**SECURITIES      AND EXCHANGE COMMISSION**

**Washington,      D.C. 20549**

----

**FORM 20-F**

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

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

**For      the fiscal year ended December 31, 2007**

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

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

**Commission      file number **
**33-65728**
**      / **
**33-99188**
**      / **
**333-10068**

**SOCIEDAD      QUIMICA Y MINERA DE CHILE S.A.**

**CHEMICAL      AND MINING COMPANY OF CHILE INC.**

**CHILE**

**El      Trovador 4285, Piso 6, Santiago, Chile +56 2 425-2000**

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

**NONE**

**NONE**

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

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*Table          of Contents*

TABLE      OF CONTENTS

|                                                                     | Page                                                                                                       |
|--------------------------------------------------------------------------|------------------------------------------------------------------------------------------------------------|
|                                                                     |                                                                                                       |
| PRESENTATION                OF INFORMATION                               | iii                                                                                                        |
| GLOSSARY                                                                 | iii                                                                                                        |
| CAUTIONARY                STATEMENT REGARDING FORWARD-LOOKING STATEMENTS | vi                                                                                                         |
|                                                                     |                                                                                                       |   |
| **PART                I**                                                |                                                                                                       | **1** |
| ITEM                1.                                                   | IDENTITY                OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS                                       | 1 |
| ITEM                2.                                                   | OFFER                STATISTICS AND EXPECTED TIMETABLE                                                     | 1 |
| ITEM                3.                                                   | KEY                INFORMATION                                                                             | 1 |
| ITEM                4.                                                   | INFORMATION                ON THE COMPANY                                                                  | 12 |
| ITEM                5.                                                   | OPERATING                AND FINANCIAL REVIEW AND PROSPECTS                                                | 45 |
| ITEM                6.                                                   | DIRECTORS,                SENIOR MANAGEMENT AND EMPLOYEES                                                  | 62 |
| ITEM                7.                                                   | MAJOR                SHAREHOLDERS AND RELATED PARTY TRANSACTIONS                                           | 74 |
| ITEM                8.                                                   | FINANCIAL                INFORMATION                                                                       | 76 |
| ITEM                9.                                                   | THE                OFFER AND LISTING                                                                       | 78 |
| ITEM                10.                                                  | ADDITIONAL                INFORMATION                                                                      | 81 |
| ITEM                11.                                                  | QUANTITATIVE                AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK                                  | 92 |
| ITEM                12.                                                  | DESCRIPTION                OF SECURITIES OTHER THAN EQUITY SECURITIES                                      | 93 |
|                                                                     |                                                                                                       |   |
| **PART                II**                                               |                                                                                                       | **94** |
| ITEM                13.                                                  | DEFAULTS,                DIVIDEND ARREARAGES AND DELINQUENCIES                                             | 94 |
| ITEM                14.                                                  | MATERIAL                MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF                PROCEEDS | 94 |
| ITEM                15.                                                  | CONTROLS                AND PROCEDURES                                                                     | 94 |
| ITEM                16.                                                  | RESERVED                                                                                                   | 95 |
| ITEM                16.A.                                                | AUDIT                COMMITTEE FINANCIAL EXPERT                                                            | 95 |
| ITEM                16.B.                                                | CODE                OF ETHICS                                                                              | 95 |
| ITEM                16.C                                                 | PRINCIPAL                ACCOUNTANT FEES AND SERVICES                                                      | 96 |
| ITEM                16.D                                                 | EXEMPTIONS                FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES                                  | 96 |
| ITEM                16.E                                                 | PURCHASES                OF EQUITY SECURITIES BY THE ISSUERS AND AFFILIATED                PURCHASERS      | 96 |
|                                                                     |                                                                                                       |   |
| **PART                III**                                              |                                                                                                       | **97** |
| ITEM                17.                                                  | FINANCIAL                STATEMENTS                                                                        | 97 |
| ITEM                18.                                                  | FINANCIAL                STATEMENTS                                                                        | 97 |
| ITEM                19.                                                  | EXHIBITS                                                                                                   | 97 |
| SIGNATURES                                                               |                                                                                                       | 98 |
|                                                                     |                                                                                                       |   |
| CONSOLIDATED                FINANCIAL STATEMENTS                         | 99                                                                                                         |
| EXHIBIT                1.1                                               |                                                                                                       |
| EXHIBIT                8.1                                               |                                                                                                       |
| EXHIBIT                12.1                                              |                                                                                                       |
| EXHIBIT                12.2                                              |                                                                                                       |
| EXHIBIT                13.1                                              |                                                                                                       |
| EXHIBIT                13.2                                              |                                                                                                       |

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*Table          of Contents*

**PRESENTATION      OF INFORMATION**

**we**
**us**
**Company**
**SQM**
*sociedad      anónima abierta*

**$**
**US$**
**U.S.      dollars**
**dollars**
**pesos**
**Ch$**
**UF**
*Unidades      de Fomento*

**GLOSSARY**
***      **

**assay      values**

**average      global metallurgical recoveries**

**average      mining exploitation factor**

**“Controller      Group**

**Corfo**
*Corporación      de Fomento de la Producción*

**cut-off      grade**

**dilution**

**exploitation      losses**

**fertigation**

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*Table          of Contents*

**geostatistical      analysis**

**heap      leaching**

**horizontal      layering**

**hypothetical      resources**

**Indicated      Mineral Resource**

**Inferred      Mineral Resource**

**industrial      crops**

**“Kriging      Method” **

**"LIBOR"**

**limited      reconnaissance**

**Measured      Mineral Resource**

**metallurgical      treatment**

**old      waste ore deposits**

**ore      depth**

**ore      type**

**ore**

**Probable      Mineral Reserve**

**Proved      Mineral Reserve**

**Reserves—Probable      Mineral Reserve**

**Reserves—Proved      Mineral Reserve**

**Resources—Indicated      Mineral Resource**

----

*Table          of Contents*

|   |   | 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 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**

**Resources—Measured      Mineral Resource**

|   |   | 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 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. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**“vat      leaching”**

**waste**

**Weighted      Average Age**

| * | 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. |
|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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*Table          of Contents*

**CAUTIONARY      STATEMENT REGARDING FORWARD-LOOKING STATEMENTS**

|   | · | the                Company's capital investment program and development of new                products; |
|--------|--------|---------------------------------------------------------------------------------------------------------|

|   | · | trends                affecting the Company's financial condition or results of                operations; |
|--------|--------|------------------------------------------------------------------------------------------------------------|

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

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

|   | · | any                statements preceded by, followed by, or that include the words "believe,"                "expect," "predict," "anticipate," "intend," "estimate," "should,"                "may,"                "could" or similar expressions; and |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | other                statements contained in this Form 20-F that are not historical                facts. |
|--------|--------|-----------------------------------------------------------------------------------------------------------|

|   | · | SQM's                ability to implement its capital expenditures, including its ability                to                arrange financing when required; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the                nature and extent of future competition in SQM's principal                markets; |
|--------|--------|-------------------------------------------------------------------------------------------------------|

|   | · | political,                economic and demographic developments in the emerging market countries                of                Latin America and Asia where SQM conducts a large portion of its                business;                and |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

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*Table          of Contents*

**PART      I**

**ITEM      1.**
**IDENTITY      OF DIRECTORS, SENIOR MANAGEMENT AND ADVISERS**

**ITEM      2.**
**OFFER      STATISTICS AND EXPECTED TIMETABLE**

**ITEM      3.**
**KEY      INFORMATION**

***3.A.****Selected        Financial Data***

|                                                                                 |   | **Year ended December 31,**       |        |
|--------------------------------------------------------------------------------------|--------|--------------------------------------------------|-------------|
|                                                                                 |   | **2007**                                         |        | **2006** |   | **2005** |   | **2004** |   | **2003** |   |
| **Income Statement Data**                                                  |   | **(in millions of US$) **(1) |        |
|                                                                                 |   |                                             |        |
| **Chilean                      GAAP**                                                |   |                                             |             |   |   |  |   |   |  |   |   |  |   |   |  |   |
| Total                      Revenues                                                  |   |                                             | 1,187.5     |   |   | 1,042.9 |   |   | 896.0 |   |   | 788.5 |   |   | 691.8 |   |
| Operating                      Income                                                |   |                                             | 259.5       |   |   | 219.9 |   |   | 181.2 |   |   | 124.1 |   |   | 87.3 |   |
| Non-operating                      results, net                                      |   |                                             | (27.1       | ) |   | (36.1 | ) |   | (34.4 | ) |   | (17.6 | ) |   | (21.2 | ) |
| Net                      income                                                      |   |                                             | 180.0       |   |   | 141.3 |   |   | 113.5 |   |   | 74.2 |   |   | 46.8 |   |
| Net                      earnings per share (2)                                      |   |                                             | 0.68        |   |   | 0.54 |   |   | 0.43 |   |   | 0.28 |   |   | 0.18 |   |
| Net                      earnings per ADS (2) (3)                                    |   |                                             | 0.68        |   |   | 0.54 |   |   | 0.43 |   |   | 0.28 |   |   | 0.18 |   |
| Dividend                      per share (4)(5)                                       |   |                                             | 0.44        |   |   | 0.349 |   |   | 0.279 |   |   | 0.182 |   |   | 0.088 |   |
| **Weighted                      average shares outstanding (000s) (2)**              |   |                                             | **263,197** |   |   | **263,197** |   |   | **263,197** |   |   | **263,197** |   |   | **263,197** |   |
|                                                                                 |   |                                             |        |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **U.S.                      GAAP**                                                   |   |                                             |             |   |   |  |   |   |  |   |   |  |   |   |  |   |
| Total                      Revenues                                                  |   |                                             | 1,187.5     |   |   | 1,042.9 |   |   | 896.0 |   |   | 788.5 |   |   | 691.8 |   |
| Operating                      Income                                                |   |                                             | 237.0       |   |   | 205.5 |   |   | 163.9 |   |   | 114.6 |   |   | 76.7 |   |
| Non-operating                      results, net (6)                                  |   |                                             | 1.7         |   |   | (14.1 | ) |   | (6.1 | ) |   | (1.6 | ) |   | (4.3 | ) |
| Equity                      participation in income (loss) of related companies, net |   |                                             | 3.6         |   |   | 2.0 |   |   | 2.6 |   |   | 1.8 |   |   | 2.2 |   |
| Net                      income                                                      |   |                                             | 192.7       |   |   | 154.3 |   |   | 125.2 |   |   | 86.8 |   |   | 57.8 |   |
| Basic                      and diluted earnings per share                            |   |                                             | 0.73        |   |   | 0.59 |   |   | 0.48 |   |   | 0.33 |   |   | 0.22 |   |
| Basic                      and diluted earnings per ADS (3)                          |   |                                             | 0.73        |   |   | 0.59 |   |   | 0.48 |   |   | 0.33 |   |   | 0.22 |   |
| **Weighted                      average shares outstanding (000s)(2)**               |   |                                             | **263,197** |   |   | **263,197** |   |   | **263,197** |   |   | **263,197** |   |   | **263,197** |   |

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*Table            of Contents*

|                                        |   | **As of December 31,**     |    |
|---------------------------------------------|--------|-------------------------------------------|---------|
|                                        |   | **2007**                                  |    | **2006** |   | **2005** |   | **2004** |   | **2003** |   |
| **Balance                  Sheet Data:**    |   | **(In                  millions of US$)** |    |
| **Chilean                  GAAP:**          |   |                                      |         |   |   |  |   |   |  |   |   |  |   |   |  |   |
| Total                  assets               |   |                                      | 1,986.3 |   |   | 1,871.2 |   |   | 1,640.6 |   |   | 1,361.4 |   |   | 1,363.5 |   |
| Long-term                  debt             |   |                                      | 486.7   |   |   | 480.7 |   |   | 100.0 |   |   | 200.0 |   |   | 260.0 |   |
| Total                  shareholders' equity |   |                                      | 1,182.4 |   |   | 1,085.9 |   |   | 1,020.4 |   |   | 948.6 |   |   | 890.0 |   |
| Capital                  stock              |   |                                      | 477.4   |   |   | 477.4 |   |   | 477.4 |   |   | 477.4 |   |   | 477.4 |   |
| **U.S.                  GAAP:**             |   |                                      |         |   |   |  |   |   |  |   |   |  |   |   |  |   |
| Total                  assets               |   |                                      | 1,959.6 |   |   | 1,846.0 |   |   | 1,609.0 |   |   | 1,318.5 |   |   | 1,319.4 |   |
| Long-term                  debt             |   |                                      | 485.0   |   |   | 478.7 |   |   | 100.0 |   |   | 200.0 |   |   | 260.0 |   |
| Total                  shareholders' equity |   |                                      | 1,084.1 |   |   | 994.5 |   |   | 923.4 |   |   | 856.9 |   |   | 794.7 |   |
| Capital                  stock              |   |                                      | 479.3   |   |   | 479.3 |   |   | 479.3 |   |   | 479.3 |   |   | 479.3 |   |

| Note:                    The Company is not aware of any material differences between                    Chilean and                    U.S. GAAP that are not addressed in Note 29 to the Consolidated                    Financial                    Statements of December 31, 2007.                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |
|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |
| (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 Chilean GAAP. For comparative                    purposes the calculation has been based on the same number of                    weighted                    average shares outstanding as used for the U.S. GAAP                    calculation. (3)                    The ratio of ordinary shares to Series A ADSs was 10:1 for all                    periods                    reflected in the table. 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, 2003, 2004, 2005, 2006 and 2007. (5)                    Dividends may only be paid from net income before amortization                    of negative                    goodwill as determined in accordance with Chilean GAAP; see Item                    8.A.8.                    Dividend Policy. For dividends in Ch$ see Item 8.A.8.Dividend                    Policy —                    Dividends. (6)                    Does not include equity participation in income (loss) of related                    companies, net. |

**EXCHANGE        RATES**

*Mercado        Cambiario Formal*
*Mercado        Cambiario Informal*

*dólar        acuerdo*

----

*Table            of Contents*

*dólar        observado*

**Observed        Exchange Rate (1)**

**Ch$        per US$**

| **Year/Month** |   | **Low (1)** |   | **High (1)** |   | **Average****    (2)(3)** |   | **Year/Month****End** |   |
|----------------|--------|------------------|--------|-------------------|--------|-----------------------------------------------|--------|-----------------------|--------|
| **2003**       |   |             | 593.10 |              |   | 758.21                                        |   |                  | 687.50 |   |   | 599.40 |   |
| **2004**       |   |             | 559.21 |              |   | 649.45                                        |   |                  | 612.13 |   |   | 559.83 |   |
| **2005**       |   |             | 509.70 |              |   | 592.75                                        |   |                  | 559.27 |   |   | 514.21 |   |
| **2006**       |   |             | 511.44 |              |   | 549.63                                        |   |                  | 531.03 |   |   | 534.43 |   |
| **2007**       |   |             | 493.14 |              |   | 548.67                                        |   |                  | 521.95 |   |   | 495.82 |   |
| Dec-07         |   |             | 495.49 |              |   | 506.79                                        |   |                  | 499.28 |   |   | 495.82 |   |
| Jan-08         |   |             | 463.58 |              |   | 498.05                                        |   |                  | 480.90 |   |   | 465.30 |   |
| Feb-08         |   |             | 458.02 |              |   | 476.44                                        |   |                  | 467.22 |   |   | 458.02 |   |
| Mar-08         |   |             | 431.22 |              |   | 454.94                                        |   |                  | 442.94 |   |   | 439.09 |   |
| Apr-08         |   |             | 433.98 |              |   | 459.16                                        |   |                  | 446.43 |   |   | 459.16 |   |
| May-08         |   |             | 461.49 |              |   | 479.66                                        |   |                  | 470.10 |   |   | 479.66 |   |

|   | (1) | Observed                    exchange rates are the actual high and low on a day-to-day basis,                    for each                    period. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | The                    yearly average rate is calculated as the average of the exchange                    rates on                    the last day of each month during the                    period. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | The                    monthly average rate is calculated on a day-to-day basis for                    each                    month. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------|

***3.B.****Capitalization        and Indebtedness***

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*Table            of Contents*

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

***3.D.****Risk        Factors***

**Risks        Relating to our Business**

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

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

----

*Table            of Contents*

***Our        exposure to unrecoverable accounts receivable may significantly increase***

***New        production of lithium carbonate in China***

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

***Currency        fluctuations may have a negative effect on our financial        results***

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*Table            of Contents*

***Sustained        high raw materials and energy prices could continue to increase our production        costs and cost of goods sold***

***Our        reserves estimates could significantly vary***

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

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

***We        face significantly higher energy costs as a result of the natural gas shortage        in Chile***

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*Table            of Contents*

***Decline        in the supply of natural gas is negatively affecting the supply of electricity        in the Northern Power Grid***

*Sistema        Interconectado del Norte Grande*

***Decline        in the supply of natural gas and increasing global oil prices could negatively        affect our electricity contracts***

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

***Pending        lawsuits could adversely impact us***

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*Table            of Contents*

**Risks        Relating to Chile**

***As        we are a Chilean-based company, we are exposed to Chilean political        risks***

***Changes        in mining and water rights laws or in regulations affecting port concessions        could affect our operating costs***

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

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

*Comisión        Nacional del Medio Ambiente*

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*Table            of Contents*

***Our        financial statements are reported, and our dividends are declared, based        on        Chilean GAAP, which generally differs from U.S. GAAP***

----

*Table            of Contents*

**Risks        related to our financial activities**

***Interest        rate fluctuations may have a material impact on our financial        results***

**Risks        related to our shares and to our ADSs**

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

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

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

***Our        share price may react negatively to future acquisitions and        investments***

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

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*Table            of Contents*

*sociedad        anónima abierta*

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

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

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*Table            of Contents*

**ITEM              4. INFORMATION ON THE COMPANY**

***4.A.****History        and Development of the Company***

**Historical        Background**

*sociedad        anónima abierta*

*Corporación        de Fomento de la Producción*

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*Table            of Contents*

**Capital        Expenditure Program**

|                                      |   | **2007**                                   |   | **2006 **(2) |   | **2005 **(3) |   |
|-------------------------------------------|--------|--------------------------------------------|--------|-------------------|--------|-------------------|--------|
|                                      |   | (in millions                  of US$) |   |
| Capital                  Expenditures (1) |   |                                       | 185.0  |              |   | 290.5             |   |   | 198.1 |   |

|   | (1) | For                    purposes of this item, capital expenditures include investments                    aimed at                    sustaining, improving or increasing production levels, including                    acquisitions and investments in related companies. Amounts set                    forth in                    this table do not match the consolidated statements of cash flows,                    as the                    Company does not consolidate development stage                    companies. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | Includes                    acquisition of DSM’s Iodine business for a total of US$72 million, plus                    all the cash, accounts receivable and final product inventories                    minus the                    total liabilities of the Chilean and Dutch companies considered                    in the                    transaction. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | Includes                    acquisition of Kefco in Dubai (US$9.3                    million) |
|--------|-----|-----------------------------------------------------------------------------------------------|

|   | · | the                    María Elena project including a new crushing                    facility; |
|--------|--------|-------------------------------------------------------------------------------------------------------|

|   | · | completion                    of the new prilling and granulating facility located at Coya                    Sur; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------|

|   | · | expansion                    of lithium carbonate facility; |
|--------|--------|-------------------------------------------------------------|

|   | · | construction                    of new evaporation ponds at the Salar de Atacama; |
|--------|--------|-----------------------------------------------------------------------------------|

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

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

|   | · | completion                  of lithium carbonate facility                  expansion; |
|--------|--------|---------------------------------------------------------------------------------------|

|   | · | new                  potassium nitrate production facility at Coya                  Sur; |
|--------|--------|------------------------------------------------------------------------------------------|

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

|   | · | upgrade                  of our railroad system to handle expanded                  capacity; |
|--------|--------|-----------------------------------------------------------------------------------------------|

|   | · | construction                  of a new mining camp at María Elena;                  and |
|--------|--------|----------------------------------------------------------------------------------------------|

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

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*Table            of Contents*

***4.B.****Business        Overview***

**The        Company**

***Specialty        Plant Nutrition***

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*Table            of Contents*

***Iodine***

***Lithium***

***Industrial        Chemicals***

***Potassium        Chloride and Other Commodity Fertilizers***

|                                                                |   | **2007** |   | **2006** |   | **2005** |   | **2004** |   | **2003** |   |
|---------------------------------------------------------------------|--------|----------|--------|----------|--------|----------|--------|----------|--------|----------|--------|
| Specialty                  Plant Nutrition                          |   |     | 49     | %        |   | 48       | %      |     | 54     | %        |   | 54 | % |   | 52 | % |
| Iodine                  and Derivatives                             |   |     | 18     | %        |   | 21       | %      |     | 17     | %        |   | 14 | % |   | 12 | % |
| Lithium                  and Derivatives                            |   |     | 15     | %        |   | 12       | %      |     | 9      | %        |   | 8 | % |   | 7 | % |
| Industrial                  Chemicals                               |   |     | 7      | %        |   | 7        | %      |     | 8      | %        |   | 9 | % |   | 10 | % |
| Potassium                  Chloride and Other Commodity Fertilizers |   |     | 11     | %        |   | 12       | %      |     | 12     | %        |   | 15 | % |   | 19 | % |
| Total                                                               |   |     | 100    | %        |   | 100      | %      |     | 100    | %        |   | 100 | % |   | 100 | % |

**Business        Strategy**

|   | (1) | participate                  in businesses where we are or will be a cost leader supported by                  strong                  fundamentals; |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | differentiate                  ourselves from commodity producers by manufacturing, marketing                  and                  distributing specialty products that sell at high                  value; |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | continually                  increase the efficiency of our production processes and reduce                  costs; |
|--------|-----|---------------------------------------------------------------------------------------------------------------------|

|   | (4) | maintain                  leadership in our core business areas – specialty plant nutrition,                  iodine and lithium – in terms of installed capacity, costs,                  production, pricing and development of new products; and |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (5) | pursue                  vertical integration into value-added                  markets. |
|--------|-----|-----------------------------------------------------------------------------------------|

----

*Table            of Contents*

***Specialty        Plant Nutrition***

***Iodine***

***Lithium***

***Industrial        Chemicals***

***New        Business Ventures***

**Production        Process**

**Caliche        Ore Deposits**

----

*Table            of Contents*

***Caliche        Ore-Derived Products***

***Sodium        Nitrate***

----

*Table            of Contents*

***Potassium        Nitrate***

***Sodium        Potassium Nitrate***

***Iodine        and Iodine Derivatives***

----

*Table            of Contents*

**Salar        de Atacama Brine Deposits**

*salar*

*salar*

***Potassium        Chloride***

*salar*

----

*Table            of Contents*

***Lithium        Carbonate***

***Lithium        Hydroxide***

***Potassium        Sulfate and Boric Acid***

*salar*

**Specialty        Plant Nutrition**

----

*Table            of Contents*

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

|   | · | are                  absorbed more rapidly by plants because they do not require nitrification,                  unlike ammonia-based fertilizers; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | are                  free of chlorine content, reducing the risk of scorching roots                  and other                  problems caused by chlorine; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

|   | · | possess                  trace elements, which promote disease resistance in plants and                  have other                  beneficial effects; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------|

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

|   | · | are                  more efficient than commodity fertilizers because they deliver                  more                  nutrients per unit of product                  applied. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

***Specialty        Plant Nutrition: Market***

** **

----

*Table            of Contents*

***Specialty        Plant Nutrition: Our Products***

|                                                              |   | **2007** |    | **2006** |   | **2005** |   | **2004** |    | **2003** |   |
|-------------------------------------------------------------------|--------|----------|---------|----------|--------|----------|--------|----------|---------|----------|--------|
| **Sales                    Volume** **(in metric tons)**     |   |     |    |     |   |     |   |     |    |     |   |   |   |   |   |   |
| Sodium                    nitrate                                 |   |     | 45,900  |     |   | 43,300   |   |     | 63,300  |     |   | 58,900 |   |   | 62,500 |   |
| Potassium                    nitrate and sodium potassium nitrate |   |     | 695,300 |     |   | 615,000  |   |     | 690,200 |     |   | 707,600 |   |   | 696,500 |   |
| Potassium                    sulfate                              |   |     | 172,000 |     |   | 172,400  |   |     | 178,600 |     |   | 157,700 |   |   | 143,200 |   |
| Blended                    and other specialty plant nutrients(1) |   |     | 378,600 |     |   | 393,800  |   |     | 350,700 |     |   | 374,400 |   |   | 377,100 |   |
| **Revenues                    (in US$ millions)**                 |   |     | 580.8   |     |   | 503.1    |   |     | 487.8   |     |   | 426.8 |   |   | 362.8 |   |

| (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***

| **Sales                  Breakdown**       |   | **2007** |   | **2006** |   | **2005** |   | **2004** |   | **2003** |   |
|--------------------------------------------|--------|----------|--------|----------|--------|----------|--------|----------|--------|----------|--------|
| Central                  and South America |   |     | 28     | %        |   | 29       | %      |     | 29     | %        |   | 29 | % |   | 26 | % |
| North                  America             |   |     | 23     | %        |   | 22       | %      |     | 22     | %        |   | 22 | % |   | 18 | % |
| Europe                                     |   |     | 19     | %        |   | 19       | %      |     | 20     | %        |   | 19 | % |   | 20 | % |
| Others                                     |   |     | 20     | %        |   | 21       | %      |     | 20     | %        |   | 20 | % |   | 27 | % |
| Chile                                      |   |     | 10     | %        |   | 9        | %      |     | 9      | %        |   | 10 | % |   | 9 | % |

----

*Table            of Contents*

***Specialty        Plant Nutrition: Fertilizer Sales in Chile***

***Specialty        Plant Nutrition: Competition***

----

*Table            of Contents*

**Iodine**

***Iodine:        Market***

----

*Table            of Contents*

***Iodine:        Our Products***

|                                                   |   |  **2007** |   | **2006** |   | **2005** |   | **2004** |   | **2003** |   |
|--------------------------------------------------------|--------|----------------|--------|----------|--------|----------|--------|----------|--------|----------|--------|
| **Sales                  Volume (thous. metric tons)** |   |           |   |     |   |     |   |     |   |     |   |   |   |   |   |   |
| Iodine                  and iodine derivatives         |   |           | 9.1    |     |   | 9.8      |   |     | 8.1    |     |   | 7.7 |   |   | 6.6 |   |
| **Revenues                  (in US$ millions)**        |   |           | 215.1  |     |   | 217.7    |   |     | 149.1  |     |   | 110.5 |   |   | 84.6 |   |

***Iodine:        Marketing and Customers***

| **Sales                  Breakdown**       |   | **2007** |   | **2006** |   | **2005** |   | **2004** |   | **2003** |   |
|--------------------------------------------|--------|----------|--------|----------|--------|----------|--------|----------|--------|----------|--------|
| Europe                                     |   |     | 31     | %        |   | 34       | %      |     | 30     | %        |   | 27 | % |   | 34 | % |
| North                  America             |   |     | 38     | %        |   | 40       | %      |     | 37     | %        |   | 38 | % |   | 40 | % |
| Central                  and South America |   |     | 5      | %        |   | 5        | %      |     | 13     | %        |   | 13 | % |   | 6 | % |
| Others                                     |   |     | 26     | %        |   | 21       | %      |     | 20     | %        |   | 22 | % |   | 20 | % |

***Iodine:        Competition***

----

*Table            of Contents*

**Lithium**

***Lithium:        Market***

***Lithium:        Our Products***

----

*Table            of Contents*

|                                                   |   | **2007** |   | **2006** |   | **2005** |   | **2004** |   | **2003** |   |
|--------------------------------------------------------|--------|----------|--------|----------|--------|----------|--------|----------|--------|----------|--------|
| **Sales                  Volume (thous. metric tons)** |   |     |   |     |   |     |   |     |   |     |   |   |   |   |   |   |
| Lithium                  carbonate and derivatives     |   |     | 28.6   |     |   | 30.4     |   |     | 27.8   |     |   | 31.2 |   |   | 27.4 |   |
| **Revenues                  (in US$ millions)**        |   |     | 179.8  |     |   | 128.9    |   |     | 81.4   |     |   | 62.6 |   |   | 49.7 |   |

***Lithium:        Marketing and Customers***

| **Sales                  Breakdown** |   |   | **2007** |   |   | **2006** |   |   | **2005** |   |   | **2004** |   |   | **2003** |   |
|--------------------------------------|--------|--------|----------|--------|--------|----------|--------|--------|----------|--------|--------|----------|--------|--------|----------|--------|
| Europe                               |   |   | 34       | %      |   | 32       | %      |   | 33       | %      |   | 32       | %      |   | 31       | %      |
| North                  America       |   |   | 21       | %      |   | 24       | %      |   | 25       | %      |   | 26       | %      |   | 29       | %      |
| Asia                  and Oceania    |   |   | 38       | %      |   | 36       | %      |   | 31       | %      |   | 37       | %      |   | 37       | %      |
| Others                               |   |   | 7        | %      |   | 8        | %      |   | 11       | %      |   | 5        | %      |   | 3        | %      |

***Lithium:        Competition***

**Industrial        Chemicals**

----

*Table            of Contents*

***Industrial        Chemicals: Market***

***Industrial        Chemicals: Our Products***

|                                            |   | **2007** |    | **2006** |   | **2005** |   | **2004** |    | **2003** |   |
|-------------------------------------------------|--------|----------|---------|----------|--------|----------|--------|----------|---------|----------|--------|
| **Sales                  Volume (metric tons)** |   |     |    |     |   |     |   |     |    |     |   |   |   |   |   |   |
| Industrial                  nitrates            |   |     | 175,200 |     |   | 162,000  |   |     | 176,300 |     |   | 192,800 |   |   | 193,200 |   |
| Boric                  Acid                     |   |     | 9,200   |     |   | 9,700    |   |     | 6,300   |     |   | 6,120 |   |   | 10,700 |   |
| **Revenues                  (in US$ millions)** |   |     | 81.2    |     |   | 71.3     |   |     | 70.5    |     |   | 68.8 |   |   | 66.7 |   |

***Industrial        Chemicals: Marketing and Customers***

| **Sales                  Breakdown**       |   |   | **2007** |   |   | **2006** |   |   | **2005** |   |   | **2004** |   |   | **2003** |   |
|--------------------------------------------|--------|--------|----------|--------|--------|----------|--------|--------|----------|--------|--------|----------|--------|--------|----------|--------|
| North                  America             |   |   | 40       | %      |   | 41       | %      |   | 42       | %      |   | 38       | %      |   | 39       | %      |
| Europe                                     |   |   | 34       | %      |   | 29       | %      |   | 28       | %      |   | 23       | %      |   | 25       | %      |
| Central                  and South America |   |   | 17       | %      |   | 17       | %      |   | 17       | %      |   | 24       | %      |   | 12       | %      |
| Others                                     |   |   | 9        | %      |   | 13       | %      |   | 13       | %      |   | 15       | %      |   | 24       | %      |

----

*Table            of Contents*

**Industrial        Chemicals: Competition**

**Raw        Materials**

*Sistema        Interconectado del Norte Grande*

----

*Table            of Contents*

**Water        Supply**

**Government        Regulations**

***Regulations        in Chile Generally***

----

*Table            of Contents*

***Safety,        Health and Environmental Regulations in Chile***

----

*Table            of Contents*

|   | · | Securing                  the health, safety and well-being of persons at work; |
|--------|--------|---------------------------------------------------------------------------------|

|   | · | Protecting                  nearby communities against risks to health or safety arising out                  of or in                  connection with mining operations in the vicinity; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Controlling                  the use and storage of explosive, highly flammable or otherwise                  dangerous                  substances; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Controlling                  the emission or pollution into the atmosphere of noxious or offensive                  substances. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------|

*Reglamentos        internos mineros*

----

*Table            of Contents*

***International        Regulations***

----

*Table            of Contents*

***4.C.****Organizational        Structure***

| **Main**** subsidiaries**                                                                                                                                                                               |   | **Activity**                                                                                                                                                                     |   | **Country of****Incorporation** |   | **SQM Beneficial ****Ownership****Interest****(Direct/Indirect)** |
|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|--------------------------------------|--------|-----------------------------------------------------------------------------|
|                                                                                                                                                                                                         |   |                                                                                                                                                                             |   |                                 |   |                                                                        |
| SQM Nitratos S.A.                                                                                                                                                                                  |   | Extracts and sells caliche ore to subsidiaries and                  affiliates of SQM                                                         |   | Chile                                |   | 100%                                                                        |
|                                                                                                                                                                                                         |   |                                                                                                                                                                             |   |                                 |   |                                                                        |
| SQM                  Industrial S.A.                                                                                                                                                                         |   | Produces                  and markets the Company’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 the Company’s products directly                  and through other subsidiaries and affiliates of SQM |   | Chile                                |   | 100%                                                                        |
|                                                                                                                                                                                                         |   |                                                                                                                                                                             |   |                                 |   |                                                                        |
| Minera                  Nueva Victoria S.A.                                                                                                                                                                  |   | Produces                  and markets the Company’s products directly and through other subsidiaries                  and affiliates of SQM                                |   | Chile                                |   | 100%                                                                        |
|                                                                                                                                                                                                         |   |                                                                                                                                                                             |   |                                 |   |                                                                        |
| Servicios                  Integrales de Tránsitos 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                  the Company’s specialty plant nutrition products domestically and imports                  fertilizers for resale in Chile                        |   | Chile                                |   | 61%                                                                         |
|                                                                                                                                                                                                         |   |                                                                                                                                                                             |   |                                 |   |                                                                        |
| Ajay-SQM                  Chile S.A.                                                                                                                                                                         |   | Produces                  and markets the Company’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                  the Company’s products throughout the world                                                                                                        |   | Various                              |   |                                                                        |

----

*Table            of Contents*

***4.D.****Property,        Plants and Equipment***

**DESCRIPTION        OF THE CALICHE ORE MINES**

***Pedro        de Valdivia***

***María        Elena***

***Pampa        Blanca***

***Nueva        Victoria***

----

*Table            of Contents*

**Description        of the Salar de Atacama Brines**

***Salar        de Atacama Brines***

***Additional        Mining Operations Leased in the Salar de Atacama        Region***

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

***Concessions        Generally***

*Caliche        ore*

----

*Table            of Contents*

***Concessions        for the Caliche Ore Mines and Salar Brines***

|                                          |   | **Exploitation Concessions** |       | **Exploration Concessions** |   | **Total**                 |   |
|-----------------------------------------------|--------|-----------------------------------|------------|----------------------------------|--------|---------------------------|--------|
| **Mines (1)**                            |   | **Total****number**               |       | **Hectares**                     |   | **Total ****number** |   | **Hectares** |   | **Total ****number** |   | **Hectares** |   |
| Pedro de Valdivia                   |   |                              | 585        |                             |   | 149,128                   |   |   | 5 |   |   | 900 |   |   | 590 |   |   | 150,028 |   |
| Maria                  Elena                  |   |                              | 619        |                             |   | 185,049                   |   |   | 24 |   |   | 8,100 |   |   | 643 |   |   | 193,149 |   |
| Pampa                  Blanca                 |   |                              | 463        |                             |   | 136,888                   |   |   | 1 |   |   | 400 |   |   | 464 |   |   | 137,288 |   |
| Nueva                  Victoria (2)           |   |                              | 344        |                             |   | 89,466                    |   |   | 77 |   |   | 27,800 |   |   | 421 |   |   | 117,266 |   |
| Salar                  de Atacama             |   |                              | 409        |                             |   | 266,965                   |   |   | 209 |   |   | 61,800 |   |   | 618 |   |   | 328,765 |   |
| **Subtotal                  mines**           |   |                              | **2,420**  |                             |   | **827,496**               |   |   | **316** |   |   | **99,000** |   |   | **2,736** |   |   | **926,496** |   |
|                                          |   |                              |       |                             |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other                  caliche areas          |   |                              | 7,039      |                             |   | 1,586,168                 |   |   | 1,058 |   |   | 301,400 |   |   | 8,097 |   |   | 1,887,568 |   |
| Other                  salars and other areas |   |                              | 581        |                             |   | 117,756                   |   |   | 308 |   |   | 81,400 |   |   | 889 |   |   | 199,156 |   |
| **Subtotal                  other areas**     |   |                              | **7,620**  |                             |   | **1,703,924**             |   |   | **1,366** |   |   | **382,800** |   |   | **8,986** |   |   | **2,086,724** |   |
|                                          |   |                              |       |                             |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Total**                                     |   |                              | **10,040** |                             |   | **2,531,421**             |   |   | **1,682** |   |   | **481,800** |   |   | **11,722** |   |   | **3,013,221** |   |

|   | (1) | We                  have included in this table both concessions that have been granted                  and                  concessions in the process of being                  granted. |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | Nueva                  Victoria amounts include the Mapocho and Soronal properties, which                  were                  presented separately in our 2006 Annual Report on Form 20-F. |
|--------|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

