.

LQDM:Certification of the liquid
fuel storage tanks. The project is in process.



LQI6:Elaboration and update of
our EIA associated with operations in the Atacama Salt Deposit. The project is in process.



LQNI: Elaboration and document application
for the DIA of the project "Drying and compacting KCl facility expansion". The considered expenses, only includes the
environmental mitigation costs. The project is under execution.



SIT S.A.



TQNA:Installation of a meteorology
station in order to measure the speed and direction of wind in the south sector of Tocopilla to comply with commitments made to
local authorities. The project is in process.



MQ6Y:To maintain and repair the
Bureau of Exchange in María Elena and Tocopilla to comply with Decree No. 594. The project is in its completion stage.



Note 19 - Environment (continued)



TPR8:Reduce the generation
of industrial waste through the use of vacuum and no-washing technologies through implementing a vacuum system that avoids the
use of water and therefore the generation of liquid industrial waste. The project is in process.

TPYX: To comply with commitments
to decrease emissions of particulate material towards the city of Tocopilla. The project is in process.

TQAP: To decrease the environmental
pollution and product losses associated with product storage. The project is in process.



TQAV:Paving and maintenance of
internal roads at the port ofTocopilla to decrease pollution and to comply with the Supreme Decree related to the local
saturated zone. The project is in process.

TQM2:Recovering operating conditions
through modification to the duct yardN°1, thus being able to diminish the environmental pollution. The project is in
process.

TQLY:Eliminate the possible ambient
contamination that may exist in working areas. The project is in process.



TQQ5:This project will reduce emissions
of particulate matter, and minimize the environmental impact in neighboring communities. This project is under commission.



SQM POTASIO S.A.



IQ4C:Supply, construction and assembly
of osmosis and septic wells and related plant at the Iris camp. The project is in its completion stage.



SQM Nitratos S.A.



PQI9:Construct new wells to replace
the current ones with a modern waste water treatment technology. The project is in process.



F-147









| | Notes to the consolidated financial statements as of December
31 2012
| | ---------------------------------------------------------------------



IQMH:Creating storage area for
dangerous substances. The project is in process.



IQDN: Building a parapet to form
a squared or rectangular pool with an impermeable membrane covering in order to be used as mud deposit. The project is in process.



F-148









| | Notes to the consolidated financial statements as of December
31 2012
| | ---------------------------------------------------------------------



Note 20 - Other
current and non-current non-financial assets



The detail of other current and non-current
assets consists of the following:



|                                     |  | 12/31/2012 |        |  | 12/31/2011 | 
|------------------------------------ |  | ---------- | ------ |  | ---------- | 
|Other non-financial  assets, current |  | ThUS$      |        |  | ThUS$      | 
|Domestic Value Added Tax             |  |            | 42,136 |  |            | 
|Foreign Value Added Tax              |  |            | 9,306  |  |            | 
|Prepaid mining licenses              |  |            | 1,512  |  |            | 
|Prepaid insurance                    |  |            | 8,278  |  |            | 
|Other prepayments                    |  |            | 494    |  |            | 
|Other assets                         |  |            | 6,094  |  |            | 
|Total                                |  |            | 67,820 |  |            | 



|                                         |  | 12/31/2012 |        |  | 12/31/2011 | 
|---------------------------------------- |  | ---------- | ------ |  | ---------- | 
|Other non-financial  assets, non-current |  | ThUS$      |        |  | ThUS$      | 
|Exploration and evaluation expenses (1)  |  |            | 16,839 |  |            | 
|Guarantee deposits                       |  |            | 571    |  |            | 
|Other assets                             |  |            | 272    |  |            | 
|Total                                    |  |            | 17,682 |  |            | 



| | (1) | Assets for the exploration or evaluation of mineral resources are amortized to the extent that
the explored or evaluated area has been exploited. Amortization is based on a variable rate applied to extracted tons determined
through measured mineral reserves and exploration costs. Capitalized expenses under current development are reclassified to inventory
and are amortized according to the estimated ore reserves. Expenses associated with future economically producible reserves are
presented under Other non-current assets. Those expenses incurred on properties with an ore grade that is not economical are directly
charged to profit and loss. Amounts associated with the exploration and assessment of mineral resources presented under inventory
are ThUS$6,174 and ThUS$3,699 as of December 31, 2012 and 2011, respectively.
| | --- | -----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



F-149









| | Notes to the consolidated financial statements as of December
31 2012
| | ---------------------------------------------------------------------



Note 20 - Other
current and non-current non-financial assets(continued)



| | - | Reconciliation of changes in assets for exploration and mineral resource evaluation, by type
| | - | --------------------------------------------------------------------------------------------



The change in exploration and evaluation
assets consists of the following:



|Reconciliation                                                                 |  | 12/31/2012 |        |   | 12/31/2011 | 
|------------------------------------------------------------------------------ |  | ---------- | ------ | - | ---------- | 
|                                                                               |  | ThUS$      |        |   | ThUS$      | 
|                                                                               |  |            |        |   |            | 
|Balance as of January 1                                                        |  |            | 21,395 |   |            | 
|                                                                               |  |            |        |   |            | 
|Additions                                                                      |  |            | 843    |   |            | 
|Depreciation and amortization                                                  |  |            | (2,080 | ) |            | 
|Transfers and other charges                                                    |  |            | (3,319 | ) |            | 
|                                                                               |  |            |        |   |            | 
|Assets for exploration and assessment of mineral resources, net, final balance |  |            | 16,839 |   |            | 



Note 21 - Operating segments

21.1	Operating segments



General information



Amounts disclosed in each operating segment
is the same as that reported to the CODM for purposes of allocating resources and assessing performance. Each segment represents
a strategic business unit that offers distinct products and services. Each segment is managed separately as each business requires
different technologies and marketing strategies.

Information related to assets and liabilities,
and income and expenses that cannot be assigned to a specific segment is included under the "Corporate Unit." The CODM
assesses performance of the operating segments based on gross profit and net income without any specific adjustments.

Sales between segments are carried out
at arm’s length under similar terms and conditions as those made to third parties. Revenues from third parties is reported
to the CODM in a manner consistent with that in the Statement of Income.

Assets and liabilities are not disclosed
by segments as this information is not easily available, certain assets can not be separable as to their specific activity, and
because this information is not used by the CODM. All assets and liabilities are disclosed in the category “amounts not assigned.”



F-150









| | Notes to the consolidated financial statements as of December
31 2012
| | ---------------------------------------------------------------------



Note 21 - Operating segments (continued)

21.2	Information on operating segments as of December
31, 2012 as of December 31, 2011 and December 31, 2010:



|12/31/2012                                                                                                         
|-------------------------------------------------------------------------------------------------------------------
|Operating segment items                                                                                            
|                                                                                                                   
|                                                                                                                   
|Revenue                                                                                                            
|Revenues from transactions with other operating segments of the
    same entity                                    
|                                                                                                                   
|Revenues from external customers and transactions
    with other operating segments of the same entity             
|                                                                                                                   
|Interest revenue                                                                                                   
|Interest expense                                                                                                   
|depreciation and amortization expense                                                                              
|The entity’s interest in the profit or loss of associates
    and joint ventures accounted for by the equity method
|income tax expense, continuing operations                                                                          
|Other items other tan significant cash                                                                             
|Income (loss) before taxes                                                                                         
|                                                                                                                   
|Net income (loss)                                                                                                  
|                                                                                                                   
|Assets                                                                                                             
|Equity-accounted investees                                                                                         
|Increase of non-current assets                                                                                     
|Liabilities                                                                                                        
|Equity                                                                                                             
|Equity and liabilities                                                                                             
|Impairment loss recognized in profit or loss                                                                       
|Cash flows from (used in) operating activities                                                                     
|Cash flows from (used in) investing activities                                                                     
|Cash flows from (used in) financing activities                                                                     



F-151











| | Notes
    to the consolidated financial statements as of December 31 2012
| | -------------------------------------------------------------------------



Note 21 - Operating segments (continued)

| | 21.2 | Information on operating segments as of December 31,
2012 as of December 31, 2011 and December 31, 2010:
| | ---- | --------------------------------------------------------------------------------------------------------



|12/31/2011                                                                                                         
|-------------------------------------------------------------------------------------------------------------------
|Operating segment items                                                                                            
|                                                                                                                   
|                                                                                                                   
|Revenue                                                                                                            
|Revenues from transactions with other operating segments of the
    same entity                                    
|                                                                                                                   
|Revenues from external customers and transactions
    with other operating segments of the same entity             
|                                                                                                                   
|Interest revenue                                                                                                   
|Interest expense                                                                                                   
|depreciation and amortization expense                                                                              
|The entity’s interest in the profit or loss of associates
    and joint ventures accounted for by the equity method
|income tax expense, continuing operations                                                                          
|Other items other tan significant cash                                                                             
|Income (loss) before taxes                                                                                         
|                                                                                                                   
|Net income (loss)                                                                                                  
|                                                                                                                   
|Assets                                                                                                             
|Equity-accounted investees                                                                                         
|Increase of non-current assets                                                                                     
|Liabilities                                                                                                        
|Equity                                                                                                             
|Equity and liabilities                                                                                             
|Reversing for value impairments recognized in the period’s
    profit or loss                                      
|Impairment loss recognized in profit or loss                                                                       
|Cash flows from (used in) operating activities                                                                     
|Cash flows from (used in) investing activities                                                                     
|Cash flows from (used in) financing activities                                                                     



F-152







| | Notes
    to the consolidated financial statements as of December 31 2012
| | -------------------------------------------------------------------------



Note 21 - Operating segments (continued)

| | 21.2 | Information on operating segments as of December 31,
2012 as of December 31, 2011 and December 31, 2010:
| | ---- | --------------------------------------------------------------------------------------------------------



|12/31/2010                                                                                                         
|-------------------------------------------------------------------------------------------------------------------
|                                                                                                                   
|Operating segment items                                                                                            
|                                                                                                                   
|Revenue                                                                                                            
|Revenues from transactions with other operating segments of the
    same entity                                    
|                                                                                                                   
|Revenues from external customers and transactions
    with other operating segments of the same entity             
|                                                                                                                   
|Interest revenue                                                                                                   
|Interest expense                                                                                                   
|depreciation and amortization expense                                                                              
|The entity’s interest in the profit or loss of associates
    and joint ventures accounted for by the equity method
|income tax expense, continuing operations                                                                          
|Other items other tan significant cash                                                                             
|Income (loss) before taxes                                                                                         
|                                                                                                                   
|Net income (loss)                                                                                                  
|                                                                                                                   
|Assets                                                                                                             
|Equity-accounted investees                                                                                         
|Increase of non-current assets                                                                                     
|Liabilities                                                                                                        
|Equity                                                                                                             
|Equity and liabilities                                                                                             
|Impairment loss recognized in profit or loss                                                                       
|Reversing for value impairments recognized in the period’s
    profit or loss                                      
|Cash flows from (used in) operating activities                                                                     
|Cash flows from (used in) investing activities                                                                     
|Cash flows from (used in) financing activities                                                                     



F-153







| | Notes
    to the consolidated financial statements as of December 31 2012
| | -------------------------------------------------------------------------



Note 21 - Operating segments (continued)



| | 21.3 | Income statement by operation segments as of December
31, 2012:
| | ---- | ---------------------------------------------------------------



|Items of integral
    income statement                                                       |  | Specialty
    plant 
    nutriente 
    ThUS$ |          |   | Iodine
    and  
    derivatives 
    ThUS$ |  |          | Lithium
    and  
    derivatives 
    ThUS$ |  |  | Industrial
    chemicals 
    ThUS$ |   |  | Potassium
    