*Table            of Contents*

***Extraction        Yields***

|  *(Values in thousands unless otherwise stated)* |   | **2007** |   | **2006** |   | **2005** |   |
|--------------------------------------------------------------------------------|--------|----------|--------|----------|--------|----------|--------|
| **Pedro de                    Valdivia**                                  |   |     |   |     |   |     |   |   |   |   |
|                                                                           |   |     |   |     |   |     |   |   |   |   |
| Metric                    tons of ore mined                                    |   |     | 10,670 |     |   | 11,652   |   |   | 12,362 |   |
| Average                    grade nitrate (% by weight)                         |   |     | 7.5    |     |   | 7.4      |   |   | 7.2 |   |
| Iodine                    (parts per million (ppm))                            |   |     | 354    |     |   | 399      |   |   | 402 |   |
| Metric                    tons of crystallized nitrate produced                |   |     | 423    |     |   | 454      |   |   | 476 |   |
| Metric                    tons of iodine produced                              |   |     | 2.3    |     |   | 2.5      |   |   | 2.6 |   |
|                                                                           |   |     |   |     |   |     |   |   |   |   |
| **María                    Elena (1)**                                    |   |     |   |     |   |     |   |   |   |   |
|                                                                           |   |     |   |     |   |     |   |   |   |   |
| Metric                    tons of ore mined                                    |   |     | 4,651  |     |   | 5,682    |   |   | 5,917 |   |
| Average                    grade nitrate (% by weight)                         |   |     | 7.4    |     |   | 7.5      |   |   | 8.0 |   |
| Iodine                    (ppm)                                                |   |     | 363    |     |   | 399      |   |   | 428 |   |
| Metric                    tons of crystallized nitrate produced                |   |     | 424    |     |   | 504      |   |   | 479 |   |
| Metric                    tons of iodine produced                              |   |     | 1.0    |     |   | 1.3      |   |   | 1.4 |   |
|                                                                           |   |     |   |     |   |     |   |   |   |   |
| **Pampa                    Blanca**                                            |   |     |   |     |   |     |   |   |   |   |
|                                                                           |   |     |   |     |   |     |   |   |   |   |
| Metric                    tons of ore mined                                    |   |     | 3,108  |     |   | 4,832    |   |   | 5,309 |   |
| Iodine                    (ppm)                                                |   |     | 527    |     |   | 530      |   |   | 520 |   |
| Metric                    tons of iodine produced                              |   |     | 1.1    |     |   | 1.4      |   |   | 1.5 |   |
|                                                                           |   |     |   |     |   |     |   |   |   |   |
| **Nueva                    Victoria (2)**                                      |   |     |   |     |   |     |   |   |   |   |
|                                                                           |   |     |   |     |   |     |   |   |   |   |
| Metric                    tons of ore mined                                    |   |     | 12,285 |     |   | 14,635   |   |   | 7,140 |   |
| Iodine                    (ppm)                                                |   |     | 495    |     |   | 941      |   |   | 504 |   |
| Metric                    tons of iodine produced                              |   |     | 3.7    |     |   | 4,6      |   |   | 2.2 |   |
|                                                                           |   |     |   |     |   |     |   |   |   |   |
| **Salar                    de Atacama**                                        |   |     |   |     |   |     |   |   |   |   |
| Metric                    tons of lithium carbonate produced (3)               |   |     | 30     |     |   | 29       |   |   | 27 |   |
| Metric                    tons of potassium chloride produced                  |   |     | 611    |     |   | 539      |   |   | 632 |   |
| Metric                    tons of potassium sulfate produced                   |   |     | 157    |     |   | 170      |   |   | 162 |   |
| Metric                    tons of boric acid produced                          |   |     | 7      |     |   | 8        |   |   | 9 |   |

|   | (1) | Includes                  production at Coya Sur from treatment of fines from María Elena and Pedro                  de Valdivia and nitrates from pile treatment at Pampa                  Blanca. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (2) | Includes                  the Iris mining property, which was acquired in 2006 and was presented                  separately in the 2006 Annual Report on Form 20-F. Nueva Victoria                  extraction yields were higher in 2006 than they were in 2007 because                  they                  reflect extraction yields from the Iris property, which SQM continued                  to                  exploit for the first six months of 2006, subsequent to the acquisition.                  The Iris property has not been exploited since mid-2006, and it                  represents                  a future extension of the Nueva Victoria                  operations. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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

----

*Table            of Contents*

**Reserves**

***Reserves        for the Caliche Ore Deposits***

| **Mine**                                |   | **Proven Reserves (1)**(millions of metric tons) |   | **Nitrate Average Grade**(percentage by weight**)** |   | **Iodine Average Grade**(parts per million) |   |
|-----------------------------------------|--------|---------------------------------------------------------------------------|--------|-------------------------------------------------------------------------|--------|-----------------------------------------------------------------|--------|
| Pedro de                  Valdivia |   |                                                                      | 152.3  |                                                                    |   | 7.1                                                             | %      |   | 370 |   |
| María                  Elena       |   |                                                                      | 134.8  |                                                                    |   | 7.3                                                             | %      |   | 415 |   |
| Pampa                  Blanca           |   |                                                                      | 74.9   |                                                                    |   | 6.3                                                             | %      |   | 549 |   |
| Nueva                  Victoria (2)     |   |                                                                      | 283.8  |                                                                    |   | 5.7                                                             | %      |   | 427 |   |

| **Mine**                                |   | **Probable Reserves (1) (3)**(millions of metric tons**)** |   | **Nitrate Average Grade**(percentage by weight) |   | **Iodine Average Grade**(parts per million) |   |
|-----------------------------------------|--------|------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------|--------|-----------------------------------------------------------------|--------|
| Pedro de                  Valdivia |   |                                                                                     | 136.8  |                                                                |   | 6.8                                                             | %      |   | 428 |   |
| María                  Elena       |   |                                                                                     | 97.6   |                                                                |   | 7.3                                                             | %      |   | 380 |   |
| Pampa                  Blanca           |   |                                                                                     | 429.4  |                                                                |   | 6.0                                                             | %      |   | 524 |   |
| Nueva                  Victoria (2)     |   |                                                                                     | 129.9  |                                                                |   | 5.5                                                             | %      |   | 407 |   |

| (1) | The                  proven and probable reserves set forth in the tables above are                  shown                  before losses related to exploitation and metallurgical 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%. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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*Table            of Contents*

| (2) | Proven                  and probable reserves for Nueva Victoria include the Soronal and                  Mapocho                  mining properties, which were presented separately in the Company’s 2006                  Annual Report on Form 20-F. Nueva Victoria also includes the reserves                  for                  the Iris mining property, which was acquired in 2006 and whose                  reserves                  had not yet been estimated at the time the 2006 Form 20-F was                  filed. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Probable                  reserves amounts can be transformed in order to obtain amounts                  expressed                  as proven reserves. On average, the transformation factor to express                  probable reserves as proven reserves 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 transformed probable reserve amounts is the result of the lower                  degree                  of certainty pertaining to probable reserves compared with proven                  reserves. |
|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

*Exploration        Program*

***Reserves        for the Salar de Atacama Brines***

|                                                        |   | **Proven Reserves (1)**(millions of metric tons) |   | **Probable Reserves (1)**(millions of metric tons) |   |
|-------------------------------------------------------------|--------|---------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------|--------|
| Potassium (K                  +)                  (2)  |   |                                                                      | 49.9   |                                                                        |   | 7.3 |   |
| Sulfate                  (SO4 2-)                  (3) |   |                                                                      | 36.1   |                                                                        |   | 1.3 |   |
| Lithium                  (Li +)                  (4)        |   |                                                                      | 3.0    |                                                                        |   | 2.0 |   |
| Boron                  (B 3+)                  (5)          |   |                                                                      | 1.2    |                                                                        |   | 0.1 |   |

| (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 68%. |
|-----|-----------------------------------------------------------------|

| (3) | Recoveries                  for sulfate vary from 27% to 44%. |
|-----|---------------------------------------------------------------|

| (4) | Recoveries                  for lithium vary from 28% to 32%. |
|-----|---------------------------------------------------------------|

| (5) | Recoveries                  for boron are approximately 29%. |
|-----|--------------------------------------------------------------|

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*Table            of Contents*

**PORTS        AND WATER RIGHTS**

**PRODUCTION        FACILITIES**

| **Location**                                   |   | **Type of Facility** |                                                                                                     | **Approximate Size **(1)** (Hectares)** |   |
|------------------------------------------------|--------|--------------------------------|----------------------------------------------------------------------------------------------------------|--------------------------------------------------------|--------|
| Pedro de Valdivia                    |   |                           | Nitrates                  and iodine production                                                          |                                                   |   | 126 |   |
| María                  Elena              |   |                           | Nitrates                  and iodine production                                                          |                                                   |   | 110 |   |
| Coya                  Sur                      |   |                           | Nitrates                  and iodine production                                                          |                                                   |   | 232 |   |
| Pampa                  Blanca                  |   |                           | Concentrated                  nitrate salts and iodine production                                        |                                                   |   | 86 |   |
| Nueva                  Victoria                |   |                           | Iodine                  production                                                                       |                                                   |   | 11 |   |
| Salar                  de Atacama (2)          |   |                           | Potassium                  chloride, lithium chloride, potassium sulfate and boric                  acid |                                                   |   | 2,288 |   |
| Salar                  del Carmen, Antofagasta |   |                           | Lithium                  carbonate and lithium hydroxide production                                      |                                                   |   | 32 |   |
| Tocopilla                                      |   |                           | Port                  facilities                                                                         |                                                   |   | 24 |   |

|  | (1) | Includes                    production facilities, solar evaporation ponds and leaching heaps,                    if                    any. |
|--|-----|----------------------------------------------------------------------------------------------------------------------------------------------|

|  | (2) | We                    lease the exploitation rights used at the Salar de Atacama from                    Corfo. |
|--|-----|-----------------------------------------------------------------------------------------------------------------|

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*Table            of Contents*

----

*Table            of Contents*

**TRANSPORTATION        AND STORAGE FACILITIES**

----

*Table            of Contents*

**ITEM        4A. UNRESOLVED STAFF COMMENTS**

----

*Table            of Contents*

**ITEM        5.**
**OPERATING        AND FINANCIAL REVIEW AND PROSPECTS**

***CRITICAL        ACCOUNTING POLICIES***

***Allowance        for doubtful accounts***

***Deferred        income tax asset valuation allowance***

***Inventories***

***Staff        severance indemnities***

***Mining        development costs***

----

*Table            of Contents*

***Long-lived        assets and their impairment***

***Impairment        of goodwill***

----

*Table            of Contents*

***5.A.***
***Operating        Results***

**Introduction**

**Overview        of Our Results of Operations**

|   | · | Specialty                  plant nutrition: production and commercialization of specialty                  fertilizers. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------|

|   | · | Iodine                  and derivatives: production and commercialization of iodine and                  derivatives. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------|

|   | · | Lithium                  and derivatives: production and commercialization of lithium and                  derivatives. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------|

|   | · | Industrial                  chemicals: production and commercialization of industrial nitrates,                  and                  boric acid. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Potassium                  chloride and other commodity fertilizers: production and commercialization                  of potassium chloride and commercialization of other commodity                  fertilizers. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**FACTORS        AFFECTING OUR RESULTS OF OPERATIONS**

|   | · | Trends                  in demand for and supply of our products. See Item 5.D. Trend                  Information; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------|

|   | · | Our                  efficiency in operating our facilities, as they are generally running                  at                  nameplate capacity; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Our                  ability to accomplish our capital expenditures program in a timely                  manner,                  as we are the main supplier in our core                  businesses; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Trends                  in the exchange rate between the US dollar and Chilean peso, as                  a                  significant portion of the cost of sales is related to the Chilean                  peso; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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*Table            of Contents*

|   | · | Logistics,                  raw materials and maintenance costs, which have been increasing                  in the                  last several years; and |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Energy                  costs, which have increased due to the high cost of oil and the                  interruption of our natural gas                  supply. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                   |   | **Year ended December 31,** |        |
|------------------------------------------------------------------------|--------|--------------------------------------------|-------------|
|                                                                   |   | **2007**                                   |        | **2006** |   | **2005** |   |
|                                                                   |   | US$                                        |        | %  |   | US$ |   |  % |   | US$ |   | %  |   |
| Specialty                  plant nutrition                             |   |                                       | 580.0       |   |   | 49 |   |   | 503.1 |   |   | 48 |   |   | 487.8 |   |   | 54 |   |
| Iodine                  and derivatives                                |   |                                       | 215.1       |   |   | 18 |   |   | 217.7 |   |   | 21 |   |   | 149.1 |   |   | 17 |   |
| Lithium                  and derivatives                               |   |                                       | 179.8       |   |   | 15 |   |   | 128.9 |   |   | 12 |   |   | 81.4 |   |   | 9 |   |
| Industrial                  chemicals                                  |   |                                       | 81.2        |   |   | 7 |   |   | 71.3 |   |   | 7 |   |   | 70.5 |   |   | 8 |   |
| Potassium                  chloride and other commodity fertilizers(1) |   |                                       | 130.7       |   |   | 11 |   |   | 121.9 |   |   | 12 |   |   | 107.2 |   |   | 12 |   |
| **Total**                                                              |   |                                       | **1,187.5** |   |   | **100** |   |   | **1,042.9** |   |   | **100** |   |   | **896.0** |   |   | **100** |   |

|   | (1) | Primarily                  imported fertilizers distributed in Chile and potassium chloride                  sold to                  third parties. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                 |   | **Year ended December 31,** |      |
|------------------------------------------------------|--------|--------------------------------------------|-----------|
|                                                 |   | **2007**                                   |      | **2006** |   | **2005** |   |
|                                                 |   | US$                                        |      | %  |   | US$ |   | %  |   | US$ |   |  % |   |
| Total                  revenues                      |   |                                       | 1,187.5   |   |   | 100.0 |   |   | 1,042.9 |   |   | 100.0 |   |   | 896.0 |   |   | 100.0 |   |
| Cost                  of goods sold                  |   |                                       | (857.7    | ) |   | (72.2 | ) |   | (753.3 | ) |   | (72.2 | ) |   | (652.9 | ) |   | (72.9 | ) |
| Gross                  margin                        |   |                                       | 329.8     |   |   | 27.8 |   |   | 289.6 |   |   | 27.8 |   |   | 243.1 |   |   | 27.1 |   |
| Selling                  and administrative expenses |   |                                       | (70.3     | ) |   | (5.9 | ) |   | (69.7 | ) |   | (6.7 | ) |   | (61.9 | ) |   | (6.9 | ) |
| Operating                  income                    |   |                                       | 259.5     |   |   | 21.9 |   |   | 219.9 |   |   | 21.1 |   |   | 181.2 |   |   | 20.2 |   |
|                                                 |   |                                       |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Non-operating                  income                |   |                                       | 25.9      |   |   | 2.2 |   |   | 19.2 |   |   | 1.8 |   |   | 16.4 |   |   | 1.8 |   |
| Non-operating                  expenses              |   |                                       | (53.0     | ) |   | (4.5 | ) |   | (55.3 | ) |   | (5.3 | ) |   | (50.8 | ) |   | (5.7 | ) |
|                                                 |   |                                       |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Income                  before income taxes          |   |                                       | 232.4     |   |   | 19.6 |   |   | 183.8 |   |   | 17.6 |   |   | 146.8 |   |   | 16.3 |   |
| Income                  tax                          |   |                                       | (48.6     | ) |   | (4.1 | ) |   | (37.9 | ) |   | (3.6 | ) |   | (32.5 | ) |   | (3.6 | ) |
| Minority                  interest                   |   |                                       | (3.8      | ) |   | (0.3 | ) |   | (4.7 | ) |   | (0.5 | ) |   | (1.0 | ) |   | (0.1 | ) |
| Amortization                  of negative goodwill   |   |                                       | 0.0       |   |   | 0.0 |   |   | 0.1 |   |   | 0.0 |   |   | 0.2 |   |   | 0.0 |   |
|                                                 |   |                                       |      |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **Net                  income**                      |   |                                       | **180.0** |   |   | **15.2** |   |   | **141.3** |   |   | **13.5** |   |   | **113.5** |   |   | **12.7** |   |

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*Table            of Contents*

**Results        of Operations - 2007 compared to 2006**

***Specialty        Plant Nutrition***

|                                                            |   |   |                     |   |   | **2007 ** |   |   | **2006 ** |   |   | **%                  Change**  |
|-----------------------------------------------------------------|--------|--------|--------------------------|--------|--------|----------------|--------|--------|----------------|--------|--------|-------------------------------------|
|                                                            |   |   |                     |   |   |           |   |   |           |   |   |                                |   |
| Sodium                  nitrate                                 |   |   | Th.                  Ton |   |   | 45.9           |   |   | 43.3           |   |   | 6                                   | % |
| Potassium                  nitrate and sodium potassium nitrate |   |   | Th.                  Ton |   |   | 695.3          |   |   | 615.0          |   |   | 13                                  | % |
| Blended                  and other specialty fertilizers        |   |   | Th.                  Ton |   |   | 261.5          |   |   | 250.9          |   |   | 4                                   | % |
| Other                  non-SQM specialty plant nutrients        |   |   | Th.                  Ton |   |   | 117.1          |   |   | 142.9          |   |   | (18                                 | )% |
| Potassium                  sulfate                              |   |   | Th.                  Ton |   |   | 172.0          |   |   | 172.4          |   |   | 0                                   | % |

***Iodine        and Iodine Derivatives***

|                                        |   |   |                     | **2007** |   | **2006** |   | **%                  Change**  |
|---------------------------------------------|--------|--------|--------------------------|----------|--------|----------|--------|-------------------------------------|
| **Iodine                  and derivatives** |   |   | Th.                  Ton |     |   | 9.1      |   |                                | 9.8 |   |   | (7 | )% |

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*Table            of Contents*

***Lithium        and Lithium Derivatives***

|                                                   |   |   |                     | **2007** |   | **2006** |   | **%                  Change** |
|--------------------------------------------------------|--------|--------|--------------------------|----------|--------|----------|--------|-------------------------------|
| **Lithium                  carbonate and derivatives** |   |   | Th.                  Ton |     |   | 28.6     |   |                          | 30.4 |   |   | (6 | )% |

----

*Table            of Contents*

**Industrial        Chemicals**

|                                 |   |   |                     | **2007** |   | **2006** |   | **%                  Change** |
|--------------------------------------|--------|--------|--------------------------|----------|--------|----------|--------|-------------------------------|
| Industrial                  nitrates |   |   | Th.                  Ton |     |   | 175.2    |   |                          | 161.7 |   |   | 8 | % |
| Boric                  acid          |   |   | Th.                  Ton |     |   | 9.2      |   |                          | 9.9 |   |   | (7 | )% |

***Potassium        Chloride and Other Commodity Fertilizers***

**Potassium        chloride**

|                                |   |   |                     | **2007** |   | **2006** |   | **%                  Change** |
|-------------------------------------|--------|--------|--------------------------|----------|--------|----------|--------|-------------------------------|
| Potassium                  chloride |   |   | Th.                  Ton |     |   | 179.0    |   |                          | 126.4 |   |   | 42 | % |

**Other        commodity fertilizers**

***Production        Costs***

----

*Table            of Contents*

***Gross        Profit***

***Selling        and Administrative Expenses***

***Operating        Income***

***Non-Operating        Income and Expenses***

***Income        Taxes***

**Results        of Operations - 2006 compared to 2005**

----

*Table            of Contents*

**Specialty        Plant Nutrition**

|                                                            |   |   |                     | **2006** |   | **2005** |   | **%                  Change** |
|-----------------------------------------------------------------|--------|--------|--------------------------|----------|--------|----------|--------|-------------------------------|
| Sodium                  nitrate                                 |   |   | Th.                  Ton |     |   | 43.3     |   |                          | 63.3 |   |   | (32 | )% |
| Potassium                  nitrate and sodium potassium nitrate |   |   | Th.                  Ton |     |   | 615.0    |   |                          | 690.2 |   |   | (11 | )% |
| Blended                  and other specialty fertilizers        |   |   | Th.                  Ton |     |   | 250.9    |   |                          | 217.5 |   |   | 15 | % |
| Other                  non-SQM specialty plant nutrients        |   |   | Th.                  Ton |     |   | 142.9    |   |                          | 133.2 |   |   | 7 | % |
| Potassium                  sulfate                              |   |   | Th.                  Ton |     |   | 172.4    |   |                          | 178.6 |   |   | (3 | )% |

|   | § | Increased                  production levels reached by other producers mainly affected our                  potassium                  nitrate and sodium potassium nitrate sales in the Brazilian market.                  Our                  sales of sodium potassium nitrate to the Brazilian market were                  also                  affected by a reduction in the planted hectares of some of our                  target                  crops. This reduction in the planted hectares is believed to have                  been                  caused in part by the strengthening of the Real against the US                  dollar                  observed during the first half of 2006, affecting the export volumes                  of                  local producers. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | § | Spain,                  an important market for our soluble plant nutrients, was affected                  by one                  of the most severe droughts of recent years. This situation generated                  a                  decrease of 6% in the sales volume for that market compared with                  2005. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | § | Lower                  volume of sodium nitrate was sold to the Japanese market. This                  effect was                  caused by a delay in arrival of a vessel destined to Japan that                  was                  rescheduled for the first half of                  2007. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

***Iodine        and Iodine Derivatives***

|                                        |   |   |                     | **2006** |   | **2005** |   | **%                  Change** |
|---------------------------------------------|--------|--------|--------------------------|----------|--------|----------|--------|-------------------------------|
| **Iodine                  and derivatives** |   |   | Th.                  Ton |     |   | 9.8      |   |                          | 8.1 |   |   | 21 | % |

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*Table            of Contents*

|   | § | Higher                  volume was mainly due to the acquisition of DSM’s iodine business and the                  capacity increase in Nueva Victoria, both during first quarter                  2006 |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | § | The                  most important applications of iodine and derivatives increasing                  in demand                  were iodophors and biocides, in the U.S.; LCD polarizing film in                  Asia and                  x-ray contrast media in Europe and                  USA. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

***Lithium        and Lithium Derivatives***

|                                                   |   |   |                     | **2006** |   | **2005** |   | **%                  Change** |
|--------------------------------------------------------|--------|--------|--------------------------|----------|--------|----------|--------|-------------------------------|
| **Lithium                  carbonate and derivatives** |   |   | Th.                  Ton |     |   | 30.4     |   |                          | 27.8 |   |   | 9 | % |

----

*Table            of Contents*

***Industrial      Chemicals***

|                               |   |   |                   | **2006** |   | **2005                (1)** |   | **%                Change** |
|------------------------------------|--------|--------|------------------------|----------|--------|-----------------------------|--------|-----------------------------|
| Industrial                nitrates |   |   | Th.                Ton |     |   | 162                         |   |                        | 176.3 |   |   | (8 | )% |
| Boric                acid          |   |   | Th.                Ton |     |   | 10                          |   |                        | 6.3 |   |   | 59 | % |

|  | (1) | Figures                have been restated to reflect a reclassification affecting Industrial                Nitrates. Sodium Sulfate that used to be included under Industrial                Chemicals was relocated to Other Products. Sodium Sulfate revenues                reached                US$3.5 million during 2005. |
|--|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

***Potassium      Chloride and Other Commodity Fertilizers***

**Potassium      chloride**

|                              |   |   |                   | **2006** |   | **2005** |   | **%                Change** |
|-----------------------------------|--------|--------|------------------------|----------|--------|----------|--------|-----------------------------|
| Potassium                chloride |   |   | Th.                Ton |     |   | 126.4    |   |                        | 128.7 |   |   | (2 | )% |

**Other      commodity fertilizers**

***Production      Costs***

|   | § | Higher                energy costs. Oil, electricity and natural gas costs were higher                in 2006                compared to the previous year. This was exacerbated by shortages                of                natural gas caused by Argentinean export restrictions. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | § | The                less favorable exchange rate scenario in Chile. The average appreciation                of the Chilean peso of 5.6% had a negative effect for our peso-denominated                costs. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | § | Depreciation                costs increased by approximately US$ 20 million during                2006. |
|--------|--------|---------------------------------------------------------------------------------------------------------|

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*Table          of Contents*

***Gross      Profit***

***Selling      and Administrative Expenses***

***Operating      Income***

***Non-Operating      Income and Expenses***

|   | § | Net                financial expenses reached US$(16.2) million during 2006, higher                than the                US$(11.1) million reached during the year 2005. This increase in                financial                expenses was related to the increase in the financial debt of the                Company. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | § | During                the year 2006, the Company recorded exchange losses of approximately                US$2.3 million, lower than the US$3.8 million during                2005. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

***Income      Taxes***

***Foreign      Exchange Rates and Inflation***

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*Table          of Contents*

|                              |   | **2007**                  |       | **2006**                  |   |
|-----------------------------------|--------|---------------------------|------------|---------------------------|--------|
|                              |   | **Th                US$** |       | **Th                US$** |   |
| Chilean                pesos      |   |                      | 36,975     |                      |   | (41,922 | ) |
| Brazilian                real     |   |                      | (1,281     | )                         |   | (1,332 | ) |
| Euro                              |   |                      | 31,730     |                      |   | 27,167 |   |
| Japanese                yen       |   |                      | 692        |                      |   | 730 |   |
| Mexican                pesos      |   |                      | (2,900     | )                         |   | 1,587 |   |
| South                African rand |   |                      | 8,346      |                      |   | 11,676 |   |
| Dirhams                           |   |                      | 10,012     |                      |   | 13,554 |   |
| Other                currencies   |   |                      | 8,584      |                      |   | 7,854 |   |
|                              |   |                      |       |                      |   |   |   |
| **Total,                net**     |   |                      | **92,158** |                      |   | **19,314** |   |

**U.S.      GAAP Reconciliation **

----

*Table          of Contents*

***5.B.****Liquidity      and Capital Resources***

| **On Balance Sheet Financial ****Instruments** |   | **Interest Rate**           |   | **Issue Date**          |   | **Maturity Date**       |   | **Amortizations**                              |   |
|--------------------------------------------------------------------|--------|----------------------------------|--------|------------------------------|--------|------------------------------|--------|------------------------------------------------|--------|
|                                                               |   |                             |   |                         |   |                         |   |                                           |   |
| Bond –                US$200 million                    |   | 6.125%                           |   | Apr.                5, 2006  |   | Apr.                15, 2016 |   | Bullet                                         |   |
| Bond –                UF 2.85 million (1)               |   | 4.00%                            |   | Jan.                24, 2006 |   | Dec.                1, 2026  |   | Semiannual                partialamortizations |   |
| Syndicated                loan – US$100 million         |   | LIBOR                3M + 0.375% |   | Mar.                3, 2005  |   | Feb.                25, 2010 |   | Bullet                                         |   |
| Syndicated                loan – US$ 80 million         |   | LIBOR                6M + 0.30%  |   | Nov.                28, 2006 |   | Nov.                28, 2011 |   | Bullet                                         |   |

|  | (1) | UF-denominated                bond fully hedged (originally issued for UF3 million; UF2.85 million                outstanding as of December 31, 2007), under Chilean GAAP, to US$                with a                cross currency swap. Approximately equivalent to US$102 million as                of                December 31, 2007. Fixed US$ interest rate of                5.84%. |
|--|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **Maturity(*)**                    |   | **Amount ( millions of US$)** |       |
|------------------------------------|--------|---------------------------------------------------|------------|
| 2009                               |   |                                              | 5.13       |   |
| 2010                               |   |                                              | 105.13     |   |
| 2011                               |   |                                              | 85.13      |   |
| 2012                               |   |                                              | 5.13       |   |
| 2013                               |   |                                              | 5.13       |   |
| 2014                and thereafter |   |                                              | 266.71     |   |
| **Total**                          |   |                                              | **472.36** |   |

|  | (*) | Only                the capital  has                been included.                For the UF 3 million bond, the amounts presented reflect the real                U.S.                dollar obligation resulting from the effects of the cross currency                swap                that fully hedges this bond to the U.S. dollar. For further information,                see Item 11. Quantitative and Qualitative Disclosures about Market                Risk. |
|--|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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*Table          of Contents*

***Environmental      Projects***

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

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*Table          of Contents*

***5.D.****Trend      Information***

***5.E.****Off-Balance      Sheet Arrangements***

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*Table          of Contents*

***5.F.***
***Tabular      Disclosure of Contractual Obligations***

| The                following table sets forth our material expected obligations and                commitments as of December 31, 2007: |   |
|-----------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                    |   |   |   |   |   |   |   |   |   |   |   |
|                                                                                                                                    |   |   |   | **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                                                                                                |   |   | 498,126 |   |   | 11,475 |   |   | 100,000 |   |   | 80,000 |   |   | 306,651 |   |
| Capital                lease obligations                                                                                                |   |   | 974 |   |   | 244 |   |   | 730 |   |   | - |   |   | - |   |
| Operating                leases (*)                                                                                                     |   |   | 120,049 |   |   | 10,760 |   |   | 9,094 |   |   | 9,094 |   |   | 91,101 |   |
| Purchase                commitments                                                                                                     |   |   | 27,488 |   |   | 27,488 |   |   | - |   |   | - |   |   | - |   |
| Staff                severance indemnities                                                                                              |   |   | 20,679 |   |   | - |   |   | - |   |   | - |   |   | 20,679 |   |
| **Total                Contractual Obligations and Commitments**                                                                        |   |   | **667,316** |   |   | **49,967** |   |   | **109,824** |   |   | **89,094** |   |   | **418,431** |   |

| (*)                See Consolidated Financial Statements Note 29 II.e) |   |   |   |   |   |   |   |   |   |   |
|------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|--------|--------|--------|

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*Table          of Contents*

**ITEM      6.**
**DIRECTORS,      SENIOR MANAGEMENT AND EMPLOYEES**

***6.A.****Directors      and Senior Management***

| **Directors**                            |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                                           |
|------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------|
| **Name**                                 |   | **Position**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | **Current position held since** |
| Julio                Ponce L. (1)        |   | Chairman                of the Board and Director                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                           |   | September                1987                  |
|                                     |   | *Mr.                Ponce is a Forestry Engineer with a degree from the Universidad de                Chile.                He joined the Company in 1981. He is also Chairman of the Board 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 Luis Eugenio                Ponce.*                                                                       |   |                                           |
|                                     |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                                           |
| Wayne                R. Brownlee         |   | Vice                Chairman of the Board and Director                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | December                2001                   |
|                                     |   | *Mr.                Brownlee is Executive Vice-President, Treasurer and Chief Financial                Officer of Potash Corporation of Saskatchewan, Inc. Mr. Brownlee                earned                degrees in Science and Business Administration from the University                of                Saskatchewan. He is on the Board of Great Western Brewing Company                as well                as PhilomBios, an agricultural biotechnology company. He became a                director                of SQM in December 2001.* |   |                                           |
|                                     |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                        |   |                                           |
| Hernán                Büchi B. |   | Director                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   | April                1993                      |
|                                     |   | *Mr.                Büchi 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 Board member in Quiñenco S.A. Banco de Chile, S.A.C.I.                Falabella and Madeco S.A., among others. He is also Chairman of the                Board                of Universidad del Desarrollo.*                                                                                 |   |                                           |

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*Table          of Contents*

| José                María Eyzaguirre B. |   | Director                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | December                2001 |
|---------------------------------------------------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------|
|                                              |   | *Mr.                Eyzaguirre is a lawyer and is a partner of the Chilean law firm Claro                y                Cia.  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 the 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 Pacífico 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.*                                                                                                                                                                                                                      |   |                         |
|                                              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                         |
| Daniel                Yarur E.                    |   | Director                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | April                2003    |
|                                              |   | *Mr.                Yarur is an Information Engineer with a degree from the Universidad                de                Chile and holds an MSc in Finance at the London School of Economics                and an                AMP from Harvard Business School. He is a member of the Board of                Banco de                Crédito e Inversiones, Antofagasta P.L.C. (based in London), Antofagasta                Minerals, Invertec Pesquera Mar de Chiloé S.A., President Fundación                Chilena de Ajedrez, President Fondo de Inversiones Alekine. 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.* |   |                         |
|                                              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                         |
| Wolf                von Appen                     |   | Director                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | May                2005      |
|                                              |   | *Mr.                Von Appen is an entrepreneur. He is currently a Board member of Sociedad                de Fomento Fabril and Vice president of Centro de Estudios                Publicos.*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   |                         |
|                                              |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   |                         |
| Eduardo                Novoa C.                   |   | Director                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                             |   | April                2008    |
|                                              |   | *Mr.                Novoa is an economist with a degree from the Universidad de Chile                and                holds a Master’s 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 Board member, Chief Development                Officer, Country Manager or CEO. Mr. Novoa currently provides strategic                advisory services, and he is also a member of the Board of Directors                of                Esval, as well as other private companies.*                                                                                                                                                                                                                                           |   |                         |

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*Table          of Contents*

| Kendrick                T. Wallace |   | Director                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | December                2001 |
|------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------|
|                               |   | *Mr.                Wallace is a lawyer who graduated from Harvard Law School. He is                now                Senior Vice President and General Counsel of Yara International ASA                in                Oslo, Norway. Prior to the spin-off of Yara International ASA from                Norsk                Hydro ASA, he was the chief legal counsel of Norsk Hydro ASA for                North and                South America in Tampa, Florida. Before that he was a partner in                the law                firm of Bryan Cave LLP in Kansas City, Missouri. Mr. Wallace is a                member                of the Board of Directors of Yara Brasil Ltda. in Brasil, OAO                Minudobreniya (Rossosh) in Russia and of a number of subsidiaries                of Yara                International ASA. He is also on the Board of Directors of Norte                Grande                S.A., Sociedad de Inversiones Oro Blanco S.A. and Sociedad de Inversiones                Pampa Calichera S.A.* |   |                         |
|                               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   |                         |

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*Table          of Contents*

| **Executive                  Officers**     |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                           |
|---------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------------------------|
| **Name**                                    |   | **Position**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | **Current position held since** |
| Patricio                  Contesse G.       |   | Chief                  Executive Officer                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | March                  1990                    |
|                                        |   | *Mr.                  Contesse is a Forestry Engineer with a degree from the Universidad                  de                  Chile. He joined the Company in 1981 as CEO, a position he held                  until                  1982, and again in 1988. In the past, he was 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 Soquimich Comercial.*                                                                                                                                                                                         |   |                                           |
|                                        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                           |
| Patricio                  de Solminihac T.  |   | Chief                  Operating Officer andExecutive                  Vice President                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   | January                  2000                  |
|                                        |   | *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 the Company                  in                  1988 as Business Development Vice President. In 1989, he became                  General                  Manager and later on he became Vice Chairman of the Board of SQM,                  a                  position he held from 1989 through January 2000. Mr. de Solminihac                  was                  Country Manager for Raychem Corporation. Currently he is a member                  of the                  Board of Empresas Melón S.A. and CEM. Mr. de Solminihac is also a member                  of the Board of Soquimich Comercial.* |   |                                           |
|                                        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                           |
| Matías                  Astaburuaga S. |   | General                  Counsel and Senior Vice President                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                              |   | February                  1989                 |
|                                        |   | *Mr.                  Astaburuaga is a lawyer with a degree from the Pontificia Universidad                  Católica de Chile. He joined the Company in 1989. Before that, he was                  Regional Counsel of The Coca Cola Export Corporation, Andean Region                  and                  Regional Counsel of American Life Insurance Company, Latin America                  Region.*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                         |   |                                           |
|                                        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                                           |
| Ricardo                  Ramos R. (2)       |   | Chief                  Financial Officer andBusiness                  Development Senior Vice President                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                 |   | November                  1994                 |
|                                        |   | *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 Soquimich                  Comercial.*                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   |                                           |

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*Table            of Contents*

| Jaime                  San Martín L. (2) |   | Nueva                  Victoria Operations Senior Vice President                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                       |   | March                  2008 |
|-----------------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------------------------|
|                                          |   | *Mr.                  San Martín is a Transportation Engineer with a degree from the Pontificia                  Universidad Católica de Chile. He joined the Company 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.*                                                                             |   |                        |
|                                          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                        |
| Eugenio                  Ponce L.             |   | Corporate                  Commercial Senior Vice President                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | March                  1999 |
|                                          |   | *Mr.                  Ponce is a Mechanical Engineer with a degree from the Universidad                  Católica                  de Valparaíso. In 1981, he joined the Company 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.                  In the past                  he was member of the Board of IANSA. Currently he is a member of                  the board                  of Soquimich Comercial and Vice Chairman of the Board of Pampa                  Calichera.                  He is Julio Ponce’s brother.* |   |                        |
|                                          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                        |
| Mauricio                  Cabello C. (2)      |   | Nitrates-Iodine                  Operations Senior Vice President                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                      |   | June                  2005  |
|                                          |   | *Mr.                  Cabello is a Mechanical Engineer with a degree from the Universidad                  de                  Santiago de Chile. He joined the Company in 2000 as Maintenance                  Superintendent of SQM Salar. He became Maintenance Manager of SQM's                  nitrates and iodine operations in 2002 and Production Manager of                  SQM's nitrates and iodine operations in 2004. He previously worked in                  various engineering-related positions in Pesquera San José S.A., Pesquera                  Coloso S.A. and Cintac S.A.*                                                                                                   |   |                        |
|                                          |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                   |   |                        |
| Pauline                  De Vidts S.          |   | Safety,                  Health & Environment Senior Vice President                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |   | June                  2005  |
|                                          |   | *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 the Company in 1996 to work in                  process development for the Salar de Atacama Operations, becoming                  Development Manager for these operations in 1998, and in 2001,                  she became                  Corporate R&D and Environmental Issues Vice                  President.*                                                                                                                                       |   |                        |

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*Table            of Contents*

| Juan Carlos Barrera P. (2) |   | Salar                  and Lithium Operations Senior Vice President                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                     |   | January                  2007 |
|------------------------------------------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------|
|                                           |   | *Mr.                  Barrera is an Industrial Engineer with a degree from the Pontificia                  Universidad Católica de Chile and holds a Master in Business                  Administration degree from Tulane University and a Master in Business                  Administration degree from Universidad de Chile. He joined the                  Company 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, Corporate Quality Manager, in 2000 Corporate                  Supply Chain Vicepresident and, in 2006, General Manger of Soquimich                  Comercial S.A*. |   |                          |
|                                           |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |   |                          |
| Daniel Jiménez Sch. (2)    |   | Human                  Resources and Corporate AffairsSenior                  Vice President                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | May                  2007     |
|                                           |   | *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 the                  Company 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 8 years. In 2002, he became VP Sales                  and                  Marketing Iodine, Lithium and Industrial Chemicals*.                                                                                                                                                        |   |                          |

|  | (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***

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*Table          of Contents*

|                                            |   | **SQM                S.A.** |            | **SQMC**                 |   | **TOTAL**              |   |
|-------------------------------------------------|--------|-----------------------------|-----------------|--------------------------|--------|------------------------|--------|
| **Name**                                        |   | **Meeting (Ch$)**      |            | **Committee (Ch$)** |   | **Meeting (Ch$)** |   | **Committee (Ch$)** |   | **(Ch$) ** |   |
| Ponce Lerou, Julio                    |   |                        | 557,486,448     |                     |   | -                      |   |   | 67,824,618 |   |   | - |   |   | 625,311,066 |   |
| Büchi                Buc, Hernán      |   |                        | 80,405,862      |                     |   | 5,605,994              |   |   | - |   |   | - |   |   | 86,011,856 |   |
| Brownlee,                Wayne R.               |   |                        | 81,386,996      |                     |   | -                      |   |   | - |   |   | - |   |   | 81,386,996 |   |
| Eyzaguirre,                José María |   |                        | 82,305,947      |                     |   | -                      |   |   | - |   |   | - |   |   | 82,305,947 |   |
| Silva,                José Antonio (1)     |   |                        | 80,467,889      |                     |   | 11,301,818             |   |   | - |   |   | - |   |   | 91,769,707 |   |
| Wallace,                Kendrick T.             |   |                        | 81,386,996      |                     |   | -                      |   |   | - |   |   | - |   |   | 81,386,996 |   |
| Yarur,                Daniel                    |   |                        | 81,386,996      |                     |   | 12,220,925             |   |   | - |   |   | - |   |   | 93,607,921 |   |
| Von                Appen, Wolf                  |   |                        | 83,226,832      |                     |   | -                      |   |   | - |   |   | - |   |   | 83,226,832 |   |
|                                            |   |                        |            |                     |   |                   |   |   |   |   |   |   |   |   |   |   |
| **Total**                                       |   |                        | **873,752,786** |                     |   | **29,128,737**         |   |   | **67,824,618** |   |   | **-** |   |   | **1,225,007,321** |   |