    ThUS$ |         |   | Other
    
    products and 
    services 
    ThUS$ |  |          | Corporate
    Unit
    ThUS$ |  |  | Total
    Segments
    and
    Corporate Unit
    ThUS$ |  
|-------------------------------------------------------------------------------------------- |  | --------------------------------------------- | -------- | - | ------------------------------------------- |  | -------- | -------------------------------------------- |  |  | ----------------------------------- | - |  | ------------------------ | ------- | - | ---------------------------------------------------- |  | -------- | ---------------------------- |  |  | ------------------------------------------------------- | -
|                                                                                             |  |                                               |          |   |                                             |  |          |                                              |  |  |                                     |   |  |                          |         |   |                                                      |  |          |                              |  |  |                                                         |  
|Revenues                                                                                     |  |                                               | 675,350  |   |                                             |  | 578,091  |                                              |  |  | 222,238                             |   |  |                          | 245,208 |   |                                                      |  | 605,059  |                              |  |  | 103,214                                                 |  
|Cost of sales                                                                                |  |                                               | (431,735 | ) |                                             |  | (177,425 | )                                            |  |  | (85,596                             | ) |  |                          | (82,489 | ) |                                                      |  | (350,092 | )                            |  |  | (77,093                                                 | )
|                                                                                             |  |                                               |          |   |                                             |  |          |                                              |  |  |                                     |   |  |                          |         |   |                                                      |  |          |                              |  |  |                                                         |  
|Gross Profit                                                                                 |  |                                               | 217,880  |   |                                             |  | 362,518  |                                              |  |  | 110,695                             |   |  |                          | 83,055  |   |                                                      |  | 246,027  |                              |  |  | 8,418                                                   |  
|                                                                                             |  |                                               |          |   |                                             |  |          |                                              |  |  |                                     |   |  |                          |         |   |                                                      |  |          |                              |  |  |                                                         |  
|Other income                                                                                 |  |                                               | -        |   |                                             |  | -        |                                              |  |  | -                                   |   |  |                          | -       |   |                                                      |  | -        |                              |  |  | -                                                       |  
|Administrative expenses                                                                      |  |                                               | -        |   |                                             |  | -        |                                              |  |  | -                                   |   |  |                          | -       |   |                                                      |  | -        |                              |  |  | -                                                       |  
|Other expenses                                                                               |  |                                               | -        |   |                                             |  | -        |                                              |  |  | -                                   |   |  |                          | -       |   |                                                      |  | -        |                              |  |  | -                                                       |  
|Other gains (losses)                                                                         |  |                                               | -        |   |                                             |  | -        |                                              |  |  | -                                   |   |  |                          | -       |   |                                                      |  | -        |                              |  |  | -                                                       |  
|Finance income                                                                               |  |                                               | -        |   |                                             |  | -        |                                              |  |  | -                                   |   |  |                          | -       |   |                                                      |  | -        |                              |  |  | -                                                       |  
|Finance expenses                                                                             |  |                                               | -        |   |                                             |  | -        |                                              |  |  | -                                   |   |  |                          | -       |   |                                                      |  | -        |                              |  |  | -                                                       |  
|Equity in income of associates and joint ventures
    accounting for using the equity method |  |                                               | -        |   |                                             |  | -        |                                              |  |  | -                                   |   |  |                          | -       |   |                                                      |  | -        |                              |  |  | -                                                       |  
|Foreign currency exchange differences                                                        |  |                                               | -        |   |                                             |  | -        |                                              |  |  | -                                   |   |  |                          | -       |   |                                                      |  | -        |                              |  |  | -                                                       |  
|Income before income tax expense                                                             |  |                                               | 217,880  |   |                                             |  | 362,518  |                                              |  |  | 110,695                             |   |  |                          | 83,055  |   |                                                      |  | 246,027  |                              |  |  | 8,418                                                   |  
|Income tax expense                                                                           |  |                                               | -        |   |                                             |  | -        |                                              |  |  | -                                   |   |  |                          | -       |   |                                                      |  | -        |                              |  |  | -                                                       |  
|Profit for the year                                                                          |  |                                               | 217,880  |   |                                             |  | 362,518  |                                              |  |  | 110,695                             |   |  |                          | 83,055  |   |                                                      |  | 246,027  |                              |  |  | 8,418                                                   |  
|Profit attributable to                                                                       |  |                                               |          |   |                                             |  |          |                                              |  |  |                                     |   |  |                          |         |   |                                                      |  |          |                              |  |  |                                                         |  
|Controlling interests                                                                        |  |                                               | -        |   |                                             |  | -        |                                              |  |  | -                                   |   |  |                          | -       |   |                                                      |  | -        |                              |  |  | -                                                       |  
|Non controlling interests                                                                    |  |                                               | -        |   |                                             |  | -        |                                              |  |  | -                                   |   |  |                          | -       |   |                                                      |  | -        |                              |  |  | -                                                       |  
|Profit for the year                                                                          |  |                                               | -        |   |                                             |  | -        |                                              |  |  | -                                   |   |  |                          | -       |   |                                                      |  | -        |                              |  |  | -                                                       |  



F-154







| | Notes
    to the consolidated financial statements as of December 31 2012
| | -------------------------------------------------------------------------



Note 21 - Operating segments (continued)



| | 21.3 | Income statement by segments of operation as of December
31, 2011:
| | ---- | ------------------------------------------------------------------



|Items of integral
    income statement                                                       |  | Specialty
    plant 
    nutriente 
    ThUS$ |          |   | Iodine
    and 
    derivatives 
    ThUS$ |  |          | Lithium
    and  
    derivatives
    ThUS$ |  |  | Industrial
    chemicals 
    ThUS$ |   |  | Potassium
    
    ThUS$ |         |   | Other
    
    products and 
    services 
    ThUS$ |  |          | Corporate
    Unit
    ThUS$ |  |  | Total
    Segments 
    and
    Corporate Unit
    ThUS$ |  
|-------------------------------------------------------------------------------------------- |  | --------------------------------------------- | -------- | - | ------------------------------------------ |  | -------- | ------------------------------------------- |  |  | ----------------------------------- | - |  | ------------------------ | ------- | - | ---------------------------------------------------- |  | -------- | ---------------------------- |  |  | -------------------------------------------------------- | -
|                                                                                             |  |                                               |          |   |                                            |  |          |                                             |  |  |                                     |   |  |                          |         |   |                                                      |  |          |                              |  |  |                                                          |  
|Revenues                                                                                     |  |                                               | 721,696  |   |                                            |  | 454,468  |                                             |  |  | 183,403                             |   |  |                          | 139,508 |   |                                                      |  | 555,742  |                              |  |  | 90,469                                                   |  
|Cost of sales                                                                                |  |                                               | (494,220 | ) |                                            |  | (192,107 | )                                           |  |  | (98,173                             | ) |  |                          | (83,503 | ) |                                                      |  | (337,478 | )                            |  |  | (85,013                                                  | )
|                                                                                             |  |                                               |          |   |                                            |  |          |                                             |  |  |                                     |   |  |                          |         |   |                                                      |  |          |                              |  |  |                                                          |  
|Gross Profit                                                                                 |  |                                               | 227,476  |   |                                            |  | 262,361  |                                             |  |  | 85,230                              |   |  |                          | 56,005  |   |                                                      |  | 218,264  |                              |  |  | 5,456                                                    |  
|                                                                                             |  |                                               |          |   |                                            |  |          |                                             |  |  |                                     |   |  |                          |         |   |                                                      |  |          |                              |  |  |                                                          |  
|Other income                                                                                 |  |                                               | -        |   |                                            |  | -        |                                             |  |  | -                                   |   |  |                          | -       |   |                                                      |  | -        |                              |  |  | -                                                        |  
|Administrative expenses                                                                      |  |                                               | -        |   |                                            |  | -        |                                             |  |  | -                                   |   |  |                          | -       |   |                                                      |  | -        |                              |  |  | -                                                        |  
|Other expenses                                                                               |  |                                               | -        |   |                                            |  | -        |                                             |  |  | -                                   |   |  |                          | -       |   |                                                      |  | -        |                              |  |  | -                                                        |  
|Other gains (losses)                                                                         |  |                                               | -        |   |                                            |  | -        |                                             |  |  | -                                   |   |  |                          | -       |   |                                                      |  | -        |                              |  |  | -                                                        |  
|Finance income                                                                               |  |                                               | -        |   |                                            |  | -        |                                             |  |  | -                                   |   |  |                          | -       |   |                                                      |  | -        |                              |  |  | -                                                        |  
|Finance expenses                                                                             |  |                                               | -        |   |                                            |  | -        |                                             |  |  | -                                   |   |  |                          | -       |   |                                                      |  | -        |                              |  |  | -                                                        |  
|Equity in income of associates and joint ventures
    accounting for using the equity method |  |                                               | -        |   |                                            |  | -        |                                             |  |  | -                                   |   |  |                          | -       |   |                                                      |  | -        |                              |  |  | -                                                        |  
|Foreign currency exchange differences                                                        |  |                                               | -        |   |                                            |  | -        |                                             |  |  | -                                   |   |  |                          | -       |   |                                                      |  | -        |                              |  |  | -                                                        |  
|Income before income tax expense                                                             |  |                                               | 227,476  |   |                                            |  | 262,361  |                                             |  |  | 85,230                              |   |  |                          | 56,005  |   |                                                      |  | 218,264  |                              |  |  | 5,456                                                    |  
|Income tax expense                                                                           |  |                                               | -        |   |                                            |  | -        |                                             |  |  | -                                   |   |  |                          | -       |   |                                                      |  | -        |                              |  |  | -                                                        |  
|Profit for the year                                                                          |  |                                               | 227,476  |   |                                            |  | 262,361  |                                             |  |  | 85,230                              |   |  |                          | 56,005  |   |                                                      |  | 218,264  |                              |  |  | 5,456                                                    |  
|Profit attributable to                                                                       |  |                                               |          |   |                                            |  |          |                                             |  |  |                                     |   |  |                          |         |   |                                                      |  |          |                              |  |  |                                                          |  
|Controlling interests                                                                        |  |                                               | -        |   |                                            |  | -        |                                             |  |  | -                                   |   |  |                          | -       |   |                                                      |  | -        |                              |  |  | -                                                        |  
|Non controlling interests                                                                    |  |                                               | -        |   |                                            |  | -        |                                             |  |  | -                                   |   |  |                          | -       |   |                                                      |  | -        |                              |  |  | -                                                        |  
|Profit for the year                                                                          |  |                                               | -        |   |                                            |  | -        |                                             |  |  | -                                   |   |  |                          | -       |   |                                                      |  | -        |                              |  |  | -                                                        |  



F-155







| | Notes
    to the consolidated financial statements as of December 31 2012
| | -------------------------------------------------------------------------