***6.C.****Board      Practices***

**Directors'      Committee – Audit Committee**

*Comité      de Directores*

|   | (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 |
|--------|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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*Table          of Contents*

|   | (b) | Propose                to the Board of Directors the external auditors and the rating agencies                that will be presented to the Ordinary Shareholders                Meeting |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (c) | Examine                and elaborate a report concerning the operations covered by articles                44                and 89 of Law No18.046 |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (d) | Examine                the remuneration and compensation plans of the senior                management |
|--------|-----|--------------------------------------------------------------------------------------------------------|

|  | a) | Analysis                of un-audited financial reports. |
|--|----|----------------------------------------------------------|

|  | b) | Analysis                of audited financial reports. |
|--|----|-------------------------------------------------------|

|  | c) | Analysis                of reports submitted by external auditors, accounts’ inspectors and rating                agencies, and formulation of proposals to the Board of Directors                recommending external auditors, accounts’ inspectors and rating agencies                that could be designated by the respective Annual General Shareholders’                Meeting. |
|--|----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | d) | Analysis                of functions, objectives and working programs of the Internal Audit                Department. |
|--|----|------------------------------------------------------------------------------------------------------------------------|

|  | e) | Analysis                of the Company’s Senior Executives remuneration and compensation plans. |
|--|----|-------------------------------------------------------------------------------------------------------|

|  | f) | Analysis                of contracts with related persons, subsidiaries and related companies                in                Chile and abroad. |
|--|----|--------------------------------------------------------------------------------------------------------------------------------------------------|

|  | g) | Analysis                of matters related to the "Sarbanes-Oxley Act" of the U.S.A., especially                regarding Section 404. |
|--|----|----------------------------------------------------------------------------------------------------------------------------------------|

|  | h) | Analysis                of future investments. |
|--|----|------------------------------------------------|

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*Table          of Contents*

**Comparative      Summary of Differences in Corporate Governance Standards**

| **Section** |   | **NYSE                Standards**                                                                                                                                                                     |   | **SQM                practices pursuant to Chilean regulations**                                                                                                                                                                                                                                               |
|-------------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 303A.01     |   | The                majority of the listed company directors must be                independent.                                                                                                       |   | There                is no legal obligation to have a majority of independent directors                on the                Board.                                                                                                                                                                            |
|        |   |                                                                                                                                                                                                  |   |                                                                                                                                                                                                                                                                                                           |
| 303A.02     |   | Independence                Test                                                                                                                                                                      |   | A                Director is considered independent if he would have been elected                without                the vote of the controlling shareholder and related persons and                entities.                                                                                               |
|        |   |                                                                                                                                                                                                  |   |                                                                                                                                                                                                                                                                                                           |
| 303A.03     |   | Non-management                directors must meet at regularly scheduled executive sessions without                management.                                                                        |   | These                meetings are not needed given that directors do not also serve as                executive officers.                                                                                                                                                                                      |
|        |   |                                                                                                                                                                                                  |   |                                                                                                                                                                                                                                                                                                           |
| 303A.04     |   | Listed                companies must have a nominating/corporate governance                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 Directors' Committee (see Board practices                above).                                                                                     |
|        |   |                                                                                                                                                                                                  |   |                                                                                                                                                                                                                                                                                                           |
| 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. On                May 24,                2005, the Board of Directors approved the establishment of an audit                committee to comply with the requirements of the NYSE corporate governance                rules. |

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*Table          of Contents*

| **Section** |   | **NYSE Standards**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                            |   | **SQM practices pursuant to Chilean regulations**                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                          |
|-------------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 303A.07     |   | The                audit committe must have a minimum of three members. Each of them                must                satisfy requirements of independence and the committee must have                a written                charter.                                                                                                                                                                                                                                                                                                          |   | Pursuant                to Section 303A.00, SQM is not required to comply with requirements                in                303A.07. Pursuant to Chilean Regulations SQM has a Director’ Committee                (see Board practices above) with certain requirements of                independence.                                                                                                                                                                                                                                                                                                      |
|        |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                               |   |                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                                |
| 303A.08     |   | Shareholders                must have the opportunity to vote on all equity-compensation plans                involving directors, executives, employees, or other service                providers.                                                                                                                                                                                                                                                                                                                                               |   | 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 employees.                                                                                                                                                                                                                                                                                                                                                                                 |   | 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 company of NYSE corporate                governance listing                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. |   | Not                required in the Chilean regulations. The CEO must only comply with                Section                303A.12 (b) and (c).                                                                                                                                                                                                                                                                                                                                                                                                                                                                    |

***6.D.****Employees***

|                                      |   | **2007** |   | **2006** |   | **2005** |   | **2004** |   | **2003** |   |
|-------------------------------------------|--------|----------|--------|----------|--------|----------|--------|----------|--------|----------|--------|
| Permanent                employees        |   |     | 3,746  |     |   | 3,745    |   |     | 3,672  |     |   | 3,418 |   |   | 3,455 |   |
| Employees                in Chile         |   |     | 3,515  |     |   | 3,415    |   |     | 3,350  |     |   | 3,138 |   |   | 3,154 |   |
| Employees                outside of Chile |   |     | 231    |     |   | 330      |   |     | 322    |     |   | 280 |   |   | 301 |   |

----

*Table          of Contents*

***6.E.***
***Share      Ownership***

----

*Table          of Contents*

|                             |   | **% Beneficial ownership** |   |
|----------------------------------|--------|--------------------------------------|--------|
| May 31,                2008 |   |                                 | 34.03  | % |
| December                31, 2007 |   |                                 | 34.03  | % |
| December                31, 2006 |   |                                 | 32.28  | % |

----

*Table          of Contents*

**ITEM      7.**
**MAJOR      SHAREHOLDERS AND RELATED PARTY TRANSACTIONS**

***7.A.***
***Major      Shareholders***

| **Shareholder**                                                                         |   | **Number of****Series A****Shares Beneficially****Owned** |       | **%****Series A****Shares** |   | **Number of****Series B****Shares Beneficially****Owned** |   | **%****Series B****Shares** |       | **% Total****Shares** |   |
|-----------------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------|------------|----------------------------------|--------|--------------------------------------------------------------------------|--------|----------------------------------|------------|----------------------------|--------|
| Sociedad de Inversiones Pampa Calichera S.A. (1) (2) |   |                                                                     | 57,934,256 |                             |   | 40.56                                                                    | %      |                             | 12,490,092 |                       |   | 10.38 | % |   | 26.76 | % |
| Inversiones                El Boldo Ltda. (3)                                           |   |                                                                     | 44,582,453 |                             |   | 31.22                                                                    | %      |                             | 17,740,419 |                       |   | 14.74 | % |   | 23.68 | % |
| The                Bank of New York                                                     |   |                                                                     | 53,850     |                             |   | 0.04                                                                     | %      |                             | 45,265,853 |                       |   | 37.56 | % |   | 17.20 | % |
| Inversiones                RAC Chile Ltda. (3)                                          |   |                                                                     | 19,200,242 |                             |   | 13.44                                                                    | %      |                             | 2,699,773  |                       |   | 2.24 | % |   | 8.32 | % |
| Inversiones                Global Mining (Chile ) Limitada. (1)                         |   |                                                                     | 13,798,539 |                             |   | 9.66                                                                     | %      |                             | -          |                       |   | 0.00 | % |   | 5.24 | % |
| AFP                Habitat S.A. (4)                                                     |   |                                                                     | -          |                             |   | 0.00                                                                     | %      |                             | 6,761,211  |                       |   | 5.62 | % |   | 2.57 | % |
| AFP                Provida S.A. (4)                                                     |   |                                                                     | -          |                             |   | 0.00                                                                     | %      |                             | 6,421,524  |                       |   | 5.33 | % |   | 2.44 | % |
| AFP                Capital S.A. (4)                                                     |   |                                                                     | 9,335      |                             |   | 0.01                                                                     | %      |                             | 5,418,113  |                       |   | 4.50 | % |   | 2.06 | % |
| Kowa                Group (5)                                                           |   |                                                                     | 5,292,450  |                             |   | 3.71                                                                     | %      |                             | 50,000     |                       |   | 0.04 | % |   | 2.03 | % |
| Banco                de Chile por Cuenta de Terceros                                    |   |                                                                     | -          |                             |   | 0.00                                                                     | %      |                             | 5,270,961  |                       |   | 4.38 | % |   | 2.00 | % |

| (1) | Mr.                Julio Ponce L., Chairman of the Board of SQM, and related persons                control                Inversiones SQ Holding S.A, which in turn, beneficially owns 100%                of                Inversiones SQYA S.A. Inversiones SQYA S.A. indirectly controls and                beneficially owns Sociedad de Inversiones Pampa Calichera S.A., which                in                turn owns 100% of Global Mining Investments (Chile) S.A. Therefore,                Mr.                Ponce and related persons beneficially own through the above entities                84,222,887 shares constituting 32.00% of the total shares of SQM.                The                stake held by Mr. Ponce and related parties as of December 31, 2007,                2006                and 2005 was, respectively, 32.00%, 30.26%, and 24.96% of the total                shares                of SQM. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (2) | Pampa                Calichera is an open stock 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. Approximately 36 of our employees are shareholders of Pampa                Calichera, either directly or                indirectly. |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (3) | Potash                Corporation of Saskatchewan Inc. owns 100% of Inversiones el Boldo                Limitada and 100% of Inversiones RAC Ltda., being therefore the beneficial                owner of 84,222,887 SQM's shares that represent 32.00% of SQM's total                shares. The stake held by Potash Corporation of Saskatchewan as of                December 31, 2007, 2006, and 2005 was, respectively, 32.00%, 24.99%,                and                24.99% of the total shares of SQM. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (4) | AFPs                are legal entities that manage pension funds in                Chile. |
|-----|-------------------------------------------------------------------------------------------|

| (5) | Kowa                Group represents the companies Kowa Co. Ltd, Kochi S.A., La Esperanza                Delaware Corporation and Inversiones La Esperanza (Chile)                Ltda. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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*Table          of Contents*

***7.B.***
***Related      Party Transactions***

***7.C.****Interests      of Experts and Counsel***

----

*Table          of Contents*

**ITEM      8.**
**FINANCIAL      INFORMATION**

***8.A.****Consolidated      Statements and Other Financial Information***

***8.A.1***
** **

***8.A.2***
** **

***8.A.3***
** **

***8.A.4***
** **

***8.A.5***
** **

***8.A.6***
**      Export Sales**

|  Th.                US$          |   | **2007** |      | **2006** |   | **2005**  |   |
|---------------------------------------|--------|----------|-----------|----------|--------|-----------|--------|
|                                  |   |     |      |     |   |      |   |
| **Foreign                sales**      |   |     | 954,641   |     |   | 878,066   |   |   | 739,924 |   |
| **Total                sales**        |   |     | 1,187,527 |     |   | 1,042,886 |   |   | 895,970 |   |
|                                  |   |     |      |     |   |      |   |   |   |   |
| **%                of foreign sales** |   |     | **80.39** | **%**    |   | **84.20** | **%**  |   | **82.60** | **%** |

***8.A.7***
**      Legal Proceedings**

***8.A.8.***
**      Dividend Policy**

----

*Table          of Contents*

**Dividends**

| **Dividends**                                              |   | **Per Share** |   | **Per ADS** (1) |   |
|------------------------------------------------------------|--------|--------------------|--------|---------------------------|--------|
| **Declared for the ****business year** |   | **Paid in**   |   | **Ch$**                   |   | **US$** |   |
|                                                       |   |               |   |                      |   |   |   |
| 2003                                                       |   |               | 2004   |                      |   | 55.05 |   |   | 0.088 |   |
| 2004                                                       |   |               | 2005   |                      |   | 106.56 |   |   | 0.182 |   |
| 2005                                                       |   |               | 2006   |                      |   | 145.11 |   |   | 0.279 |   |
| 2006                                                       |   |               | 2007   |                      |   | 183.96 |   |   | 0.349 |   |
| 2007                                                       |   |               | 2008   |                      |   | 204.14 |   |   | 0.445 |   |

|   | (1) | The                ratio of ordinary shares to Series A ADSs was 10:1 for all periods                reflected in the table. 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                in the                table for all periods is based on the ratio of                1:1. |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

***8.B.****Significant      Changes***

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*Table          of Contents*

**ITEM      9.**
**THE      OFFER AND LISTING**

***9.A      Offer and Listing Details***

**Price      History**

**(a)**
**Last      5 years**

|     |   | **Santiago                Stock Exchange** |   | **NYSE**                    |   |
|----------|--------|--------------------------------------------|--------|-----------------------------|--------|
|     |   | **Per                Share (1)**           |   | **Per                ADS**  |   |
|     |   | **Series                A**                |   | **Series                B** |   | **Series                A (2)** |   | **Series                B (3)** |   |
|     |   | **High**                                   |   | **Low**                     |   | **High** |   | **Low** |   | **High** |   | **Low** |   | **High** |   | **Low** |   |
|     |   | **Ch$**                                    |   | **Ch$**                     |   | **Ch$** |   | **Ch$** |   | **US$** |   | **US$** |   | **US$** |   | **US$** |   |
| **2003** |   |                                       | 3,050  |                        |   | 1,630 |   |   | 2,995 |   |   | 1,580 |   |   | 47.10 |   |   | 22.00 |   |   | 4.62 |   |   | 3.97 |   |
| **2004** |   |                                       | 3,900  |                        |   | 2,350 |   |   | 3,580 |   |   | 2,160 |   |   | 68.00 |   |   | 37.05 |   |   | 6.28 |   |   | 3.30 |   |
| **2005** |   |                                       | 7,000  |                        |   | 3,600 |   |   | 7,170 |   |   | 3,269 |   |   | 129.40 |   |   | 66.80 |   |   | 13.34 |   |   | 5.75 |   |
| **2006** |   |                                       | 7,100  |                        |   | 5,220 |   |   | 7,347 |   |   | 5,000 |   |   | 137.5 |   |   | 93.15 |   |   | 13.95 |   |   | 8.99 |   |
| **2007** |   |                                       | 12,100 |                        |   | 7,100 |   |   | 9,985 |   |   | 6,800 |   |   | 234.80 |   |   | 135.00 |   |   | 20.04 |   |   | 12.50 |   |

**(b)**
**Last      10 quarters**

|                                           |   | **Santiago                Stock Exchange** |   | **NYSE**                    |   |
|------------------------------------------------|--------|--------------------------------------------|--------|-----------------------------|--------|
|                                           |   | **Per                Share (1)**           |   | **Per                ADS**  |   |
|                                           |   | **Series                A**                |   | **Series                B** |   | **Series                A (2)** |   | **Series                B (3)** |   |
|                                           |   | **High**                                   |   | **Low**                     |   | **High** |   | **Low** |   | **High** |   | **Low** |   | **High** |   | **Low** |   |
|                                           |   | **Ch$**                                    |   | **Ch$**                     |   | **Ch$** |   | **Ch$** |   | **US$** |   | **US$** |   | **US$** |   | **US$** |   |
| **2006**                                       |   |                                       |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| First                quarter                   |   |                                       | 6,000  |                        |   | 5,599 |   |   | 6,390 |   |   | 5,540 |   |   | 115.50 |   |   | 105.02 |   |   | 12.25 |   |   | 10.99 |   |
| Second                quarter                  |   |                                       | 5,950  |                        |   | 5,220 |   |   | 6,001 |   |   | 5,000 |   |   | 109.01 |   |   | 93.15 |   |   | 11.63 |   |   | 8.99 |   |
| Third                quarter                   |   |                                       | 6,000  |                        |   | 5,300 |   |   | 6,190 |   |   | 5,300 |   |   | 104.95 |   |   | 99.35 |   |   | 11.51 |   |   | 9.67 |   |
| Fourth                quarter                  |   |                                       | 7,100  |                        |   | 6,000 |   |   | 7,347 |   |   | 6,240 |   |   | 137.50 |   |   | 105.20 |   |   | 13.95 |   |   | 11.67 |   |
|                                           |   |                                       |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **2007**                                       |   |                                       |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| First                quarter                   |   |                                       | 7,600  |                        |   | 7,100 |   |   | 7,830 |   |   | 6,800 |   |   | 142.95 |   |   | 136.95 |   |   | 14.60 |   |   | 12.50 |   |
| Second                quarter                  |   |                                       | 9,050  |                        |   | 7,100 |   |   | 9,152 |   |   | 6,800 |   |   | 180.95 |   |   | 136.95 |   |   | 17.20 |   |   | 12.50 |   |
| Third                quarter                   |   |                                       | 12,100 |                        |   | 9,050 |   |   | 9,160 |   |   | 7,650 |   |   | 228.75 |   |   | 175.10 |   |   | 17.62 |   |   | 14.10 |   |
| Fourth                quarter                  |   |                                       | 12,100 |                        |   | 12,100 |   |   | 9,985 |   |   | 8,042 |   |   | 234.80 |   |   | 219.75 |   |   | 20.04 |   |   | 15.89 |   |
|                                           |   |                                       |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| **2008**                                       |   |                                       |   |                        |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| First                quarter                   |   |                                       | 12,600 |                        |   | 12,100 |   |   | 10,658 |   |   | 6,750 |   |   | 290.00 |   |   | 226.00 |   |   | 24.25 |   |   | 14.77 |   |
| Second                quarter (through May 31) |   |                                       | 17,000 |                        |   | 12,600 |   |   | 17,688 |   |   | 10,500 |   |   | - |   |   | - |   |   | 36.91 |   |   | 23.98 |   |

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*Table          of Contents*

| **(c)** | **Last                6 months** |
|---------|----------------------------------|

|                             |   | **Santiago                Stock Exchange** |   | **NYSE**                    |   |
|----------------------------------|--------|--------------------------------------------|--------|-----------------------------|--------|
|                             |   | **Per                Share (1)**           |   | **Per                ADS**  |   |
|                             |   | **Series                A**                |   | **Series                B** |   | **Series                A (2)** |   | **Series                B (3)** |   |
|                             |   | **High**                                   |   | **Low**                     |   | **High** |   | **Low** |   | **High** |   | **Low** |   | **High** |   | **Low** |   |
|                             |   | **Ch$**                                    |   | **Ch$**                     |   | **Ch$** |   | **Ch$** |   | **US$** |   | **US$** |   | **US$** |   | **US$** |   |
| **December                2007** |   |                                       | 12,100 |                        |   | 12,100 |   |   | 9,319 |   |   | 8,042 |   |   | 223.75 |   |   | 219.75 |   |   | 18.75 |   |   | 15.93 |   |
| **January                2008**  |   |                                       | 12,100 |                        |   | 12,100 |   |   | 8,750 |   |   | 6,750 |   |   | 233.95 |   |   | 226.00 |   |   | 17.72 |   |   | 14.77 |   |
| **February                2008** |   |                                       | 12,100 |                        |   | 12,100 |   |   | 9,200 |   |   | 7,749 |   |   | 290.00 |   |   | 230.51 |   |   | 20.05 |   |   | 16.18 |   |
| **March                2008**    |   |                                       | 12,600 |                        |   | 12,100 |   |   | 10,658 |   |   | 8,470 |   |   | 271.00 |   |   | 270.00 |   |   | 24.25 |   |   | 18.98 |   |
| **April                2008**    |   |                                       | 16,000 |                        |   | 12,600 |   |   | 14,052 |   |   | 10,500 |   |   | - |   |   | - |   |   | 30.90 |   |   | 23.98 |   |
| **May                2008**      |   |                                       | 17,000 |                        |   | 16,000 |   |   | 17,688 |   |   | 12,664 |   |   | - |   |   | - |   |   | 36.91 |   |   | 27.04 |   |

| (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 in September                1993.                Historical prices have been restated to reflect the change in the                ratio of                local shares to ADRs from 10:1 to 1:1, effective March 28,                2008. |
|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**9.B**
***Plan      Of Distribution***

**9.C**
***Markets***

**9.D**
***Selling      Shareholders***

----

*Table          of Contents*

**9.E**
***Dilution***

**9.F**
***Expenses      Of The Issue***

----

*Table          of Contents*

**ITEM      10.**
**ADDITIONAL      INFORMATION**

***10.A.***
**Share      Capital**

***10.B.***
**Memorandum      and Articles Of Association**

*sociedad      anónima abierta*

**Corporate      purposes**

**(a)**
**(b)**
**(c)**
**(d)**
**(e)**
**(f)**
**(g)**
**(h)**
**(i)**
**(j)**
**(k)**

----

*Table          of Contents*

**Directors**

**Shares**

|  | (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; |
|--|-----|------------------------------------------------------------------------------------------|

|  | (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. |
|--|-----|-----------------------------------------------------------------------------|

----

*Table          of Contents*

**Shareholders’      meetings**

**Foreign      shareholders**

**Change      in control**

*Ley      de Oferta Pública de Acciones*

|   | (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. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Disclosure      of share ownership**

----

*Table          of Contents*

***10.C.****Material      Contracts***

|   | · | On                February 12, 1999, SQM S.A. entered into an Electrical Energy Supply                contract with Electroandina S.A. The term of this contract extends                through                February 12, 2009. SQM has two three-year renewal options. 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. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | On                May 22, 2001, SQM S.A. entered into a Natural Gas Supply agreement                with                Distrinor S.A. The term of this contract extends through May 21,                2011.                Early termination of the contract is subject to payment of non-amortized                investments. SQM pays a fixed annual amount (amortization of investments),                and when we receive gas, we pay the corresponding amounts. However,                in                2007 we received practically no gas, and we expect this situation                to                continue during 2008. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

***10.D.***
***Exchange      Controls***

*'Convención      Capítulo XXVI del Título I del Compendio de Normas de Cambios      Internacionales'*

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*Table          of Contents*

----

*Table          of Contents*

*Compendio      de Normas de Cambios Internacionales*
*Compendio      de Normas de Cambios Internacionales*

***10.E.****Taxation***

**Chilean      Tax Considerations**

**Cash      Dividends and Other Distributions**

----

*Table          of Contents*

**Capital      Gains**

----

*Table          of Contents*

**Other      Chilean Taxes**

**Withholding      Tax Certificates**

**United      States Tax Considerations**
** **

----

*Table          of Contents*

**Cash      Dividends and Other Distributions**

----

*Table          of Contents*

**Capital      Gains**

**Passive      Foreign Investment Company Considerations**

**Information      Reporting and Backup Withholding**

----

*Table          of Contents*

***10.F.****Dividends      and Paying Agents***

***10.G.****Statement      by Experts***

***10.H.****Documents      on Display***

**http://www.sec.gov/edgar/searchedgar/companysearch.html**

***10.I.****Subsidiary      Information***

----

*Table          of Contents*

**ITEM      11.**
**QUANTITATIVE      AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK**

*Interest      Rate Risk*

|                                                                        |   | **Expected                Maturity Date** |         |     |   |         |   |
|-----------------------------------------------------------------------------|--------|-------------------------------------------|--------------|----------|--------|--------------|--------|
| **On                Balance Sheet****Financial                Instruments** |   | **2008**                                  |         | **2009** |   | **2010**     |   | **2011** |   | **2012                and thereafter** |   | **Total** |   | **Fair                Value** |   |
| (in                thousands of U.S. dollars)                          |   |                                      |         |     |   |         |   |   |   |   |   |   |   |   |   |
|                                                                        |   |                                      |         |     |   |         |   |   |   |   |   |   |   |   |   |
| **Fixed                Rate (US$)**                                         |   |                                      | **23,094**   |     |   | **22,775**   |   |   | **22,471** |   |   | **22,167** |   |   | **367,446** |   |   | **457,953** |   |   | **313,845** |   |
| 200m                US$ bond - Int. rate: 6.125%                            |   |                                      | 12,250       |     |   | 12,250       |   |   | 12,250 |   |   | 12,250 |   |   | 255,125 |   |   | 304,125 |   |   | 211,668 |   |
| 3m                UF bond swapped to US$ at 5.84% (1)                       |   |                                      | 10,844       |     |   | 10,525       |   |   | 10,221 |   |   | 9,917 |   |   | 112,321 |   |   | 153,828 |   |   | 102,177 |   |
|                                                                   |   |                                      |              |     |   |              |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |
| **Variable                Rate (US$)**                                      |   |                                      | **7,436**    |     |   | **7,540**    |   |   | **104,570** |   |   | **84,096** |   |   | **-** |   |   | **203,643** |   |   | **179,665** |   |
| 100m                US$ loan – Avg. Int.: 4.083%                      |   |                                      | 4,052        |     |   | 4,230        |   |   | 100,954 |   |   | - |   |   | - |   |   | 109,236 |   |   | 99,692 |   |
| 80m                US$ loan – Avg. Int.: 4.441%                  |   |                                      | 3,384        |     |   | 3,310        |   |   | 3,616 |   |   | 84,096 |   |   | - |   |   | 94,407 |   |   | 79,972 |   |
|                                                                   |   |                                      |    |     |   |    |   |   |                    |   |   |                    |   |   |                    |   |   |                    |   |   |                    |   |
| **Total**                                                                   |   |                                      | **30,531**   |     |   | **30,315**   |   |   | **127,041** |   |   | **106,263** |   |   | **367,446** |   |   | **661,596** |   |   | **493,510** |   |

|                                                      |   | **Expected                Maturity Date** |          |     |   |          |   |
|-----------------------------------------------------------|--------|-------------------------------------------|---------------|----------|--------|---------------|--------|
|                                                      |   | **2008**                                  |          | **2009** |   | **2010**      |   | **2011** |   | **2012                and thereafter** |   | **Total** |   | **Fair                Value** |   |
| **3M                UF Bond - Int. rate 4.00%**           |   |                                      |          |     |   |          |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| SQM                 pays bondholders (UF)            |   |                                      |  261,398 |     |   |  255,456 |   |   |  249,515 |   |   |  243,574 |   |   |  2,940,665 |   |   |  3,950,607 |   |   |  2,985,272 |   |
| **Cross                Currency Swap**                    |   |                                      |          |     |   |          |   |   |  |   |   |  |   |   |  |   |   |  |   |   |  |   |
| CCS                UF Int. rate 4.00% - SQM receives (UF) |   |                                      | -261,398      |     |   | -255,456      |   |   | -249,515 |   |   | -243,574 |   |   | -2,940,665 |   |   | -3,950,607 |   |   | -2,985,272 |   |
| CCS                US$ Int. rate 5.84% - SQM pays (US$)   |   |                                      | 10,844        |     |   | 10,525        |   |   | 10,221 |   |   | 9,917 |   |   | 112,321 |   |   | 153,828 |   |   | 102,177 |   |

*Exchange      Rate Risk*

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*Table          of Contents*

|                              |   | **2007**                  |       | **2006**                  |   |
|-----------------------------------|--------|---------------------------|------------|---------------------------|--------|
|                              |   | **Th                US$** |       | **Th                US$** |   |
| Chilean                pesos      |   |                      | 36,975     |                      |   | (41,922 | ) |
| Brazilian                real     |   |                      | (1,281     | )                         |   | (1,332 | ) |
| Euro                              |   |                      | 31,730     |                      |   | 27,167 |   |
| Japanese                yen       |   |                      | 692        |                      |   | 730 |   |
| Mexican                pesos      |   |                      | (2,900     | )                         |   | 1,587 |   |
| South                African rand |   |                      | 8,346      |                      |   | 11,676 |   |
| Dirhams                           |   |                      | 10,012     |                      |   | 13,554 |   |
| Other                currencies   |   |                      | 8,584      |                      |   | 7,854 |   |
|                              |   |                      |       |                      |   |   |   |
| **Total,                net**     |   |                      | **92,158** |                      |   | **19,314** |   |

**ITEM      12.**
**DESCRIPTION      OF SECURITIES OTHER THAN EQUITY SECURITIES**

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*Table          of Contents*

**PART      II**

**ITEM      13.**
**DEFAULTS,      DIVIDEND ARREARAGES AND DELINQUENCIES**

**ITEM      14.**
**MATERIAL      MODIFICATIONS TO THE RIGHTS OF SECURITY HOLDERS AND USE OF      PROCEEDS**

**ITEM      15.**
**CONTROLS      AND PROCEDURES**

**(a)**
***Disclosure      Control and Procedures***

***(b) Management’s      Annual Report on Internal Control Over Financial      Reporting***

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*Table          of Contents*

***(c) Attestation      Report of the Registered Public Accounting Firm***

***(d) Changes      in internal control***

**ITEM      16.**
**[Reserved]**

**ITEM      16A.**
**AUDIT      COMMITTEE FINANCIAL EXPERT**

**ITEM      16B.**
**CODE      OF ETHICS**

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*Table          of Contents*

**ITEM      16C.**
**PRINCIPAL      ACCOUNTANT FEES AND SERVICES**

|                              |   | **Year ended December 31,** |        |
|-----------------------------------|--------|--------------------------------------------|-------------|
|                              |   | **2007**                                   |        | **2006** |   |
| Audit fees                   |   |                                       | 1,061.6     |   |   | 859.5 |   |
| Audit-related                fees |   |                                       | 41.2        |   |   | - |   |
| Tax                fees           |   |                                       | 78.1        |   |   | 202.5 |   |
| Other                fees         |   |                                       | 114.3       |   |   | 84.00 |   |
| **Total                fees**     |   |                                       | **1,295.1** |   |   | **1,146.0** |   |

**Directors'      Committee Pre-Approval Policies and Procedures**

**ITEM      16D.**
**EXEMPTIONS      FROM THE LISTING STANDARDS FOR AUDIT COMMITTEES**

**ITEM      16E.**
**PURCHASES      OF EQUITY SECURITIES BY THE ISSUER AND AFFILIATED      PURCHASERS**

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*Table          of Contents*

**PART      III**

**ITEM      17.**
**FINANCIAL      STATEMENTS**

**ITEM      18.**
**FINANCIAL      STATEMENTS**
** **

**ITEM      19.**
**EXHIBITS**

**(a)      Index to Financial Statements **

| Report                      of Independent Registered                      Public Accounting Firm                                                                                                                      | F-1    |
|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|                                                                                                                                                                                                                             |   |
| Report                      of Independent Registered                      Public Accounting Firm on the internal control over financial                      reporting as                      of December 31, 2007   | F-2    |
|                                                                                                                                                                                                                             |   |
| **Consolidated                      Financial Statements:**                                                                                                                                                                      |   |
|                                                                                                                                                                                                                             |   |
| Audited                      Consolidated Balance Sheets as of December 31, 2007 and 2006                                                                                                                                   | F-4    |
|                                                                                                                                                                                                                             |   |
| Audited                      Consolidated Statements of Income for each of the three years                      in the                      period ended December 31, 2007, 2006 and 2005                                   | F-6    |
|                                                                                                                                                                                                                             |   |
| Audited                      Consolidated Statements of Cash Flows for each of the three                      years in the                      period ended December 31, 2007, 2006 and 2005                               | F-7    |
|                                                                                                                                                                                                                             |   |
| Notes                      to the Audited Consolidated Financial Statements                                                                                                                                                 | F-9    |
|                                                                                                                                                                                                                             |   |
| 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**

| **Exhibit**** ****No.** |   | **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 |

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*Table          of Contents*

**SIGNATURES**

**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**

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*Table          of Contents*

**SOCIEDAD      QUIMICA Y MINERA DE CHILE S.A. AND SUBSIDIARIES**

| **Contents**                                                                                                                                                                  |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|                                                                                                                                                                          |   |
|                                                                                                                                                                          |   |
| Report                of Independent Registered Public Accounting Firm                                                                                                        | F-1 |
| Report                of Independent Registered Public Accounting Firm on the internal                control                over financial reporting as of December 31, 2007 | F-2 |
|                                                                                                                                                                          |   |
| **Consolidated                Financial Statements:**                                                                                                                         |   |
| Audited                Consolidated Balance Sheets as of December 31, 2007 and 2006                                                                                      | F-4 |
| Audited                Consolidated Statements of Income for each of the three years in                the                period ended December                31, 2007       | F-6 |
| Audited                Consolidated Statements of Cash Flows for each of the three years                in the                period ended December 31, 2007                  | F-7 |
| Notes                to the Audited Consolidated Financial Statements                                                                                                         | F-9 |

| US$    | - | United                States dollars                                                                                                                                                                                                                                                   |
|--------|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| ThUS$  | - | Thousands                of United States dollars                                                                                                                                                                                                                                      |
| Ch$    | - | Chilean                pesos                                                                                                                                                                                                                                                           |
| ThCh$  | - | Thousands                of Chilean pesos                                                                                                                                                                                                                                              |
| ThEuro | - | Thousands                of Euros                                                                                                                                                                                                                                                      |
| UF     | - | or                *Unidad de Fomento*. 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. |

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*Table          of Contents*

**Report      of Independent Registered Public Accounting Firm**

----

*Table          of Contents*

**Report      of Independent Registered Public Accounting Firm**

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*Table          of Contents*

** **

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*Table          of Contents*

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

**Audited      Consolidated Balance Sheets**

**(Expressed      in thousands of US dollars, except as stated)**

|                                                                  |   |     |   | **As                  of December 31,** |   |
|-----------------------------------------------------------------------|--------|----------|--------|-----------------------------------------|--------|
| **ASSETS**                                                            |   | **Note** |   | **2007**                                |   | **2006** |   |
|                                                                  |   |     |   | **ThUS$**                               |   | **ThUS$** |   |
| **Current                  assets**                                   |   |     |   |                                    |   |   |   |   |   |   |
| Cash                  and cash equivalents                       |   |     |   |                                    |   | 164,212 |   |   | 183,943 |   |
| Trade                  accounts receivable, net                  |   |     | 4      |                                    |   | 224,444 |   |   | 177,406 |   |
| Other                  accounts receivable, net                  |   |     | 4      |                                    |   | 6,249 |   |   | 4,857 |   |
| Accounts                  receivable from related companies      |   |     | 5      |                                    |   | 61,042 |   |   | 65,640 |   |
| Inventories,                  net                                |   |     | 6      |                                    |   | 387,768 |   |   | 365,499 |   |
| Recoverable                  taxes                               |   |     |   |                                    |   | 31,322 |   |   | 32,830 |   |
| Prepaid                  expenses                                |   |     |   |                                    |   | 4,197 |   |   | 3,885 |   |
| Other                  current assets                            |   |     |   |                                    |   | 24,720 |   |   | 11,815 |   |
| Total                  current assets                            |   |     |   |                                    |   | 903,954 |   |   | 845,875 |   |
|                                                                  |   |     |   |                                    |   |   |   |   |   |   |
| **Property,                  plant and equipment, net**          |   |     | 7      |                                    |   | 983,449 |   |   | 916,928 |   |
|                                                                  |   |     |   |                                    |   |   |   |   |   |   |
| **Other                  Assets**                                     |   |     |   |                                    |   |   |   |   |   |   |
| Investments                  in related companies                |   |     | 8      |                                    |   | 23,935 |   |   | 18,329 |   |
| Goodwill,                  net                                   |   |     | 9      |                                    |   | 34,236 |   |   | 36,331 |   |
| Negative                  goodwill, net                          |   |     | 9      |                                    |   | (1,291 | ) |   | (1,928 | ) |
| Intangible                  assets, net                          |   |     |   |                                    |   | 3,814 |   |   | 4,523 |   |
| Long-term                  accounts receivable, net              |   |     | 4      |                                    |   | 604 |   |   | 388 |   |
| Long-term                  accounts receivable from related companies |   |     | 5      |                                    |   | 2,000 |   |   | 2,000 |   |
| Other                  long-term assets                          |   |     | 10     |                                    |   | 35,618 |   |   | 48,756 |   |
| Total                  other assets                                   |   |     |   |                                    |   | 98,916 |   |   | 108,399 |   |

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*Table          of Contents*

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

**Audited      Consolidated Balance Sheets**

**(Expressed      in thousands of US dollars, except as stated)**

|                                                           |   |     |   | **As                of December 31,** |   |
|----------------------------------------------------------------|--------|----------|--------|---------------------------------------|--------|
| **LIABILITIES                AND SHAREHOLDERS' EQUITY**        |   | **Note** |   | **2007**                              |   | **2006** |   |
|                                                           |   |     |   | **ThUS$**                             |   | **ThUS$** |   |
| **Current                liabilities**                         |   |     |   |                                  |   |   |   |   |   |   |
| Short-term                bank debt                            |   |     | 11     |                                  |   | 1,806 |   |   | 58,350 |   |
| Current                portion of long-term bank debt          |   |     | 11     |                                  |   | 801 |   |   | 828 |   |
| Current                portion of bonds payable                |   |     | 12     |                                  |   | 8,868 |   |   | 5,540 |   |
| Dividends                payable                               |   |     |   |                                  |   | 531 |   |   | 264 |   |
| Accounts                payable                                |   |     |   |                                  |   | 99,030 |   |   | 80,810 |   |
| Notes                and accounts payable to related companies |   |     | 5      |                                  |   | 6,880 |   |   | 5,807 |   |
| Accrued                liabilities                             |   |     | 13     |                                  |   | 22,314 |   |   | 16,404 |   |
| Withholdings                                                   |   |     |   |                                  |   | 22,931 |   |   | 11,386 |   |
| Income                taxes                                    |   |     |   |                                  |   | 9,514 |   |   | 8,722 |   |
| Deferred                income                                 |   |     |   |                                  |   | 10,858 |   |   | 4,065 |   |
| Deferred                income taxes                           |   |     | 14     |                                  |   | 6,214 |   |   | 4,088 |   |
| Other                current liabilities                       |   |     |   |                                  |   | 2,675 |   |   | 1,378 |   |
| Total                current liabilities                       |   |     |   |                                  |   | 192,422 |   |   | 197,642 |   |
|                                                           |   |     |   |                                  |   |   |   |   |   |   |
| **Long-term                liabilities**                       |   |     |   |                                  |   |   |   |   |   |   |
| Long-term                bank debt                             |   |     | 11     |                                  |   | 180,000 |   |   | 180,000 |   |
| Bonds                payable                                   |   |     | 12     |                                  |   | 306,651 |   |   | 300,724 |   |
| Deferred                income taxes                           |   |     | 14     |                                  |   | 55,409 |   |   | 47,361 |   |
| Long-term                accrued liabilities                   |   |     | 15     |                                  |   | 22,671 |   |   | 19,464 |   |
| Other                long-term liabilities                     |   |     |   |                                  |   | 731 |   |   | 849 |   |
| Total                long-term liabilities                     |   |     |   |                                  |   | 565,462 |   |   | 548,398 |   |
|                                                           |   |     |   |                                  |   |   |   |   |   |   |
| **Minority                interest**                           |   |     | 16     |                                  |   | 45,999 |   |   | 39,213 |   |
|                                                           |   |     |   |                                  |   |   |   |   |   |   |
| **Commitments                and contingencies**               |   |     | 23     |                                  |   | - |   |   | - |   |
|                                                           |   |     |   |                                  |   |   |   |   |   |   |
| **Shareholders'                equity**                        |   |     |   |                                  |   |   |   |   |   |   |
| Paid-in                capital                                 |   |     | 17     |                                  |   | 477,386 |   |   | 477,386 |   |
| Other                reserves                                  |   |     | 17     |                                  |   | 163,442 |   |   | 155,190 |   |
| Retained                earnings                               |   |     | 17     |                                  |   | 541,608 |   |   | 453,373 |   |
| Total                Shareholders' equity                      |   |     |   |                                  |   | 1,182,436 |   |   | 1,085,949 |   |
| Total                Liabilities and Shareholders' equity      |   |     |   |                                  |   | 1,986,319 |   |   | 1,871,202 |   |