Note 21 - Operating segments (continued)



| | 21.3 | Income statement by segments of operation as of December
31, 2010:
| | ---- | ------------------------------------------------------------------



|Items
    of integral income statement                                                       |  | Specialty
    plant 
    nutriente 
    ThUS$ |          |   | Iodine
    and  
    derivatives 
    ThUS$ |  |          | Lithium
    and  
    derivatives
    ThUS$ |  |  | Industrial
    
    chemicals 
    ThUS$ |   |  | Potassium
    
    ThUS$ |         |   | Other
    
    products and 
    services 
    ThUS$ |  |          | Corporate
    Unit
    ThUS$ |  |  | Total
    Segments
    and
    Corporate Unit
    ThUS$ |  
|-------------------------------------------------------------------------------------------- |  | --------------------------------------------- | -------- | - | ------------------------------------------- |  | -------- | ------------------------------------------- |  |  | ---------------------------------------- | - |  | ------------------------ | ------- | - | ---------------------------------------------------- |  | -------- | ---------------------------- |  |  | ------------------------------------------------------- | -
|                                                                                             |  |                                               |          |   |                                             |  |          |                                             |  |  |                                          |   |  |                          |         |   |                                                      |  |          |                              |  |  |                                                         |  
|Revenues                                                                                     |  |                                               | 603,678  |   |                                             |  | 316,253  |                                             |  |  | 150,810                                  |   |  |                          | 149,706 |   |                                                      |  | 528,151  |                              |  |  | 81,815                                                  |  
|Cost of sales                                                                                |  |                                               | (431,735 | ) |                                             |  | (177,425 | )                                           |  |  | (85,596                                  | ) |  |                          | (82,489 | ) |                                                      |  | (350,092 | )                            |  |  | (77,073                                                 | )
|                                                                                             |  |                                               |          |   |                                             |  |          |                                             |  |  |                                          |   |  |                          |         |   |                                                      |  |          |                              |  |  |                                                         |  
|Gross Profit                                                                                 |  |                                               | 171,943  |   |                                             |  | 138,828  |                                             |  |  | 65,214                                   |   |  |                          | 67,217  |   |                                                      |  | 178,059  |                              |  |  | 4,742                                                   |  
|                                                                                             |  |                                               |          |   |                                             |  |          |                                             |  |  |                                          |   |  |                          |         |   |                                                      |  |          |                              |  |  |                                                         |  
|Other income                                                                                 |  |                                               | -        |   |                                             |  | -        |                                             |  |  | -                                        |   |  |                          | -       |   |                                                      |  | -        |                              |  |  | -                                                       |  
|Administrative expenses                                                                      |  |                                               | -        |   |                                             |  | -        |                                             |  |  | -                                        |   |  |                          | -       |   |                                                      |  | -        |                              |  |  | -                                                       |  
|Other expenses                                                                               |  |                                               | -        |   |                                             |  | -        |                                             |  |  | -                                        |   |  |                          | -       |   |                                                      |  | -        |                              |  |  | -                                                       |  
|Other gains (losses)                                                                         |  |                                               | -        |   |                                             |  | -        |                                             |  |  | -                                        |   |  |                          | -       |   |                                                      |  | -        |                              |  |  | -                                                       |  
|Finance income                                                                               |  |                                               | -        |   |                                             |  | -        |                                             |  |  | -                                        |   |  |                          | -       |   |                                                      |  | -        |                              |  |  | -                                                       |  
|Finance expenses                                                                             |  |                                               | -        |   |                                             |  | -        |                                             |  |  | -                                        |   |  |                          | -       |   |                                                      |  | -        |                              |  |  | -                                                       |  
|Equity in income of associates and joint ventures
    accounting for using the equity method |  |                                               | -        |   |                                             |  | -        |                                             |  |  | -                                        |   |  |                          | -       |   |                                                      |  | -        |                              |  |  | -                                                       |  
|Foreign currency exchange differences                                                        |  |                                               | -        |   |                                             |  | -        |                                             |  |  | -                                        |   |  |                          | -       |   |                                                      |  | -        |                              |  |  | -                                                       |  
|Income before income tax expense                                                             |  |                                               | 171,943  |   |                                             |  | 138,828  |                                             |  |  | 65,214                                   |   |  |                          | 67,217  |   |                                                      |  | 178,059  |                              |  |  | 4,742                                                   |  
|Income tax expense                                                                           |  |                                               | -        |   |                                             |  | -        |                                             |  |  | -                                        |   |  |                          | -       |   |                                                      |  | -        |                              |  |  | -                                                       |  
|Profit for the year                                                                          |  |                                               | 171,943  |   |                                             |  | 138,828  |                                             |  |  | 65,214                                   |   |  |                          | 67,217  |   |                                                      |  | 178,059  |                              |  |  | 4,742                                                   |  
|Profit attributable to                                                                       |  |                                               |          |   |                                             |  |          |                                             |  |  |                                          |   |  |                          |         |   |                                                      |  |          |                              |  |  |                                                         |  
|Controlling interests                                                                        |  |                                               | -        |   |                                             |  | -        |                                             |  |  | -                                        |   |  |                          | -       |   |                                                      |  | -        |                              |  |  | -                                                       |  
|Non controlling interests                                                                    |  |                                               | -        |   |                                             |  | -        |                                             |  |  | -                                        |   |  |                          | -       |   |                                                      |  | -        |                              |  |  | -                                                       |  
|Profit for the year                                                                          |  |                                               | -        |   |                                             |  | -        |                                             |  |  | -                                        |   |  |                          | -       |   |                                                      |  | -        |                              |  |  | -                                                       |  



F-156







| | Notes
    to the consolidated financial statements as of December 31 2012
| | -------------------------------------------------------------------------



Note 21 - Operating segments (continued)



| | 21.4 | Income from regular activities proceeding from transactions
with other operating segments of the Company as of December 31, 2012:
| | ---- | ---------------------------------------------------------------------------------------------------------------------------------



|Items of integral income statement |  | Specialty
    plant 
    nutritients  
    ThUS$ |         |  | Iodine and  
    derivatives 
    ThUS$ |  |         | Lithium and  
    derivatives 
    ThUS$ |  |  | Industrial
    
    chemicals 
    ThUS$ |  |  | Potassium
    
    ThUS$ |         |  | Other 
    products 
    and services 
    ThUS$ |  |         | TotalSegments and Corporate
    Unit 
    ThUS$ | 
|---------------------------------- |  | ------------------------------------------------ | ------- |  | --------------------------------------- |  | ------- | ---------------------------------------- |  |  | ---------------------------------------- |  |  | ------------------------ | ------- |  | ------------------------------------------------ |  | ------- | ----------------------------------------------- | 
|                                   |  |                                                  |         |  |                                         |  |         |                                          |  |  |                                          |  |  |                          |         |  |                                                  |  |         |                                                 | 
|Income from regular activities     |  |                                                  | 675,350 |  |                                         |  | 578,091 |                                          |  |  | 222,238                                  |  |  |                          | 245,208 |  |                                                  |  | 605,059 |                                                 | 



| | 21.4 | Income from regular activities proceeding from transactions
with other operating segments of the Company, as of December 31, 2011:
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------



|Items of integral income statement |  | Specialty
    plant 
    nutritients  
    ThUS$ |         |  | Iodine and 
    derivatives 
    ThUS$ |  |         | Lithium and  
    derivatives
    ThUS$ |  |  | Industrial
    
    chemicals 
    ThUS$ |  |  | Potassium
    
    ThUS$ |         |  | Other 
    products 
    and services 
    ThUS$ |  |         | Total 
    Segments and Corporate Unit ThUS$ | 
|---------------------------------- |  | ------------------------------------------------ | ------- |  | -------------------------------------- |  | ------- | --------------------------------------- |  |  | ---------------------------------------- |  |  | ------------------------ | ------- |  | ------------------------------------------------ |  | ------- | -------------------------------------------- | 
|                                   |  |                                                  |         |  |                                        |  |         |                                         |  |  |                                          |  |  |                          |         |  |                                                  |  |         |                                              | 
|Income from regular activities     |  |                                                  | 721,696 |  |                                        |  | 454,468 |                                         |  |  | 183,403                                  |  |  |                          | 139,508 |  |                                                  |  | 555,742 |                                              | 



| | 21.4 | Income from regular activities proceeding from transactions
with other operating segments of the Company, as of December 31, 2010:
| | ---- | ----------------------------------------------------------------------------------------------------------------------------------



|Items of integral income statement |  | Specialty
    plant 
    nutritients 
    ThUS$ |         |  | Iodine and 
    derivatives
    ThUS$ |  |         | Lithium and 
    derivatives 
    ThUS$ |  |  | Industrial
    
    chemicals 
    ThUS$ |  |  | Potassium
    
    ThUS$ |         |  | Other 
    products
    and services 
    ThUS$ |  |         | Total
    Segments And
    Corporate Unit
    ThUS$ | 
|---------------------------------- |  | ----------------------------------------------- | ------- |  | ------------------------------------- |  | ------- | --------------------------------------- |  |  | ---------------------------------------- |  |  | ------------------------ | ------- |  | ----------------------------------------------- |  | ------- | --------------------------------------------------- | 
|                                   |  |                                                 |         |  |                                       |  |         |                                         |  |  |                                          |  |  |                          |         |  |                                                 |  |         |                                                     | 
|Income from regular activities     |  |                                                 | 603,678 |  |                                       |  | 316,253 |                                         |  |  | 150,810                                  |  |  |                          | 149,706 |  |                                                 |  | 528,151 |                                                     | 



F-157







| | Notes
    to the consolidated financial statements as of December 31 2012
| | -------------------------------------------------------------------------



Note 21 - Operating segments (continued)



| | 21.5 | Information about geographic areas
| | ---- | ----------------------------------



The
Company disclose geographic information of its income from regular activities from external clients and for assets excluding financial
instruments, assets associated with income taxes, assets associated with employee benefits andrights derived from insurance
contracts.



| | 21.6 | Information on main customers
| | ---- | -----------------------------



The Company has no external customers who
individually represent 10% or more of consolidated revenues or accounts receivable. Concentration of credit risk associated with
trade and other accounts receivable is limited due to the significant number of customers in the Company’s portfolio and
its worldwide distribution.





F-158







| | Notes
    to the consolidated financial statements as of December 31 2012
| | -------------------------------------------------------------------------



Nota 21 - Operating segments (continued)



| | 21.7 | Segment information by geographical area
| | ---- | ----------------------------------------



|                                      |  | Chile |           |  | Latin America
    and the
    Caribbean |  |         | Europe |  |  | North
    America |  |  | Asia and
    others |         |  | 12/31/2012 | 
|------------------------------------- |  | ----- | --------- |  | --------------------------------------- |  | ------- | ------ |  |  | ----------------- |  |  | ------------------- | ------- |  | ---------- | 
|Items                                 |  | ThUS$ |           |  | ThUS$                                   |  |         | ThUS$  |  |  | ThUS$             |  |  | ThUS$               |         |  | ThUS$      | 
|                                      |  |       |           |  |                                         |  |         |        |  |  |                   |  |  |                     |         |  |            | 
|Revenue                               |  |       | 269,421   |  |                                         |  | 416,089 |        |  |  | 558,245           |  |  |                     | 619,667 |  |            | 
|                                      |  |       |           |  |                                         |  |         |        |  |  |                   |  |  |                     |         |  |            | 
|Non-current assets:                   |  |       | 2,054,806 |  |                                         |  | 488     |        |  |  | 35,709            |  |  |                     | 18,066  |  |            | 
|Equity-accounted investees            |  |       | 1,656     |  |                                         |  | -       |        |  |  | 24,051            |  |  |                     | 15,357  |  |            | 
|Intangible assets other than goodwill |  |       | 23,630    |  |                                         |  | -       |        |  |  | -                 |  |  |                     | 378     |  |            | 
|Goodwill                              |  |       | 26,929    |  |                                         |  | 86      |        |  |  | 11,373            |  |  |                     | -       |  |            | 
|Property, plant and equipment, net    |  |       | 1,985,128 |  |                                         |  | 183     |        |  |  | 285               |  |  |                     | 2,331   |  |            | 
|Investment property                   |  |       | -         |  |                                         |  | -       |        |  |  | -                 |  |  |                     | -       |  |            | 
|Other non-current assets              |  |       | 17,463    |  |                                         |  | 219     |        |  |  | -                 |  |  |                     | -       |  |            | 



|                                      |  | Chile |           |  | Latin America
    and the Caribbean |  |         | Europe |  |  | North
    America |  |  | Asia and
    others |         |  | 12/31/2011 | 
|------------------------------------- |  | ----- | --------- |  | ----------------------------------- |  | ------- | ------ |  |  | ----------------- |  |  | ------------------- | ------- |  | ---------- | 
|Items                                 |  | ThUS$ |           |  | ThUS$                               |  |         | ThUS$  |  |  | ThUS$             |  |  | ThUS$               |         |  | ThUS$      | 
|                                      |  |       |           |  |                                     |  |         |        |  |  |                   |  |  |                     |         |  |            | 
|Revenue                               |  |       | 247,510   |  |                                     |  | 284,605 |        |  |  | 837,126           |  |  |                     | 445,048 |  |            | 
|                                      |  |       |           |  |                                     |  |         |        |  |  |                   |  |  |                     |         |  |            | 
|Non-current assets:                   |  |       | 1,809,871 |  |                                     |  | 1,757   |        |  |  | 28,681            |  |  |                     | 15,335  |  |            | 
|Equity-accounted investees            |  |       | 1,444     |  |                                     |  | -       |        |  |  | 16,919            |  |  |                     | 14,867  |  |            | 
|Intangible assets other than goodwill |  |       | 3,877     |  |                                     |  | -       |        |  |  | -                 |  |  |                     | 439     |  |            | 
|Goodwill                              |  |       | 27,146    |  |                                     |  | 86      |        |  |  | 11,373            |  |  |                     | -       |  |            | 
|Property, plant and equipment, net    |  |       | 1,752,991 |  |                                     |  | 1,433   |        |  |  | 389               |  |  |                     | 29      |  |            | 
|Investment property                   |  |       | -         |  |                                     |  | -       |        |  |  | -                 |  |  |                     | -       |  |            | 
|Other non-current assets              |  |       | 24,413    |  |                                     |  | 238     |        |  |  | -                 |  |  |                     | -       |  |            | 