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*Table          of Contents*

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

**Audited      Consolidated Statements of Income**

**(Expressed      in thousands of US dollars, except as stated)**

|                                                                                                                        |   |     |   | **For                the years ended December 31,** |   |
|-----------------------------------------------------------------------------------------------------------------------------|--------|----------|--------|-----------------------------------------------------|--------|
|                                                                                                                        |   | **Note** |   | **2007**                                            |   | **2006** |   | **2005** |   |
|                                                                                                                        |   |     |   | **ThUS$**                                           |   | **ThUS$** |   | **ThUS$** |   |
| **Operating                income**                                                                                         |   |     |   |                                                |   |   |   |   |   |   |   |   |   |
|                                                                                                                        |   |     |   |                                                |   |   |   |   |   |   |   |   |   |
| Sales                                                                                                             |   |     |   |                                                |   | 1,187,527 |   |   | 1,042,886 |   |   | 895,970 |   |
| Cost                of sales                                                                                           |   |     |   |                                                |   | (857,765 | ) |   | (753,336 | ) |   | (652,901 | ) |
| Gross                margin                                                                                            |   |     |   |                                                |   | 329,762 |   |   | 289,550 |   |   | 243,069 |   |
| Selling                and administrative expenses                                                                     |   |     |   |                                                |   | (70,273 | ) |   | (69,662 | ) |   | (61,878 | ) |
| Operating                income                                                                                        |   |     |   |                                                |   | 259,489 |   |   | 219,888 |   |   | 181,191 |   |
|                                                                                                                        |   |     |   |                                                |   |   |   |   |   |   |   |   |   |
| **Non-operating                income and expense**                                                                         |   |     |   |                                                |   |   |   |   |   |   |   |   |   |
|                                                                                                                        |   |     |   |                                                |   |   |   |   |   |   |   |   |   |
| Non-operating                income                                                                                    |   |     | 19     |                                                |   | 25,948 |   |   | 19,293 |   |   | 16,433 |   |
| Non-operating                expenses                                                                                  |   |     | 19     |                                                |   | (53,032 | ) |   | (55,341 | ) |   | (50,755 | ) |
| Non-operating                loss                                                                                      |   |     |   |                                                |   | (27,084 | ) |   | (36,048 | ) |   | (34,322 | ) |
|                                                                                                                        |   |     |   |                                                |   |   |   |   |   |   |   |   |   |
| **Income                before income taxes, minority interest and amortization of negative                goodwill**  |   |     |   |                                                |   | **232,405** |   |   | **183,840** |   |   | **146,869** |   |
|                                                                                                                        |   |     |   |                                                |   |   |   |   |   |   |   |   |   |
| Income                tax expense                                                                                      |   |     | 14     |                                                |   | (48,592 | ) |   | (37,916 | ) |   | (32,527 | ) |
|                                                                                                                        |   |     |   |                                                |   |   |   |   |   |   |   |   |   |
| **Income                before minority interest and amortization of negative                goodwill**                |   |     |   |                                                |   | 183,813 |   |   | 145,924 |   |   | 114,342 |   |
|                                                                                                                        |   |     |   |                                                |   |   |   |   |   |   |   |   |   |
| Minority                interest                                                                                       |   |     | 16     |                                                |   | (3,792 | ) |   | (4,715 | ) |   | (1,039 | ) |
|                                                                                                                        |   |     |   |                                                |   |   |   |   |   |   |   |   |   |
| **Income                before amortization of negative goodwill**                                                |   |     |   |                                                |   | 180,021 |   |   | 141,209 |   |   | 113,303 |   |
|                                                                                                                        |   |     |   |                                                |   |   |   |   |   |   |   |   |   |
| Amortization                of negative goodwill                                                                       |   |     | 9      |                                                |   | - |   |   | 68 |   |   | 203 |   |
|                                                                                                                        |   |     |   |                                                |   |   |   |   |   |   |   |   |   |
| **Net                income for the year**                                                                             |   |     |   |                                                |   | **180,021** |   |   | **141,277** |   |   | **113,506** |   |

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*Table          of Contents*

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

**Audited      Consolidated Statements of Cash Flows**

**(Expressed      in thousands of US dollars, except as stated)**

|                                                                                                                                                    |   |     | **For                the years ended December 31** |      |
|---------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------|----------------------------------------------------|-----------|
|                                                                                                                                                    |   | **Note** |                                               | **2007**  |   | **2006** |   | **2005** |   |
|                                                                                                                                                    |   |     |                                               | **ThUS$** |   | **ThUS$** |   | **ThUS$** |   |
| **Cash                flows from operating activities**                                                                                                 |   |     |                                               |      |   |   |   |   |   |   |   |   |   |
| Net                income                                                                                                                               |   |     |                                               |      |   | 180,021 |   |   | 141,277 |   |   | 113,506 |   |
| **Charges                (credits) to income not representing cash flows:**                                                                             |   |     |                                               |      |   |   |   |   |   |   |   |   |   |
| Depreciation                expense                                                                                                                     |   |     | 7                                                  |      |   | 97,826 |   |   | 90,354 |   |   | 70,054 |   |
| Amortization                of intangible assets                                                                                                        |   |     |                                               |      |   | 712 |   |   | 915 |   |   | 498 |   |
| Write-offs                and accruals                                                                                                                  |   |     |                                               |      |   | 34,063 |   |   | 16,512 |   |   | 17,034 |   |
| Equity                participation in net income of unconsolidated investees                                                                           |   |     |                                               |      |   | (3,643 | ) |   | (2,314 | ) |   | (3,073 | ) |
| Equity                participation in net losses of unconsolidated investees                                                                           |   |     |                                               |      |   | 77 |   |   | 362 |   |   | 477 |   |
| Amortization                of goodwill                                                                                                                 |   |     | 9                                                  |      |   | 2,252 |   |   | 2,229 |   |   | 2,070 |   |
| Amortization                of negative goodwill                                                                                                        |   |     | 9                                                  |      |   | - |   |   | (68 | ) |   | (203 | ) |
| Loss                (gain) on sales of assets                                                                                                           |   |     |                                               |      |   | 87 |   |   | (809 | ) |   | 216 |   |
| Gains                on sale of investment                                                                                                              |   |     |                                               |      |   | (1,316 | ) |   | (732 | ) |   | - |   |
| Other                credits to income not representing gash flows                                                                                      |   |     | 22                                                 |      |   | (1,745 | ) |   | (2,762 | ) |   | (10,109 | ) |
| Other                charges to income not representing cash flows                                                                                      |   |     | 22                                                 |      |   | 108,075 |   |   | 82,333 |   |   | 87,689 |   |
| Foreign                currency exchange and price-level restatement, net                                                                               |   |     |                                               |      |   | (2,212 | ) |   | 2,263 |   |   | 3,804 |   |
| **Net                changes in operating assets and liabilities:**                                                                                     |   |     |                                               |      |   |   |   |   |   |   |   |   |   |
| Accounts                receivable                                                                                                                      |   |     |                                               |      |   | (25,830 | ) |   | (240 | ) |   | (15,838 | ) |
| Inventories                                                                                                                                             |   |     |                                               |      |   | (34,983 | ) |   | (46,730 | ) |   | (58,807 | ) |
| Other                assets                                                                                                                             |   |     |                                               |      |   | (6,437 | ) |   | 7,917 |   |   | (10,783 | ) |
| Accounts                payable                                                                                                                         |   |     |                                               |      |   | (4,000 | ) |   | (23,359 | ) |   | (6,520 | ) |
| Interest                payable                                                                                                                         |   |     |                                               |      |   | 582 |   |   | 2,968 |   |   | 349 |   |
| Net                income taxes payable                                                                                                                 |   |     |                                               |      |   | (23,541 | ) |   | (49,515 | ) |   | (25,620 | ) |
| Other                accounts payable                                                                                                                   |   |     |                                               |      |   | (2,760 | ) |   | (10,840 | ) |   | (10,517 | ) |
| VAT                and taxes payable                                                                                                                    |   |     |                                               |      |   | (9,726 | ) |   | 6,724 |   |   | (3,282 | ) |
| Minority                interest                                                                                                                        |   |     | 16                                                 |      |   | 3,792 |   |   | 4,715 |   |   | 1,039 |   |
| Net                cash provided by operating activities                                                                                                |   |     |                                               |      |   | 311,294 |   |   | 221,200 |   |   | 151,984 |   |
| **Cash                flows from financing activities**                                                                                                 |   |     |                                               |      |   |   |   |   |   |   |   |   |   |
| Proceeds                from bank loans                                                                                                                 |   |     |                                               |      |   | - |   |   | 259,257 |   |   | 185,000 |   |
| Proceeds                from issuance of bonds                                                                                                          |   |     |                                               |      |   | - |   |   | 299,833 |   |   | - |   |
| Payments                of dividends                                                                                                                    |   |     |                                               |      |   | (94,910 | ) |   | (74,566 | ) |   | (51,732 | ) |
| Repayment                of bank loans                                                                                                                  |   |     |                                               |      |   | (57,089 | ) |   | (406,282 | ) |   | (6,000 | ) |
| Payment                of bonds                                                                                                                         |   |     |                                               |      |   | (5,131 | ) |   | - |   |   | - |   |
| Payment                of expenses for the issuance and placement of bonds                payable                                                  |   |     |                                               |      |   | - |   |   | (6,629 | ) |   | - |   |
| Net                cash provided by (used in) financing activities                                                                                      |   |     |                                               |      |   | (157,130 | ) |   | 71,613 |   |   | 127,268 |   |
| **Cash                flows from investing activities**                                                                                                 |   |     |                                               |      |   |   |   |   |   |   |   |   |   |
| Sales                of property, plant and equipment                                                                                                   |   |     |                                               |      |   | 2,498 |   |   | 10,289 |   |   | 2,546 |   |
| Sales                of investments in related companies                                                                                                |   |     |                                               |      |   | 1,478 |   |   | 5,790 |   |   | - |   |
| Other                investing income                                                                                                                   |   |     |                                               |      |   | 399 |   |   | 500 |   |   | 1,345 |   |
| Additions                to property, plant and equipment                                                                                               |   |     |                                               |      |   | (165,640 | ) |   | (175,788 | ) |   | (185,603 | ) |
| Capitalized                interest                                                                                                                     |   |     |                                               |      |   | (12,388 | ) |   | (10,948 | ) |   | (5,140 | ) |
| Purchase                of permanent investments, net of cash acquired of ThUS$ 0, ThUS$                24,311,                836 and 242 respectively |   |     |                                               |      |   | - |   |   | (88,885 | ) |   | (12,026 | ) |
| Other                disbursements                                                                                                                      |   |     |                                               |      |   | (513 | ) |   | (504 | ) |   | (668 | ) |
| Net                cash used in investing activities                                                                                                    |   |     |                                               |      |   | (174,166 | ) |   | (259,546 | ) |   | (199,546 | ) |
| Effect                of inflation on cash and cash equivalents                                                                                         |   |     |                                               |      |   | 271 |   |   | 2,720 |   |   | 1,497 |   |
| Net                change in cash and cash equivalents                                                                                                  |   |     |                                               |      |   | (19,731 | ) |   | 35,987 |   |   | 81,203 |   |
| Beginning                balance of cash and cash equivalents                                                                                           |   |     |                                               |      |   | 183,943 |   |   | 147,956 |   |   | 66,753 |   |
| **Ending                balance of cash and cash equivalents**                                                                                          |   |     | 2e)                                                |      |   | **164,212** |   |   | **183,943** |   |   | **147,956** |   |

----

*Table          of Contents*

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

**Audited      Consolidated Statements of Cash Flows**

**(Expressed      in thousands of US dollars, except as stated)**

|                                                   |   | **For                the years ended December 31** |   |
|--------------------------------------------------------|--------|----------------------------------------------------|--------|
|                                                   |   | **2007**                                           |   | **2006** |   | **2005** |   |
|                                                   |   | **ThUS$**                                          |   | **ThUS$** |   | **ThUS$** |   |
| **Supplemental                cash flow information:** |   |                                               |   |   |   |   |   |   |   |   |
| Interest                paid                      |   |                                               | 33,441 |   |   | 37,884 |   |   | 20,315 |   |
| Income                taxes paid                  |   |                                               | 43,666 |   |   | 49,515 |   |   | 22,330 |   |
| Capital                lease obligation           |   |                                               | 315    |   |   | 274 |   |   | 204 |   |

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*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note      1 – Company Background**

*Superintendencia      de Valores y Seguros*

**Note      2 – Summary of Significant Accounting Policies**

**a)**
**Basis      for the preparation of the consolidated financial      statements**

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*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note      2 – Summary of Significant Accounting Policies (continued)**

**a)**
**Basis      for the preparation of the consolidated financial statements      (continued)**

|                                                                                                     |   | **Direct                or indirect ownership** |   |
|----------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------|--------|
|                                                                                                     |   | **2007**                                        |   | **2006** |   | **2005** |   |
| **Foreign                subsidiaries:**                                                                 |   |                                            | **%**  |  |   | **%** |  |   | **%** |   |
| Nitrate                Corp. of Chile Limited (United Kingdom)                                      |   |                                            | 100.00 |   |   | 100.00 |   |   | 100.00 |   |
| Soquimich                SRL (Argentina)                                                                 |   |                                            | 100.00 |   |   | 100.00 |   |   | 100.00 |   |
| Nitratos                Naturais do Chile Ltda. (Brazil)                                                 |   |                                            | 100.00 |   |   | 100.00 |   |   | 100.00 |   |
| SQM                Europe NV (Belgium)                                                                   |   |                                            | 100.00 |   |   | 100.00 |   |   | 100.00 |   |
| SQM                North America Corp. (USA)                                                             |   |                                            | 100.00 |   |   | 100.00 |   |   | 100.00 |   |
| North                American Trading Company (USA)                                                      |   |                                            | 100.00 |   |   | 100.00 |   |   | 100.00 |   |
| SQM                Perú S.A.                                                                        |   |                                            | 100.00 |   |   | 100.00 |   |   | 100.00 |   |
| SQM                Corporation NV (Dutch Antilles)                                                       |   |                                            | 100.00 |   |   | 100.00 |   |   | 100.00 |   |
| S.Q.I.                Corporation NV (Dutch Antilles)                                                    |   |                                            | 100.00 |   |   | 100.00 |   |   | 100.00 |   |
| Soquimich                European Holding BV (Holland)                                                   |   |                                            | 100.00 |   |   | 100.00 |   |   | 100.00 |   |
| PTM                - SQM Ibérica S.A. (Spain)                                                       |   |                                            | -      |   |   | 100.00 |   |   | 100.00 |   |
| SQMC                Holding Corporation LLP (USA)                                                        |   |                                            | 100.00 |   |   | 100.00 |   |   | 100.00 |   |
| SQM                Ecuador S.A.                                                                          |   |                                            | 100.00 |   |   | 100.00 |   |   | 100.00 |   |
| Cape                Fear Bulk LLC (USA)                                                                  |   |                                            | -      |   |   | 51.00 |   |   | 51.00 |   |
| SQM                Investment Corporation NV (Dutch Antilles)                                            |   |                                            | 100.00 |   |   | 100.00 |   |   | 100.00 |   |
| SQM                Brasil Ltda.                                                                          |   |                                            | 100.00 |   |   | 100.00 |   |   | 100.00 |   |
| Royal                Seed Trading Corporation AVV (Aruba)                                                |   |                                            | 100.00 |   |   | 100.00 |   |   | 100.00 |   |
| SQM                Japan K.K.                                                                            |   |                                            | 100.00 |   |   | 100.00 |   |   | 100.00 |   |
| SQM                Oceanía PTY Limited (Australia)                                                  |   |                                            | 100.00 |   |   | 100.00 |   |   | 100.00 |   |
| SQM                France S.A.                                                                           |   |                                            | 100.00 |   |   | 100.00 |   |   | 100.00 |   |
| RS                Agro-Chemical Trading AVV (Aruba)                                                      |   |                                            | 100.00 |   |   | 100.00 |   |   | 100.00 |   |
| SQM                Comercial de México S.A. de C.V.                                                 |   |                                            | 100.00 |   |   | 100.00 |   |   | 100.00 |   |
| SQM                Indonesia                                                                             |   |                                            | 80.00  |   |   | 80.00 |   |   | 80.00 |   |
| SQM                Virginia LLC (USA)                                                                    |   |                                            | 100.00 |   |   | 100.00 |   |   | 100.00 |   |
| Agricolima                S.A. de C.V. (Mexico)                                                          |   |                                            | 100.00 |   |   | 100.00 |   |   | 100.00 |   |
| SQM                Venezuela S.A.                                                                        |   |                                            | 100.00 |   |   | 100.00 |   |   | 100.00 |   |
| SQM                Italia SRL (Italy)                                                                    |   |                                            | 100.00 |   |   | 100.00 |   |   | 95.00 |   |
| Comercial                Caiman Internacional S.A. (Cayman Islands)                                      |   |                                            | 100.00 |   |   | 100.00 |   |   | 100.00 |   |
| SQM                Africa PTY (South Africa)                                                             |   |                                            | 100.00 |   |   | 100.00 |   |   | 100.00 |   |
| Fertilizantes                Olmeca y SQM S.A. de C.V. (Mexico)                                          |   |                                            | -      |   |   | - |   |   | 100.00 |   |
| Administración                y Servicios Santiago S.A. de C.V. (Mexico)                            |   |                                            | 100.00 |   |   | 100.00 |   |   | 100.00 |   |
| SQM                Lithium Specialties LLC (USA)                                                         |   |                                            | 100.00 |   |   | 100.00 |   |   | 100.00 |   |
| SQM                Nitratos México S.A. de C.V. (Mexico)                                            |   |                                            | 51.00  |   |   | 51.00 |   |   | 51.00 |   |
| Fertilizantes                Naturales S.A. (Spain)                                                      |   |                                            | 66.67  |   |   | 66.67 |   |   | 50.00 |   |
| Iodine                Minera B.V. (Holland)Fertilizantes                Naturales S.A. (Spain) (1)  |   |                                            | 100.00 |   |   | 100.00 |   |   | - |   |
| SQM                Dubai – Fzco (United Arab Emirates).                                       |   |                                            | 100.00 |   |   | 100.00 |   |   | 100.00 |   |

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*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note      2 – Summary of Significant Accounting Policies      (continued)**

**a)**
**Basis      for the preparation of the consolidated financial statements      (continued)**

|                                                                               |   | **Direct                or indirect ownership** |   |
|------------------------------------------------------------------------------------|--------|-------------------------------------------------|--------|
|                                                                               |   | **2007**                                        |   | **2006** |   | **2005** |   |
| **Domestic                subsidiaries:**                                          |   |                                            | **%**  |  |   | **%** |  |   | **%** |   |
| Servicios                Integrales de Tránsitos y Transferencias S.A.   |   |                                            | 100.00 |   |   | 100.00 |   |   | 100.00 |   |
| Soquimich                Comercial S.A.                                            |   |                                            | 60.64  |   |   | 60.64 |   |   | 60.64 |   |
| Isapre                Norte Grande Limitada                                        |   |                                            | 100.00 |   |   | 100.00 |   |   | 100.00 |   |
| Almacenes                y Depósitos Limitada                                 |   |                                            | 100.00 |   |   | 100.00 |   |   | 100.00 |   |
| Ajay                SQM Chile S.A.                                                 |   |                                            | 51.00  |   |   | 51.00 |   |   | 51.00 |   |
| SQM                Nitratos S.A.                                                   |   |                                            | 99.99  |   |   | 99.99 |   |   | 99.99 |   |
| Proinsa                Limitada                                                    |   |                                            | 60.58  |   |   | 60.58 |   |   | 60.58 |   |
| SQM                Potasio S.A.                                                    |   |                                            | 100.00 |   |   | 100.00 |   |   | 100.00 |   |
| SQMC                International Limitada                                         |   |                                            | 60.64  |   |   | 60.64 |   |   | 60.64 |   |
| SQM                Salar S.A.                                                      |   |                                            | 100.00 |   |   | 100.00 |   |   | 100.00 |   |
| SQM                Industrial S.A                                                  |   |                                            | 100.00 |   |   | 100.00 |   |   | 100.00 |   |
| Minera                Nueva Victoria S.A.                                          |   |                                            | 100.00 |   |   | 100.00 |   |   | - |   |
| Exploraciones                Mineras S.A.                                          |   |                                            | 100.00 |   |   | 100.00 |   |   | - |   |
| Sociedad                Prestadora de Servicios de Salud Cruz del Norte S.A.       |   |                                            | 100.00 |   |   | 100.00 |   |   | - |   |
| Comercial                Hydro S.A.                                                |   |                                            | 60.64  |   |   | 60.64 |   |   | 60.64 |   |

**b)**
**Period      presented**

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*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note      2 – Summary of Significant Accounting Policies (continued)**

**c)**
**Reporting      currency and price-level restatement **

*Index-linked      assets and liabilities*

*Unidad      de Fomento*

|                             |   | **US$** |   |
|----------------------------------|--------|---------|--------|
|                             |   |    |   |
| December                31, 2005 |   |    | 35.07  |   |
| December                31, 2006 |   |    | 34.44  |   |
| December                31, 2007 |   |    | 39.49  |   |

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*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note      2 – Summary of Significant Accounting Policies      (continued)**

| **d)** | **Foreign                currency** |
|--------|-------------------------------------|

|   | **i)** | **Foreign                currency transactions** |
|--------|--------|--------------------------------------------------|

|   | **ii)** | **Translation                of non-U.S. dollar financial                statements** |
|--------|---------|---------------------------------------------------------------------------------------|

|   | - | Balance                sheet accounts are translated to US dollars at the year-end exchange                rate                without eliminating the effects of price-level restatement. The assets                and                liabilities were translated into US dollars at the exchange rates                as of                the respective balance sheet dates of Ch$ 496.89 and Ch$ 532.39 per                US$ 1                as of December 31, 2007 and 2006,                respectively. |
|--------|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | - | Income                statement accounts are translated to US dollars at the average exchange                rate each month. The monetary correction account on the income statement,                which is generated by the inclusion of price-level restatement on                the                non-monetary assets and liabilities and shareholders’ equity, is                translated to US dollars at the average exchange rate for each                month. |
|--------|---|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | - | Translation                gains and losses, as well as effects of the price-level restatement                are                included as an adjustment in shareholders’ equity, in conformity with                Circular No. 1697 of the SVS. |
|--------|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note      2 – Summary of Significant Accounting Policies      (continued)**

| **d)** | **Foreign                currency (continued)** |
|--------|-------------------------------------------------|

|  | · | Foreign                subsidiaries |
|--|--------|-------------------------------------|

|   | - | Monetary                assets and liabilities are translated at year-end exchange rates                between                the US dollar and the local                currency. |
|--------|---|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | - | All                non-monetary assets and liabilities and shareholders’ equity are                translated at historical exchange rates between the US dollar and                the                local currency. |
|--------|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | - | Income                and expense accounts, except                for such accounts that are calculated using historical rates (e.g.                depreciation and amortization)                are translated at average exchange rates between the US dollar and                the                local currency each month. |
|--------|---|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | - | Any                exchange differences are included in the results of operations for                the                period. |
|--------|---|---------------------------------------------------------------------------------------------------------------------------------|

|                              |   | **As                of December 31,** |     |
|-----------------------------------|--------|---------------------------------------|----------|
|                              |   | ** ****2007**                    |     | **2006** |   | **2005** |   |
|                              |   | **US$**                               |     | **US$** |   | **US$** |   |
| Brazilian                Real     |   |                                  | 1.77     |   |   | 2.14 |   |   | 2.34 |   |
| New                Peruvian Sol   |   |                                  | 2.99     |   |   | 3.19 |   |   | 3.43 |   |
| Argentine                Peso     |   |                                  | 3.15     |   |   | 3.06 |   |   | 3.03 |   |
| Japanese                Yen       |   |                                  | 114.15   |   |   | 119.11 |   |   | 118.07 |   |
| Euro                              |   |                                  | 0.87     |   |   | 0.76 |   |   | 0.85 |   |
| Mexican                Peso       |   |                                  | 10.90    |   |   | 10.88 |   |   | 10.71 |   |
| Indonesian                Rupee   |   |                                  | 9,830.04 |   |   | 9,830.04 |   |   | 9,290.00 |   |
| Australian                Dollar  |   |                                  | 1.15     |   |   | 1.27 |   |   | 1.36 |   |
| Pound                Sterling     |   |                                  | 0.51     |   |   | 0.51 |   |   | 0.52 |   |
| Ecuadorian                Sucre   |   |                                  | 1.00     |   |   | 1.00 |   |   | 1.00 |   |
| South                African Rand |   |                                  | 6.81     |   |   | 6.99 |   |   | 6.33 |   |

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*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note      2 – Summary of Significant Accounting Policies      (continued)**

| **e)** | **Cash                and cash equivalents** |
|--------|----------------------------------------------|

|                                       |   | **As                of December 31,** |    |
|--------------------------------------------|--------|---------------------------------------|---------|
|                                       |   | **2007**                              |    | **2006** |   | **2005** |   |
|                                       |   | **ThUS$**                             |    | **ThUS$** |   | **ThUS$** |   |
|                                       |   |                                  |    |   |   |   |   |
| Cash                                       |   |                                  | 18,236  |   |   | 20,915 |   |   | 13,273 |   |
| Time                deposits               |   |                                  | 85,523  |   |   | 32,707 |   |   | 1,483 |   |
| Mutual                funds                |   |                                  | 60,453  |   |   | 130,321 |   |   | 132,303 |   |
| Repurchase                agreements  |   |                                  | -       |   |   | - |   |   | 897 |   |
| Total                                      |   |                                  | 164,212 |   |   | 183,943 |   |   | 147,956 |   |

| **f)** | **Time                deposits** |
|--------|----------------------------------|

| **g)** | **Allowance                for doubtful accounts** |
|--------|----------------------------------------------------|

| **h)** | **Inventories                and materials** |
|--------|----------------------------------------------|

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*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note      2 - Summary of Significant Accounting Policies (continued)**

**i)**
**Income      taxes and deferred income taxes**

**j)**
**Property,      plant and equipment**

|                                                   |   | **Estimated****years                of****useful                life** |                             |
|--------------------------------------------------------|--------|------------------------------------------------------------------------|----------------------------------|
|                                                   |   |                                                                   |                             |
| Mining                Concessions                 |   |                                                                   | 7 –                13 |   |
| Building                and infrastructure   |   |                                                                   | 3                – 80      |   |
| Machinery                and equipment            |   |                                                                   | 3                – 35      |   |
| Other                                             |   |                                                                   | 2                – 30      |   |

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*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note      2 - Summary of Significant Accounting Policies (continued)**

**j)**
**Property,      plant and equipment (continued)**

**k)**
**Investments      in related companies**

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*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note      2 - Summary of Significant Accounting Policies (continued)**

**l)**
**Goodwill      and negative goodwill**

**m)**
**Intangible      assets**

**n)**
**Mining      development cost**

**o)**
**Staff      severance indemnities**

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*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note      2 - Summary of Significant Accounting Policies (continued)**

**p)**
**Vacations**

**q)**
**Reverse      repurchase agreements**

**r)      **
**Dividends**

**s)**
**Derivative      Contracts**

**t)**
**Revenue      recognition**

**u)**
**Computer      software**

**v)**
**Research      and development expenses**

**w)      **
**Bonds      payable**

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*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note      2 - Summary of Significant Accounting Policies (continued)**

**x)**
**Provisions      for mine closure costs**

**y)**
**Deferred      income**

**z)      Employee Benefits**

**Note      3 - Changes in Accounting Estimates**

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*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note      4 - Short-Term and Long-Term Accounts Receivable**

| a) | Short-term                and long-term accounts receivable and other accounts receivable as                of                December 31 are detailed as                follows: |
|----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                                        |   |                             |    | **Between 90 days** |   | **Total**                 |   |
|---------------------------------------------------------------------------------------------|--------|----------------------------------|---------|-------------------------------|--------|---------------------------|--------|
|                                                                                        |   | **Up to 90 days** |    | **And 1 year**      |   | **Short-term (net)** |   |
|                                                                                        |   | **2007**                         |    | **2006**                      |   | **2007**                  |   | **2006** |   | **2007** |   | **2006** |   |
|                                                                                        |   | **ThUS$**                        |    | **ThUS$**                     |   | **ThUS$**                 |   | **ThUS$** |   | **ThUS$** |   | **ThUS$** |   |
| **Short-term                **receivables****                                               |   |                             |    |                          |   |                      |   |   |   |   |   |   |   |
| Trade                accounts receivable                                                    |   |                             | 118,229 |                          |   | 95,111                    |   |   | 52,444 |   |   | 41,743 |   |   | 170,673 |   |   | 136,854 |   |
| Allowance                for doubtful accounts                                              |   |                             |    |                          |   |                      |   |   |   |   |   |   |   |   | (6,203 | ) |   | (7,419 | ) |
| Notes                receivable                                                             |   |                             | 43,784  |                          |   | 50,859                    |   |   | 19,459 |   |   | 354 |   |   | 63,243 |   |   | 51,213 |   |
| Allowance                for doubtful accounts                                              |   |                             |    |                          |   |                      |   |   |   |   |   |   |   |   | (3,269 | ) |   | (3,242 | ) |
| **Total                trade accounts receivable and notes receivable,                net** |   |                             |    |                          |   |                      |   |   |   |   |   |   |   |   | 224,444 |   |   | 177,406 |   |
|                                                                                        |   |                             |    |                          |   |                      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Other                accounts receivable                                                    |   |                             | 7,355   |                          |   | 5,582                     |   |   | 71 |   |   | 407 |   |   | 7,426 |   |   | 5,989 |   |
| Allowance                for doubtful accounts                                              |   |                             |    |                          |   |                      |   |   |   |   |   |   |   |   | (1,177 | ) |   | (1,132 | ) |
| **Other                accounts receivable, net**                                           |   |                             |    |                          |   |                      |   |   |   |   |   |   |   |   | 6,249 |   |   | 4,857 |   |
|                                                                                        |   |                             |    |                          |   |                      |   |   |   |   |   |   |   |   |    |   |   |    |   |
| **Long-term                receivables**                                                    |   |                             |    |                          |   |                      |   |   |   |   |   |   |   |   | 604 |   |   | 388 |   |

| b) | Changes                in the allowance for doubtful accounts for the years ended December                31 are                as follows: |
|----|---------------------------------------------------------------------------------------------------------------------------------------------|

|                                              |   | **2007**  |   | **2006**  |   | **2005**  |   |
|---------------------------------------------------|--------|-----------|--------|-----------|--------|-----------|--------|
|                                              |   | **ThUS$** |   | **ThUS$** |   | **ThUS$** |   |
|                                              |   |      |   |      |   |      |   |
| At                January 1,                 |   |      | 11,793 |      |   | 11,912    |   |   | 10,891 |   |
| Charged                to expenses           |   |      | 466    |      |   | 1,598     |   |   | 1,741 |   |
| Deductions                (release)          |   |      | (2,235 | )         |   | (542      | )      |   | (1,097 | ) |
| Exchange                rate differences     |   |      | 512    |      |   | (177      | )      |   | 377 |   |
| Business                disposals and other  |   |      | 113    |      |   | (998      | )      |   | - |   |
| At                December 31,               |   |      | 10,649 |      |   | 11,793    |   |   | 11,912 |   |

----

*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note      4 - Short-Term and Long-Term Accounts Receivable      (continued)**

| c) | Consolidated                short-term and long-term receivables by geographic location of                customer are as follows: |
|----|-----------------------------------------------------------------------------------------------------------------------------------------|

|                                                                    |   | **Chile** |    | **Africa                and Middle East** |   | **Asia and****Oceania and Other** |   | **North America, Mexico****and Canada** |   | **Latin America ****and the Caribbean** |   |  **Total** |   |
|-------------------------------------------------------------------------|--------|-----------|---------|-------------------------------------------|--------|--------------------------------------------------|--------|--------------------------------------------------------|--------|-------------------------------------------------------------|--------|-----------------|--------|
|                                                                    |   | **2007**  |    | **2006**                                  |   | **2007**                                         |   | **2006**                                               |   | **2007**                                                    |   | **2006**        |   | **2007** |   | **2006** |   | **2007** |   | **2006** |   | **2007** |   | **2006** |   |
|                                                                    |   | **ThUS$** |    | **ThUS$**                                 |   | **ThUS$**                                        |   | **ThUS$**                                              |   | **ThUS$**                                                   |   | **ThUS$**       |   | **ThUS$** |   | **ThUS$** |   | **ThUS$** |   | **ThUS$** |   | **ThUS$** |   | **ThUS$** |   |
|                                                                    |   |      |    |                                      |   |                                             |   |                                                   |   |                                                        |   |            |   |   |   |   |   |   |   |   |   |   |   |
| Net                short-term trade accounts receivable            |   |      |    |                                      |   |                                             |   |                                                   |   |                                                        |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance                                                                 |   |      | 60,999  |                                      |   | 42,375                                           |   |                                                   | 50,389 |                                                        |   | 43,402          |   |   | 9,352 |   |   | 4,575 |   |   | 28,134 |   |   | 28,730 |   |   | 15,596 |   |   | 10,353 |   |   | 164,470 |   |   | 129,435 |   |
| %                of                total                                |   |      | 37.08   | %                                         |   | 32.74                                            | %      |                                                   | 30.64  | %                                                           |   | 33.53           | %      |   | 5.69 | % |   | 3.53 | % |   | 17.11 | % |   | 22.20 | % |   | 9.48 | % |   | 8.00 | % |   | 100.00 | % |   | 100.00 | % |
|                                                                    |   |      |    |                                      |   |                                             |   |                                                   |   |                                                        |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                short-term notes receivable                          |   |      |    |                                      |   |                                             |   |                                                   |   |                                                        |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance                                                                 |   |      | 53,713  |                                      |   | 41,270                                           |   |                                                   | 429    |                                                        |   | 2,093           |   |   | 490 |   |   | 340 |   |   | 392 |   |   | 994 |   |   | 4,950 |   |   | 3,274 |   |   | 59,974 |   |   | 47,971 |   |
| %                of                total                                |   |      | 89.56   | %                                         |   | 86.03                                            | %      |                                                   | 0.72   | %                                                           |   | 4.36            | %      |   | 0.82 | % |   | 0.71 | % |   | 0.65 | % |   | 2.08 | % |   | 8.25 | % |   | 6.82 | % |   | 100.00 | % |   | 100.00 | % |
|                                                                    |   |      |    |                                      |   |                                             |   |                                                   |   |                                                        |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Net                short-term other accounts receivable            |   |      |    |                                      |   |                                             |   |                                                   |   |                                                        |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance                                                                 |   |      | 3,376   |                                      |   | 2,815                                            |   |                                                   | 1,609  |                                                        |   | 585             |   |   | 159 |   |   | 9 |   |   | 457 |   |   | 1,277 |   |   | 648 |   |   | 171 |   |   | 6,249 |   |   | 4,857 |   |
| %                of                total                                |   |      | 54.03   | %                                         |   | 57.96                                            | %      |                                                   | 25.75  | %                                                           |   | 12.04           | %      |   | 2.54 | % |   | 0.19 | % |   | 7.31 | % |   | 26.29 | % |   | 10.37 | % |   | 3.52 | % |   | 100.00 | % |   | 100.00 | % |
|                                                                    |   |      |    |                                      |   |                                             |   |                                                   |   |                                                        |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Subtotal                short-term accounts receivable, net        |   |      |    |                                      |   |                                             |   |                                                   |   |                                                        |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance                                                                 |   |      | 118,088 |                                      |   | 86,460                                           |   |                                                   | 52,427 |                                                        |   | 46,080          |   |   | 10,001 |   |   | 4,924 |   |   | 28,983 |   |   | 31,001 |   |   | 21,194 |   |   | 13,798 |   |   | 230,693 |   |   | 182,263 |   |
| %                of                total                                |   |      | 51.18   | %                                         |   | 47.44                                            | %      |                                                   | 22.73  | %                                                           |   | 25.28           | %      |   | 4.34 | % |   | 2.70 | % |   | 12.56 | % |   | 17.01 | % |   | 9.19 | % |   | 7.57 | % |   | 100.00 | % |   | 100.00 | % |
|                                                                    |   |      |    |                                      |   |                                             |   |                                                   |   |                                                        |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Long-term                accounts receivable, net                       |   |      |    |                                      |   |                                             |   |                                                   |   |                                                        |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance                                                                 |   |      | 604     |                                      |   | 368                                              |   |                                                   | -      |                                                        |   | -               |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 20 |   |   | 604 |   |   | 388 |   |
| %                of                total                                |   |      | 100.00  | %                                         |   | 94.85                                            | %      |                                                   | -      |                                                        |   | -               |   |   | - |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 5.15 | % |   | 100.00 | % |   | 100.00 | % |
|                                                                    |   |      |    |                                      |   |                                             |   |                                                   |   |                                                        |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Total                short and long-term accounts receivable, net  |   |      |    |                                      |   |                                             |   |                                                   |   |                                                        |   |            |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Balance                                                                 |   |      | 118,692 |                                      |   | 86,828                                           |   |                                                   | 52,427 |                                                        |   | 46,080          |   |   | 10,001 |   |   | 4,924 |   |   | 28,983 |   |   | 31,001 |   |   | 21,194 |   |   | 13,818 |   |   | 231,297 |   |   | 182,651 |   |
| %                of                total                                |   |      | 51.31   | %                                         |   | 47.54                                            | %      |                                                   | 22.67  | %                                                           |   | 25.23           | %      |   | 4.32 | % |   | 2.70 | % |   | 12.54 | % |   | 16.96 | % |   | 9.16 | % |   | 7.57 | % |   | 100.00 | % |   | 100.00 | % |