F-159







| | Notes
    to the consolidated financial statements as of December 31 2012
| | -------------------------------------------------------------------------



Nota 21 - Operating segments (continued)



| | 21.7 | Segment information by geographical area, continued
| | ---- | ---------------------------------------------------



|                                      |  | Chile |           |  | Latin America
    and the
    Caribbean |  |         | Europe |  |  | North
    America |  |  | Asia and
    others |         |  | 12/31/2010 | 
|------------------------------------- |  | ----- | --------- |  | --------------------------------------- |  | ------- | ------ |  |  | ----------------- |  |  | ------------------- | ------- |  | ---------- | 
|Items                                 |  | ThUS$ |           |  | ThUS$                                   |  |         | ThUS$  |  |  | ThUS$             |  |  | ThUS$               |         |  | ThUS$      | 
|                                      |  |       |           |  |                                         |  |         |        |  |  |                   |  |  |                     |         |  |            | 
|Revenue                               |  |       | 216,028   |  |                                         |  | 162,967 |        |  |  | 799,457           |  |  |                     | 363,676 |  |            | 
|                                      |  |       |           |  |                                         |  |         |        |  |  |                   |  |  |                     |         |  |            | 
|Non-current assets:                   |  |       | 1,594,033 |  |                                         |  | 2,171   |        |  |  | 31,323            |  |  |                     | 11,809  |  |            | 
|Equity-accounted investees            |  |       | 1,352     |  |                                         |  | -       |        |  |  | 19,615            |  |  |                     | 7,251   |  |            | 
|Intangible assets other than goodwill |  |       | 2,765     |  |                                         |  | -       |        |  |  | 4                 |  |  |                     | 501     |  |            | 
|Goodwill                              |  |       | 24,147    |  |                                         |  | 86      |        |  |  | 11,373            |  |  |                     | 724     |  |            | 
|Property, plant and equipment, net    |  |       | 1,451,576 |  |                                         |  | 1,858   |        |  |  | 331               |  |  |                     | 40      |  |            | 
|Investment property                   |  |       | 1,373     |  |                                         |  | -       |        |  |  | -                 |  |  |                     | -       |  |            | 
|Other non-current assets              |  |       | 112,820   |  |                                         |  | 227     |        |  |  | -                 |  |  |                     | 3,293   |  |            | 
|                                      |  |       |           |  |                                         |  |         |        |  |  |                   |  |  |                     |         |  |            | 



F-160







| | Notes
    to the consolidated financial statements as of December 31 2012
| | -------------------------------------------------------------------------



Note 21 - Operating segments (continued)



| | 21.8 | Property, plant and equipment classified by geographical
areas
| | ---- | --------------------------------------------------------------



The Company's primary production facilities
are located near their mines and extraction facilities in the North of Chile. The following table describes our primary production
facilities:





|Location          |  | Products:                                                      
|----------------- |  | ---------------------------------------------------------------
|Pedro de Valdivia |  | Production of nitrite, sulfate, and iodine                     
|María Elena       |  | Production of nitrite, sulfate, and iodine                     
|Coya Sur          |  | Production of nitrite, sulfate, and iodine                     
|Nueva Victoria    |  | Production of iodine and nitrate salts                         
|Salar de Atacama  |  | Potassium chloride, Lithium chloride and boric acid            
|Salar del Carmen  |  | Production of Lithium carbonate lithium hydroxide, and of boron
|Tocopilla         |  | Port facilities                                                



F-161







| | Notes
    to the consolidated financial statements as of December 31 2012
| | -------------------------------------------------------------------------



Note 22 – Income and expenses from operating activities



| | 22.1 | Revenue
| | ---- | -------





|         |  | 12/31/2012 |           |  | 12/31/2011 |  |           | 12/31/2010 | 
|-------- |  | ---------- | --------- |  | ---------- |  | --------- | ---------- | 
|         |  | ThUS$      |           |  | ThUS$      |  |           | ThUS$      | 
|         |  |            |           |  |            |  |           |            | 
|         |  |            |           |  |            |  |           |            | 
|Products |  |            | 2,420,357 |  |            |  | 2,138,264 |            | 
|Services |  |            | 8,803     |  |            |  | 7,022     |            | 
|         |  |            |           |  |            |  |           |            | 
|Total    |  |            | 2,429,160 |  |            |  | 2,145,286 |            | 





| | 22.2 | Cost of sales
| | ---- | -------------







|                                       |  | 12/31/2012 |            |   | 12/31/2011 |  |            | 12/31/2010 | 
|-------------------------------------- |  | ---------- | ---------- | - | ---------- |  | ---------- | ---------- | 
|                                       |  | ThUS$      |            |   | ThUS$      |  |            | ThUS$      | 
|Raw material and supplies              |  |            | (1,066,803 | ) |            |  | (762,350   | )          | 
|                                       |  |            |            |   |            |  |            |            | 
|Types of employee benefits expenses    |  |            |            |   |            |  |            |            | 
|Salaries and wages                     |  |            | (134,400   | ) |            |  | (104,757   | )          | 
|Other short-term employee benefits     |  |            | (66,370    | ) |            |  | (52,804    | )          | 
|Termination benefit expenses           |  |            | (4,325     | ) |            |  | (4,646     | )          | 
|Total employee benefits expenses       |  |            | (205,095   | ) |            |  | (162,207   | )          | 
|                                       |  |            |            |   |            |  |            |            | 
|Depreciation and amortization expenses |  |            |            |   |            |  |            |            | 
|Depreciation expense                   |  |            | (190,509   | ) |            |  | (163,438   | )          | 
|                                       |  |            |            |   |            |  |            |            | 
|Provisions for inventory losses        |  |            | (18,158    | ) |            |  | (6,144     | )          | 
|Other expenses, by nature (1)          |  |            | 79,998     |   |            |  | (196,355   | )          | 
|                                       |  |            |            |   |            |  |            |            | 
|Total                                  |  |            | (1,400,567 | ) |            |  | (1,290,494 | )          | 





| | (1) | Include the change in finished and in-process inventories
| | --- | ---------------------------------------------------------



F-162







| | Notes
    to the consolidated financial statements as of December 31 2012
| | -------------------------------------------------------------------------



Note 22 – Income and expenses from operating activities
(continued)



| | 22.3 | Other income
| | ---- | ------------





|                                                          |  | 12/31/2012 |        |  | 12/31/2011 |  |        | 12/31/2010 | 
|--------------------------------------------------------- |  | ---------- | ------ |  | ---------- |  | ------ | ---------- | 
|                                                          |  | ThUS$      |        |  | ThUS$      |  |        | ThUS$      | 
|                                                          |  |            |        |  |            |  |        |            | 
|Discounts obtained from suppliers                         |  |            | 648    |  |            |  | 777    |            | 
|Compensation received                                     |  |            | 53     |  |            |  | 876    |            | 
|Penalties charged to suppliers                            |  |            | 312    |  |            |  | 453    |            | 
|Tax recoveries                                            |  |            | 15     |  |            |  | 12     |            | 
|Insurance recoveries                                      |  |            | 5,187  |  |            |  | 395    |            | 
|Change in the provision of liabilities with third parties |  |            | 669    |  |            |  | 630    |            | 
|Change in allowance for doubtful accounts                 |  |            | 154    |  |            |  | 178    |            | 
|Sale of property, plant and equipment                     |  |            | 281    |  |            |  | 2,213  |            | 
|Sale of materials, spare parts and supplies               |  |            | 1,388  |  |            |  | 959    |            | 
|Sale of mining concessions                                |  |            | 1,578  |  |            |  | 613    |            | 
|Other disposals                                           |  |            | 176    |  |            |  | 141    |            | 
|Indemnities at Minera Esperanza                           |  |            | 28     |  |            |  | 192    |            | 
|Change indemnity provision Yara South Africa              |  |            | 335    |  |            |  | -      |            | 
|Change inventory provision                                |  |            | -      |  |            |  | 559    |            | 
|Sale of concession of Minera Sierra Gorda                 |  |            | -      |  |            |  | 37,679 |            | 
|Other services                                            |  |            | 2      |  |            |  | 84     |            | 
|Other operating results                                   |  |            | 1,876  |  |            |  | 1,920  |            | 
|                                                          |  |            |        |  |            |  |        |            | 
|Total                                                     |  |            | 12,702 |  |            |  | 47,681 |            | 





| | 22.4 | Administrative
                                                                                 expenses
| | ---- | --------------------------------------------------------------------------------------------------------





|                                       |  | 12/31/2012 |          |   | 12/31/2011 |  |         | 12/31/2010 | 
|-------------------------------------- |  | ---------- | -------- | - | ---------- |  | ------- | ---------- | 
|                                       |  | ThUS$      |          |   | ThUS$      |  |         | ThUS$      | 
|                                       |  |            |          |   |            |  |         |            | 
|Employee benefit expenses by nature    |  |            |          |   |            |  |         |            | 
|Salaries and wages                     |  |            | (44,429  | ) |            |  | (42,609 | )          | 
|Other short-term benefits to employees |  |            | (2,868   | ) |            |  | (3,884  | )          | 
|                                       |  |            |          |   |            |  |         |            | 
|Total employee benefit expenses        |  |            | (47,297  | ) |            |  | (46,493 | )          | 
|                                       |  |            |          |   |            |  |         |            | 
|Other expenses                         |  |            | (59,145  | ) |            |  | (45,267 | )          | 
|                                       |  |            |          |   |            |  |         |            | 
|Total                                  |  |            | (106,442 | ) |            |  | (91,760 | )          | 







F-163







| | Notes
    to the consolidated financial statements as of December 31 2012
| | -------------------------------------------------------------------------