----

*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note      5 - Balances and Transactions with Related Parties**

| a) | Amounts                included in balances with related parties as of December 31, 2007                and 2006                are as follows: |
|----|-------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                              |   | **Short-term** |   | **Long-term** |   |
|-------------------------------------------------------------------|--------|----------------|--------|---------------|--------|
|                                                              |   | **2007**       |   | **2006**      |   | **2007** |   | **2006** |   |
|                                                              |   | **ThUS$**      |   | **ThUS$**     |   | **ThUS$** |   | **ThUS$** |   |
| **Accounts                receivable**                            |   |           |   |          |   |   |   |   |   |
| Doktor                Tarsa                                  |   |           | 4,349  |          |   | 8,446 |   |   | - |   |   | - |   |
| Nutrisi                Holding N.V.                          |   |           | 1,800  |          |   | 1,603 |   |   | - |   |   | - |   |
| Ajay                Europe S.A.R.L.                          |   |           | 6,838  |          |   | 8,617 |   |   | - |   |   | - |   |
| Ajay                North America LLC                        |   |           | 2,706  |          |   | 3,271 |   |   | - |   |   | - |   |
| Abu                Dhabi Fertilizer Ind. WLL                 |   |           | 3,622  |          |   | 3,732 |   |   | 2,000 |   |   | 2,000 |   |
| Impronta                SRL                                  |   |           | -      |          |   | 1,094 |   |   | - |   |   | - |   |
| NU3                B.V.                                      |   |           | 720    |          |   | 413 |   |   | - |   |   | - |   |
| Sales                de Magnesio Ltda.                       |   |           | 104    |          |   | 86 |   |   | - |   |   | - |   |
| SQM                Agro India                                |   |           | 364    |          |   | 113 |   |   | - |   |   | - |   |
| Misr                Specialty Fertilizers                    |   |           | 616    |          |   | 462 |   |   | - |   |   | - |   |
| Sociedad                de Inversiones Pampa Calichera S.A.  |   |           | 8      |          |   | 8 |   |   | - |   |   | - |   |
| Inversiones                PCS Chile S.A.                    |   |           | 17     |          |   | - |   |   | - |   |   | - |   |
| Kowa                (Japan)                                  |   |           | 14,465 |          |   | 8,609 |   |   | - |   |   | - |   |
| SQM                East Med Turkey                           |   |           | 160    |          |   | - |   |   | - |   |   | - |   |
| PCS                Sales Inc                                 |   |           | -      |          |   | 10 |   |   | - |   |   | - |   |
| Yara                AB.                                           |   |           | -      |          |   | 2 |   |   | - |   |   | - |   |
| Yara                Benelux B.V.                                  |   |           | 715    |          |   | 78 |   |   | - |   |   | - |   |
| Yara                Hellas S.A.                              |   |           | 228    |          |   | 310 |   |   | - |   |   | - |   |
| Yara                International Australia PTY.             |   |           | 536    |          |   | 642 |   |   | - |   |   | - |   |
| Yara                Poland Sp. z o.o.                        |   |           | -      |          |   | 85 |   |   | - |   |   | - |   |
| Yara                UK Ltd.                                  |   |           | 159    |          |   | 285 |   |   | - |   |   | - |   |
| Yara                CZECH Republic                           |   |           | -      |          |   | 2 |   |   | - |   |   | - |   |
| Yara                GMBH & CO KG                         |   |           | 102    |          |   | 95 |   |   | - |   |   | - |   |
| Yara                Norge AS.                                |   |           | 35     |          |   | - |   |   | - |   |   | - |   |
| Yara                Iberian S.A.                             |   |           | 2,351  |          |   | 1,317 |   |   | - |   |   | - |   |
| Yara                Argentina S.A.                           |   |           | 892    |          |   | 125 |   |   | - |   |   | - |   |
| Yara                Colombia Ltda.                           |   |           | 101    |          |   | 2,938 |   |   |   |   |   |   |   |
| AduboS                Trevo S.A. (Yara)                      |   |           | 252    |          |   | 252 |   |   | - |   |   | - |   |
| Yara                North America LLC                        |   |           | 3,274  |          |   | 6,331 |   |   | - |   |   | - |   |
| Yara                Fertilizantes Ltda (Brasil)              |   |           | -      |          |   | 715 |   |   | - |   |   | - |   |
| Yara                France BU Latin America                  |   |           | 2,144  |          |   | 1,794 |   |   | - |   |   | - |   |
| Yara                France BU Africa                         |   |           | 2,372  |          |   | 1,030 |   |   | - |   |   | - |   |
| Yara                France S.A.                              |   |           | 594    |          |   | - |   |   | - |   |   | - |   |
| Yara                S.A. PTY LTD Sudáfrica              |   |           | 4,967  |          |   | - |   |   | - |   |   | - |   |
| Yara                Western Cape Sudafrica                   |   |           | 1,773  |          |   | - |   |   | - |   |   | - |   |
| Yara                Internacional ASA                        |   |           | -      |          |   | 7,884 |   |   | - |   |   | - |   |
| Yara                International Asia Trade Pte Ltd.             |   |           | 223    |          |   | 1,227 |   |   | - |   |   | - |   |
| Yara                International Asia Trade Pte Ltd.             |   |           | 2,586  |          |   | - |   |   | - |   |   | - |   |
| Yara                East Africa Limited                      |   |           | 478    |          |   | 504 |   |   | - |   |   | - |   |
| Yara                Italia SPA                               |   |           | 1,204  |          |   | - |   |   | - |   |   | - |   |
| Yara                Fertilizers (New Zealand)                |   |           | 124    |          |   | 157 |   |   | - |   |   | - |   |
| Yara                México S.A. de C.V.                 |   |           | 163    |          |   | 3,365 |   |   | - |   |   | - |   |
| Yara                Phosyn Ltda.                                  |   |           | -      |          |   | 38 |   |   | - |   |   | - |   |
| Total                                                        |   |           | 61,042 |          |   | 65,640 |   |   | 2,000 |   |   | 2,000 |   |

----

*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note      5 - Balances and Transactions with Related Parties      (continued)**

| a) | Amounts                included in balances with related parties as of December 31, 2007                and                2006, continued: |
|----|---------------------------------------------------------------------------------------------------------------------------------------------|

|                                                    |   | **Short-term** |   |
|---------------------------------------------------------|--------|----------------|--------|
|                                                    |   | **2007**       |   | **2006** |   |
|                                                    |   | **ThUS$**      |   | **ThUS$** |   |
| **Accounts                payable**                     |   |           |   |   |   |
| NU3                N.V.                                 |   |           | 1,877  |   |   | 847 |   |
| Charlee                SQM Thailand Co.            |   |           | 110    |   |   | 182 |   |
| SQM                East Med Turkey                 |   |           | -      |   |   | 15 |   |
| Yara                International ASA              |   |           | 4,458  |   |   | - |   |
| Yara                AB.                            |   |           | 4      |   |   | - |   |
| Yara                Fertilizantes Ltda. (Brazil)   |   |           | 31     |   |   | - |   |
| Yara                Business Support               |   |           | -      |   |   | 4,363 |   |
| Yara                Nederland B.V.                 |   |           | 400    |   |   | 400 |   |
| Total                                              |   |           | 6,880  |   |   | 5,807 |   |

----

*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note      5 - Balances and Transactions with Related Parties      (continued)**

| b) | During                the years ended December 31, 2007, 2006 and 2005 principal commercial                transactions with related parties were as follows                (1): |
|----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                         |   |             |        |                              |   | **Amount of**               |   | **Impact in income** |   |
|--------------------------------------------------------------|--------|------------------|-------------|-----------------------------------|--------|----------------------------------|--------|--------------------------------|--------|
|                                                         |   |             |        |                              |   | **Transaction**                  |   | **(charge) credit**       |   |
| **Company**                                                  |   | **Relationship** |        | **Type of Transaction** |   | **2007**                         |   | **2006**                       |   | **2005** |   | **2007** |   | **2006** |   | **2005** |   |
|                                                         |   |             |        |                              |   | **ThUS$**                        |   | **ThUS$**                      |   | **ThUS$** |   | **ThUS$** |   | **ThUS$** |   | **ThUS$** |   |
|                                                         |   |             |        |                              |   |                             |   |                           |   |   |   |   |   |   |   |   |   |
| NU3                N.V.                                 |   |             | Investee    |                              |   | Sales                of products |   |                           | 6,545  |   |   | 6,079 |   |   | 5,018 |   |   | 2,026 |   |   | 2,008 |   |   | 1,892 |   |
| Doktor                Tarsa Tarim Sanayi AS        |   |             | Investee    |                              |   | Sales                of products |   |                           | 7,577  |   |   | 8,868 |   |   | 14,977 |   |   | 2,159 |   |   | 2,409 |   |   | 3,872 |   |
| Abu                Dhabi Fertilizer WLL            |   |             | Investee    |                              |   | Sales                of products |   |                           | 5,434  |   |   | 3,551 |   |   | 3,834 |   |   | 1,123 |   |   | 992 |   |   | 1,222 |   |
|                                                         |   |             |        |                              |   | Financial                income  |   |                           | 117    |   |   | - |   |   | - |   |   | 117 |   |   | - |   |   | - |   |
| Impronta                SRL                        |   |             | Investee    |                              |   | Sales                of products |   |                           | -      |   |   | 4,887 |   |   | 4,471 |   |   | - |   |   | 1,566 |   |   | 1,613 |   |
| Ajay                Europe S.A.R.L.                     |   |             | Investee    |                              |   | Sales                of products |   |                           | 24,965 |   |   | 16,931 |   |   | 8,017 |   |   | 9,250 |   |   | 6,424 |   |   | 4,743 |   |
|                                                         |   |             |        |                              |   | Financial                income  |   |                           | 10     |   |   | - |   |   | - |   |   | 10 |   |   | - |   |   | - |   |
| NU3                B.V.                                 |   |             | Investee    |                              |   | Sales                of products |   |                           | 9,025  |   |   | 7,212 |   |   | 6,035 |   |   | 2,791 |   |   | 2,488 |   |   | 2,846 |   |
| Fertilizantes                Naturales S.A.             |   |             | Investee    |                              |   | Sales                of products |   |                           | -      |   |   | - |   |   | 19,916 |   |   | - |   |   | - |   |   | 6,663 |   |
| Ajay                North America LLC              |   |             | Investee    |                              |   | Sales                of products |   |                           | 17,281 |   |   | 16,215 |   |   | 12,401 |   |   | 8,060 |   |   | 7,605 |   |   | 7,031 |   |
| Yara                Italia SPA                          |   |             | Shareholder |                              |   | Sales                of products |   |                           | 4,153  |   |   | - |   |   | - |   |   | 1,066 |   |   | - |   |   | - |   |
| Yara                International Asia Trade Pte Ltd.   |   |             | Shareholder |                              |   | Sales                of products |   |                           | 10,344 |   |   | 6,703 |   |   | 6,782 |   |   | 2,384 |   |   | 2,061 |   |   | 1,984 |   |
| Yara                France BU Africa.              |   |             | Shareholder |                              |   | Sales                of products |   |                           | 5,637  |   |   | 2,826 |   |   | 8,748 |   |   | 1,483 |   |   | 661 |   |   | 2,640 |   |
| Yara                Benelux B.V.                             |   |             | Shareholder |                              |   | Sales                of products |   |                           | 7,064  |   |   | 7,081 |   |   | 6,698 |   |   | 1,478 |   |   | 1,554 |   |   | 2,385 |   |
| Yara                AB Sweden                           |   |             | Shareholder |                              |   | Sales                of products |   |                           | -      |   |   | - |   |   | 808 |   |   | - |   |   | - |   |   | 284 |   |
| Yara                International Australia Pty Ltd.    |   |             | Shareholder |                              |   | Sales                of products |   |                           | 2,655  |   |   | 2,688 |   |   | 2,853 |   |   | 742 |   |   | 787 |   |   | 999 |   |
| Yara                Iberian S.A.                        |   |             | Shareholder |                              |   | Sales                of products |   |                           | 9,940  |   |   | 8,277 |   |   | 8,900 |   |   | 2,745 |   |   | 2,767 |   |   | 3,060 |   |
| Yara                Colombia Ltda.                      |   |             | Shareholder |                              |   | Sales                of products |   |                           | 5,712  |   |   | 6,285 |   |   | 5,004 |   |   | 1,836 |   |   | 1,982 |   |   | 1,543 |   |
| Yara                Poland SP                           |   |             | Shareholder |                              |   | Sales                of products |   |                           | 2,233  |   |   | 1,752 |   |   | 1,623 |   |   | 690 |   |   | 593 |   |   | 703 |   |
| Yara                GMBH & Co Kg               |   |             | Shareholder |                              |   | Sales                of products |   |                           | 2,056  |   |   | 1,741 |   |   | 1,603 |   |   | 553 |   |   | 548 |   |   | 635 |   |
| Yara                France                         |   |             | Shareholder |                              |   | Sales                of products |   |                           | 8,400  |   |   | 7,246 |   |   | 7,622 |   |   | 2,107 |   |   | 2,091 |   |   | 2,458 |   |
| Yara                Fertilizers Brazil             |   |             | Shareholder |                              |   | Sales                of products |   |                           | 11,957 |   |   | 8,489 |   |   | - |   |   | 4,307 |   |   | 3,631 |   |   | - |   |
|                                                         |   |             |        |                              |   | Services                         |   |                           | 142    |   |   | - |   |   | - |   |   | 142 |   |   | - |   |   | - |   |
| Yara                France S.A.                    |   |             | Shareholder |                              |   | Sales                of products |   |                           | -      |   |   | - |   |   | 209 |   |   | - |   |   | - |   |   | 73 |   |
| Yara                Hellas S.A.                    |   |             | Shareholder |                              |   | Sales                of products |   |                           | 1,846  |   |   | 1,892 |   |   | 1,448 |   |   | 457 |   |   | 530 |   |   | 473 |   |
| Yara                France BU Latin America        |   |             | Shareholder |                              |   | Sales                of products |   |                           | 30     |   |   | 2,014 |   |   | 1,192 |   |   | 30 |   |   | 595 |   |   | 288 |   |
| Yara                Argentina S.A.                 |   |             | Shareholder |                              |   | Sales                of products |   |                           | 1,950  |   |   | 10,912 |   |   | 9,441 |   |   | 492 |   |   | 3,151 |   |   | 2,658 |   |
| Adubos                Trevo S.A.                   |   |             | Shareholder |                              |   | Sales                of products |   |                           | -      |   |   | 1,573 |   |   | 3,991 |   |   | - |   |   | 560 |   |   | 1,746 |   |
| Yara                Internacional ASA              |   |             | Shareholder |                              |   | Sales                of products |   |                           | 33,764 |   |   | 32,296 |   |   | 8,250 |   |   | 9,366 |   |   | 7,997 |   |   | 2,120 |   |
|                                                         |   |             |        |                              |   | Services                         |   |                           | 494    |   |   | - |   |   | - |   |   | 140 |   |   | - |   |   | - |   |
| Yara                North America                  |   |             | Shareholder |                              |   | Sales                of products |   |                           | 54,570 |   |   | 45,407 |   |   | 43,386 |   |   | 12,574 |   |   | 12,422 |   |   | 13,137 |   |
| Yara                International Wholesale        |   |             | Shareholder |                              |   | Sales                of products |   |                           | -      |   |   | - |   |   | 20,013 |   |   | - |   |   | - |   |   | 5,733 |   |
| Yara                Business Support               |   |             | Shareholder |                              |   | Services                         |   |                           | 4,317  |   |   | 4,364 |   |   | 4,129 |   |   | (4,317 | ) |   | (4,364 | ) |   | (4,129 | ) |
| Yara                East Africa                    |   |             | Shareholder |                              |   | Sales                of products |   |                           | -      |   |   | 1,255 |   |   | 1,311 |   |   | - |   |   | 344 |   |   | 474 |   |
| Yara                France S.A.                         |   |             | Shareholder |                              |   | Sales                of products |   |                           | 10,082 |   |   | - |   |   | - |   |   | 2,642 |   |   | - |   |   | - |   |
|                                                         |   |             |        |                              |   | Services                         |   |                           | 481    |   |   | - |   |   | - |   |   | 481 |   |   | - |   |   | - |   |
| Yara                Mexico S.A. de C.V.                 |   |             | Shareholder |                              |   | Sales                of products |   |                           | 5,019  |   |   | - |   |   | - |   |   | 1,200 |   |   | - |   |   | - |   |
| Kowa                Company Ltd.(Japan)            |   |             | Shareholder |                              |   | Sales                of products |   |                           | 84,701 |   |   | 8,019 |   |   | - |   |   | 50,770 |   |   | 3,671 |   |   | - |   |
| Yara                UK Ltd.                             |   |             | Shareholder |                              |   | Sales                of products |   |                           | -      |   |   | 1,388 |   |   | 1,276 |   |   | - |   |   | 403 |   |   | 485 |   |

| (1) | Transactions                with related parties involving acquisitions and disposals of                participations in other entities are discussed in Note 8. |
|-----|-------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note      6 - Inventories**

|                                   |   | **2007**  |    | **2006**  |   |
|----------------------------------------|--------|-----------|---------|-----------|--------|
|                                   |   | **ThUS$** |    | **ThUS$** |   |
|                                   |   |      |    |      |   |
| Finished                products  |   |      | 218,073 |      |   | 209,112 |   |
| Work                in process    |   |      | 145,209 |      |   | 136,734 |   |
| Supplies                          |   |      | 24,486  |      |   | 19,653 |   |
| Total                             |   |      | 387,768 |      |   | 365,499 |   |

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*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note      7 - Property, Plant and Equipment **

|                                                            |   | **As of December 31,** |      |
|-----------------------------------------------------------------|--------|---------------------------------------|-----------|
|                                                            |   | **2007**                              |      | **2006** |   |
|                                                            |   | **ThUS$**                             |      | **ThUS$** |   |
| **Land**                                                        |   |                                  |      |   |   |
| Land                                                       |   |                                  | 82,727    |   |   | 81,153 |   |
| Mining                concessions                          |   |                                  | 30,086    |   |   | 30,793 |   |
| Subtotal                                                   |   |                                  | 112,813   |   |   | 111,946 |   |
|                                                            |   |                                  |      |   |   |   |   |
| **Buildings                and Infrastructure**                 |   |                                  |      |   |   |   |   |
| Buildings                                                  |   |                                  | 163,603   |   |   | 155,542 |   |
| Installations                                              |   |                                  | 282,759   |   |   | 263,175 |   |
| Ponds                                                      |   |                                  | 162,385   |   |   | 120,568 |   |
| Railroad                                                   |   |                                  | 23,166    |   |   | 23,166 |   |
| Construction-in-progress                                   |   |                                  | 165,648   |   |   | 159,516 |   |
| Other                                                      |   |                                  | 44,266    |   |   | 53,374 |   |
| Subtotal                                                   |   |                                  | 841,827   |   |   | 775,341 |   |
|                                                            |   |                                  |      |   |   |   |   |
| **Machinery                and Equipment**                      |   |                                  |      |   |   |   |   |
| Machinery                                                  |   |                                  | 556,466   |   |   | 495,426 |   |
| Equipment                                                  |   |                                  | 131,898   |   |   | 114,101 |   |
| Project-in-progress                                        |   |                                  | 23,060    |   |   | 5,236 |   |
| Other                                                      |   |                                  | 19,729    |   |   | 18,893 |   |
| Subtotal                                                   |   |                                  | 731,153   |   |   | 633,656 |   |
|                                                            |   |                                  |      |   |   |   |   |
| **Other                Fixed Assets**                           |   |                                  |      |   |   |   |   |
| Tools                                                      |   |                                  | 9,390     |   |   | 8,937 |   |
| Furniture                and office equipment              |   |                                  | 15,100    |   |   | 29,958 |   |
| Project-in-progress                                        |   |                                  | 11,275    |   |   | 15,708 |   |
| Other                                                      |   |                                  | 14,264    |   |   | 10,925 |   |
| Subtotal                                                   |   |                                  | 50,029    |   |   | 65,528 |   |
|                                                            |   |                                  |      |   |   |   |   |
| **Amounts                related to technical appraisal**       |   |                                  |      |   |   |   |   |
| Land                                                       |   |                                  | 7,839     |   |   | 7,839 |   |
| Buildings                and infrastructure                |   |                                  | 41,439    |   |   | 41,439 |   |
| Machinery                and equipment                     |   |                                  | 12,048    |   |   | 12,048 |   |
| Other                assets                                |   |                                  | 53        |   |   | 53 |   |
| Subtotal                                                   |   |                                  | 61,379    |   |   | 61,379 |   |
|                                                            |   |                                  |      |   |   |   |   |
| Total                property, plant and equipment (cost)  |   |                                  | 1,797,201 |   |   | 1,647,850 |   |
|                                                            |   |                                  |      |   |   |   |   |
| **Less:                Accumulated depreciation**               |   |                                  |      |   |   |   |   |
| Buildings                and infrastructure                |   |                                  | (339,623  | ) |   | (308,192 | ) |
| Machinery                and equipment                     |   |                                  | (404,573  | ) |   | (358,008 | ) |
| Other                fixed assets                          |   |                                  | (31,441   | ) |   | (27,746 | ) |
| Technical                appraisal                         |   |                                  | (38,115   | ) |   | (36,976 | ) |
| Total                accumulated depreciation              |   |                                  | (813,752  | ) |   | (730,922 | ) |
|                                                            |   |                                  |      |   |   |   |   |
| Net                property, plant and equipment                |   |                                  | 983,449   |   |   | 916,928 |   |

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*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note      7 - Property, Plant and Equipment (continued)**

|                                                     |   | **For the year ended December 31, ** |    |
|----------------------------------------------------------|--------|--------------------------------------------------------------------|---------|
|                                                     |   | **2007**                                                           |    | **2006** |   | **2005** |   |
|                                                     |   | **ThUS$**                                                          |    | **ThUS$** |   | **ThUS$** |   |
|                                                     |   |                                                               |    |   |   |   |   |
| Buildings                and infrastructure         |   |                                                               | (44,135 | ) |   | (41,259 | ) |   | (30,286 | ) |
| Machinery                and equipment              |   |                                                               | (46,210 | ) |   | (43,290 | ) |   | (37,108 | ) |
| Other                property, plant and equipment  |   |                                                               | (6,342  | ) |   | (4,328 | ) |   | (1,462 | ) |
| Technical                appraisal                  |   |                                                               | (1,139  | ) |   | (1,477 | ) |   | (1,198 | ) |
| Total                depreciation                   |   |                                                               | (97,826 | ) |   | (90,354 | ) |   | (70,054 | ) |

|                                                       |   | **As of December 31,** |   |
|------------------------------------------------------------|--------|---------------------------------------|--------|
|                                                       |   | **2007**                              |   | **2006** |   |
|                                                       |   | **ThUS$**                             |   | **ThUS$** |   |
|                                                       |   |                                  |   |   |   |
| Administrative                office buildings   |   |                                  | 1,988  |   |   | 1,988 |   |
| Accumulated                depreciation               |   |                                  | (521   | ) |   | (489 | ) |
| Total                assets in leasing                |   |                                  | 1,467  |   |   | 1,499 |   |

**Note      8 - Investments in Related Companies**

|  | · | On                December 7, 2007, SQM North America Corp. sold to Nautilus International                Holding Corporation all the rights which SQM North America Corp had                in                Cape Fear Bulk LLC. for ThUS$ 1,478, thereby generating a gain from                the                sale of investments of ThUS$ 1,316. |
|--|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | On                January 12, 2007, the subsidiary PTM SQM Ibérica S.A. was liquidated and                extinguished. This operation gave rise to a loss of ThUS$ 41 in the                subsidiary Soquimich European Holding                B.V. |
|--|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note      8 - Investments in Related Companies (continued)**

|  | · | On                October 27, 2006, SQM Comercial de México S.A. de C.V. and SQM Industrial                S.A. sold all the shares (100%) they had in Fertilizantes Olmeca                y SQM                S.A. de C.V. to Yara Nederland B.V. and Yara Holdings Netherlands                B.V.                (both being part of Yara Group, party related to SQM) for a sum of                ThUS$                4,888. The sale generated gain of ThUS$                1,040. |
|--|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | On                September 14, 2006, Soquimich European Holding B.V. (SEH) sold to                Yara                Italia SPA (being part of Yara Group, party related to SQM) its entire                participation (50% of rights) in Impronta SRL for a sum of ThUS$                902. The                transaction generated loss of ThUS$                308. |
|--|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | On                May 9, 2006, SQM Industrial S.A. and SQM Potasio S.A. provided funding                to                Prestadora de Servicios de Salud Cruz del Norte S.A. The entity’s paid-in                capital amounts to ThCh$ 50,000 (approx. ThUS$ 97 when the entity                was                formed) divided into 5,000 shares with no par value, no privileges                or                preferences, which are paid in full upon                subscription. |
|--|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | On                January 24, 2006, Soquimich European Holding B.V. and Nutrisi Holding                N.V.                acquired 334 and 666 shares, respectively of Fertilizantes Naturales                S.A.                (“Fenasa”) for ThEuro 75,100 (approx. ThUS$ 91 in the moment of the                transaction) thereby increasing total SQM Group ownership of Fenasa                to                66.67%. |
|--|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | On                January 19, 2006 Sociedad Química y Minera de Chile S.A. and some of its                subsidiaries have acquired from DSM Group based in the Netherlands                (third                party), the total amount of shares of three companies that participate                in                the markets of the production and commercialization of iodine and                iodine                derivatives in Chile (DSM Minera S.A. and Exploraciones Mineras S.A.)                and                abroad (DSM Minera B.V. based in Netherlands). The purchase price                paid in                cash for Chilean operations was ThUS$ 100,067 and for DSM Minera                B.V. was                ThUS$ 13,840 in cash. |
|--|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note      8 - Investments in Related Companies (continued)**

|  | · | At                the First General Extraordinary Shareholders’ Meeting of SQM Industrial                S.A. held on January 9, 2006, its shareholders approved the merger                of SQM                Procesos S.A. into SQM Industrial S.A. through the dissolution of                SQM                Procesos S.A. and its incorporation into SQM Industrial S.A., which                in                effect acquires all assets and liabilities of SQM Procesos                S.A. |
|--|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | In                September 2005, the subsidiary Soquimich European Holding B.V. and                Charlee                Industries Co, Ltd. (third party) incorporated Charlee SQM (Thailand)                Co.                Ltd. Soquimich European Holding B.V. contributed ThUS$ 800 for 40%                participation in Charlee SQM (Thailand) Co. Ltd. This operation did                not                generate any negative goodwill or                goodwill. |
|--|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | On                August 9, 2005, SQM Nitratos S.A. and SQM S.A. acquired from third                party                99 and 1 shares, respectively of Kemira Emirates Fertilizers Company                (Kefco) for ThUS$ 9,282 paid in cash at the date of the acquisition.                Acquired shares represent in total 100% of the capital of that entity.                In                accordance with the provisions of Technical Bulletin No. 72 issued                by the                Chilean Association of Accountants and Circular No. 1697 issued by                the                SVS, the preliminary valuation of Kefco’s identifiable assets and                liabilities as of July 31, 2005 was performed. Such valuation indicated                that those fair values do not significantly differ from assets’ and                liabilities’ carrying amounts at that date. Goodwill determined on the                acquisition amounted to ThUS$2,058 is amortized over a period of                20 years.                Subsequent to the acquisition Kefco changed its name to SQM Dubai                -                Fzco. |
|--|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | · | In                April 2005, the subsidiary SQM Corporation N.V. acquired additional                13%                participation in its investee Abu Dhabi Fertilizers Industries WLL                for a                sum of ThUS$484 reaching total stake in that entity of 50%. In accordance                with Technical Bulletin No. 72 issued by the Chilean Association                of                Accountants and Circular No. 1697 issued by the SVS the Company valued                this investment in consideration of the book value of equity of Abu                Dhabi                Fertilizers Industries WLL as of December 31, 2004, which did not                significantly differ from its fair value at that date. This operation                gave                rise to no goodwill or negative                goodwill. |
|--|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note      8 - Investments in Related Companies (continued)**

|  | · | In                March 2005, the subsidiary Soquimich European Holding B.V. made a                capital                increase of ThUS$ 411 in its investee Misr Specialty Fertilizers.                In                accordance with Technical Bulletin No. 72 issued by the Chilean                Association of Accountants and the regulations in Circular No. 1697                issued                by the SVS, the valuation was performed in consideration of the book                value                of the equity of Misr Specialty Fertilizers as of December 31, 2004,                which                did not differ significantly from its fair value determined at that                date.                This operation gave rise to no goodwill or negative                goodwill. |
|--|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

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*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note      8 - Investments in Related Companies (continued)**

|                                                               |   |   |     |  Currency                     |   | **Ownership                interest****as                of December 31,** |   | **Equity                  of****investment                as****of                December 31,** |   | **Net                income (loss)****for                the year ended** |   | **Carrying                value as****of December 31,** |   | **Equity                  participation****in                net income (loss) for****the                year December 31,** |   |
|-------------------------------------------------------------------------|--------|--------|----------|------------------------------------|--------|----------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------------|--------|---------------------------------------------------------------------------|--------|---------------------------------------------------------|--------|------------------------------------------------------------------------------------------------------------------------------|--------|
|  **Company**                                                       |   |   |     |  **of                origin** |   | **2007**                                                                   |   | **2006**                                                                                         |   | **2005**                                                                  |   | **2007**                                                |   | **2006**                                                                                                                     |   | **2007** |   | **2006** |   | **2005** |   | **2007** |   | **2006** |   | **2007** |   | **2006** |   | **2005** |   |
|                                                                    |   |   |     |                               |   | %                                                                          |   | %                                                                                                |   |  %                                                                   |   | **ThUS$**                                               |   | **ThUS$**                                                                                                                    |   | **ThUS$** |   | **ThUS$** |   | **ThUS$** |   | **ThUS$** |   | **ThUS$** |   | **ThUS$** |   | **ThUS$** |   | **ThUS$** |   |
|                                                                    |   |   |     |                               |   |                                                                       |   |                                                                                             |   |                                                                      |   |                                                    |   |                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Ajay                North America LLC                              |   |   | USA      |                               |   | US                                                                         |   | $                                                                                                | 49.00  |                                                                      |   | 49.00                                                   |   |                                                                                                                         | 49.00  |   |   | 11,966 |   |   | 11,282 |   |   | 1,284 |   |   | 291 |   |   | 2,810 |   |   | 4,657 |   |   | 3,998 |   |   | 629 |   |   | 142 |   |   | 1,377 |   |
| Nutrisi                Holding N.V.                                |   |   | Belgium  |                               |   | Euros                                                                      |   |                                                                                             | 50.00  |                                                                      |   | 50.00                                                   |   |                                                                                                                         | 50.00  |   |   | 10,429 |   |   | 8,290 |   |   | 1,163 |   |   | 846 |   |   | 1,609 |   |   | 5,092 |   |   | 4,025 |   |   | 581 |   |   | 425 |   |   | 805 |   |
| Doktor                Tarsa Tarim Sanayi AS                        |   |   | Turkey   |                               |   | Euros                                                                      |   |                                                                                             | 50.00  |                                                                      |   | 50.00                                                   |   |                                                                                                                         | 50.00  |   |   | 8,472 |   |   | 5,813 |   |   | 2,027 |   |   | 1,291 |   |   | 429 |   |   | 4,236 |   |   | 2,906 |   |   | 1,014 |   |   | 645 |   |   | 214 |   |
| Ajay                Europe S.A.R.L.                                |   |   | France   |                               |   | Euros                                                                      |   |                                                                                             | 50.00  |                                                                      |   | 50.00                                                   |   |                                                                                                                         | 50.00  |   |   | 9,467 |   |   | 6,561 |   |   | 1,474 |   |   | 993 |   |   | 1,063 |   |   | 3,703 |   |   | 1,915 |   |   | 737 |   |   | 497 |   |   | 532 |   |
| Misr                Specialty Fertilizers                          |   |   | Egypt    |                               |   | US                                                                         |   | $                                                                                           | 47.49  |                                                                      |   | 47.49                                                   |   |                                                                                                                         | 47.49  |   |   | 4,529 |   |   | 4,361 |   |   | (140 | ) |   | (446 | ) |   | (708 | ) |   | 2,151 |   |   | 2,071 |   |   | (67 | ) |   | (212 | ) |   | (336 | ) |
| Abu                Dhabi Fertilizer Industries WLL  Industries WLL |   |   | UAE      |                               |   | US                                                                         |   | $                                                                                           | 50.00  |                                                                      |   | 50.00                                                   |   |                                                                                                                         | 50.00  |   |   | 4,713 |   |   | 3,886 |   |   | 794 |   |   | 366 |   |   | 13 |   |   | 2,356 |   |   | 1,943 |   |   | 397 |   |   | 183 |   |   | 6 |   |
| Impronta                SRL                                        |   |   | Italia   |                               |   | Euros                                                                      |   |                                                                                             | -      |                                                                      |   | -                                                       |   |                                                                                                                         | 50.00  |   |   | - |   |   | - |   |   | - |   |   | - |   |   | (281 | ) |   | - |   |   | - |   |   | - |   |   | 141 |   |   | (141 | ) |
| Sales                de Magnesio Ltda.                             |   |   | Chile    |                               |   | Ch                                                                         |   | $                                                                                           | 50.00  |                                                                      |   | 50.00                                                   |   |                                                                                                                         | 50.00  |   |   | 1,290 |   |   | 946 |   |   | 509 |   |   | 428 |   |   | 259 |   |   | 645 |   |   | 473 |   |   | 254 |   |   | 214 |   |   | 130 |   |
| SQM                Eastmed Turkey                                  |   |   | Turkey   |                               |   | Euros                                                                      |   |                                                                                             | 50.00  |                                                                      |   | 50.00                                                   |   |                                                                                                                         | 50.00  |   |   | 196 |   |   | 184 |   |   | (7 | ) |   | (210 | ) |   | - |   |   | 98 |   |   | 92 |   |   | (4 | ) |   | (105 | ) |   | - |   |
| Asociación                Garantizadora de Pensiones          |   |   | Chile    |                               |   | Ch                                                                         |   | $                                                                                           | 3.31   |                                                                      |   | 3.31                                                    |   |                                                                                                                         | 3.31   |   |   | 728 |   |   | 874 |   |   | - |   |   | - |   |   | - |   |   | 24 |   |   | 29 |   |   | - |   |   | - |   |   | - |   |
| Charlee                SQM Thailand Co. Ltd.                       |   |   | Thailand |                               |   | US                                                                         |   | $                                                                                           | 40.00  |                                                                      |   | 40.00                                                   |   |                                                                                                                         | 40.00  |   |   | 2,401 |   |   | 2,167 |   |   | 77 |   |   | 167 |   |   | - |   |   | 960 |   |   | 867 |   |   | 31 |   |   | 67 |   |   | - |   |
| Fertilizantes                Naturales S.A. (1).                   |   |   | Spain    |                               |   | Euros                                                                      |   |                                                                                             | 66.67  |                                                                      |   | 66.67                                                   |   |                                                                                                                         | 50.00  |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 37 |   |   | - |   |   | - |   |   | - |   |   | - |   |   | 9 |   |
| Agro                India Ltda.                                    |   |   | India    |                               |   | US                                                                         |   | $                                                                                           | 49.00  |                                                                      |   | 49.00                                                   |   |                                                                                                                         | -      |   |   | 27 |   |   | 19 |   |   | (13 | ) |   | (94 | ) |   | - |   |   | 13 |   |   | 10 |   |   | (6 | ) |   | (45 | ) |   | - |   |
| Total                                                              |   |   |     |                               |   |                                                                       |   |                                                                                             |   |                                                                      |   |                                                    |   |                                                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   |   | 23,935 |   |   | 18,329 |   |   | 3,566 |   |   | 1,952 |   |   | 2,596 |   |

| (1) | For                the year ended December 31, 2005 the Company accounted for its 50%                investment in Fertilizantes Naturales S.A. using the equity method.                During                2006 the Company acquired additional participation in the entity                and,                having control, included it in the consolidation for the years ended                December 31, 2006 and 2007 (see Note                2a). |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note      9 - Goodwill and Negative Goodwill**

|                                                     |   | **Amortization                for the year ended****December                31,** |   | **Net                Balance as of****December                31,** |   |
|----------------------------------------------------------|--------|-----------------------------------------------------------------------------------|--------|---------------------------------------------------------------------|--------|
| **Company**                                              |   | **2007**                                                                          |   | **2006**                                                            |   | **2005** |   | **2007** |   | **2006** |   |
|                                                     |   | **ThUS$**                                                                         |   | **ThUS$**                                                           |   | **ThUS$** |   | **ThUS$** |   | **ThUS$** |   |
|                                                     |   |                                                                              |   |                                                                |   |   |   |   |   |   |   |
| SQM                Potassium S.A.                   |   |                                                                              | 145    |                                                                |   | 144 |   |   | 144 |   |   | 1,302 |   |   | 1,447 |   |
| Comercial                Hydro S.A.                 |   |                                                                              | 245    |                                                                |   | 174 |   |   | 176 |   |   | 1,065 |   |   | 1,153 |   |
| SQM                Industrial S.A.                  |   |                                                                              | 1,113  |                                                                |   | 1,154 |   |   | 1,072 |   |   | 18,916 |   |   | 20,029 |   |
| Soquimich                Comercial S.A.                  |   |                                                                              | -      |                                                                |   | - |   |   | 122 |   |   | - |   |   | - |   |
| SQM                Salar S.A.                       |   |                                                                              | -      |                                                                |   | - |   |   | 40 |   |   | - |   |   | - |   |
| Doktor                Tarsa                         |   |                                                                              | -      |                                                                |   | - |   |   | 18 |   |   | - |   |   | - |   |
| SQM                México S.A. de C.V.         |   |                                                                              | 56     |                                                                |   | 56 |   |   | 56 |   |   | 779 |   |   | 835 |   |
| Comercial                Caiman Internacional S.A.  |   |                                                                              | 23     |                                                                |   | 23 |   |   | 23 |   |   | 108 |   |   | 131 |   |
| Fertilizantes                Olmeca S.A. de C.V.    |   |                                                                              | -      |                                                                |   | 56 |   |   | 56 |   |   | - |   |   | - |   |
| Saftnits                Pty Ltd.                    |   |                                                                              | -      |                                                                |   | - |   |   | 290 |   |   | - |   |   | - |   |
| SQM                Dubai – FZCO          |   |                                                                              | 101    |                                                                |   | 101 |   |   | 73 |   |   | 1,783 |   |   | 1,884 |   |
| Iodine                Minera B.V.                   |   |                                                                              | 569    |                                                                |   | 521 |   |   | - |   |   | 10,283 |   |   | 10,852 |   |
| Total                                               |   |                                                                              | 2,252  |                                                                |   | 2,229 |   |   | 2,070 |   |   | 34,236 |   |   | 36,331 |   |

|                                      |   | **Amortization for the year ended****December 31,** |   | **Net Balance as of****December 31,** |   |
|-------------------------------------------|--------|------------------------------------------------------------------------------|--------|-----------------------------------------------------------|--------|
| **Company**                               |   | **2007**                                                                     |   | **2006**                                                  |   | **2005** |   | **2007** |   | **2006** |   |
|                                      |   | **ThUS$**                                                                    |   | **ThUS$**                                                 |   | **ThUS$** |   | **ThUS$** |   | **ThUS$** |   |
|                                      |   |                                                                         |   |                                                      |   |   |   |   |   |   |   |
| Minera                Mapocho S.A.   |   |                                                                         | -      |                                                      |   | 68 |   |   | 203 |   |   | - |   |   | - |   |
| Minera                Nueva Victoria S.A. |   |                                                                         | -      |                                                      |   | - |   |   | - |   |   | 1,291 |   |   | 1,928 |   |
| Total                                |   |                                                                         | -      |                                                      |   | 68 |   |   | 203 |   |   | 1,291 |   |   | 1,928 |   |

----

*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note      10 - Other Long-Term Assets**

|                                                         |   | **As                of December 31,** |   |
|--------------------------------------------------------------|--------|---------------------------------------|--------|
|                                                         |   | **2007**                              |   | **2006** |   |
|                                                         |   | **ThUS$**                             |   | **ThUS$** |   |
|                                                         |   |                                  |   |   |   |
| Engine                and equipment spare-parts, net    |   |                                  | 2,987  |   |   | 13,222 |   |
| Mine                development costs                        |   |                                  | 23,944 |   |   | 26,545 |   |
| Construction                of Salar-Baquedano road     |   |                                  | 1,170  |   |   | 1,290 |   |
| Deferred                debt issuance costs             |   |                                  | 342    |   |   | 521 |   |
| Cost                of issuance and placement of bonds  |   |                                  | 4,864  |   |   | 5,737 |   |
| Other                                                   |   |                                  | 2,311  |   |   | 1,441 |   |
| Total                                                   |   |                                  | 35,618 |   |   | 48,756 |   |

**Note      11 - Bank Debt**

|                                                      |   | **As                of December 31,** |   |
|-----------------------------------------------------------|--------|---------------------------------------|--------|
|                                                      |   | **2007**                              |   | **2006** |   |
|                                                      |   | **ThUS$**                             |   | **ThUS$** |   |
| **Bank                or financial institution**          |   |                                  |   |   |   |
| Banco                de Credito e Inversiones   |   |                                  | -      |   |   | 30,022 |   |
| Corpbanca                                            |   |                                  | -      |   |   | 15,216 |   |
| BBVA                Banco Bilbao Vizcaya Argentaria  |   |                                  | 180    |   |   | 10,475 |   |
| Fortis                Bank                           |   |                                  | 685    |   |   | 1,150 |   |
| CAM                Caja Ahorros Mediterraneo         |   |                                  | -      |   |   | 633 |   |
| Banesto                                              |   |                                  | 432    |   |   | 369 |   |
| Deutsche                Bank España S.A.        |   |                                  | 345    |   |   | 256 |   |
| Caixa                Penedes de España          |   |                                  | 131    |   |   | 185 |   |
| HSBC                Bank Middle East Ltd             |   |                                  | 33     |   |   | 44 |   |
| Total                                                |   |                                  | 1,806  |   |   | 58,350 |   |
|                                                      |   |                                  |   |   |   |   |   |
| Annual                average interest rate          |   |                                  | 4.31   | % |   | 5.32 | % |

----

*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note      11 - Bank Debt (continued)**

| b) | Long-term                bank debt is detailed as follows: |
|----|------------------------------------------------------------|

|                                                          |   | **As                of December 31,** |    |
|---------------------------------------------------------------|--------|---------------------------------------|---------|
|                                                          |   | **2007**                              |    | **2006** |   |
| **Bank                or financial institution**              |   | **ThUS$**                             |    | **ThUS$** |   |
|                                                          |   |                                  |    |   |   |
| BBVA                Banco Bilbao Vizcaya Argentaria (1)  |   |                                  | 100,433 |   |   | 100,412 |   |
| ING                Bank (2)                              |   |                                  | 80,368  |   |   | 80,416 |   |
| Total                                                    |   |                                  | 180,801 |   |   | 180,828 |   |
|                                                          |   |                                  |    |   |   |   |   |
| Less:                Current portion                          |   |                                  | (801    | ) |   | (828 | ) |
|                                                          |   |                                  |    |   |   |   |   |
| Long-term                debt                            |   |                                  | 180,000 |   |   | 180,000 |   |

|  | (1) | U.S.                dollar-denominated loan without guarantee, interest rate of Libor                + 0.375%                per annum, quarterly payment. The principal is due on February 25,                2010. |
|--|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (2) | U.S.                dollar-denominated loan without guarantee, interest rate of Libor                + 0.300%                per annum, semi-annually payment. The principal is due on November                28,                2011. |
|--|-----|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                       |   | **As                of December 31,** |    |
|--------------------------------------------|--------|---------------------------------------|---------|
|                                       |   | **2007**                              |    | **2006** |   |
| **Years                to maturity**       |   | **ThUS$**                             |    | **ThUS$** |   |
|                                       |   |                                  |    |   |   |
| Current                portion   |   |                                  | 801     |   |   | 828 |   |
| 1                to 2 years           |   |                                  | -       |   |   | - |   |
| 2                to 3 years           |   |                                  | 100,000 |   |   | - |   |
| 3                to 5 years           |   |                                  | 80,000  |   |   | 180,000 |   |
| Total                                 |   |                                  | 180,801 |   |   | 180,828 |   |

----

*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note      12 - Bonds Payable**

| **Number                of****registration                of****the                instrument** |   | **Series** |   | **Nominal ****Amount** |   | **Currency****or****indexation**** unit** |   | **Interest Rate** |   | **Matures on** |   | **Payment ****of**** interest** |   | **Repayment ****of principal** |   | **Balance as****of Dec 31, ****2007** |   | **Balance as****of Dec 31, ****2006** |   |
|-------------------------------------------------------------------------------------------------|--------|------------|--------|-----------------------------|--------|------------------------------------------------|--------|------------------------|--------|---------------------|--------|-------------------------------------------|--------|------------------------------------------|--------|-----------------------------------------------------------|--------|-----------------------------------------------------------|--------|
|                                                                                            |   |       |   |                        |   |                                           |   |                   |   |                |   |                                      |   |                                     |   | **ThUS$**                                                 |   | **ThUS$**                                                 |   |
| Current                portion of long-term bonds payable:                                      |   |
| 446..                                                                                      |   |       | C      |                        |   | 150,000                                        |   |                   | UF     |                |   | 4.00                                      | %      | Jun 1, 2008                    |   |  Semi-annual                                         |   |  Semi-annual                                         |   |   | 6,291 |   |   | 2,920 |   |
| 184.                                                                                       |   |       | Single |                        |   | -                                              |   |                   | ThUS$  |                |   | 6.125                                     | %      | Apr 15, 2008                   |   |  Semi-annual                                         |   |  Bullet                                              |   |   | 2,577 |   |   | 2,620 |   |
| Total                                                                                      |   | 8,868      |   |                        | 5,540  |                                           |
|                                                                                            |   |       |   |                        |   |                                           |   |                   |   |                |   |                                      |   |                                     |   |                                                      |   |                                                      |   |   |   |   |   |   |   |   |   |   |
| Long-term bonds payable:                                                              |
| 446..                                                                                      |   |       | C      |                        |   | 2,700,000                                      |   |                   | UF     |                |   | 4.00                                      | %      | Dec 1, 2026                    |   |  Semi-annual                                         |   |  Semi-annual                                         |   |   | 106,651 |   |   | 100,724 |   |
| 184.                                                                                       |   |       | Single |                        |   | 200,000                                        |   |                   | ThUS$  |                |   | 6.125                                     | %      | Apr 15, 2016                   |   |  Semi-annual                                         |   |  Bullet                                              |   |   | 200,000 |   |   | 200,000 |   |
| Total                                                                                      |   |       |   |                        |   |                                           |   |                   |   |                |   |                                      |   |                                     |   |                                                      |   |                                                      |   |   |   |   |   | 306,651 |   |   | 300,724 |   |

----

*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note      13 - Accrued Liabilities**

|                                                                     |   | **As                of December 31,** |   |
|--------------------------------------------------------------------------|--------|---------------------------------------|--------|
|                                                                     |   | **2007**                              |   | **2006** |   |
|                                                                     |   | **ThUS$**                             |   | **ThUS$** |   |
|                                                                     |   |                                  |   |   |   |
| Accrued                royalty payments to Corfo               |   |                                  | 3,643  |   |   | 2,358 |   |
| Provision                for employee compensation and legal costs  |   |                                  | 925    |   |   | 504 |   |
| Taxes                and monthly income tax installment payments    |   |                                  | 3,496  |   |   | 3,309 |   |
| Vacation                accrual                                     |   |                                  | 11,919 |   |   | 8,478 |   |
| Marketing                expenses                                   |   |                                  | 107    |   |   | 109 |   |
| Audit                fees                                           |   |                                  | 400    |   |   | 576 |   |
| Other                accruals                                       |   |                                  | 1,824  |   |   | 1,070 |   |
| Total                                                               |   |                                  | 22,314 |   |   | 16,404 |   |

**Note      14 - Current and Deferred Income Taxes**

|                                                                      |   | **As                of December 31,** |    |
|---------------------------------------------------------------------------|--------|---------------------------------------|---------|
|                                                                      |   | **2007**                              |    | **2006** |   |
|                                                                      |   | **ThUS$**                             |    | **ThUS$** |   |
|                                                                      |   |                                  |    |   |   |
| Accumulated                tax basis retained earnings with tax credit    |   |                                  | 381,272 |   |   | 278,515 |   |
| Accumulated                tax basis retained earnings without tax credit |   |                                  | 56,332  |   |   | 97,140 |   |
| Tax                loss carry-forwards (1)                           |   |                                  | 142,236 |   |   | 171,249 |   |
| Credit                for shareholders (2)                           |   |                                  | 77,904  |   |   | 56,759 |   |

| (1) | Tax                  losses                  in Chile can be carried forward                  indefinitely. |
|-----|-------------------------------------------------------------------------------------------------------------|

| (2) | Corresponds                to credit to income taxes that shareholders have in relation to                distribution of dividends. |
|-----|--------------------------------------------------------------------------------------------------------------------------------------|

----

*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note      14 - Current and Deferred Income Taxes (continued)**

| **As                of December 31, 2007**                             |   | **Deferred                tax asset** |   | **Deferred                tax liability** |   |
|------------------------------------------------------------------------|--------|---------------------------------------|--------|-------------------------------------------|--------|
|                                                                   |   | **Short-term**                        |   | **Long-term**                             |   | **Short-term** |   | **Long-term** |   |
|                                                                   |   | **ThUS$**                             |   | **ThUS$**                                 |   | **ThUS$** |   | **ThUS$** |   |
| **Temporary                differences**                               |   |                                  |   |                                      |   |   |   |   |   |
| Allowance                for doubtful accounts                    |   |                                  | 1,335  |                                      |   | 605 |   |   | - |   |   | - |   |
| Vacation                accrual                                   |   |                                  | 1,872  |                                      |   | - |   |   | - |   |   | - |   |
| Unrealized                gain on sale of products                |   |                                  | 17,521 |                                      |   | - |   |   | - |   |   | - |   |
| Provision                for obsolescence of non-current assets   |   |                                  | -      |                                      |   | 3,779 |   |   | - |   |   | - |   |
| Production                expenses                                |   |                                  | -      |                                      |   | - |   |   | 20,535 |   |   | - |   |
| Accelerated                depreciation                           |   |                                  | -      |                                      |   | - |   |   | - |   |   | 62,190 |   |
| Exploration                expenses                               |   |                                  | -      |                                      |   | - |   |   | - |   |   | 4,327 |   |
| Capitalized                interest                               |   |                                  | -      |                                      |   | - |   |   | - |   |   | 8,384 |   |
| Staff                severance indemnities                        |   |                                  | -      |                                      |   | - |   |   | - |   |   | 1,733 |   |
| Fair                value of fixed assets                         |   |                                  | -      |                                      |   | 2,119 |   |   | - |   |   | - |   |
| Leased                assets                                      |   |                                  | -      |                                      |   | - |   |   | - |   |   | 12 |   |
| Capitalized                expenses                               |   |                                  | -      |                                      |   | - |   |   | - |   |   | 929 |   |
| Tax                loss carry-forwards                            |   |                                  | -      |                                      |   | 25,883 |   |   | - |   |   | - |   |
| Accrued                gain from swap contract                    |   |                                  | -      |                                      |   | - |   |   | 2,545 |   |   | - |   |
| Deferred                revenue                                   |   |                                  | 188    |                                      |   | - |   |   | - |   |   | - |   |
| Provision                for energy tariff difference             |   |                                  | 2,175  |                                      |   | - |   |   | - |   |   | - |   |
| Accrued                interest                                   |   |                                  | 233    |                                      |   | - |   |   | - |   |   | - |   |
| Allowances                for obsolete inventories                     |   |                                  | -      |                                      |   | 5,382 |   |   |   |   |   |   |   |
| Other                                                             |   |                                  | 1,215  |                                      |   | 45 |   |   | 140 |   |   | 596 |   |
| Total                gross deferred taxes                         |   |                                  | 24,539 |                                      |   | 37,813 |   |   | 23,220 |   |   | 78,171 |   |
| Total                complementary accounts                  |   |                                  | -      |                                      |   | - |   |   | - |   |   | (15,633 | ) |
| Valuation                allowance                                |   |                                  | (7,533 | )                                         |   | (30,684 | ) |   | - |   |   | - |   |
| Total                deferred taxes                                    |   |                                  | 17,006 |                                      |   | 7,129 |   |   | 23,220 |   |   | 62,538 |   |
| Deferred                tax asset/liability, net                  |   |                                  | -      |                                      |   | - |   |   | 6,214 |   |   | 55,409 |   |

----

*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note      14 - Current and Deferred Income Taxes (continued)**

| **As                of December 31, 2006**                             |   | **Deferred                tax asset** |   | **Deferred                tax liability** |   |
|------------------------------------------------------------------------|--------|---------------------------------------|--------|-------------------------------------------|--------|
|                                                                   |   | **Short-term**                        |   | **Long-term**                             |   | **Short-term** |   | **Long-term** |   |
|                                                                   |   | **ThUS$**                             |   | **ThUS$**                                 |   | **ThUS$** |   | **ThUS$** |   |
| **Temporary                differences**                               |   |                                  |   |                                      |   |   |   |   |   |
| Allowance                for doubtful accounts                    |   |                                  | 1,814  |                                      |   | 594 |   |   | - |   |   | - |   |
| Vacation                accrual                                   |   |                                  | 1,411  |                                      |   | - |   |   | - |   |   | - |   |
| Unrealized                gain on sale of products                |   |                                  | 13,308 |                                      |   | - |   |   | - |   |   | - |   |
| Provision                for obsolescence of non-current assets   |   |                                  | -      |                                      |   | 2,283 |   |   | - |   |   | - |   |
| Production                expenses                                |   |                                  | -      |                                      |   | - |   |   | 18,613 |   |   | - |   |
| Accumulated                depreciation                           |   |                                  | -      |                                      |   | - |   |   | - |   |   | 61,046 |   |
| Exploration                expenses                               |   |                                  | -      |                                      |   | - |   |   | - |   |   | 4,712 |   |
| Capitalized                interest                               |   |                                  | -      |                                      |   | - |   |   | - |   |   | 7,052 |   |
| Staff                severance indemnities                        |   |                                  | -      |                                      |   | - |   |   | - |   |   | 1,796 |   |
| Fair                value of fixed assets                         |   |                                  | -      |                                      |   | 841 |   |   | - |   |   | - |   |
| Provision                for claim expense                        |   |                                  | -      |                                      |   | 88 |   |   | - |   |   | - |   |
| Capitalized                expenses                               |   |                                  | -      |                                      |   | - |   |   | - |   |   | 1,055 |   |
| Tax                loss carry-forwards                            |   |                                  | -      |                                      |   | 31,969 |   |   | - |   |   | - |   |
| Accrued                gain from swap contract                    |   |                                  | -      |                                      |   | - |   |   | 182 |   |   | - |   |
| Deferred                revenue                                   |   |                                  | 144    |                                      |   | - |   |   | - |   |   | - |   |
| Provision                for energy tariff difference             |   |                                  | 765    |                                      |   | - |   |   | - |   |   | - |   |
| Accrued                interest                                   |   |                                  | 159    |                                      |   | - |   |   | - |   |   | - |   |
| Provision                capital expenditure                      |   |                                  | 610    |                                      |   | - |   |   | - |   |   | - |   |
| Allowances                for obsolete inventories                |   |                                  | -      |                                      |   | 3,786 |   |   | - |   |   | - |   |
| Other                                                             |   |                                  | 481    |                                      |   | 169 |   |   | - |   |   | 497 |   |
| Total                gross deferred taxes                         |   |                                  | 18,692 |                                      |   | 39,730 |   |   | 18,795 |   |   | 76,158 |   |
| Total                complementary accounts                  |   |                                  | -      |                                      |   | - |   |   | (566 | ) |   | (20,551 | ) |
| Valuation                allowance                                |   |                                  | (4,551 | )                                         |   | (31,484 | ) |   | - |   |   | - |   |
| Total                deferred taxes                               |   |                                  | 14,141 |                                      |   | 8,246 |   |   | 18,229 |   |   | 55,607 |   |
| Deferred tax asset/liability, net                       |   |                                  | -      |                                      |   | - |   |   | 4,088 |   |   | 47,361 |   |

|                                                                                                                    |   | **2007**  |    | **2006**  |   | **2005**  |   |
|-------------------------------------------------------------------------------------------------------------------------|--------|-----------|---------|-----------|--------|-----------|--------|
|                                                                                                                    |   | **ThUS$** |    | **ThUS$** |   | **ThUS$** |   |
|                                                                                                                    |   |      |    |      |   |      |   |
| Provision                for current income taxes                                                                  |   |      | (38,218 | )         |   | (24,797   | )      |   | (37,428 | ) |
| Effect                of deferred tax assets and liabilities                                                       |   |      | (2,833  | )         |   | (13,447   | )      |   | 10,844 |   |
| Adjustment                for tax expense (previous year)                                                          |   |      | 132     |      |   | 238       |   |   | (945 | ) |
| Effect                of amortization of complementary accounts                                                    |   |      | (5,508  | )         |   | (4,021    | )      |   | (3,084 | ) |
| Effect                on deferred tax assets and liabilities due to changes in valuation                allowance  |   |      | (2,182  | )         |   | 4,420     |   |   | (1,350 | ) |
| Other                tax charges and credits                                                                       |   |      | 17      |      |   | (309      | )      |   | (564 | ) |
| Total                income tax expense                                                                            |   |      | (48,592 | )         |   | (37,916   | )      |   | (32,527 | ) |

----

*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note      15 - Long-Term Accrued Liabilities**

| a) | Long-term                accrued liabilities are composed as                follows: |
|----|--------------------------------------------------------------------------------------|

|                                                                    |   | **As                of December 31,** |   |
|-------------------------------------------------------------------------|--------|---------------------------------------|--------|
|                                                                    |   | **2007**                              |   | **2006** |   |
|                                                                    |   | **ThUS$**                             |   | **ThUS$** |   |
|                                                                    |   |                                  |   |   |   |
| Staff                severance indemnities                    |   |                                  | 20,679 |   |   | 17,472 |   |
| Closure                of mining sites and environmental expenses  |   |                                  | 1,992  |   |   | 1,992 |   |
| Total                                                              |   |                                  | 22,671 |   |   | 19,464 |   |

| b) | Staff                severance indemnities |
|----|--------------------------------------------|

|                                              |   | **2007**  |   | **2006**  |   | **2005**  |   |
|---------------------------------------------------|--------|-----------|--------|-----------|--------|-----------|--------|
|                                              |   | **ThUS$** |   | **ThUS$** |   | **ThUS$** |   |
|                                              |   |      |   |      |   |      |   |
| Opening                balance               |   |      | 17,472 |      |   | 16,415    |   |   | 11,875 |   |
| Increases                in obligation       |   |      | 4,190  |      |   | 3,253     |   |   | 5,193 |   |
| Benefits                paid                 |   |      | (2,245 | )         |   | (1,546    | )      |   | (3,379 | ) |
| Foreign                currency translation  |   |      | 1,336  |      |   | (640      | )      |   | 1,000 |   |
| Other                changes                 |   |      | (74    | )         |   | (10       | )      |   | 1,726 |   |
| Total                                        |   |      | 20,679 |      |   | 17,472    |   |   | 16,415 |   |

**Note      16 - Minority Interest**

|                                                       |   | **Participation in equity as****of December 31,** |   | **Participation in (income) loss for****the years ended December 31,** |   |
|------------------------------------------------------------|--------|----------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------------------------|--------|
|                                                       |   | **2007**                                                                   |   | **2006**                                                                                                       |   | **2007** |   | **2006** |   | **2005** |   |
|                                                       |   | **ThUS$**                                                                  |   | **ThUS$**                                                                                                      |   | **ThUS$** |   | **ThUS$** |   | **ThUS$** |   |
|                                                       |   |                                                                       |   |                                                                                                           |   |   |   |   |   |   |   |
| Soquimich                Comercial S.A.               |   |                                                                       | 42,347 |                                                                                                           |   | 35,138 |   |   | (3,886 | ) |   | (3,500 | ) |   | (84 | ) |
| Ajay                SQM Chile S.A.                    |   |                                                                       | 3,541  |                                                                                                           |   | 3,717 |   |   | 166 |   |   | (912 | ) |   | (827 | ) |
| Cape                Fear Bulk LLC                     |   |                                                                       | -      |                                                                                                           |   | 219 |   |   | (99 | ) |   | (248 | ) |   | (118 | ) |
| SQM                Italia S.R.L                       |   |                                                                       | -      |                                                                                                           |   | - |   |   | - |   |   | - |   |   | (3 | ) |
| SQM                Nitratos México S.A. de C.V.  |   |                                                                       | 13     |                                                                                                           |   | 45 |   |   | 31 |   |   | (84 | ) |   | (7 | ) |
| Fertilizantes                Naturales S.A.      |   |                                                                       | 123    |                                                                                                           |   | 120 |   |   | - |   |   | 2 |   |   | - |   |
| SQM                Indonesia S.A.                     |   |                                                                       | (30    | )                                                                                                              |   | (31 | ) |   | (1 | ) |   | 29 |   |   | - |   |
| SQM                Potasio S.A..                      |   |                                                                       | 5      |                                                                                                           |   | 5 |   |   | (3 | ) |   | (2 | ) |   | - |   |
| Total                                                 |   |                                                                       | 45,999 |                                                                                                           |   | 39,213 |   |   | (3,792 | ) |   | (4,715 | ) |   | (1,039 | ) |

----

*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note      17 - Shareholders’ Equity**

|                                                                                                                                               |   |                         |        |        |   | **Other**         |   | **Accumulated ****deficit of** |    |         |   |       |   |      |    |
|----------------------------------------------------------------------------------------------------------------------------------------------------|--------|------------------------------|-------------|-------------|--------|-------------------|--------|------------------------------------------|---------|--------------|--------|------------|--------|-----------|---------|
|                                                                                                                                               |   |                         |        |        |   | **accumulated**   |   | **subsidiaries in**                 |    |         |   |       |   |      |    |
|                                                                                                                                               |   | **Number**                   |        | **Paid-in** |   | **comprehensive** |   | **development**                          |    | **Retained** |   | **Net**    |   |      |    |
|                                                                                                                                               |   | **of                shares** |        | **capital** |   | **income**        |   | **stage**                                |    | **earnings** |   | **income** |   | **Total** |    |
|                                                                                                                                               |   |                         |        | **ThUS$**   |   | **ThUS$**         |   | **ThUS$**                                |    | **ThUS$**    |   | **ThUS$**  |   | **ThUS$** |    |
| Balance                as of January 1, 2005                                                                                                  |   |                         | 263,196,524 |        |   | 477,386           |   |                                     | 150,887 |         |   | (8,370     | )      |      | 254,493 |   |   | 74,232 |   |   | 948,628 |   |
| Transfer                of the 2003 net income to retained earnings                                                                           |   |                         | -           |        |   | -                 |   |                                     | -       |         |   | -          |   |      | 74,232  |   |   | (74,232 | ) |   | - |   |
| Declared                dividends 2005                                                                                                        |   |                         | -           |        |   | -                 |   |                                     | -       |         |   | -          |   |      | (48,118 | ) |   | - |   |   | (48,118 | ) |
| Other                comprehensive income                                                                                                     |   |                         | -           |        |   | -                 |   |                                     | 6,400   |         |   | -          |   |      | -       |   |   | - |   |   | 6,400 |   |
| Net                income for the year                                                                                                        |   |                         | -           |        |   | -                 |   |                                     | -       |         |   | -          |   |      | -       |   |   | 113,506 |   |   | 113,506 |   |
| Balance                as of December 31, 2005                                                                                                |   |                         | 263,196,524 |        |   | 477,386           |   |                                     | 157,287 |         |   | (8,370     | )      |      | 280,607 |   |   | 113,506 |   |   | 1,020,416 |   |
| Balance                as of January 1, 2006                                                                                                  |   |                         | 263,196,524 |        |   | 477,386           |   |                                     | 157,287 |         |   | (8,370     | )      |      | 280,607 |   |   | 113,506 |   |   | 1,020,416 |   |
| Transfer                of the 2005 net income to retained earnings                                                                           |   |                         | -           |        |   | -                 |   |                                     | -       |         |   | -          |   |      | 113,506 |   |   | (113,506 | ) |   | - |   |
| Transfer                of the accumulated deficit from subsidiaries in development stage                to                retained earnings  |   |                         | -           |        |   | -                 |   |                                     | -       |         |   | 8,370      |   |      | (8,370  | ) |   | - |   |   | - |   |
| Declared                dividends 2006                                                                                                        |   |                         | -           |        |   | -                 |   |                                     | -       |         |   | -          |   |      | (73,647 | ) |   | - |   |   | (73,647 | ) |
| Other                comprehensive loss                                                                                                       |   |                         | -           |        |   | -                 |   |                                     | (2,097  | )            |   | -          |   |      | -       |   |   | - |   |   | (2,097 | ) |
| Net                income for the year                                                                                                        |   |                         | -           |        |   | -                 |   |                                     | -       |         |   | -          |   |      | -       |   |   | 141,277 |   |   | 141,277 |   |
| Balance                as of December 31, 2006                                                                                                |   |                         | 263,196,524 |        |   | 477,386           |   |                                     | 155,190 |         |   | -          |   |      | 312,096 |   |   | 141,277 |   |   | 1,085,949 |   |
| Balance                January 1,2007                                                                                                         |   |                         | 263,196,524 |        |   | 477,386           |   |                                     | 155,190 |         |   | -          |   |      | 312,096 |   |   | 141,277 |   |   | 1,085,949 |   |
| Transfer                of the 2006 net income to retained earnings                                                                           |   |                         | -           |        |   | -                 |   |                                     | -       |         |   | -          |   |      | 141,277 |   |   | (141,277 | ) |   | - |   |
| Declared                dividends 2007                                                                                                        |   |                         | -           |        |   | -                 |   |                                     | -       |         |   | -          |   |      | (91,786 | ) |   | - |   |   | (91,786 | ) |
| Other                comprehensive income                                                                                                     |   |                         | -           |        |   | -                 |   |                                     | 8,252   |         |   | -          |   |      | -       |   |   | - |   |   | 8,252 |   |
| Net                income for the year                                                                                                        |   |                         | -           |        |   | -                 |   |                                     | -       |         |   | -          |   |      | -       |   |   | 180,021 |   |   | 180,021 |   |
| Balance                as of December 31, 2007                                                                                                |   |                         | 263,196,524 |        |   | 477,386           |   |                                     | 163,442 |         |   | -          |   |      | 361,587 |   |   | 180,021 |   |   | 1,182,436 |   |

----

*Table          of Contents*

**Note      17 - Shareholders’ Equity (continued)**

|                                                                         |   | **Other comprehensive income (loss)****For the year ended December 31,** |   | **Accumulated other****comprehensive income****As of December 31,** |   |
|------------------------------------------------------------------------------|--------|------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------|--------|
| **Description**                                                              |   | **2007**                                                                                                         |   | **2006**                                                                                     |   | **2005** |   | **2007** |   | **2006** |   |
|                                                                         |   | **ThUS$**                                                                                                        |   | **ThUS$**                                                                                    |   | **ThUS$** |   | **ThUS$** |   | **ThUS$** |   |
|                                                                         |   |                                                                                                             |   |                                                                                         |   |   |   |   |   |   |   |
| Technical                appraisal                                      |   |                                                                                                             | -      |                                                                                         |   | - |   |   | - |   |   | 151,345 |   |   | 151,345 |   |
| Changes                in other comprehensive income related to investments: |   |                                                                                                             |   |                                                                                         |   |   |   |   |   |   |   |   |   |   |   |   |
| Soquimich                Comercial S.A. (1)                             |   |                                                                                                             | 7,888  |                                                                                         |   | (871 | ) |   | 5,522 |   |   | 13,286 |   |   | 5,398 |   |
| Isapre                Norte Grande Limitada (1)                              |   |                                                                                                             | 39     |                                                                                         |   | - |   |   | - |   |   | (44 | ) |   | (83 | ) |
| Inversiones                Augusta S.A. (1)                             |   |                                                                                                             | -      |                                                                                         |   | - |   |   | - |   |   | (761 | ) |   | (761 | ) |
| SQM                Ecuador S.A. (2)                                     |   |                                                                                                             | -      |                                                                                         |   | - |   |   | - |   |   | (271 | ) |   | (271 | ) |
| Almacenes                y Depósitos Limitada (1)                  |   |                                                                                                             | 66     |                                                                                         |   | - |   |   | 78 |   |   | 88 |   |   | 22 |   |
| Asociación                Garantizadora de Pensiones (1)           |   |                                                                                                             | (5     | )                                                                                            |   | (1 | ) |   | 2 |   |   | (17 | ) |   | (12 | ) |
| Sales                de Magnesio Ltda. (1)                              |   |                                                                                                             | 59     |                                                                                         |   | (7 | ) |   | 7 |   |   | 111 |   |   | 52 |   |
| Sociedad                de Servicios de Salud                           |   |                                                                                                             | 14     |                                                                                         |   | - |   |   | - |   |   | 14 |   |   | - |   |
| SQM                North America Corp. (3)                              |   |                                                                                                             | (141   | )                                                                                            |   | (1,218 | ) |   | 792 |   |   | (1,359 | ) |   | (1,218 | ) |
| SQM                Dubai Fzco. (1)                                      |   |                                                                                                             | (11    | )                                                                                            |   | - |   |   | - |   |   | (11 | ) |   | - |   |
| Ajay                Europe SARL (1)                                     |   |                                                                                                             | 343    |                                                                                         |   | - |   |   | - |   |   | 343 |   |   | - |   |
| Other                entities (1)                                       |   |                                                                                                             | -      |                                                                                         |   | - |   |   | (1 | ) |   | 718 |   |   | 718 |   |
| Total                                                                   |   |                                                                                                             | 8,252  |                                                                                         |   | (2,097 | ) |   | 6,400 |   |   | 163,442 |   |   | 155,190 |   |

|   | (1) | Corresponds                to translation adjustments and price-level restatements. |
|--------|-----|-------------------------------------------------------------------------------------|

|   | (2) | Corresponds                to the translation adjustment produced by the application of a law                enacted                by the Ecuadorian Government |
|--------|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | (3) | Relates                to valuation differences generated in the pension plan of the subsidiary                SQM North America Corp. |
|--------|-----|----------------------------------------------------------------------------------------------------------------------------------------|

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*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note      17 - Shareholders’ Equity (continued)**

| c) | Paid-in                capital |
|----|--------------------------------|

| Series                A: |   | If                the election of the president of the Company results in a tied vote,                the                Company's directors may vote once again, without the vote of the                director                elected by the Series B                shareholders. |
|--------------------------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| Series                B: | (1) | A                general or extraordinary shareholders' meeting may be called at the                request of shareholders representing 5% of the Company's Series B                shares. |
|--------------------------|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|  | (2) | An                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. |
|--|-----|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

**Note      18 – Derivative Instruments**

| **2007****Type of****derivative** |   | **Notional or****covered****amount** |    | **Expiration** |   | **Risk type**                 |   | **Position ****Purchase/Sale ****(P/S)** |               | **(Liability)Asset ****amount** |   | **Income ****(loss) effect** |   |
|----------------------------------------|--------|-------------------------------------------|---------|----------------|--------|------------------------------------|--------|----------------------------------------------------|--------------------|--------------------------------------|--------|----------------------------------------|--------|
|                                   |   | **ThUS$**                                 |    |           |   |                               |   |                                               |               | **ThUS$**                            |   | **ThUS$**                              |   |
|                                   |   |                                      |    |           |   |                               |   |                                               |               |                                 |   |                                   |   |
| US                dollar option        |   |                                      | 13,916  |           |   | 1st quarter of 2008 |   |                                               | Exchange rate |                                 |   | P                                      |   |   | (130 | ) |   | (130 | ) |
| US dollar fwd.               |   |                                      | 4,696   |           |   | 1st quarter of 2008 |   |                                               | Exchange rate |                                 |   | P                                      |   |   | (1 | ) |   | (1 | ) |
| Swap                                   |   |                                      | 102,630 |           |   | 1st quarter of 2026 |   |                                               | Interest rate |                                 |   | P                                      |   |   | 14,968 |   |   | 14,968 |   |
| US dollar PUT                |   |                                      | 368     |           |   | 1st quarter of 2008 |   |                                               | Exchange rate |                                 |   | P                                      |   |   | (368 | ) |   | (368 | ) |
|                                   |   |                                      | 121,610 |           |   |                               |   |                                               |               |                                 |   |                                   |   |   | 14,469 |   |   | 14,469 |   |

| **2006****Type of ****derivative** |   | **Notional or****covered ****amount** |    | **Expiration** |   | **Risk type**                 |   | **Position ****Purchase/Sale ****(P/S)** |               | **(Liability)Asset ****amount** |   | **Income ****(loss) effect** |   |
|----------------------------------------------|--------|-------------------------------------------------|---------|----------------|--------|------------------------------------|--------|----------------------------------------------------|--------------------|--------------------------------------|--------|----------------------------------------|--------|
|                                         |   | **ThUS$**                                       |    |           |   |                               |   |                                               |               | **ThUS$**                            |   | **ThUS$**                              |   |
|                                         |   |                                            |    |           |   |                               |   |                                               |               |                                 |   |                                   |   |
| US                  dollar option            |   |                                            | 6,436   |           |   | 1st quarter of 2007 |   |                                               | Exchange rate |                                 |   | P                                      |   |   | (150 | ) |   | - |   |
| US dollar fwd.                     |   |                                            | 7,079   |           |   | 1st quarter of 2007 |   |                                               | Exchange rate |                                 |   | P                                      |   |   | (69 | ) |   | - |   |
| US dollar fwd.                |   |                                            | 10,000  |           |   | 1st quarter of 2007 |   |                                               | Exchange rate |                                 |   | P                                      |   |   | 100 |   |   | - |   |
| Swap                                         |   |                                            | 102,630 |           |   | 1st quarter of 2026 |   |                                               | Interest rate |                                 |   | P                                      |   |   | 5,398 |   |   | 564 |   |
|                                         |   |                                            | 126,145 |           |   |                               |   |                                               |               |                                 |   |                                   |   |   | 5,279 |   |   | 564 |   |