Nota 22 – – Income and expenses from operating
activities (continued)



| | 22.5 | Other expenses
| | ---- | --------------







|                                                                                        |  | 12/31/2012 |         |   | 12/31/2011 |  |         | 12/31/2010 | 
|--------------------------------------------------------------------------------------- |  | ---------- | ------- | - | ---------- |  | ------- | ---------- | 
|                                                                                        |  | ThUS$      |         |   | ThUS$      |  |         | ThUS$      | 
|                                                                                        |  |            |         |   |            |  |         |            | 
|Expenses for employee benefits                                                          |  |            |         |   |            |  |         |            | 
|Other benefits for short term employees                                                 |  |            | (24     | ) |            |  | (16     | )          | 
|Depreciation and amortization expenses                                                  |  |            |         |   |            |  |         |            | 
|Depreciation of assets no longer in use                                                 |  |            | (5,649  | ) |            |  | (32,459 | )          | 
|                                                                                        |  |            |         |   |            |  |         |            | 
|Impairment loss (review of impairment losses) recognized in profit or loss for the year |  |            |         |   |            |  |         |            | 
|Impairment of allowance for doubtful accounts                                           |  |            | (1,054  | ) |            |  | (3,364  | )          | 
|Provision for loss in auction of materials and spare parts                              |  |            | (2,000  | ) |            |  | (2,000  | )          | 
|                                                                                        |  |            |         |   |            |  |         |            | 
|Subtotal                                                                                |  |            | (3,054  | ) |            |  | (5,364  | )          | 
|                                                                                        |  |            |         |   |            |  |         |            | 
|Other expenses                                                                          |  |            |         |   |            |  |         |            | 
|Legal expenses                                                                          |  |            | (1,984  | ) |            |  | (2,422  | )          | 
|VAT and other unrecoverable taxes                                                       |  |            | (1,182  | ) |            |  | (685    | )          | 
|Investment plan expenses                                                                |  |            | (13,578 | ) |            |  | (11,462 | )          | 
|Donations                                                                               |  |            | (5,517  | ) |            |  | (2,557  | )          | 
|Provision for work closing                                                              |  |            | (634    | ) |            |  | (224    | )          | 
|Legal provision                                                                         |  |            | -       |   |            |  | (3,500  | )          | 
|Indemnities                                                                             |  |            | (281    | ) |            |  | (3,495  | )          | 
|Fixed asset impairment                                                                  |  |            | -       |   |            |  | -       |            | 
|Exploracion expenses                                                                    |  |            | -       |   |            |  | -       |            | 
|Other operating expenses                                                                |  |            | (2,725  | ) |            |  | (863    | )          | 
|                                                                                        |  |            |         |   |            |  |         |            | 
|Subtotal                                                                                |  |            | (25,901 | ) |            |  | (25,208 | )          | 
|                                                                                        |  |            |         |   |            |  |         |            | 
|Total                                                                                   |  |            | (34,628 | ) |            |  | (63,047 | )          | 





| | 22.6 | Other gains
                                                                                (losses)
| | ---- | ----------------------------------------------------------------------------------------------------









|                                 |  | 12/31/2012 |       |   | 12/31/2011 |  |       | 12/31/2010 | 
|-------------------------------- |  | ---------- | ----- | - | ---------- |  | ----- | ---------- | 
|                                 |  | ThUS$      |       |   | ThUS$      |  |       | ThUS$      | 
|                                 |  |            |       |   |            |  |       |            | 
|Sale of investment in associates |  |            | (404  | ) |            |  | 1,467 |            | 
|Retirement plan provision        |  |            | -     |   |            |  | 880   |            | 
|El Toco closing provision        |  |            | -     |   |            |  | 3,016 |            | 
|Other                            |  |            | 1,087 |   |            |  | 424   |            | 
|                                 |  |            |       |   |            |  |       |            | 
|Total                            |  |            | 683   |   |            |  | 5,787 |            | 







F-164







| | Notes
    to the consolidated financial statements as of December 31 2012
| | -------------------------------------------------------------------------



Note 22 – Income and expenses from operating activities
(continued)



| | 22.7 | Summary
                                                                                of expenses by nature :
| | ---- | ---------------------------------------------------------------------------------------------------------------





|                                                                                        |  | Year ended December 31 |           
|--------------------------------------------------------------------------------------- |  | ---------------------- | ----------
|                                                                                        |  | 2012                   |           
|                                                                                        |  | ThUS$                  |           
|                                                                                        |  |                        |           
|Raw material and supplies                                                               |  |                        | (1,066,803
|                                                                                        |  |                        |           
|Types of employee benefits expenses                                                     |  |                        |           
|                                                                                        |  |                        |           
|Salaries and wages                                                                      |  |                        | (178,829  
|Other short-term employee benefits                                                      |  |                        | (69,262   
|Termination benefit expenses                                                            |  |                        | (4,325    
|Total employee benefit expenses                                                         |  |                        | (252,416  
|Depreciation and amortization expenses                                                  |  |                        |           
|Depreciation expense                                                                    |  |                        | (196,158  
|Impairment loss (review of impairment losses) recognized in profit or loss for the year |  |                        | (21,212   
|Other expenses, by nature                                                               |  |                        | (5,048    
|                                                                                        |  |                        |           
|Total expenses, by nature                                                               |  |                        | (1,541,637







This table corresponds to the summary from
Note 22.2 to 22.6 required by the SVS.



F-165







| | Notes
    to the consolidated financial statements as of December 31 2012
| | -------------------------------------------------------------------------



Note 23 - Income Tax and Deferred Taxes



| | 23.1 | Current tax assets:
| | ---- | -------------------



|                                                                        |  | 12/31/2012 |        |  | 12/31/2011 | 
|----------------------------------------------------------------------- |  | ---------- | ------ |  | ---------- | 
|                                                                        |  | ThUS$      |        |  | ThUS$      | 
|Monthly provisional income tax payments, Chilean companies current year |  |            | 23,713 |  |            | 
|Monthly provisional income tax payments, Chilean companies prior year   |  |            | 2,430  |  |            | 
|Monthly provisional income tax payments, foreign companies              |  |            | 1,979  |  |            | 
|Corporate tax credits (1)                                               |  |            | 144    |  |            | 
|Corporate tax absorbed by tax losses (2)                                |  |            | 1,968  |  |            | 
|Total                                                                   |  |            | 30,234 |  |            | 





| | (1) | These credits correspond to corporate tax payment made in April of the following year. These credits
include, amongst others, training expense credits (SENCE) and property, plant and equipment acquisition credits that are equivalent
to 4% of the property, plant and equipment purchases made during the year. In addition, some credits relate to donations the Company
has made during 2012 and 2011.
| | --- | ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



| | (2) | Generation of non-operating losses (NOL’s), which must be imputed or recorded in the Retained
Taxable Profits Registry (FUT).
| | --- | -----------------------------------------------------------------------------------------------------------------------------



In accordance with the laws in
force and as provided by article 31, No. 3 of the Income Tax Law, when profits are recorded in the FUT that have not been withdrawn
or distributed are totally or partially absorbed by NOL’s, the corporate tax paid on such profits (20%, 17%, 16,5%, 16%,
15%, 10% depending on the year in which profits were generated) will be considered to be a provisional payment with respect to
the portion representing the absorbed accumulated tax profits.



F-166







| | Notes
    to the consolidated financial statements as of December 31 2012
| | -------------------------------------------------------------------------



Note 23 - Income Tax and Deferred Taxes (continued)



| | 23.1 | Current tax assets, continued
| | ---- | -----------------------------



Taxpayers are entitled to apply
for a refund of this monthly provisional income tax payments on the absorbed profits recorded in the FUT registry via their tax
returns (Form 22).



Therefore, the provisional payment
for absorbed profits (PPAP) recorded in the FUT is in effect a recoverable tax, and as such the Company records it as an asset.



| | 23.2 | Current tax liabilities:
| | ---- | ------------------------



|Current tax liabilities         |  | 12/31/2012 |        |  | 12/31/2011 | 
|------------------------------- |  | ---------- | ------ |  | ---------- | 
|                                |  |            | ThUS$  |  |            | 
|Companies incorporated in Chile |  |            | 13,408 |  |            | 
|Companies incorporated abroad   |  |            | 10,206 |  |            | 
|Tax under article 21            |  |            | 10     |  |            | 
|Total                           |  |            | 23,624 |  |            | 



Income tax is determined based on the Chilean
fiscal rate applied, and as per Act 20,630, was fixed at 20% beginning with the fiscal year ending December 31, 2012. The provision
for royalty is determined by applying the tax rate determined for net operating income (NOI). Both concepts represent the estimated
amount the Company will pay for income tax and specific tax on mining activities.



| | 23.3 | Tax earnings
| | ---- | ------------



The Company and its subsidiaries have recorded
the following consolidated balances for retained tax earnings, income not constituting revenue subject to income tax, accumulated
tax losses and credit for shareholders:



|                                          |  | 12/31/2012 ThUS$ |           |  | 12/31/2011 ThUS$ |  |           | 12/31/2010 ThUS$ | 
|----------------------------------------- |  | ---------------- | --------- |  | ---------------- |  | --------- | ---------------- | 
|Taxable profits with credit rights (1)    |  |                  | 1,262,201 |  |                  |  | 1,053,651 |                  | 
|Taxable profits without credit rights (1) |  |                  | 138,535   |  |                  |  | 150,234   |                  | 
|Taxable loss                              |  |                  | 9,931     |  |                  |  | 15,069    |                  | 
|Credit for shareholders                   |  |                  | 294,146   |  |                  |  | 242,143   |                  | 



F-167







| | Notes
    to the consolidated financial statements as of December 31 2012
| | -------------------------------------------------------------------------



Note 23 - Income Tax and Deferred Taxes (continued)



| | 23.3 | Tax earnings, continued
| | ---- | -----------------------



| | (1) | The FUT is a chronological registry where the profits generated and distributed by the Company
are recorded. The object of the FUT is to control the accumulated tax profits of the Company that may be distributed, withdrawn
or remitted to the owners, shareholders or partners, and the final taxes that must be imposed, thereon called in Chile Global Aggregate
Tax (that is levied on persons resident or domiciled in Chile), or Withholding Tax (that is levied on non resident persons).
| | --- | ---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



The FUT Register contains profits with credit rights and profits
without credit rights, which arise out of the inclusion of the net taxable income determined by the Company or the profits received
by the Company that may be dividends received or withdrawals made during the period. Profits without credit rights represent tax
payable by the Company within the year and filed the following year, therefore they will be deducted from the FUT Registry the
following year. Profits with credit rights may be used to reduce the final tax burden of owners, shareholders or partners, which
upon withdrawal are entitled to use the credits associated with the relevant profits. In summary, companies using the FUT Registry
to maintain control over their profits that have not been distributed to the owners and the relevant credits associated with such
profits.



| | 23.4 | Income tax and deferred taxes
| | ---- | -----------------------------



Assets and liabilities recognized in the
Statement of Financial Position are offset if and only if:



| | 1 | The Company has legally recognized before the tax authority the right to offset the amounts recognized
in these entries; and
| | - | ----------------------------------------------------------------------------------------------------------------------------



| | 2 | Deferred income tax assets and liabilities are derived from income tax related to the same tax
authority on the same entity or tax subject; or different entities or tax subjects who intend either to settle current fiscal assets
and liabilities for their net amount, or to realize assets and pay liabilities simultaneously in each of the future periods in
which the Company expects to settle or recover significant amounts of deferred tax assets or liabilities.
| | - | ----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------



Deferred income tax assets recognized are
those income taxes to be recovered in future periods, related to:



(a) deductible temporary differences;



(b) the offset of losses obtained
in prior periods and not yet subject to tax deduction; and



(c) the offset of unused credits
from prior periods.



The Company recognizes a deferred tax asset
when there is certainty that these can be offset with tax income from subsequent periods, losses or fiscal credits not yet used,
but solely as long as it is more likely than not that there will be tax earnings in the future against which to charge to these
losses or unused fiscal credits.