----

*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note      19- Non-Operating Income and Expenses **

| a) | Non-operating                income |
|----|-------------------------------------|

|                                                                                 |   | **For                the year ended December 31,** |   |
|--------------------------------------------------------------------------------------|--------|----------------------------------------------------|--------|
|                                                                                 |   | **2007**                                           |   | **2006** |   | **2005** |   |
|                                                                                 |   | **ThUS$**                                          |   | **ThUS$** |   | **ThUS$** |   |
|                                                                                 |   |                                               |   |   |   |   |   |
| Interest                income                                                  |   |                                               | 9,347  |   |   | 11,410 |   |   | 5,530 |   |
| Equity                participation in net income of unconsolidated investees   |   |                                               | 3,643  |   |   | 2,314 |   |   | 3,073 |   |
| Insurance                recoveries                                             |   |                                               | 275    |   |   | 307 |   |   | 213 |   |
| Write-off                of liabilities                                         |   |                                               | -      |   |   | - |   |   | 2,204 |   |
| Reversal                of allowance for doubtful accounts                      |   |                                               | 229    |   |   | 238 |   |   | - |   |
| Sale                of mining concessions                                       |   |                                               | 399    |   |   | 499 |   |   | 298 |   |
| Sale                of materials and services                                   |   |                                               | 369    |   |   | 75 |   |   | 438 |   |
| Sale                of Antucoya project                                         |   |                                               | -      |   |   | 753 |   |   | - |   |
| Gain                on sale of investments in related companies                      |   |                                               | 1,316  |   |   | 732 |   |   | - |   |
| Rental                of property, plant and equipment                          |   |                                               | 958    |   |   | 1,023 |   |   | 1,015 |   |
| Compensation                obtained from third parties                         |   |                                               | -      |   |   | - |   |   | 737 |   |
| Sale                of cross currency swap                                      |   |                                               | 4,000  |   |   | - |   |   | - |   |
| Net                foreign currency exchange gains and price-level restatement  |   |                                               | 2,212  |   |   | - |   |   | - |   |
| Recovery                of provisioned accounts receivable                      |   |                                               | 1,384  |   |   | - |   |   | - |   |
| Payment                discounts obtained from suppliers                        |   |                                               | 458    |   |   | 690 |   |   | 1,026 |   |
| Fines                collected from third parties                               |   |                                               | 192    |   |   | 159 |   |   | - |   |
| Other                income                                                     |   |                                               | 1,166  |   |   | 1,093 |   |   | 1,899 |   |
| Total                                                                           |   |                                               | 25,948 |   |   | 19,293 |   |   | 16,433 |   |

| b) | Non-operating                expenses |
|----|---------------------------------------|

|                                                                                                                                                  |   | **For                the year ended December 31,** |   |
|-------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------|--------|
|                                                                                                                                                  |   | **2007**                                           |   | **2006** |   | **2005** |   |
|                                                                                                                                                  |   | **ThUS$**                                          |   | **ThUS$** |   | **ThUS$** |   |
|                                                                                                                                                  |   |                                               |   |   |   |   |   |
| Interest                expense                                                                                                                  |   |                                               | 19,949 |   |   | 27,593 |   |   | 16,663 |   |
| Net                foreign currency exchange loss and price-level restatement and                price-level restatement                         |   |                                               | -      |   |   | 2,263 |   |   | 3,804 |   |
| Non-capitalized                exploration project expenses and provisions for damages and liquidation                of                assets   |   |                                               | 16,528 |   |   | 11,387 |   |   | 13,489 |   |
| Equity                participation in net losses of unconsolidated investees                                                                    |   |                                               | 77     |   |   | 362 |   |   | 477 |   |
| Amortization                of goodwill                                                                                                          |   |                                               | 2,252  |   |   | 2,229 |   |   | 2,070 |   |
| Work                disruption expenses                                                                                                          |   |                                               | 844    |   |   | 2,534 |   |   | 584 |   |
| Increase                in provision for employee compensation and legal costs                                                                        |   |                                               | -      |   |   | - |   |   | 7,986 |   |
| Change                of discount rate for staff severance indemnities provision                                                                 |   |                                               | -      |   |   | - |   |   | 678 |   |
| Allowances                for materials, spare parts and supplies                                                                                |   |                                               | 4,925  |   |   | 2,685 |   |   | 1,188 |   |
| Allowance                for doubtful accounts                                                                                                   |   |                                               | -      |   |   | 129 |   |   | 151 |   |
| Non-recoverable                taxes                                                                                                             |   |                                               | 669    |   |   | 508 |   |   | 647 |   |
| Consulting                services                                                                                                               |   |                                               | -      |   |   | - |   |   | 314 |   |
| Suppliers’                compensations services                                                                                           |   |                                               | 1,575  |   |   | - |   |   | - |   |
| Donations                                                                                                                                        |   |                                               | -      |   |   | - |   |   | 896 |   |
| Provision                for legal expenses and litigations                                                                                      |   |                                               | 523    |   |   | 1,010 |   |   | - |   |
| Accrued                expenses related to energy tariff adjustments                                                                             |   |                                               | 2,066  |   |   | 2,500 |   |   | - |   |
| Other                expenses                                                                                                                    |   |                                               | 3,624  |   |   | 2,141 |   |   | 1,808 |   |
| Total                                                                                                                                            |   |                                               | 53,032 |   |   | 55,341 |   |   | 50,755 |   |

----

*Table          of Contents*

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

**Notes        to the Audited Consolidated Financial Statements**

**(Expressed        in thousands of US dollars, except as stated)**

**Note      20 – Price-Level Restatement**

|                                                                            |   | **(Charge) to income for the year ended****December 31,** |   |
|---------------------------------------------------------------------------------|--------|----------------------------------------------------------------------------------------------|--------|
|                                                                            |   | **2007**                                                                                     |   | **2006** |   | **2005** |   |
|                                                                            |   | **ThUS$**                                                                                    |   | **ThUS$** |   | **ThUS$** |   |
| Inventories                                                                |   |                                                                                         | 1,450  |   |   | (40 | ) |   | (130 | ) |
| Property,                plant and equipment                               |   |                                                                                         | 517    |   |   | 142 |   |   | 239 |   |
| Other                assets                                                |   |                                                                                         | 558    |   |   | 184 |   |   | 324 |   |
| Other                liabilities                                           |   |                                                                                         | 119    |   |   | - |   |   | 199 |   |
| Shareholders’                equity                                  |   |                                                                                         | (7,016 | ) |   | (1,734 | ) |   | (2,846 | ) |
| Subtotal                price-level restatement                            |   |                                                                                         | (4,372 | ) |   | (1,448 | ) |   | (2,214 | ) |
| Net                adjustment of assets and liabilities denominated in UF  |   |                                                                                         | (484   | ) |   | 141 |   |   | (641 | ) |
| Net                price-level restatement                                 |   |                                                                                         | (4,856 | ) |   | (1,307 | ) |   | (2,855 | ) |

**Note      21 – Assets and Liabilities Denominated in Foreign      Currency**

|                                            |   | **As of                  December 31,** |      |
|-------------------------------------------------|--------|----------------------------------------------|-----------|
|                                            |   | **2007**                                     |      | **2006** |   |
|                                            |   | **ThUS$**                                    |      | **ThUS$** |   |
| **Assets**                                      |   |                                         |      |   |   |
| Chilean                  pesos             |   |                                         | 198,254   |   |   | 100,614 |   |
| US                  dollars                |   |                                         | 1,637,379 |   |   | 1,636,721 |   |
| Euros                                      |   |                                         | 44,809    |   |   | 37,092 |   |
| Japanese                  Yen              |   |                                         | 971       |   |   | 975 |   |
| Brazilian                  Real            |   |                                         | 400       |   |   | 330 |   |
| Mexican                  pesos             |   |                                         | 1,705     |   |   | 4,783 |   |
| UF                                         |   |                                         | 73,354    |   |   | 55,108 |   |
| South                  African Rand   |   |                                         | 9,366     |   |   | 13,374 |   |
| Dirhams                                    |   |                                         | 10,942    |   |   | 14,225 |   |
| Other                  currencies          |   |                                         | 9,139     |   |   | 7,980 |   |
| **Current                  liabilities**        |   |                                         |      |   |   |   |   |
| Chilean                  pesos             |   |                                         | 98,456    |   |   | 75,190 |   |
| US                  dollars                |   |                                         | 63,415    |   |   | 101,549 |   |
| Euros                                      |   |                                         | 13,079    |   |   | 9,925 |   |
| Japanese                  Yen              |   |                                         | 92        |   |   | 93 |   |
| Brazilian                  Real            |   |                                         | 1,681     |   |   | 1,662 |   |
| Mexican                  pesos             |   |                                         | 4,605     |   |   | 3,196 |   |
| UF                                         |   |                                         | 8,599     |   |   | 3,541 |   |
| South                  African Rand        |   |                                         | 1,020     |   |   | 1,698 |   |
| Dirhams                                    |   |                                         | 930       |   |   | 671 |   |
| Other                  currencies          |   |                                         | 545       |   |   | 117 |   |
|                                            |   |                                         |      |   |   |   |   |
| **Long-term                  liabilities**      |   |                                         |      |   |   |   |   |
|  Chilean                  pesos       |   |                                         | 20,196    |   |   | 17,340 |   |
| US                  dollars                |   |                                         | 437,687   |   |   | 429,324 |   |
| Japanese                  Yen              |   |                                         | 187       |   |   | 152 |   |
| UF                                         |   |                                         | 107,382   |   |   | 101,573 |   |
| Other                  currencies          |   |                                         | 10        |   |   | 9 |   |

----

*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note        22 - Cash Flow Statement**

|                                                                       |   | **For                the year ended December 31,** |   |
|----------------------------------------------------------------------------|--------|----------------------------------------------------|--------|
|                                                                       |   | **2007**                                           |   | **2006** |   | **2005** |   |
| **Description**                                                            |   | **ThUS$**                                          |   | **ThUS$** |   | **ThUS$** |   |
|                                                                       |   |                                               |   |   |   |   |   |
| Deferred                income taxes benefit for tax loss                  |   |                                               | -      |   |   | - |   |   | (5,602 | ) |
| Adjustment                of provision included in other financial income  |   |                                               | (229   | ) |   | (238 | ) |   | (2,203 | ) |
| Adjustment                of investees’ equity                       |   |                                               | -      |   |   | - |   |   | (1,143 | ) |
| Discounts                obtained from suppliers                           |   |                                               | (458   | ) |   | (690 | ) |   | (598 | ) |
| Reversal                of the provision for damages caused by heavy rains |   |                                               | -      |   |   | (1,000 | ) |   | - |   |
| Other                minor credits to income not representing cash flows   |   |                                               | (1,058 | ) |   | (834 | ) |   | (563 | ) |
| Total                                                                      |   |                                               | (1,745 | ) |   | (2,762 | ) |   | (10,109 | ) |

|                                                                                                                          |   | **For                the year ended December 31,** |    |
|-------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------|---------|
|                                                                                                                          |   | **2007**                                           |    | **2006** |   | **2005** |   |
| **Description**                                                                                                               |   | **ThUS$**                                          |    | **ThUS$** |   | **ThUS$** |   |
|                                                                                                                          |   |                                               |    |   |   |   |   |
| Provision                for Corfo royalty payments                                                                           |   |                                               | 3,643   |   |   | 2,358 |   |   | 1,855 |   |
| Deferred                income taxes benefit for tax loss                                                                     |   |                                               | 10,174  |   |   | 8,500 |   |   | - |   |
| Provision                for legal expenses for GNV lawsuit and other legal expense                                           |   |                                               | -       |   |   | - |   |   | 5,000 |   |
| Provision                for marketing expenses                                                                               |   |                                               | 4,317   |   |   | 4,364 |   |   | 4,130 |   |
| Provision                for employee incentive plans                                                                         |   |                                               | 13,495  |   |   | 3,160 |   |   | 8,215 |   |
| Adjustment                of provision for severance indemnities                                                              |   |                                               | 4,736   |   |   | 3,882 |   |   | 8,199 |   |
| Provision                for income taxes                                                                                     |   |                                               | 38,218  |   |   | 28,204 |   |   | 38,427 |   |
| Adjustment                of provision for vacation                                                                           |   |                                               | 8,300   |   |   | 5,333 |   |   | 4,447 |   |
| Non-capitalizable                exploration project expense and provisions for damages and liquidation                assets |   |                                               | 8,806   |   |   | 11,825 |   |   | 12,156 |   |
| Accrued                expenses related to energy tariff adjustments                                                          |   |                                               | 4,023   |   |   | 4,500 |   |   | - |   |
| Amortization                of prepaid insurance expenses                                                                     |   |                                               | 7,553   |   |   | 3,189 |   |   | 1,838 |   |
| Remuneration                of Board of Directors                                                                             |   |                                               | 1,820   |   |   | 1,800 |   |   | 1,557 |   |
| Provision                for mine closure                                                                                     |   |                                               | -       |   |   | 1,000 |   |   | - |   |
| Adjustment                and other expenses of inventories                                                                   |   |                                               | -       |   |   | 1,297 |   |   | - |   |
| Other                charges to income not representing cash flows                                                            |   |                                               | 2,990   |   |   | 2,921 |   |   | 1,865 |   |
| Total                                                                                                                         |   |                                               | 108,075 |   |   | 82,333 |   |   | 87,689 |   |

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*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note      23 – Commitments and Contingencies**

| 1.     | Plaintiff                      | :                Compañía                Salitre y Yodo Soledad S.A.                                                                                     |
|--------|--------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | Defendant                      | :                Sociedad                Química y Minera de Chile S.A.                                                                                       |
|   | Date                of lawsuit | :                December                1994                                                                                                                      |
|   | Court                          | :                Civil                Court of Pozo Almonte                                                                                                        |
|   | Cause                          | :                Partial                annulment of mining property, Cesard 1 to 29                                                                               |
|   | Instance                       | :                Evidence                provided                                                                                                                  |
|   | Nominal                amount  | :                ThUS$                211                                                                                                                          |
|   |                           |                                                                                                                                                               |   |
|   |                           |                                                                                                                                                               |   |
| 2.     | Plaintiff                      | :                Compañía                Productora de Yodo y Sales S.A.                                                                                 |
|   | Defendant                      | :                SQM                Químicos S.A.                                                                                                             |
|   | Date                of lawsuit | :                November                1999                                                                                                                      |
|   | Court                          | :                Civil                Court of Pozo Almonte                                                                                                        |
|   | Cause                          | :                Partial                annulment of mining property, Paz II 1 to 25                                                                               |
|   | Instance                       | :                Evidence                provided                                                                                                                  |
|   | Nominal                amount  | :                ThUS$                162                                                                                                                          |
|   |                           |                                                                                                                                                               |   |
|   |                           |                                                                                                                                                               |   |
| 3.     | Plaintiff                      | :                Compañía                Productora de Yodo y Sales S.A.                                                                                 |
|   | Defendant                      | :                SQM                Químicos S.A.                                                                                                             |
|   | Date                of lawsuit | :                November                1999                                                                                                                      |
|   | Court                          | :                Civil                Court of Pozo Almonte                                                                                                        |
|   | Cause                          | :                Partial                annulment of mining property, Paz III 1 to 25                                                                              |
|   | Instance                       | :                Evidence                provided                                                                                                                  |
|   | Nominal                amount  | :                ThUS$                204                                                                                                                          |
|   |                           |                                                                                                                                                               |   |
|   |                           |                                                                                                                                                               |   |
| 4.     | Plaintiff                      | :                Gabriela                Véliz Huanchicay                                                                                                     |
|   | Defendant                      | :                Gilberto                Mercado Barreda and subsidiary and jointly and severally SQM Nitratos                S.A.                and its insurers |
|   | Date                of lawsuit | :                August                2005                                                                                                                        |
|   | Court                          | :                4th                Civil Court of Santiago                                                                                                        |
|   | Cause                          | :                Work                accident                                                                                                                      |
|   | Instance                       | :                The                Court awarded a judgment of ThCh$ 250. The defendants filed an appeal                against this verdict.                     |
|   | Nominal                amount  | :                ThUS$                481                                                                                                                          |

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*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note      23 – Commitments and Contingencies (continued)**

| 5.     | Plaintiff                      | :                Juana                Muraña Quispe                                                                                                                                                                                                                                                                                                                                         |
|--------|--------------------------------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
|   | Defendant                      | :                Intro                Ingenieria Limitada and subsidiary and jointly and severally SQM                S.A. and                its insurers                                                                                                                                                                                                                                       |
|   | Date                of lawsuit | :                October                2005                                                                                                                                                                                                                                                                                                                                                     |
|   | Court                          | :                25th                Civil Court of Santiago                                                                                                                                                                                                                                                                                                                                     |
|   | Cause                          | :                Work                accident                                                                                                                                                                                                                                                                                                                                                    |
|   | Instance                       | :                Evidentiary                stage                                                                                                                                                                                                                                                                                                                                                |
|   | Nominal                amount  | :                ThUS$                1,500                                                                                                                                                                                                                                                                                                                                                      |
|   |                           |                                                                                                                                                                                                                                                                                                                                                                                             |   |
|   |                           |                                                                                                                                                                                                                                                                                                                                                                                             |   |
| 6.     | Plaintiff                      | :                Marina                Arnéz Valencia                                                                                                                                                                                                                                                                                                                                       |
|   | Defendant                      | :                SQM                S.A. and its insurance companies                                                                                                                                                                                                                                                                                                                             |
|   | Date                of lawsuit | :                April                2006                                                                                                                                                                                                                                                                                                                                                       |
|   | Court                          | :                2nd                Civil Court of Santiago                                                                                                                                                                                                                                                                                                                                      |
|   | Cause                          | :                Work                accident                                                                                                                                                                                                                                                                                                                                                    |
|   | Instance                       | :                Conciliation                audience                                                                                                                                                                                                                                                                                                                                            |
|   | Nominal                amount  | :                ThUS$                500                                                                                                                                                                                                                                                                                                                                                        |
|   |                           |                                                                                                                                                                                                                                                                                                                                                                                             |   |
|   |                           |                                                                                                                                                                                                                                                                                                                                                                                             |   |
| 7.     | Plaintiff                      | :                Sociedad                de Servicios Tacora Limitada                                                                                                                                                                                                                                                                                                                            |
|   | Defendant                      | :                SQM                Nitratos S.A.                                                                                                                                                                                                                                                                                                                                                |
|   | Date                of lawsuit | :                December                2006                                                                                                                                                                                                                                                                                                                                                    |
|   | Court                          | :                25th                Civil Court of Santiago                                                                                                                                                                                                                                                                                                                                     |
|   | Cause                          | :                Collection                of securities which SQM Nitratos S.A., by virtue of a mandate conferred                in                its favor, used to pay the plaintiff’s employees who had not received                their salaries and contributions for transportation and machinery                services                rendered indirectly to SQM Nitratos S.A. |
|   | Instance                       | :                Response                                                                                                                                                                                                                                                                                                                                                                        |
|   | Nominal                amount  | :                ThUS$                266                                                                                                                                                                                                                                                                                                                                                        |
|   |                           |                                                                                                                                                                                                                                                                                                                                                                                             |   |
|   |                           |                                                                                                                                                                                                                                                                                                                                                                                             |   |
| 8.     | Plaintiff                      | :                Marineer                Zona Franca S.A.                                                                                                                                                                                                                                                                                                                                        |
|   | Defendant                      | :                Minera                Nueva Victoria S.A.                                                                                                                                                                                                                                                                                                                                       |
|   | Date                of lawsuit | :                August                2007                                                                                                                                                                                                                                                                                                                                                      |
|   | Court                          | :                Arbitration                Court of Santiago                                                                                                                                                                                                                                                                                                                                    |
|   | Cause                          | :                Damages                for alleged unilateral and early termination of mineral transport                contract                                                                                                                                                                                                                                                                |
|   | Instance                       | :                Evidentiary                stage                                                                                                                                                                                                                                                                                                                                                |
|   | Nominal                amount  | :                ThUS$                1,400                                                                                                                                                                                                                                                                                                                                                      |

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*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note      23 – Commitments and Contingencies (continued)**

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*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note      24 – Guarantees **

|                                                |   | **Debtor**                                          |   | **Balances                outstanding** |   |
|-----------------------------------------------------|--------|-----------------------------------------------------|--------|-----------------------------------------|--------|
| **Beneficiary**                                     |   | **Name**                                            |   | **Relationship**                        |   | **2007** |   | **2006** |   |
|                                                |   |                                                |   |                                    |   | **ThUS$** |   | **ThUS$** |   |
| BBVA                Banco Bilbao Vizcaya Argentaria |   | Royal Seed Trading Corp. A.V.V. |   | Consolidated                Subsidiary  |   |   | 100,433 |   |   | 100,412 |   |
| ING                Capital LLC                      |   | Royal                Seed Trading Corp. A.V.V.      |   | Consolidated                Subsidiary  |   |   | 80,368 |   |   | 80,416 |   |

| **Company                Name**                  |   | **ThUS$** |   |
|--------------------------------------------------|--------|-----------|--------|
|                                             |   |      |   |
| Llanos                y Wammes Soc. Com. Ltda.   |   |      | 2,013  |   |
| Fertglobal                Chile Ltda. y Bramelli |   |      | 3,422  |   |
| Tattersall                S.A.                   |   |      | 1,158  |   |

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*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note      25 - Sanctions**

**Note      26 – Environmental Projects**

|                                                                   |   | **2007**  |   | **2006**  |   | **2005**  |   |
|------------------------------------------------------------------------|--------|-----------|--------|-----------|--------|-----------|--------|
|                                                                   |   | **ThUS$** |   | **ThUS$** |   | **ThUS$** |   |
| **Project**                                                            |   |      |   |      |   |      |   |
| Environmental                department                                |   |      | 1,040  |      |   | 748       |   |   | 596 |   |
| Risk                and security management                            |   |      | -      |      |   | -         |   |   | 424 |   |
| Improvements                in María Elena Camp – streets   |   |      | 436    |      |   | 296       |   |   | - |   |
| Dust                emission control                                   |   |      | 76     |      |   | 823       |   |   | 962 |   |
| Light                normalization                                     |   |      | 921    |      |   | 919       |   |   | 378 |   |
| Improvement                of mining operations                        |   |      | -      |      |   | -         |   |   | 220 |   |
| Environmental                studies – Region I of Chile project |   |      | -      |      |   | 605       |   |   | - |   |
| María                Elena environmental studies                  |   |      | 1,007  |      |   | 870       |   |   | - |   |
| Normalization                of lighting at FFCC yard, PV Mill         |   |      | 164    |      |   | 123       |   |   | - |   |
| Equipment                washing system                                |   |      | -      |      |   | 184       |   |   | - |   |
| The                Environment MOP/SOP 2                               |   |      | 294    |      |   | 142       |   |   | - |   |
| Construction                of facilities for workers                  |   |      | 292    |      |   | 279       |   |   | - |   |
| Atacama                salt deposit hydrological model                 |   |      | -      |      |   | 176       |   |   | - |   |
| Environmental                commitments in Region I of Chile          |   |      | 169    |      |   | 152       |   |   | - |   |
| Waste                pools R&R Lithium C. Plant               |   |      | 2,073  |      |   | -         |   |   | - |   |
| Salar                (Salt deposit) environmental follow-up plan  |   |      | 2,272  |      |   | -         |   |   | - |   |
| Handling                of household and industrial waste         |   |      | 917    |      |   | 25        |   |   | - |   |
| Environmental                evaluation                      |   |      | 194    |      |   | 21        |   |   | - |   |
| Elimination                of PCB equipment                            |   |      | -      |      |   | 304       |   |   | - |   |
| Others                                                                 |   |      | 325    |      |   | 1,175     |   |   | 811 |   |
| Total                                                                  |   |      | 10,180 |      |   | 6,842     |   |   | 3,391 |   |

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*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note      26 – Environmental Projects (continued)**

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*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note      27 – Significant Events**

**Note      28 – Subsequent Events**

**Note      29 – Differences between Chilean and United States Generally Accepted Accounting      Principles **

**I.**
**Differences      in measurement methods**

**a)**
**Revaluation      of property, plant and equipment**

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*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note      29 – Differences between Chilean and United States Generally Accepted Accounting      Principles (continued)**

**b)**
**Deferred      income taxes**

**c)          **
**Translation          of foreign currency financial statements and price-level          restatement**

|   | · | Monetary                assets and liabilities are translated at the year-end exchange rate;                and |
|--------|--------|-----------------------------------------------------------------------------------------------------------------|

|   | · | Non-monetary                assets and liabilities and shareholders' equity are translated at                historical exchange rates. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------|

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*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note      29 – Differences between Chilean and United States Generally Accepted Accounting      Principles (continued)**

| **c)** | **Translation                of foreign currency financial statements and price-level restatement                (continued)** |
|--------|--------------------------------------------------------------------------------------------------------------------------------|

|   | · | Depreciation                and amortization expense and other accounts derived from non-monetary                assets and liabilities are translated at historical rates;                and |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | All                other accounts are translated at monthly-average exchange rates,                which                approximate the actual rates of exchange at the date the transactions                occurred. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **d)** | **Minimum                dividend** |
|--------|-------------------------------------|

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*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note      29 – Differences between Chilean and United States Generally Accepted Accounting      Principles (continued)**

| **e)** | **Loans                to employees** |
|--------|---------------------------------------|

| **f)** | **Staff                    severance                    indemnities** |
|--------|-----------------------------------------------------------------------|

| **g)** | **Derivatives                and hedging** |
|--------|--------------------------------------------|

*Accounting      for Derivative Instruments and Hedging Activities*

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*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note      29 – Differences between Chilean and United States Generally Accepted Accounting      Principles (continued)**

| **g)** | **Derivatives                and hedging (continued)** |
|--------|--------------------------------------------------------|

| **h)** | **Business                combinations and goodwill** |
|--------|-------------------------------------------------------|

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*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note      29 – Differences between Chilean and United States Generally Accepted Accounting      Principles (continued)**

| **i)** | **Negative                goodwill** |
|--------|--------------------------------------|

|  | i-1: | The                reversal of negative goodwill amortization recorded under Chilean                GAAP; |
|--|------|-----------------------------------------------------------------------------------------------------------|

|  | i-2: | The                effects of reducing depreciation expense, due to the allocation of                the                excess purchase price to property, plant and                equipment. |
|--|------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **j)** | **Capitalized                interest** |
|--------|-----------------------------------------|

| **k)** | **Minority                interest** |
|--------|--------------------------------------|

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*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note      29 – Differences between Chilean and United States Generally Accepted Accounting      Principles (continued)**

**I.**

**l)**
**Effects      of conforming to US GAAP**

|                                                                                                    |   | **For                the years ended December 31,** |        |
|---------------------------------------------------------------------------------------------------------|--------|-----------------------------------------------------|-------------|
|                                                                                                    |   | **2007**                                            |        | **2006** |   | **2005** |   |
|                                                                                                    |   | **ThUS$**                                           |        | **ThUS$** |   | **ThUS$** |   |
|                                                                                                    |   |                                                |        |   |   |   |   |
| **Net                income in accordance with Chilean GAAP**                                           |   |                                                | **180,021** |   |   | **141,277** |   |   | **113,506** |   |
|                                                                                                    |   |                                                |        |   |   |   |   |   |   |   |
| Revaluation                of property, plant and equipment (paragraph a)                               |   |                                                | 4,288       |   |   | 4,174 |   |   | 2,132 |   |
| Deferred                income taxes (paragraph b)                                                      |   |                                                | 5,483       |   |   | 4,021 |   |   | 2,236 |   |
| Translation                of foreign currency financial statements (paragraph c)                       |   |                                                | 9,507       |   |   | (576 | ) |   | 8,994 |   |
| Staff                severance indemnities (paragraph f)                                                |   |                                                | (1,406      | ) |   | (484 | ) |   | (836 | ) |
| Derivatives                (paragraph g)                                                                |   |                                                | (4,821      | ) |   | 4,432 |   |   | 1,483 |   |
| Goodwill                (paragraph h)                                                                   |   |                                                | 2,252       |   |   | 1,950 |   |   | 1,718 |   |
| Negative                goodwill (paragraph i)                                                          |   |                                                |        |   |   |   |   |   |   |   |
| i-1:                Reversal of negative goodwill amortization                                          |   |                                                | -           |   |   | (68 | ) |   | (203 | ) |
| i-2:                Depreciation of property, plant and equipment                                       |   |                                                | 113         |   |   | 113 |   |   | 113 |   |
| Capitalized                interest (paragraph j)                                                       |   |                                                | (91         | ) |   | (91 | ) |   | (91 | ) |
| Minority                interest (paragraph k)                                                          |   |                                                | (3,752      | ) |   | 172 |   |   | (3,576 | ) |
| Deferred                income tax effect of the above US GAAP adjustments (paragraph                b) |   |                                                | 1,074       |   |   | (656 | ) |   | (272 | ) |
| *Net                income under US GAAP*                                                               |   |                                                | **192,668** |   |   | **154,264** |   |   | **125,204** |   |
| Other                comprehensive income (loss), net of tax:                                           |   |                                                |        |   |   |   |   |   |   |   |
| Minimum                pension liability adjustment                                                     |   |                                                | (141        | ) |   | - |   |   | 792 |   |
| Translation                adjustment                                                                   |   |                                                | 356         |   |   | (24 | ) |   | - |   |
| **Total                comprehensive income under US GAAP**                                             |   |                                                | **192,883** |   |   | **154,240** |   |   | **125,996** |   |

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*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note      29 – Differences between Chilean and United States Generally Accepted Accounting      Principles (continued)**

**l)**
**Effects      of conforming to US GAAP (continued)**

|                                                                                                    |   | **As                of December 31,** |          |
|---------------------------------------------------------------------------------------------------------|--------|---------------------------------------|---------------|
|                                                                                                    |   | **2007**                              |          | **2006** |   |
|                                                                                                    |   | **ThUS$**                             |          | **ThUS$** |   |
|                                                                                                    |   |                                  |          |   |   |
| **Shareholders’                equity in accordance with Chilean GAAP**                           |   |                                  | **1,182,436** |   |   | **1,085,949** |   |
| Revaluation                of property, plant and equipment: (paragraph a)                              |   |                                  |          |   |   |   |   |
| a-1:                Property, plant and equipment                                                       |   |                                  | (133,309      | ) |   | (133,309 | ) |
| a-2:                Accumulated depreciation                                                            |   |                                  | 107,731       |   |   | 103,444 |   |
| Deferred                income taxes (paragraph b)                                                      |   |                                  | (17,144       | ) |   | (22,627 | ) |
| Translation                of foreign currency financial statements (paragraph c)                       |   |                                  |          |   |   |   |   |
| c-1:                Property, plant and equipment                                                       |   |                                  | (3,745        | ) |   | (2,160 | ) |
| c-2:                Accumulated depreciation                                                            |   |                                  | 1,797         |   |   | 1,104 |   |
| c-3:                Inventory                                                                           |   |                                  | (3,035        | ) |   | (364 | ) |
| c-4:                Goodwill, net                                                                       |   |                                  | (302          | ) |   | (335 | ) |
| c-5:                Other assets                                                                        |   |                                  | (103          | ) |   | - |   |
| Minimum                dividend (paragraph d)                                                           |   |                                  | (54,006       | ) |   | (42,383 | ) |
| Employer                loans used to purchase shares (paragraph e)                                     |   |                                  | (127          | ) |   | (253 | ) |
| Staff                severance indemnities (paragraph f)                                                |   |                                  | (6,816        | ) |   | (5,409 | ) |
| Derivatives                (paragraph g)                                                                |   |                                  | (389          | ) |   | 4,432 |   |
| Goodwill                (paragraph h)                                                                   |   |                                  | 8,015         |   |   | 5,763 |   |
| Negative                goodwill: (paragraph i)                                                         |   |                                  |          |   |   |   |   |
| i-1:                Property, plant and equipment                                                       |   |                                  | (4,447        | ) |   | (5,084 | ) |
| i-1:                Accumulated depreciation of property, plant and equipment                           |   |                                  | 2,023         |   |   | 1,910 |   |
| i-2:                Negative goodwill                                                                   |   |                                  | 4,447         |   |   | 5,084 |   |
| i-2:                Accumulated amortization of negative goodwill                                       |   |                                  | (3,156        | ) |   | (3,156 | ) |
| Capitalized                interest (paragraph j)                                                       |   |                                  |          |   |   |   |   |
| j-1:                Property, plant and equipment                                                       |   |                                  | 1,643         |   |   | 1,643 |   |
| j-2:                Amortization of capitalized interest                                                |   |                                  | (365          | ) |   | (274 | ) |
| Effect                of minority interest on US GAAP adjustments (paragraph k)                         |   |                                  | 1,966         |   |   | 614 |   |
| Deferred                income tax effect of the above US GAAP adjustments (paragraph                b) |   |                                  | 1,007         |   |   | (67 | ) |
| **Shareholders'                equity in accordance with US GAAP**                                      |   |                                  | **1,084,121** |   |   | **994,522** |   |

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*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note      29 – Differences between Chilean and United States Generally Accepted Accounting      Principles (continued)**

**l)**
**Effects      of conforming to US GAAP, continued**

|                                                                           |   | **ThUS$** |          |
|--------------------------------------------------------------------------------|--------|-----------|---------------|
|                                                                           |   |      |          |   |
| **Balance                at January 1, 2005**                                  |   |      | **856,871**   |   |
|                                                                           |   |      |          |   |
| Reversal                of accrued minimum dividend at December 31, 2003  |   |      | 22,270        |   |
| Distribution                of final 2003 dividend                        |   |      | (48,118       | ) |
| Accrued                minimum dividend at December 31, 2005              |   |      | (34,053       | ) |
| Employer                loans used to purchase shares                     |   |      | 476           |   |
| Other                comprehensive income                                 |   |      | 792           |   |
| Net                income for the year                                    |   |      | 125,204       |   |
|                                                                           |   |      |          |   |
| **Balance                at December 31, 2005**                                |   |      | **923,442**   |   |
| Reversal                of accrued minimum dividend at December 31, 2005       |   |      | 34,053        |   |
| Distribution                of final 2005 dividend                             |   |      | (73,647       | ) |
| Accrued                minimum dividend at December 31, 2006                   |   |      | (42,383       | ) |
| Employer                loans used to purchase shares                          |   |      | 35            |   |
| Other                comprehensive income                                      |   |      | (1,242        | ) |
| Net                income for the year                                         |   |      | 154,264       |   |
|                                                                           |   |      |          |   |
| **Balance                at December 31, 2006**                                |   |      | **994,522**   |   |
| Reversal                of accrued minimum dividend at December 31, 2006       |   |      | 42,383        |   |
| Distribution                of final 2006 dividend                             |   |      | (91,787       | ) |
| Accrued                minimum dividend at December 31, 2007                   |   |      | (54,006       | ) |
| Employer                loans used to purchase shares                          |   |      | 126           |   |
| Other                comprehensive loss                                        |   |      | 215           |   |
| Net                income for the year                                         |   |      | 192,668       |   |
|                                                                           |   |      |          |   |
| **Balance                at December 31, 2007**                                |   |      | **1,084,121** |   |

----

*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note      29 – Differences between Chilean and United States Generally Accepted Accounting      Principles (continued)**

**II.**
**Additional      Disclosure Requirements**

**a)**
**Earnings      per share **

|                                                                            |   | **2007**                                     |    | **2006** |   | **2005** |   |
|---------------------------------------------------------------------------------|--------|----------------------------------------------|---------|----------|--------|----------|--------|
|                                                                            |   | **(Expressed                in US dollars)** |    |
|                                                                            |   |                                         |    |     |   |     |   |
| Basic                and diluted earnings per share under Chilean GAAP          |   |                                         | 0.68    |     |   | 0.54     |   |   | 0.43 |   |
| Basic                and diluted earnings per share under US GAAP               |   |                                         | 0.73    |     |   | 0.59     |   |   | 0.48 |   |
| Dividends                declared per share (1)                                 |   |                                         | 0.44    |     |   | 0.35     |   |   | 0.28 |   |
|                                                                            |   |                                         |    |     |   |     |   |   |   |   |
| Weighted                average number of common shares outstanding (thousands) |   |                                         | 263,197 |     |   | 263,197  |   |   | 263,197 |   |

**b)**
**Income      taxes**

|                                                            |   | **2007**        |    | **2006**        |   | **2005**        |   |
|-----------------------------------------------------------------|--------|-----------------|---------|-----------------|--------|-----------------|--------|
|                                                            |   | **ThUS$**  |    | **ThUS$**  |   | **ThUS$**  |   |
|                                                            |   |            |    |            |   |            |   |   |   |   |
| Consolidated                pretax income under US GAAP         |   |            | 242,247 |            |   | 193,358         |   |   | 160,382 |   |
| Statutory                tax rate                               |   |            | 17      | %               |   | 17              | %      |   | 17 | % |
| Theoretical                tax at statutory rate                |   |            | 41,182  |            |   | 32,871          |   |   | 27,265 |   |
|                                                            |   |            |    |            |   |            |   |   |   |   |
| Non-deductible                items                             |   |            | (1,433  | )               |   | 5,853           |   |   | 892 |   |
| Difference                in tax rates in foreign jurisdictions |   |            | 105     |            |   | 247             |   |   | 1,056 |   |
| Valuation                allowance                              |   |            | 2,182   |            |   | (4,420          | )      |   | 1,350 |   |
| Total                income tax under US GAAP                   |   |            | 42,036  |            |   | 34,551          |   |   | 30,563 |   |

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*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note      29 – Differences between Chilean and United States Generally Accepted Accounting      Principles (continued)**

**b)**
**Income      taxes (continued)**

|                                                 |   | **2007** |            | **2006** |   |
|------------------------------------------------------|--------|----------|-----------------|----------|--------|
|                                                 |   |     | **ThUS$**  |     |   | **ThUS$**  |   |
|                                                 |   |     |            |     |   |   |   |
| **Deferred                Tax Assets**          |   |     |            |     |   |   |   |
| Allowance                for doubtful debts          |   |     | 1,940           |     |   | 2,408 |   |
| Vacation                accrual                      |   |     | 1,872           |     |   | 1,411 |   |
| Unrealized                gains on sales of products |   |     | 17,521          |     |   | 13,308 |   |
| Provision                for obsolescence            |   |     | 3,779           |     |   | 2,283 |   |
| Tax                loss carryforwards (1)            |   |     | 25,883          |     |   | 31,969 |   |
| Fair                value acquisition adjustments    |   |     | 2,119           |     |   | 841 |   |
| Other                                                |   |     | 9,238           |     |   | 6,202 |   |
| Gross                deferred tax assets             |   |     | 62,352          |     |   | 58,422 |   |
| Valuation                allowance                   |   |     | (38,217         | )        |   | (36,035 | ) |
| Total                deferred tax assets             |   |     | 24,135          |     |   | 22,387 |   |
|                                                 |   |     |            |     |   |   |   |
| **Deferred                Tax Liabilities**          |   |     |            |     |   |   |   |
| Production                expenses                   |   |     | (20,535         | )        |   | (18,613 | ) |
| Accelerated                depreciation              |   |     | (62,190         | )        |   | (61,046 | ) |
| Staff                severance indemnities           |   |     | (574            | )        |   | (876 | ) |
| Exploration                expenses                  |   |     | (4,327          | )        |   | (4,712 | ) |
| Capitalized                interest                  |   |     | (8,601          | )        |   | (7,284 | ) |
| Gain                from derivative transactions     |   |     | (2,478          | )        |   | (935 | ) |
| Other                                                |   |     | (1,679          | )        |   | (1,552 | ) |
| Total                deferred tax liabilities        |   |     | (100,384        | )        |   | (95,018 | ) |

|   | (1) | The                Company’s tax loss carryforwards were primarily generated from losses                incurred in Chile. In accordance with current laws, in Chile tax                losses                may be carried forward indefinitely. In other countries tax losses                usually                expire. For the years ended December 31, 2007, 2006 and 2005 the                Company                realized benefits from the use of tax loss carry forwards amounting                to                ThUS$ 6,477, ThUS$ 9,037 and ThUS$ 3,541, respectively. |
|--------|-----|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                 |   | **2007**  |   | **2006**  |   |
|--------------------------------------|--------|-----------|--------|-----------|--------|
|                                 |   | **ThUS$** |   | **ThUS$** |   |
|                                 |   |      |   |      |   |
| Chile                           |   |      | 22,625 |      |   | 29,180 |   |
| Other                countries  |   |      | 3,258  |      |   | 2,789 |   |
| Total                           |   |      | 25,883 |      |   | 31,969 |   |

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*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note      29 – Differences between Chilean and United States Generally Accepted Accounting      Principles (continued)**