Note 23 - Income Tax and Deferred Taxes (continued)



Deferred tax liabilities recognized refer
to the amounts of income taxes payable in future periods related to taxable temporary differences.



d.1	     Deferred
income tax assets and liabilities net as of December 31, 2012 are detailed as follows:



F-168







| | Notes
    to the consolidated financial statements as of December 31 2012
| | -------------------------------------------------------------------------





|Description of deferred income tax assets and 
liabilities |  | Assets  ThUS$ |     |  | Liabilities *  ThUS$ | 
|---------------------------------------------------------- |  | ------------- | --- |  | -------------------- | 
|Depreciation                                               |  |               | -   |  |                      | 
|Provision for doubtful accounts impairment                 |  |               | -   |  |                      | 
|Accrued vacations                                          |  |               | -   |  |                      | 
|Manufacturing expenses                                     |  |               | -   |  |                      | 
|Unrealized gains from sales of products                    |  |               | -   |  |                      | 
|Fair value of bonds                                        |  |               | -   |  |                      | 
|Severance indemnity                                        |  |               | -   |  |                      | 
|Hedging                                                    |  |               | -   |  |                      | 
|Inventory of products, spare parts and supplies            |  |               | 37  |  |                      | 
|Research and development expenses                          |  |               | -   |  |                      | 
|Tax losses                                                 |  |               | -   |  |                      | 
|Capitalized interest                                       |  |               | -   |  |                      | 
|Expenses in assumption of bank loans                       |  |               | -   |  |                      | 
|Unaccrued interest                                         |  |               | -   |  |                      | 
|Fair value of property, plant and equipment                |  |               | -   |  |                      | 
|Employee benefits                                          |  |               | -   |  |                      | 
|Royalty taxes                                              |  |               | -   |  |                      | 
|Other                                                      |  |               | 186 |  |                      | 
|Total                                                      |  |               | 223 |  |                      | 





(*) Deferred tax assets are netted with deferred tax liabilities
as allowed under applicable tax jurisdictions.



F-169







| | Notes
    to the consolidated financial statements as of December 31 2012
| | -------------------------------------------------------------------------



Note 23 - Income Tax and Deferred Taxes (continued)



| | 23.4 | Income tax and deferred taxes, continued
| | ---- | ----------------------------------------



d.2	        Deferred
income tax assets and liabilities net as of December 31, 2011 are detailed as follows:





|Description of deferred income tax assets and 
liabilities |  | Assets ThUS$ |     |  | Liabilities *  ThUS$ | 
|---------------------------------------------------------- |  | ------------ | --- |  | -------------------- | 
|Depreciation                                               |  |              | -   |  |                      | 
|Provision for doubtful accounts                            |  |              | 16  |  |                      | 
|Vacation accrual                                           |  |              | 9   |  |                      | 
|Production expenses                                        |  |              | -   |  |                      | 
|Unrealized gains from sales of products                    |  |              | -   |  |                      | 
|Bonds fair value                                           |  |              | -   |  |                      | 
|Employee termination benefits                              |  |              | -   |  |                      | 
|Hedging                                                    |  |              | -   |  |                      | 
|Inventory of products, spare parts and supplies            |  |              | 85  |  |                      | 
|Research and development expenses                          |  |              | -   |  |                      | 
|Tax losses                                                 |  |              | -   |  |                      | 
|Capitalized interest                                       |  |              | -   |  |                      | 
|Expenses in assumption of bank loans                       |  |              | -   |  |                      | 
|Unaccrued interest                                         |  |              | -   |  |                      | 
|Fair value of property, plant and equipment                |  |              | -   |  |                      | 
|Employee benefits                                          |  |              | -   |  |                      | 
|Royalty taxes                                              |  |              | -   |  |                      | 
|Other                                                      |  |              | 194 |  |                      | 
|Total                                                      |  |              | 304 |  |                      | 





F-170







| | Notes
    to the consolidated financial statements as of December 31 2012
| | -------------------------------------------------------------------------



Note 23 - Income Tax and Deferred Taxes (continued)



| | 23.4 | Income tax and deferred taxes, continued
| | ---- | ----------------------------------------



d.3
Deferred taxes related to benefits for tax losses



The Company’s tax loss carryforwards
(NOL carryforwards) were mainly generated by losses in Chile, which in accordance with current Chilean tax regulations have no
expiration date.



Tax loss carryforwards (NOL carryforwards)
are detailed as follows:



|                 |  | 12/31/2012 |       |  | 12/31/2011 | 
|---------------- |  | ---------- | ----- |  | ---------- | 
|                 |  | ThUS$      |       |  | ThUS$      | 
|                 |  |            |       |  |            | 
|Chile            |  |            | 1,509 |  |            | 
|Other countries  |  |            | -     |  |            | 
|                 |  |            |       |  |            | 
|Balances to date |  |            | 1,509 |  |            | 



Tax losses as of December 31, 2012 correspond
mainly to Servicios Integrales de Tránsitos y Transferencias S.A., Exploraciones Mineras and Isapre Norte Grande Ltda.



d.4
Unrecognized deferred income tax assets and liabilities



Tax loss carryforwards (NOL carryforwards) are detailed as follows:



|                             |  | 12/31/2012           |       |   | 12/31/2011           |  |       | 12/31/2010           | 
|---------------------------- |  | -------------------- | ----- | - | -------------------- |  | ----- | -------------------- | 
|                             |  | ThUS$                |       |   | ThUS$                |  |       | ThUS$                | 
|                             |  | Assets (liabilities) |       |   | Assets (liabilities) |  |       | Assets (liabilities) | 
|                             |  |                      |       |   |                      |  |       |                      | 
|Tax losses (NOL’s)           |  |                      | 139   |   |                      |  | 139   |                      | 
|Doubtful accounts impairment |  |                      | 81    |   |                      |  | 81    |                      | 
|Inventory impairment         |  |                      | 1,020 |   |                      |  | 1,020 |                      | 
|Pensions plan                |  |                      | (536  | ) |                      |  | (536  | )                    | 
|Accrued vacations            |  |                      | 29    |   |                      |  | 29    |                      | 
|Depreciation                 |  |                      | (57   | ) |                      |  | (57   | )                    | 
|Other                        |  |                      | (19   | ) |                      |  | (19   | )                    | 
|                             |  |                      |       |   |                      |  |       |                      | 
|Balances to date             |  |                      | 657   |   |                      |  | 657   |                      | 



Tax losses mainly relate to losses generated in the United States,
which expire in 20 years.



F-171







| | Notes
    to the consolidated financial statements as of December 31 2012
| | -------------------------------------------------------------------------



Note 23 - Income Tax and Deferred Taxes (continued)



| | 23.4 | Income tax and deferred taxes, continued
| | ---- | ----------------------------------------



Movements in deferred tax assets and liabilities are detailed
as follows:



|                                                             |  | 12/31/2012            |         |   | 12/31/2011            | 
|------------------------------------------------------------ |  | --------------------- | ------- | - | --------------------- | 
|                                                             |  | ThUS$                 |         |   | ThUS$                 | 
|                                                             |  | Liabilities 
(assets) |         |   | Liabilities 
(assets) | 
|                                                             |  |                       |         |   |                       | 
|Deferred tax assets and liabilities, net opening balance     |  |                       | 98,290  |   |                       | 
|Increase (decrease) in deferred taxes in profit or loss      |  |                       | 28,512  |   |                       | 
|Tax Recovery of first category credit absorbed by tax losses |  |                       | -       |   |                       | 
|Decrease in deferred taxes in equity                         |  |                       | (1,580  | ) |                       | 
|                                                             |  |                       |         |   |                       | 
|Balances to date                                             |  |                       | 125,222 |   |                       | 



Disclosures
of income tax expense (income)



The Company recognizes current tax and deferred taxes as income
or expenses, and they are included in profit or loss, unless they arise from:



| | (a) | a transaction or event recognized in the same period or in a different period, outside profit or loss either in other comprehensive
income or directly in equity; or
| | --- | --------------------------------------------------------------------------------------------------------------------------------------------------------------------



(b)	a business combination.



F-172







| | Notes
    to the consolidated financial statements as of December 31 2012
| | -------------------------------------------------------------------------



Note 23 - Income Tax and Deferred Taxes (continued)



| | 23.4 | Income tax and deferred taxes, continued
| | ---- | ----------------------------------------



Current
and deferred tax expenses (income) are detailed as follows :



|                                                                                             |  | 12/31/2012        |          |   | 12/31/2011        |  |          | 12/31/2010        | 
|-------------------------------------------------------------------------------------------- |  | ----------------- | -------- | - | ----------------- |  | -------- | ----------------- | 
|                                                                                             |  | ThUS$             |          |   | ThUS$             |  |          | ThUS$             | 
|                                                                                             |  | Income 
(expense) |          |   | Income 
(expense) |  |          | Income 
(expense) | 
|                                                                                             |  |                   |          |   |                   |  |          |                   | 
|Current income tax expense                                                                   |  |                   |          |   |                   |  |          |                   | 
|Current income tax expense                                                                   |  |                   | (187,715 | ) |                   |  | (181,424 | )                 | 
|Adjustments to prior year current income tax                                                 |  |                   | 145      |   |                   |  | (1,950   | )                 | 
|                                                                                             |  |                   |          |   |                   |  |          |                   | 
|Current income tax expense, net, total                                                       |  |                   | (187,570 | ) |                   |  | (183,374 | )                 | 
|                                                                                             |  |                   |          |   |                   |  |          |                   | 
|Deferred tax expense                                                                         |  |                   |          |   |                   |  |          |                   | 
|Deferred tax expense (income) relating to the creation and reversal of temporary differences |  |                   | (28,512  | ) |                   |  | 3,664    |                   | 
|Deferred tax expense, net, total                                                             |  |                   | (28,512  | ) |                   |  | 3,664    |                   | 
|                                                                                             |  |                   |          |   |                   |  |          |                   | 
|Tax expense (income)                                                                         |  |                   | (216,082 | ) |                   |  | (179,710 | )                 | 



Tax
expenses (income) for foreign and domestic parties are detailed as follows:



|                                                                |  | 12/31/2012        |          |   | 12/312011         |  |          | 12/31/2010        | 
|--------------------------------------------------------------- |  | ----------------- | -------- | - | ----------------- |  | -------- | ----------------- | 
|                                                                |  | ThUS$             |          |   | ThUS$             |  |          | ThUS$             | 
|                                                                |  | Income 
(expense) |          |   | Income 
(expense) |  |          | Income
 (expense) | 
|                                                                |  |                   |          |   |                   |  |          |                   | 
|Current income tax expense by foreign and domestic parties, net |  |                   |          |   |                   |  |          |                   | 
|Current income tax expense, foreign parties, net                |  |                   | (14,790  | ) |                   |  | (5,231   | )                 | 
|Current income tax expense, domestic, net                       |  |                   | (172,780 | ) |                   |  | (178,143 | )                 | 
|                                                                |  |                   |          |   |                   |  |          |                   | 
|Current income tax expense, net, total                          |  |                   | (187,570 | ) |                   |  | (183,374 | )                 | 
|                                                                |  |                   |          |   |                   |  |          |                   | 
|Deferred tax expense by foreign and domestic parties, net       |  |                   |          |   |                   |  |          |                   | 
|Deferred tax expense, foreign parties, net                      |  |                   | 474      |   |                   |  | (651     | )                 | 
|Deferred tax expense, domestic, net                             |  |                   | (28,986  | ) |                   |  | 4,315    |                   | 
|                                                                |  |                   |          |   |                   |  |          |                   | 
|Deferred tax expense, net, total                                |  |                   | (28,512  | ) |                   |  | 3,664    |                   | 
|                                                                |  |                   |          |   |                   |  |          |                   | 
|Income tax expense                                              |  |                   | (216,082 | ) |                   |  | (179,710 | )                 | 



F-173







| | Notes
    to the consolidated financial statements as of December 31 2012
| | -------------------------------------------------------------------------



Note 23 - Income Tax and Deferred Taxes (continued)



| | 23.4 | Income tax and deferred taxes, continued
| | ---- | ----------------------------------------



The Company does not recognize any deferred
tax liability in cases of taxable temporary differences associated with investments in associated companies or interest in joint
ventures, because the following two conditions are jointly met:



| | (a) | the parent, investor or interest holder is able to control the time for reversal of the temporary difference; and
| | --- | -----------------------------------------------------------------------------------------------------------------



| | (b) | It is more likely than not that the temporary difference is not reversed in the foreseeable future.
| | --- | ---------------------------------------------------------------------------------------------------



In addition, the Company does not recognize
deferred income tax assets for all deductible temporary differences from investments in associated companies or interests in joint
ventures because it is not possible to meet for the following requirements:



| | (a) | Temporary differences are reversed in a foreseeable future; and
| | --- | ---------------------------------------------------------------



| | (b) | The Company has tax earnings, against which temporary differences can be used.
| | --- | ------------------------------------------------------------------------------



Disclosures on the tax effects
of other comprehensive income components



|Income tax related to components of other income 
and expense with a charge or credit to net  equity |  | 12/31/2012 ThUS$     |       
|---------------------------------------------------------------------------------------------------- |  | -------------------- | ------
|                                                                                                     |  | Amount 
before taxes |       
|Cash flow hedge                                                                                      |  |                      | (6,236
|Total                                                                                                |  |                      | (6,236



|Income tax related to components of other income 
and expense with a charge or credit to net  equity |  |                      |        |   | 12/31/2011 ThUS$                    |  |     |                     | 
|---------------------------------------------------------------------------------------------------- |  | -------------------- | ------ | - | ----------------------------------- |  | --- | ------------------- | 
|                                                                                                     |  | Amount 
before taxes |        |   | Expense 
(income) for 
income taxes |  |     | Amount 
after taxes | 
|Cash flow hedge                                                                                      |  |                      | (1,091 | ) |                                     |  | 218 |                     | 
|Total                                                                                                |  |                      | (1,091 | ) |                                     |  | 218 |                     | 



F-174







| | Notes
    to the consolidated financial statements as of December 31 2012
| | -------------------------------------------------------------------------



Note 23 - Income Tax and Deferred Taxes (continued)



| | 23.4 | Income tax and deferred taxes, continued
| | ---- | ----------------------------------------



|Income tax related to components of other income 
and expense with a charge or credit to net  equity |  |                      |        |   | 12/31/2010 ThUS$                    |  |     |                     | 
|---------------------------------------------------------------------------------------------------- |  | -------------------- | ------ | - | ----------------------------------- |  | --- | ------------------- | 
|                                                                                                     |  | Amount 
before taxes |        |   | Expense
 (income) for 
income taxes |  |     | Amount 
after taxes | 
|Cash flow hedge                                                                                      |  |                      | (1,474 | ) |                                     |  | 251 |                     | 
|Total                                                                                                |  |                      | (1,474 | ) |                                     |  | 251 |                     | 



The Company has estimated that the method
that discloses more significant information for the users of its financial statements is the reconciliation of tax expense (income)
to the result of multiplying income for accounting purposes by the tax rate in force in Chile. This option is based on the fact
that the both SQM entire amount of tax expense (income) and considering that amounts from subsidiaries incorporated in foreign
countries have an insignificant amount of tax expense (income).



Reconciliation of numbers in income
tax expenses (income) and the result of multiplying financial gain by the rate prevailing in Chile



|                                                                                           |  | 12/31/2012        |          |   | 12/31/2011        |  |          | 12/31/2010        | 
|------------------------------------------------------------------------------------------ |  | ----------------- | -------- | - | ----------------- |  | -------- | ----------------- | 
|                                                                                           |  | ThUS$             |          |   | ThUS$             |  |          | ThUS$             | 
|                                                                                           |  | Income 
(expense) |          |   | Income 
(expense) |  |          | Income
 (expense) | 
|                                                                                           |  |                   |          |   |                   |  |          |                   | 
|Consolidated income before taxes                                                           |  |                   | 873,451  |   |                   |  | 733,829  |                   | 
|Income tax rate in force in Chile                                                          |  |                   | 20       | % |                   |  | 20       | %                 | 
|                                                                                           |  |                   |          |   |                   |  |          |                   | 
|Tax expense using the legal rate                                                           |  |                   | (174,690 | ) |                   |  | (146,766 | )                 | 
|Effect of royalty tax expense                                                              |  |                   | (25,486  | ) |                   |  | (24,487  | )                 | 
|Tax effect of non-taxable revenue                                                          |  |                   | 7,419    |   |                   |  | 6,865    |                   | 
|Tax effect of rates in other jurisdictions                                                 |  |                   | (3,091   | ) |                   |  | (2,548   | )                 | 
|Tax effect of tax rates supported abroad                                                   |  |                   | (5,265   | ) |                   |  | (3,173   | )                 | 
|Effect on the tax rate arising from changes in the tax rate                                |  |                   | -        |   |                   |  | -        |                   | 
|Other effects from the reconciliation between carrying amount and the tax expense (income) |  |                   | (14,969  | ) |                   |  | (9,601   | )                 | 
|                                                                                           |  |                   |          |   |                   |  |          |                   | 
|Tax expense using the effective rate                                                       |  |                   | (216,082 | ) |                   |  | (179,710 | )                 | 



F-175







| | Notes
    to the consolidated financial statements as of December 31 2012
| | -------------------------------------------------------------------------



Note 23 - Income Tax and Deferred Taxes (continued)



| | 23.4 | Income tax and deferred taxes, continued
| | ---- | ----------------------------------------



Tax
periods potentially subject to verification:



The Company and its subsidiaries are potentially
subject to income tax audits by tax authorities in each country of operations based on the statutory time limits of each country.



Tax audits, due to their nature, are often
complex and may require several years for ultimate resolution. A summary of tax periods that are potentially subject to verification,
in accordance with tax regulations in force in the country of origin for our primary tax jurisdictions is provided below:



| | a) | Chile
| | -- | -----



According to article 200 of Decree
Law No, 830, the tax authority shall review for any deficiencies in tax settlements and returns, by applying a requirement of 3
years term from the expiration of the legal deadline when payment should have been made. Besides, this requirement was extended
to 6 years term for the revision of taxes subject to declaration, when such declaration was not filed or has been presented maliciously
false.



| | b) | United States
| | -- | -------------



In the United States, the tax
authority may review tax returns for up to 3 years from the expiration date of the tax return, In the event that an omission or
error is detected in the tax return of sales or cost of sales, the review can be extended for a period of up to 6 years.



| | c) | Mexico:
| | -- | -------



In Mexico, the tax authority can review tax returns
up to 5 years from the expiration date of the tax return.



| | d) | Spain:
| | -- | ------



In Spain, the tax authority can
review tax returns up to 4 years from the expiration date of the tax return.



| | e) | Belgium:
| | -- | --------



In Belgium, the tax authority
may review tax returns for up to 3 years from the expiration date of the tax return if no tax losses exist In the event of detecting
an omission or error in the tax return, the review can be extended for a period of up to 5 years.



| | f) | South Africa:
| | -- | -------------



In South Africa, the tax authority
may review tax returns for up to 3 years from the expiration date of the tax return In the event an omission or error in the tax
return is detected, the review can be extended for a period of up to 5 years.



F-176







| | Notes
    to the consolidated financial statements as of December 31 2012
| | -------------------------------------------------------------------------



Note 24 - Disclosures on the effects of fluctuations in foreign
currency exchange rates



Assets held in foreign currency are detailed as follows:



|Class of asset                              |  | Currency |  | 12/31/2012 ThUS$ |         |  | 12/31/2011 ThUS$ | 
|------------------------------------------- |  | -------- |  | ---------------- | ------- |  | ---------------- | 
|Current assets:                             |  |          |  |                  |         |  |                  | 
|Cash and cash equivalents                   |  | BRL      |  |                  | 20      |  |                  | 
|Cash and cash equivalents                   |  | CLP      |  |                  | 76,712  |  |                  | 
|Cash and cash equivalents                   |  | CNY      |  |                  | 181     |  |                  | 
|Cash and cash equivalents                   |  | EUR      |  |                  | 3,601   |  |                  | 
|Cash and cash equivalents                   |  | GBP      |  |                  | 70      |  |                  | 
|Cash and cash equivalents                   |  | IDR      |  |                  | 5       |  |                  | 
|Cash and cash equivalents                   |  | INR      |  |                  | 13      |  |                  | 
|Cash and cash equivalents                   |  | MXN      |  |                  | 720     |  |                  | 
|Cash and cash equivalents                   |  | PEN      |  |                  | 75      |  |                  | 
|Cash and cash equivalents                   |  | YEN      |  |                  | 1,369   |  |                  | 
|Cash and cash equivalents                   |  | ZAR      |  |                  | 7,421   |  |                  | 
|Subtotal cash and cash equivalents          |  |          |  |                  | 90,187  |  |                  | 
|Other current financial assets              |  | CLP      |  |                  | 182,427 |  |                  | 
|Subtotal other current financial assets     |  |          |  |                  | 182,427 |  |                  | 
|Other current non-financial assets          |  | ARS      |  |                  | 29      |  |                  | 
|Other current non-financial assets          |  | AUD      |  |                  | -       |  |                  | 
|Other current non-financial assets          |  | BRL      |  |                  | 5       |  |                  | 
|Other current non-financial assets          |  | CLF      |  |                  | 23      |  |                  | 
|Other current non-financial assets          |  | CLP      |  |                  | 42,378  |  |                  | 
|Other current non-financial assets          |  | CNY      |  |                  | 29      |  |                  | 
|Other current non-financial assets          |  | EUR      |  |                  | 8,534   |  |                  | 
|Other current non-financial assets          |  | INR      |  |                  | -       |  |                  | 
|Other current non-financial assets          |  | MXN      |  |                  | 736     |  |                  | 
|Other current non-financial assets          |  | PEN      |  |                  | 55      |  |                  | 
|Other current non-financial assets          |  | YEN      |  |                  | 15      |  |                  | 
|Other current non-financial assets          |  | ZAR      |  |                  | 702     |  |                  | 
|Subtotal other current non-financial assets |  |          |  |                  | 52,506  |  |                  | 
|Trade and other receivables                 |  | ARS      |  |                  | -       |  |                  | 
|Trade and other receivables                 |  | AUD      |  |                  | 14      |  |                  | 
|Trade and other receivables                 |  | BRL      |  |                  | 58      |  |                  | 
|Trade and other receivables                 |  | CLF      |  |                  | 826     |  |                  | 
|Trade and other receivables                 |  | CLP      |  |                  | 78,112  |  |                  | 
|Trade and other receivables                 |  | CNY      |  |                  | 2,014   |  |                  | 
|Trade and other receivables                 |  | EUR      |  |                  | 47,962  |  |                  | 
|Trade and other receivables                 |  | GBP      |  |                  | 399     |  |                  | 
|Trade and other receivables                 |  | MXN      |  |                  | 200     |  |                  | 
|Trade and other receivables                 |  | PEN      |  |                  | 114     |  |                  | 
|Trade and other receivables                 |  | YEN      |  |                  | -       |  |                  | 
|Trade and other receivables                 |  | ZAR      |  |                  | 16,004  |  |                  | 
|Subtotal trade and other receivables        |  |          |  |                  | 145,703 |  |                  | 
|Receivables from related parties            |  | AED      |  |                  | -       |  |                  | 
|Receivables from related parties            |  | CLP      |  |                  | 1,154   |  |                  | 
|Receivables from related parties            |  | EUR      |  |                  | 34      |  |                  | 
|Receivables from related parties            |  | YEN      |  |                  | 28      |  |                  | 
|Receivables from related parties            |  | ZAR      |  |                  | 3,312   |  |                  | 
|Subtotal receivables from related parties   |  |          |  |                  | 4,528   |  |                  | 
|Current tax assets                          |  | AUD      |  |                  | 452     |  |                  | 
|Current tax assets                          |  | CLP      |  |                  | 457     |  |                  | 
|Current tax assets                          |  | CNY      |  |                  | -       |  |                  | 
|Current tax assets                          |  | EUR      |  |                  | 72      |  |                  | 
|Current tax assets                          |  | INR      |  |                  | 5       |  |                  | 
|Current tax assets                          |  | MXN      |  |                  | 698     |  |                  | 
|Current tax assets                          |  | PEN      |  |                  | 363     |  |                  | 
|Current tax assets                          |  | YEN      |  |                  | 135     |  |                  | 
|Current tax assets                          |  | ZAR      |  |                  | -       |  |                  | 
|Subtotal current tax assets                 |  |          |  |                  | 2,182   |  |                  | 
|Total current assets                        |  |          |  |                  | 477,533 |  |                  | 



F-177







| | Notes
    to the consolidated financial statements as of December 31 2012
| | -------------------------------------------------------------------------



Note 24 - Disclosures on the effects of fluctuations in foreign
currency exchange rates (continued)



|Class of asset                                  |  | Currency |  | 12/31/2012 ThUS$ |         |  | 12/31/2011 ThUS$ | 
|----------------------------------------------- |  | -------- |  | ---------------- | ------- |  | ---------------- | 
|Non-current assets:                             |  |          |  |                  |         |  |                  | 
|Other non-current financial assets              |  | BRL      |  |                  | 30      |  |                  | 
|Other non-current financial assets              |  | CLP      |  |                  | 20      |  |                  | 
|Other non-current financial assets              |  | EUR      |  |                  | -       |  |                  | 
|Other non-current financial assets              |  | YEN      |  |                  | 54      |  |                  | 
|Subtotal other non-current financial assets     |  |          |  |                  | 104     |  |                  | 
|Other non-current non-financial assets          |  | BRL      |  |                  | 219     |  |                  | 
|Other non-current non-financial assets          |  | CLP      |  |                  | 624     |  |                  | 
|Other non-current non-financial assets          |  | YEN      |  |                  | -       |  |                  | 
|Subtotal other non-current non-financial assets |  |          |  |                  | 843     |  |                  | 
|Non-current rights receivable                   |  | CLF      |  |                  | 602     |  |                  | 
|Non-current rights receivable                   |  | CLP      |  |                  | 709     |  |                  | 
|Subtotal non-current rights receivable          |  |          |  |                  | 1,311   |  |                  | 
|Equity-accounted investees                      |  | AED      |  |                  | 17,044  |  |                  | 
|Equity-accounted investees                      |  | CLP      |  |                  | 1,656   |  |                  | 
|Equity-accounted investees                      |  | EGP      |  |                  | -       |  |                  | 
|Equity-accounted investees                      |  | EUR      |  |                  | 8,495   |  |                  | 
|Equity-accounted investees                      |  | INR      |  |                  | 683     |  |                  | 
|Equity-accounted investees                      |  | THB      |  |                  | 1,608   |  |                  | 
|Equity-accounted investees                      |  | TRY      |  |                  | 15,431  |  |                  | 
|Subtotal equity-accounted investees             |  |          |  |                  | 44,917  |  |                  | 
|Intangible assets other than goodwill           |  | CLP      |  |                  | 170     |  |                  | 
|Intangible assets other than goodwill           |  | CNY      |  |                  | 6       |  |                  | 
|Subtotal intangible assets other than goodwill  |  |          |  |                  | 176     |  |                  | 
|Property, plant and equipment                   |  | CLP      |  |                  | 3,639   |  |                  | 
|Subtotal property, plant and equipment          |  |          |  |                  | 3,639   |  |                  | 
|Total non-current assets                        |  |          |  |                  | 50,990  |  |                  | 
|Total assets                                    |  |          |  |                  | 528,523 |  |                  | 
|                                                |  |          |  |                  |         |  |                  | 



F-178







| | Notes
    to the consolidated financial statements as of December 31 2012
| | -------------------------------------------------------------------------



Note 24 - Disclosures on the effects of fluctuations in foreign
currency exchange rates (continued)



Liabilities held in foreign currency are detailed as follows:



|                                                  |  |          |  | 12/31/2012           |         |  | 12/31/2011                           | 
|------------------------------------------------- |  | -------- |  | -------------------- | ------- |  | ------------------------------------ | 
|Class of liability                                |  | Currency |  | Up To 90 
Days ThUS$ |         |  | Over 90 
Days Up 
To One 
Year ThUS$ | 
|Current liabilities                               |  |          |  |                      |         |  |                                      | 
|Other current financial liabilities               |  | CLF      |  |                      | 5,967   |  |                                      | 
|Other current financial liabilities               |  | CLP      |  |                      | 1,265   |  |                                      | 
|Subtotal other current financial liabilities      |  |          |  |                      | 7,232   |  |                                      | 
|Trade and other payables                          |  | ARS      |  |                      | 1       |  |                                      | 
|Trade and other payables                          |  | BRL      |  |                      | 71      |  |                                      | 
|Trade and other payables                          |  | CHF      |  |                      | 155     |  |                                      | 
|Trade and other payables                          |  | CLP      |  |                      | 132,037 |  |                                      | 
|Trade and other payables                          |  | CNY      |  |                      | 1,642   |  |                                      | 
|Trade and other payables                          |  | EUR      |  |                      | 18,983  |  |                                      | 
|Trade and other payables                          |  | GBP      |  |                      | 142     |  |                                      | 
|Trade and other payables                          |  | INR      |  |                      | 4       |  |                                      | 
|Trade and other payables                          |  | MXN      |  |                      | 808     |  |                                      | 
|Trade and other payables                          |  | PEN      |  |                      | 36      |  |                                      | 
|Trade and other payables                          |  | YEN      |  |                      | 66      |  |                                      | 
|Trade and other payables                          |  | ZAR      |  |                      | 1,810   |  |                                      | 
|Subtotal trade and other payables                 |  |          |  |                      | 155,755 |  |                                      | 
|Payables to related parties                       |  | EUR      |  |                      | -       |  |                                      | 
|Subtotal payables to related parties              |  |          |  |                      | -       |  |                                      | 
|Other short-term provisions                       |  | ARS      |  |                      | -       |  |                                      | 
|Other short-term provisions                       |  | BRL      |  |                      | 17      |  |                                      | 
|Other short-term provisions                       |  | CLP      |  |                      | 28      |  |                                      | 
|Other short-term provisions                       |  | EUR      |  |                      | 248     |  |                                      | 
|Other short-term provisions                       |  | MXN      |  |                      | -       |  |                                      | 
|Subtotal other short-term provisions              |  |          |  |                      | 293     |  |                                      | 
|Current tax liabilities                           |  | ARS      |  |                      | 5       |  |                                      | 
|Current tax liabilities                           |  | BRL      |  |                      | -       |  |                                      | 
|Current tax liabilities                           |  | CLP      |  |                      | -       |  |                                      | 
|Current tax liabilities                           |  | CNY      |  |                      | -       |  |                                      | 
|Current tax liabilities                           |  | EUR      |  |                      | -       |  |                                      | 
|Current tax liabilities                           |  | MXN      |  |                      | 36      |  |                                      | 
|Current tax liabilities                           |  | YEN      |  |                      | -       |  |                                      | 
|Current tax liabilities                           |  | ZAR      |  |                      | -       |  |                                      | 
|Subtotal current tax liabilities                  |  |          |  |                      | 41      |  |                                      | 
|Current provisions for employee benefits          |  | CLP      |  |                      | 7,557   |  |                                      | 
|Current provisions for employee benefits          |  | MXN      |  |                      | -       |  |                                      | 
|Subtotal current provisions for employee benefits |  |          |  |                      | 7,557   |  |                                      | 



F-179







| | Notes
    to the consolidated financial statements as of December 31 2012
| | -------------------------------------------------------------------------



Note 24 - Disclosures on the effects of fluctuations in foreign
currency exchange rates (continued)



|                                                 |  | 12/31/2012 |  |                      | 12/31/2011 | 
|------------------------------------------------ |  | ---------- |  | -------------------- | ---------- | 
|Class of liabilities                             |  | Currency   |  | Up To 90 
Days ThUS$ |            | 
|Other current non-financial liabilities          |  | ARS        |  |                      | -          | 
|Other current non-financial liabilities          |  | BRL        |  |                      | 12         | 
|Other current non-financial liabilities          |  | CLP        |  |                      | 9,561      | 
|Other current non-financial liabilities          |  | CNY        |  |                      | 26         | 
|Other current non-financial liabilities          |  | EUR        |  |                      | 637        | 
|Other current non-financial liabilities          |  | MXN        |  |                      | 250        | 
|Other current non-financial liabilities          |  | PEN        |  |                      | 70         | 
|Other current non-financial liabilities          |  | ZAR        |  |                      | 9          | 
|Subtotal other current non-financial liabilities |  |            |  |                      | 10,565     | 
|Total current liabilities                        |  |            |  |                      | 181,443    | 



F-180







| | Notes
    to the consolidated financial statements as of December 31 2012
| | -------------------------------------------------------------------------



Note 24 - Disclosures on the effects of fluctuations in foreign
currency exchange rates (continued)



|                                                          |  |          |  | 12/31/2012                          |         |  | 12/31/2011                           | 
|--------------------------------------------------------- |  | -------- |  | ----------------------------------- | ------- |  | ------------------------------------ | 
|Class of liabilities                                      |  | Currency |  | Over 1 year up to 3 years
    ThUS$ |         |  | Over 3 years up to 5 years
    ThUS$ | 
|Non-current liabilities                                   |  |          |  |                                     |         |  |                                      | 
|Other non-current financial liabilities                   |  | CLF      |  |                                     | 85,681  |  |                                      | 
|Other non-current financial liabilities                   |  | CLP      |  |                                     | 151,500 |  |                                      | 
|Subtotal other non-current financial liabilities          |  |          |  |                                     | 237,181 |  |                                      | 
|Deferred tax liabilities                                  |  | CLP      |  |                                     | -       |  |                                      | 
|Deferred tax liabilities                                  |  | MXN      |  |                                     | 159     |  |                                      | 
|Subtotal deferred tax liabilities                         |  |          |  |                                     | 159     |  |                                      | 
|Non-current provisions for employee benefits              |  | CLP      |  |                                     | -       |  |                                      | 
|Non-current provisions for employee benefits              |  | MXN      |  |                                     | -       |  |                                      | 
|Non-current provisions for employee benefits              |  | YEN      |  |                                     | -       |  |                                      | 
|Subtotal non-current provisions for employee
    benefits |  |          |  |                                     | -       |  |                                      | 
|Total non-current liabilities                             |  |          |  |                                     | 237,340 |  |                                      | 



F-181







Note 25 - Subsequent events







25.1      Authorization of the financial
statements



The consolidated financial statements of
Sociedad Química y Minera de Chile S.A. and subsidiaries prepared in accordance with IFRS for the year ended December 31,
2012 were approved and authorized for issuance by the Managment on April 19, 2013.



25.2      Disclosures on subsequent
events



On April 3, 2013, the Company placed US$300
million in notes due in 2023 bearing interest at 3.625% under Rule 144A and Regulation S of the U.S. Securities Act of 1933



Management is not aware of any other significant
events that occurred between December 31, 2012 and April 19, 2013, the date of issuance of these consolidated financial statements
that may significantly affect them.









F-182