**b)**
**Income      taxes (continued)**

|                                        |   | **2007**  |    | **2006**  |   |
|---------------------------------------------|--------|-----------|---------|-----------|--------|
|                                        |   | **ThUS$** |    | **ThUS$** |   |
|                                        |   |      |    |      |   |
| Short-term                                  |   |      | (6,148  | )         |   | (5,406 | ) |
| Long-term                                   |   |      | (70,101 | )         |   | (67,225 | ) |
| Net                deferred tax liabilities |   |      | (76,249 | )         |   | (72,631 | ) |

|                                                   |   | **2007**        |   | **2006**        |   | **2005**        |   |
|--------------------------------------------------------|--------|-----------------|--------|-----------------|--------|-----------------|--------|
|                                                   |   | **ThUS$**  |   | **ThUS$**  |   | **ThUS$**  |   |
|                                                   |   |            |   |            |   |            |   |   |   |   |
| Income                tax expense under Chilean GAAP   |   |            | 48,592 |            |   | 37,916          |   |   | 32,527 |   |
| Additional                deferred taxes under US GAAP |   |            | (1,048 | )               |   | 656             |   |   | 272 |   |
| Reversal                of complementary accounts      |   |            | (5,508 | )               |   | (4,021          | )      |   | (2,236 | ) |
| Total                tax provision US GAAP             |   |            | 42,036 |            |   | 34,551          |   |   | 30,563 |   |

|    |   | **2007**  |    | **2006**  |   | **2005**  |   |
|---------|--------|-----------|---------|-----------|--------|-----------|--------|
|    |   | **ThUS$** |    | **ThUS$** |   | **ThUS$** |   |
|    |   |      |    |      |   |      |   |
| Chile   |   |      | 246,251 |      |   | 215,036   |   |   | 134,411 |   |
| Foreign |   |      | (4,004  | )         |   | (21,678   | )      |   | 25,971 |   |
| Total   |   |      | 242,247 |      |   | 193,358   |   |   | 160,382 |   |

|    |   | **2007**     |   | **2006**    |   | **2005**  |   |
|---------|--------|--------------|--------|-------------|--------|-----------|--------|
|    |   | **Deferred** |   | **Current** |   | **Total** |   | **Deferred** |   | **Current** |   | **Total** |   | **Deferred** |   | **Current** |   | **Total** |   |
|    |   | **ThUS$**    |   | **ThUS$**   |   | **ThUS$** |   | **ThUS$** |   | **ThUS$** |   | **ThUS$** |   | **ThUS$** |   | **ThUS$** |   | **ThUS$** |   |
|    |   |         |   |        |   |      |   |   |   |   |   |   |   |   |   |   |   |   |   |
| Chile   |   |         | 3,554  |        |   | 36,010    |   |   | 39,564 |   |   | 9,469 |   |   | 22,263 |   |   | 31,732 |   |   | (5,777 | ) |   | 33,537 |   |   | 27,760 |   |
| Foreign |   |         | 264    |        |   | 2,208     |   |   | 2,472 |   |   | 285 |   |   | 2,534 |   |   | 2,819 |   |   | (1,088 | ) |   | 3,891 |   |   | 2,803 |   |
| Total   |   |         | 3,818  |        |   | 38,218    |   |   | 42,036 |   |   | 9,754 |   |   | 24,797 |   |   | 34,551 |   |   | (6,865 | ) |   | 37,428 |   |   | 30,563 |   |

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*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note      29 – Differences between Chilean and United States Generally Accepted Accounting      Principles (continued)**

**c)**
**Other      comprehensive income**

*Reporting      Comprehensive Income*

|                                                |   | **Year                ended December 31, 2005** |   |
|-----------------------------------------------------|--------|-------------------------------------------------|--------|
|                                                |   | **Before-tax amount**                      |   | **Tax (expense) or benefit** |   | **Net-of-tax amount** |   |
|                                                |   | **ThUS$**                                       |   | **ThUS$** |   | **ThUS$** |   |
|                                                |   |                                            |   |   |   |   |   |
| Beginning                balance                    |   |                                            | (1,274 | ) |   | 482 |   |   | (792 | ) |
| Translation                adjustment               |   |                                            | -      |   |   | - |   |   | - |   |
| Minimum                pension liability adjustment |   |                                            | 1,274  |   |   | (482 | ) |   | 792 |   |
| Net                change                           |   |                                            | 1,274  |   |   | (482 | ) |   | 792 |   |
| Ending                balance                       |   |                                            | -      |   |   | - |   |   | - |   |

|                                                |   | **Year                ended December 31, 2006** |   |
|-----------------------------------------------------|--------|-------------------------------------------------|--------|
|                                                |   | **Before-tax amount**                      |   | **Tax (expense) or benefit** |   | **Net-of-tax amount** |   |
|                                                |   | **ThUS$**                                       |   | **ThUS$** |   | **ThUS$** |   |
|                                                |   |                                            |   |   |   |   |   |
| Beginning                balance                    |   |                                            | -      |   |   | - |   |   | - |   |
| Translation                adjustment               |   |                                            | (24    | ) |   | - |   |   | (24 | ) |
| Minimum                pension liability adjustment |   |                                            | (1,218 | ) |   | - |   |   | (1,218 | ) |
| Net                change                           |   |                                            | (1,242 | ) |   | - |   |   | (1,242 | ) |
| Ending                balance                       |   |                                            | (1,242 | ) |   | - |   |   | (1,242 | ) |

|                                                |   | **Year                ended December 31, 2007** |   |
|-----------------------------------------------------|--------|-------------------------------------------------|--------|
|                                                |   | **Before-tax amount**                      |   | **Tax (expense) or benefit** |   | **Net-of-tax amount** |   |
|                                                |   | **ThUS$**                                       |   | **ThUS$** |   | **ThUS$** |   |
|                                                |   |                                            |   |   |   |   |   |
| Beginning                balance                    |   |                                            | (1,242 | ) |   | - |   |   | (1,242 | ) |
| Translation                adjustment               |   |                                            | 356    |   |   | - |   |   | 356 |   |
| Minimum                pension liability adjustment |   |                                            | (141   | ) |   | - |   |   | (141 | ) |
| Net                change                           |   |                                            | 215    |   |   | - |   |   | 215 |   |
| Ending                balance                       |   |                                            | 1,027  |   |   | - |   |   | 1,027 |   |

----

*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note      29 – Differences between Chilean and United States Generally Accepted Accounting      Principles (continued)**

**d)**
**Credit      agreements**

**e)**
**Lease      commitments**

|                                                       |   | **Minimum**  |   |
|------------------------------------------------------------|--------|--------------|--------|
|                                                       |   | **lease**    |   |
|                                                       |   | **payments** |   |
| **Year                ended December 31,**                 |   | **ThUS$**    |   |
|                                                       |   |         |   |
| 2008                                                       |   |         | 315    |   |
| 2009                                                       |   |         | 315    |   |
| 2010                                                       |   |         | 314    |   |
| 2011                                                       |   |         | 183    |   |
| Total                future minimum lease payments         |   |         | 1,127  |   |
| Interest                                                   |   |         | (153   | ) |
| Present                value of net minimum lease payments |   |         | 974    |   |

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*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note      29 – Differences between Chilean and United States Generally Accepted Accounting      Principles (continued)**

**e)**
**Lease      commitments (continued)**

|                                       |   | **Minimum** |    |
|--------------------------------------------|--------|-------------|---------|
|                                       |   | **annual**  |    |
|                                       |   | **rentals** |    |
| **Year                ended December 31,** |   | **ThUS$**   |    |
|                                       |   |        |    |
| 2008                                       |   |        | 5,061   |   |
| 2009                                       |   |        | 5,061   |   |
| 2010                                       |   |        | 5,061   |   |
| 2011                                       |   |        | 5,061   |   |
| 2012                                       |   |        | 5,061   |   |
| Thereafter                                 |   |        | 91,101  |   |
| Total                                      |   |        | 116,406 |   |

**f)**
**Concentration      of credit risk**

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*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note      29 – Differences between Chilean and United States Generally Accepted Accounting      Principles (continued)**

**g)**
**Foreign      exchange gains and losses**

**h)          **
**Advertising          and research and development costs**

**i)**
**Business      combinations and goodwill**

|                                                   |   | **ThUS$** |   |
|--------------------------------------------------------|--------|-----------|--------|
|                                                   |   |      |   |
| Balance                at 31, 2005                     |   |      | 29,103 |   |
| Goodwill                on acquisition of DSM business |   |      | 11,373 |   |
| Sale                of Fertilizantes Olmeca            |   |      | (279   | ) |
| Translation                adjustment                  |   |      | 52     |   |
| Balance                at December 31, 2006            |   |      | 40,249 |   |
| Translation                adjustment                  |   |      | 86     |   |
| Balance                at December 31, 2007            |   |      | 40,335 |   |

----

*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note      29 – Differences between Chilean and United States Generally Accepted Accounting      Principles (continued)**

| **j)** | **Reclassification                differences between Chilean GAAP and US                GAAP** |
|--------|-------------------------------------------------------------------------------------------------|

|   | (i) | Non-operating                income and expense under US GAAP calculated in accordance with Chilean                GAAP |
|--------|-----|-------------------------------------------------------------------------------------------------------------------------|

|                                                                                                                                           |   | **2007**  |   | **2006**  |   | **2005**  |   |
|------------------------------------------------------------------------------------------------------------------------------------------------|--------|-----------|--------|-----------|--------|-----------|--------|
|                                                                                                                                           |   | **ThUS$** |   | **ThUS$** |   | **ThUS$** |   |
|                                                                                                                                           |   |      |   |      |   |      |   |
| Non-operating                income under Chilean GAAP                                                                                         |   |      | 25,948 |      |   | 19,293    |   |   | 16,433 |   |
| Less:                                                                                                                                          |   |      |   |      |   |      |   |   |   |   |
| Sale                of mining concessions                                                                                                      |   |      | 399    |      |   | 1,252     |   |   | 298 |   |
| Sale                of material and services                                                                                                   |   |      | 369    |      |   | 75        |   |   | 438 |   |
| Insurance                recoveries                                                                                                            |   |      | 275    |      |   | 307       |   |   | 213 |   |
| Write-off                of liabilities                                                                                                        |   |      | 335    |      |   | 238       |   |   | 2,204 |   |
| Payment                discount obtained from suppliers                                                                                        |   |      | 458    |      |   | 690       |   |   | 1,026 |   |
| Rental                of property, plant and equipment                                                                                         |   |      | 958    |      |   | 1,023     |   |   | 1,015 |   |
| Compensation                obtained from third parties                                                                                        |   |      | 524    |      |   | 1         |   |   | 737 |   |
| Other                income                                                                                                                    |   |      | 2,013  |      |   | 1,251     |   |   | 1,899 |   |
| Non-operating                income as classified under US GAAP, but calculated in accordance                with                Chilean GAAP  |   |      | 20,617 |      |   | 14,456    |   |   | 8,603 |   |
|                                                                                                                                           |   |      |   |      |   |      |   |   |   |   |
|                                                                                                                                           |   |      |   |      |   |      |   |   |   |   |
| Non-operating                expenses under Chilean GAAP                                                                                       |   |      | 53,032 |      |   | 55,341    |   |   | 50,755 |   |
| Less:                                                                                                                                          |   |      |   |      |   |      |   |   |   |   |
| Sales                of material and services                                                                                             |   |      | -      |      |   | 630       |   |   | - |   |
| Work                disruption expenses                                                                                                   |   |      | 844    |      |   | 1,534     |   |   | 584 |   |
| Increase                in allowance for doubtful debts                                                                                        |   |      | -      |      |   | 129       |   |   | 151 |   |
| Non-capitalizable                exploration project expenses                                                                                  |   |      | 16,528 |      |   | 12,087    |   |   | 13,489 |   |
| Non-recoverable                taxes                                                                                                           |   |      | 669    |      |   | 542       |   |   | 647 |   |
| Provision                for legal expenses and litigations                                                                                    |   |      | 523    |      |   | 1,010     |   |   | 7,986 |   |
| Change                of discount rate for staff severance indemnities provision                                                               |   |      | -      |      |   | -         |   |   | 678 |   |
| Allowances                for materials, spare parts and supplies                                                                              |   |      | 4,925  |      |   | 2,055     |   |   | 1,188 |   |
| Consulting                services                                                                                                             |   |      | -      |      |   | 281       |   |   | 314 |   |
| Donations                                                                                                                                      |   |      | -      |      |   | 458       |   |   | 896 |   |
| Penalties                                                                                                                                      |   |      | -      |      |   | -         |   |   | 238 |   |
| Suppliers’                compensations                                                                                                  |   |      | 1,575  |      |   | -         |   |   | - |   |
| Accrued                expenses related to energy tariff adjustments                                                                           |   |      | 2,066  |      |   | 2,500     |   |   | - |   |
| Other                expenses                                                                                                                  |   |      | 3,624  |      |   | 1,668     |   |   | 1,570 |   |
| Non-operating                expense as classified under US GAAP, but calculated in accordance                with                Chilean GAAP |   |      | 22,278 |      |   | 32,447    |   |   | 23,014 |   |

----

*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note      29 – Differences between Chilean and United States Generally Accepted Accounting      Principles (continued)**

**j)      **
**Reclassification      differences between Chilean GAAP and US GAAP (continued)**

|                                                            |   | **As                of December 31,** |      |
|-----------------------------------------------------------------|--------|---------------------------------------|-----------|
| **b)**                                                     |   | **2007**                              |      | **2006** |   |
| **Assets**                                                      |   | **ThUS$**                             |      | **ThUS$** |   |
|                                                            |   |                                  |      |   |   |
| Current                assets                                   |   |                                  | 900,593   |   |   | 849,958 |   |
| Property,                plant and equipment                    |   |                                  | 1,655,970 |   |   | 1,507,568 |   |
| Accumulated                depreciation                         |   |                                  | (701,582  | ) |   | (623,768 | ) |
| Property                plant and equipment, net                |   |                                  | 954,388   |   |   | 883,800 |   |
| Goodwill                                                        |   |                                  | 40,335    |   |   | 40,249 |   |
| Other                assets                                     |   |                                  | 64,301    |   |   | 72,019 |   |
| Total                assets                                     |   |                                  | 1,959,617 |   |   | 1,846,026 |   |
|                                                            |   |                                  |      |   |   |   |   |
| **Liabilities                and shareholders’ equity**   |   |                                  |      |   |   |   |   |
|                                                            |   |                                  |      |   |   |   |   |
| Current                liabilities                              |   |                                  | 246,163   |   |   | 241,210 |   |
| Long-term                liabilities                            |   |                                  | 585,300   |   |   | 571,695 |   |
| Minority                interest                                |   |                                  | 44,033    |   |   | 38,599 |   |
| Shareholders’                equity                       |   |                                  | 1,084,121 |   |   | 994,522 |   |
| Total                liabilities and shareholders’ equity |   |                                  | 1,959,617 |   |   | 1,846,026 |   |

----

*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note      29 – Differences between Chilean and United States Generally Accepted Accounting      Principles (continued)**

**j)      **
**Reclassification      differences between Chilean GAAP and US GAAP (continued)**

|                                                                    |   | **For                the years ended December 31,** |         |
|-------------------------------------------------------------------------|--------|-----------------------------------------------------|--------------|
|                                                                    |   | **2007**                                            |         | **2006** |   | **2005** |   |
| **Operating                income**                                     |   | **ThUS$**                                           |         | **ThUS$** |   | **ThUS$** |   |
|                                                                    |   |                                                |         |   |   |   |   |
| Sales                                                                   |   |                                                | 1,187,527    |   |   | 1,042,886 |   |   | 895,970 |   |
| Cost                of sales                                            |   |                                                | (880,272     | ) |   | (767,679 | ) |   | (670,213 | ) |
| Gross                margin                                             |   |                                                | 307,255      |   |   | 275,207 |   |   | 225,757 |   |
|                                                                    |   |                                                |         |   |   |   |   |   |   |   |
| Selling                and administrative expense                       |   |                                                | (70,273      | ) |   | (69,662 | ) |   | (61,878 | ) |
| Operating                income                                         |   |                                                | 236,982      |   |   | 205,545 |   |   | 163,879 |   |
|                                                                    |   |                                                |         |   |   |   |   |   |   |   |
| Non-operating                income (expense), net                      |   |                                                | 1,699        |   |   | (14,139 | ) |   | (6,093 | ) |
| Income                taxes                                             |   |                                                | (42,036      | ) |   | (34,551 | ) |   | (30,563 | ) |
| Minority                interest                                        |   |                                                | (7,544       | ) |   | (4,543 | ) |   | (4,615 | ) |
| Equity                participation in income of related companies, net |   |                                                | 3,567        |   |   | 1,952 |   |   | 2,596 |   |
|                                                                    |   |                                                |    |   |   |    |   |   |    |   |
| Net                income                                               |   |                                                | **192,668**  |   |   | **154,264** |   |   | **125,204** |   |
| Other                comprehensive income (loss), net of tax:           |   |                                                |         |   |   |   |   |   |   |   |
| Minimum                pension liability adjustment                     |   |                                                | (141         | ) |   | - |   |   | 792 |   |
| Translation                adjustment                                   |   |                                                | 356          |   |   | (24 | ) |   | **-** |   |
| Deferred                gain from sale of swap                          |   |                                                | **-**        |   |   | **-** |   |   | **-** |   |
| Total                comprehensive income under US GAAP                 |   |                                                | **192,883**  |   |   | **154,240** |   |   | **125,996** |   |

----

*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note      29 – Differences between Chilean and United States Generally Accepted Accounting      Principles (continued)**

**k)**
**Industry      segment and geographic area information**

*Disclosures      About Segments of an Enterprise and Related Information*

| (i) | Sales                by product type and by geographic area for the years ended December                31,                2007, 2006 and 2005 |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------|

|  **Year                ended December 31, 2007**       |   | **Chile** |        | **Latin America****and Caribbean (1) ** |   | **Europe**  |   | **North America** |        | **Asia****and other** |   | **Eliminations** |   | **Total** |        |
|-----------------------------------------------------------------------|--------|-----------|-------------|-------------------------------------------------------------|--------|-------------|--------|------------------------|-------------|----------------------------|--------|------------------|--------|-----------|-------------|
|                                                                  |   | **ThUS$** |        | **ThUS$**                                                   |   | **ThUS$**   |   | **ThUS$**              |        | **ThUS$**                  |   | **ThUS$**        |   | **ThUS$** |        |
| **Total                revenues:**                                    |   |      |        |                                                        |   |        |   |                   |        |                       |   |             |   |      |        |   |   |   |   |   |   |   |
| Specialty                plant nutrition                              |   |      | 157,148     |                                                        |   | 127,274     |   |                   | 240,982     |                       |   | 192,830          |   |      | 84,509      |   |   | (221,982 | ) |   | 580,761 |   |
| Iodine                and derivatives                                 |   |      | 167,189     |                                                        |   | 7,584       |   |                   | 144,977     |                       |   | 157,530          |   |      | 63,353      |   |   | (325,530 | ) |   | 215,103 |   |
| Lithium                and derivatives                                |   |      | 631         |                                                        |   | 2,621       |   |                   | 152,993     |                       |   | 66,708           |   |      | 72,651      |   |   | (115,814 | ) |   | 179,790 |   |
| Industrial                chemicals                                   |   |      | 3,027       |                                                        |   | 14,695      |   |                   | 95,282      |                       |   | 88,266           |   |      | 19,801      |   |   | (139,881 | ) |   | 81,190 |   |
| Potassium                chloride and other commodity fertilizers (2) |   |      | 334,008     |                                                        |   | 13,457      |   |                   | (5,519      | )                          |   | 3,645            |   |      | 12,549      |   |   | (227,457 | ) |   | 130,683 |   |
| Total                                                                 |   |      | **662,003** |                                                        |   | **165,631** |   |                   | **628,715** |                       |   | **508,979**      |   |      | **252,863** |   |   | **(1,030,664** | **)** |   | **1,187,527** |   |
| **Transfers                between geographic areas:**                |   |      |             |                                                        |   |             |   |                   |             |                       |   |                  |   |      |             |   |   |  |   |   |  |   |
| Specialty                plant nutrition                              |   |      | 33,102      |                                                        |   | 13,174      |   |                   | 95,014      |                       |   | 62,424           |   |      | 18,268      |   |   | (221,982 | ) |   | - |   |
| Iodine                and derivatives                                 |   |      | 166,244     |                                                        |   | -           |   |                   | 59,011      |                       |   | 78,736           |   |      | 21,539      |   |   | (325,530 | ) |   | - |   |
| Lithium                and derivatives                                |   |      | 260         |                                                        |   | -           |   |                   | 69,409      |                       |   | 28,228           |   |      | 17,917      |   |   | (115,814 | ) |   | - |   |
| Industrial                chemicals                                   |   |      | 1,322       |                                                        |   | 2,776       |   |                   | 58,897      |                       |   | 61,298           |   |      | 15,588      |   |   | (139,881 | ) |   | - |   |
| Potassium                chloride and other commodity fertilizers (2) |   |      | 228,189     |                                                        |   | 2,334       |   |                   | (14,456     | )                          |   | 2,314            |   |      | 9,076       |   |   | (227,457 | ) |   | - |   |
| Total                                                                 |   |      | **429,117** |                                                        |   | **18,284**  |   |                   | **267,875** |                       |   | **233,000**      |   |      | **82,388**  |   |   | **(1,030,664** | **)** |   | **-** |   |
| **Sales                to unaffiliated customers:**                   |   |      |             |                                                        |   |             |   |                   |             |                       |   |                  |   |      |             |   |   |  |   |   |  |   |
| Specialty                plant nutrition                         |   |      | 124,046     |                                                        |   | 114,100     |   |                   | 145,968     |                       |   | 130,406          |   |      | 66,241      |   |   | - |   |   | 580,761 |   |
| Iodine                and derivatives                                 |   |      | 945         |                                                        |   | 7,584       |   |                   | 85,966      |                       |   | 78,794           |   |      | 41,814      |   |   | - |   |   | 215,103 |   |
| Lithium                and derivatives                                |   |      | 371         |                                                        |   | 2,621       |   |                   | 83,584      |                       |   | 38,480           |   |      | 54,734      |   |   | - |   |   | 179,790 |   |
| Industrial                chemicals                                   |   |      | 1,705       |                                                        |   | 11,919      |   |                   | 36,385      |                       |   | 26,968           |   |      | 4,213       |   |   | - |   |   | 81,190 |   |
| Potassium                chloride and other commodity fertilizers (2) |   |      | 105,819     |                                                        |   | 11,123      |   |                   | 8,937       |                       |   | 1,331            |   |      | 3,473       |   |   | - |   |   | 130,683 |   |
| Total                                                                 |   |      | **232,886** |                                                        |   | **147,347** |   |                   | **360,840** |                       |   | **275,979**      |   |      | **170,475** |   |   | **-** |   |   | **1,187,527** |   |

----

*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note      29 – Differences between Chilean and United States Generally Accepted Accounting      Principles (continued)**

**k)**
**Industry      segment and geographic area information (continued)**

|  **Year ended December 31, 2006**            |   | **Chile** |        | **Latin America and Caribbean (1) ** |   | **Europe**  |   | **North America** |        | **Asia****and other** |   | **Eliminations** |   | **Total** |        |
|-----------------------------------------------------------------------|--------|-----------|-------------|---------------------------------------------------------------|--------|-------------|--------|------------------------|-------------|----------------------------|--------|------------------|--------|-----------|-------------|
|                                                                  |   | **ThUS$** |        | **ThUS$**                                                     |   | **ThUS$**   |   | **ThUS$**              |        | **ThUS$**                  |   | **ThUS$**        |   | **ThUS$** |        |
| **Total                revenues:**                                    |   |      |        |                                                          |   |        |   |                   |        |                       |   |             |   |      |        |   |   |   |   |   |   |   |
| Specialty                plant nutrition                              |   |      | 114,144     |                                                          |   | 114,838     |   |                   | 203,445     |                       |   | 201,906          |   |      | 78,545      |   |   | (209,762 | ) |   | 503,116 |   |
| Iodine                and derivatives                                 |   |      | 165,814     |                                                          |   | 6,965       |   |                   | 159,783     |                       |   | 155,992          |   |      | 68,651      |   |   | (339,468 | ) |   | 217,737 |   |
| Lithium                and derivatives                                |   |      | 46          |                                                          |   | 1,422       |   |                   | 95,342      |                       |   | 49,651           |   |      | 83,786      |   |   | (101,359 | ) |   | 128,888 |   |
| Industrial                chemicals                                   |   |      | 3,675       |                                                          |   | 12,795      |   |                   | 57,361      |                       |   | 83,616           |   |      | 11,555      |   |   | (97,718 | ) |   | 71,284 |   |
| Potassium                chloride and other commodity fertilizers (2) |   |      | 301,673     |                                                          |   | 9,064       |   |                   | 9,414       |                       |   | 69,459           |   |      | 8,155       |   |   | (275,903 | ) |   | 121,862 |   |
| **Total**                                                             |   |      | **585,352** |                                                          |   | **145,084** |   |                   | **525,344** |                       |   | **560,624**      |   |      | **250,692** |   |   | **(1,024,210** | **)** |   | **1,042,886** |   |
| **Transfers                between geographic areas:**                |   |      |        |                                                          |   |        |   |                   |        |                       |   |             |   |      |        |   |   |   |   |   |   |   |
| Specialty                plant nutrition                              |   |      | 25,902      |                                                          |   | 11,487      |   |                   | 66,206      |                       |   | 70,757           |   |      | 35,410      |   |   | (209,762 | ) |   | - |   |
| Iodine                and derivatives                                 |   |      | 163,943     |                                                          |   | -           |   |                   | 66,927      |                       |   | 74,934           |   |      | 33,664      |   |   | (339,468 | ) |   | - |   |
| Lithium                and derivatives                                |   |      | -           |                                                          |   | 8           |   |                   | 39,339      |                       |   | 17,771           |   |      | 44,241      |   |   | (101,359 | ) |   | - |   |
| Industrial                chemicals                                   |   |      | 1,206       |                                                          |   | 3,144       |   |                   | 29,623      |                       |   | 52,584           |   |      | 11,161      |   |   | (97,718 | ) |   | - |   |
| Potassium                chloride and other commodity fertilizers (2) |   |      | 229,481     |                                                          |   | 1,904       |   |                   | -           |                       |   | 36,363           |   |      | 8,155       |   |   | (275,903 | ) |   | - |   |
| **Total**                                                             |   |      | **420,532** |                                                          |   | **16,543**  |   |                   | **202,095** |                       |   | **252,409**      |   |      | **132,631** |   |   | **(1,024,210** | **)** |   | **-** |   |
| **Sales                to unaffiliated customers:**                   |   |      |        |                                                          |   |        |   |                   |        |                       |   |             |   |      |        |   |   |   |   |   |   |   |
| Specialty                plant nutrition                         |   |      | 88,242      |                                                          |   | 103,351     |   |                   | 137,239     |                       |   | 131,149          |   |      | 43,135      |   |   | - |   |   | 503,116 |   |
| Iodine                and derivatives                                 |   |      | 1,871       |                                                          |   | 6,965       |   |                   | 92,856      |                       |   | 81,058           |   |      | 34,987      |   |   | - |   |   | 217,737 |   |
| Lithium                and derivatives                                |   |      | 46          |                                                          |   | 1,414       |   |                   | 56,003      |                       |   | 31,880           |   |      | 39,545      |   |   | - |   |   | 128,888 |   |
| Industrial                chemicals                                   |   |      | 2,469       |                                                          |   | 9,651       |   |                   | 27,738      |                       |   | 31,032           |   |      | 394         |   |   | - |   |   | 71,284 |   |
| Potassium                chloride and other commodity fertilizers (2) |   |      | 72,192      |                                                          |   | 7,160       |   |                   | 9,414       |                       |   | 33,096           |   |      | -           |   |   | - |   |   | 121,862 |   |
| **Total**                                                             |   |      | **164,820** |                                                          |   | **128,541** |   |                   | **323,249** |                       |   | **308,215**      |   |      | **118,061** |   |   | **-** |   |   | **1,042,886** |   |

----

*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note      29 – Differences between Chilean and United States Generally Accepted Accounting      Principles (continued)**

**k)**
**Industry      segment and geographic area information (continued)**

|  **Year ended December 31, 2005**            |   | **Chile** |        | **Latin America and Caribbean (1) ** |   | **Europe**  |   | **North America** |        | **Asia****and other** |   | **Eliminations** |   | **Total** |        |
|-----------------------------------------------------------------------|--------|-----------|-------------|---------------------------------------------------------------|--------|-------------|--------|------------------------|-------------|----------------------------|--------|------------------|--------|-----------|-------------|
|                                                                  |   | **ThUS$** |        | **ThUS$**                                                     |   | **ThUS$**   |   | **ThUS$**              |        | **ThUS$**                  |   | **ThUS$**        |   | **ThUS$** |        |
| **Total                revenues:**                                    |   |      |        |                                                          |   |        |   |                   |        |                       |   |             |   |      |        |   |   |   |   |   |   |   |
| Specialty                plant nutrition                              |   |      | 135,864     |                                                          |   | 114,055     |   |                   | 267,572     |                       |   | 194,050          |   |      | 55,468      |   |   | (279,205 | ) |   | 487,804 |   |
| Iodine                and derivatives                                 |   |      | 84,220      |                                                          |   | 8,114       |   |                   | 115,634     |                       |   | 115,032          |   |      | 43,615      |   |   | (217,511 | ) |   | 149,104 |   |
| Lithium                and derivatives                                |   |      | 379         |                                                          |   | 1,213       |   |                   | 72,271      |                       |   | 37,917           |   |      | 21,128      |   |   | (51,548 | ) |   | 81,360 |   |
| Industrial                chemicals                                   |   |      | 6,627       |                                                          |   | 12,245      |   |                   | 79,612      |                       |   | 88,545           |   |      | 1,526       |   |   | (118,073 | ) |   | 70,482 |   |
| Potassium                chloride and other commodity fertilizers (2) |   |      | 207,321     |                                                          |   | 8,164       |   |                   | 10,336      |                       |   | 59,177           |   |      | 46          |   |   | (177,824 | ) |   | 107,220 |   |
| **Total**                                                             |   |      | **434,411** |                                                          |   | **143,791** |   |                   | **545,425** |                       |   | **494,721**      |   |      | **121,783** |   |   | **(844,161** | **)** |   | **895,970** |   |
| **Transfers                between geographic areas:**                |   |      |        |                                                          |   |        |   |                   |        |                       |   |             |   |      |        |   |   |   |   |   |   |   |
| Specialty                plant nutrition                              |   |      | 47,722      |                                                          |   | 9,155       |   |                   | 131,279     |                       |   | 72,551           |   |      | 18,498      |   |   | (279,205 | ) |   | - |   |
| Iodine                and derivatives                                 |   |      | 82,766      |                                                          |   | 460         |   |                   | 60,481      |                       |   | 56,318           |   |      | 17,486      |   |   | (217,511 | ) |   | - |   |
| Lithium                and derivatives                                |   |      | 12          |                                                          |   | 52          |   |                   | 38,180      |                       |   | 12,132           |   |      | 1,172       |   |   | (51,548 | ) |   | - |   |
| Industrial                chemicals                                   |   |      | 1,931       |                                                          |   | 4,229       |   |                   | 53,372      |                       |   | 57,337           |   |      | 1,204       |   |   | (118,073 | ) |   | - |   |
| Potassium                chloride and other commodity fertilizers (2) |   |      | 145,894     |                                                          |   | 1,708       |   |                   | 3,817       |                       |   | 26,376           |   |      | 29          |   |   | (177,824 | ) |   | - |   |
| **Total**                                                             |   |      | **278,325** |                                                          |   | **15,604**  |   |                   | **287,129** |                       |   | **224,714**      |   |      | **38,389**  |   |   | **(844,161** | **)** |   | **-** |   |
| **Sales                to unaffiliated customers:**                   |   |      |        |                                                          |   |        |   |                   |        |                       |   |             |   |      |        |   |   |   |   |   |   |   |
| Specialty                plant nutrition                              |   |      | 88,142      |                                                          |   | 104,900     |   |                   | 136,293     |                       |   | 121,499          |   |      | 36,970      |   |   | - |   |   | 487,804 |   |
| Iodine                and derivatives                                 |   |      | 1,454       |                                                          |   | 7,654       |   |                   | 55,153      |                       |   | 58,714           |   |      | 26,129      |   |   | - |   |   | 149,104 |   |
| Lithium                and derivatives                                |   |      | 367         |                                                          |   | 1,161       |   |                   | 34,091      |                       |   | 25,785           |   |      | 19,956      |   |   | - |   |   | 81,360 |   |
| Industrial                chemicals                                   |   |      | 4,696       |                                                          |   | 8,016       |   |                   | 26,240      |                       |   | 31,208           |   |      | 322         |   |   | - |   |   | 70,482 |   |
| Potassium                chloride and other commodity fertilizers (2) |   |      | 61,427      |                                                          |   | 6,456       |   |                   | 6,519       |                       |   | 32,801           |   |      | 17          |   |   | - |   |   | 107,220 |   |
| **Total**                                                             |   |      | **156,086** |                                                          |   | **128,187** |   |                   | **258,296** |                       |   | **270,007**      |   |      | **83,394**  |   |   | **-** |   |   | **895,970** |   |

----

*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note      29 – Differences between Chilean and United States Generally Accepted Accounting      Principles (continued)**

**k)**
**Industry      segment and geographic area information (continued)**

| (ii) | Other                segment information as of and for the years ended December 31, 2007,                2006                and 2005: |
|------|----------------------------------------------------------------------------------------------------------------------------------------|

| **As                of and for the year ended December 31, 2007** |   | **Chile** |          | **Latin                America****and****Caribbean** |   | **Europe** |   | **North                America** |       | **Asia****and                other** |   | **Eliminations** |   | **Total** |      |
|-------------------------------------------------------------------|--------|-----------|---------------|------------------------------------------------------|--------|------------|--------|----------------------------------|------------|--------------------------------------|--------|------------------|--------|-----------|-----------|
|                                                              |   | **ThUS$** |          | **ThUS$**                                            |   | **ThUS$**  |   | **ThUS$**                        |       | **ThUS$**                            |   | **ThUS$**        |   | **ThUS$** |      |
| **Production                facilities (1):**                     |   |      |          |                                                 |   |       |   |                             |       |                                 |   |             |   |      |      |   |   |   |   |   |   |   |
| Pedro                de Valdivia                                  |   |      | 74,036        |                                                 |   | -          |   |                             | -          |                                 |   | -                |   |      | -         |   |   | - |   |   | 74,036 |   |
| María                Elena                                   |   |      | 156,484       |                                                 |   | -          |   |                             | -          |                                 |   | -                |   |      | -         |   |   | - |   |   | 156,484 |   |
| Coya                Sur                                           |   |      | 106,771       |                                                 |   | -          |   |                             | -          |                                 |   | -                |   |      | -         |   |   | - |   |   | 106,771 |   |
| Pampa                Blanca                                       |   |      | 4,069         |                                                 |   | -          |   |                             | -          |                                 |   | -                |   |      | -         |   |   | - |   |   | 4,069 |   |
| Nueva                Victoria                                     |   |      | 104,758       |                                                 |   | -          |   |                             | -          |                                 |   | -                |   |      | -         |   |   | - |   |   | 104,758 |   |
| Salar                de Atacama                                   |   |      | 250,577       |                                                 |   | -          |   |                             | -          |                                 |   | -                |   |      | -         |   |   | - |   |   | 250,577 |   |
| Salar                del Carmen                                   |   |      | 43,997        |                                                 |   | -          |   |                             | -          |                                 |   | -                |   |      | -         |   |   | - |   |   | 43,997 |   |
| Others                                                            |   |      | 6,822         |                                                 |   | -          |   |                             | -          |                                 |   | 21,440           |   |      | 5,970     |   |   | (4,865 | ) |   | 29,367 |   |
| Sub-total                production facilities                    |   |      | 747,514       |                                                 |   | -          |   |                             | -          |                                 |   | 21,440           |   |      | 5,970     |   |   | (4,865 | ) |   | 770,059 |   |
|                                                              |   |      |          |                                                 |   |       |   |                             |       |                                 |   |             |   |      |      |   |   |   |   |   |   |   |
| Port                facility (1)                                  |   |      | 39,038        |                                                 |   | -          |   |                             | -          |                                 |   | -                |   |      | -         |   |   | - |   |   | 39,038 |   |
| Other                property, plant and equipment                |   |      | 155,065       |                                                 |   | -          |   |                             | -          |                                 |   | -                |   |      | -         |   |   | 7,839 |   |   | 162,904 |   |
| Assets                of commercial locations                     |   |      | 7,615         |                                                 |   | 1,450      |   |                             | 2,813      |                                 |   | 2,867            |   |      | 566       |   |   | (1,174 | ) |   | 14,137 |   |
| Investments                in related companies                   |   |      | 1,221,498     |                                                 |   | 15,659     |   |                             | 24,035     |                                 |   | 36,450           |   |      | -         |   |   | (1,273,707 | ) |   | 23,935 |   |
| Goodwill(3)                                                       |   |      | 23,844        |                                                 |   | 108        |   |                             | 10,284     |                                 |   | -                |   |      | -         |   |   | - |   |   | 34,236 |   |
| Other                non-current assets (2)(3)                    |   |      | 353,743       |                                                 |   | -          |   |                             | 6          |                                 |   | 1,675            |   |      | -         |   |   | (317,369 | ) |   | 38,055 |   |
| Total                long-lived assets long                       |   |      | **2,548,317** |                                                 |   | **17,217** |   |                             | **37,138** |                                 |   | **62,432**       |   |      | **6,536** |   |   | **(1,589,276** | **)** |   | **1,082,364** |   |
|                                                              |   |      |          |                                                 |   |       |   |                             |       |                                 |   |             |   |      |      |   |   |   |   |   |   |   |
| Expenditures                on long-lived assets                  |   |      | 175,910       |                                                 |   | 57         |   |                             | 205        |                                 |   | 1,838            |   |      | 18        |   |   | - |   |   | 178,028 |   |
|                                                              |   |      |          |                                                 |   |       |   |                             |       |                                 |   |             |   |      |      |   |   |   |   |   |   |   |
| Export                by region                                   |   |      | -             |                                                 |   | 139,242    |   |                             | 241,097    |                                 |   | 217,116          |   |      | 189,897   |   |   | - |   |   | 787,352 |   |

| (1) | The                Company’s principal production facilities are located near its mines and                extraction facilities in northern Chile. The following table sets                forth                the principal production facilities as of December 31, 2007, 2006                and                2005: |
|-----|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| **Location:**                    |   | **Products:**                                                                                        |
|----------------------------------|--------|------------------------------------------------------------------------------------------------------|
| Pedro                de Valdivia |   | Nitrate                and iodine production                                                         |
| María                Elena  |   | Nitrate                and iodine production                                                         |
| Coya                Sur          |   | Nitrate                and iodine production                                                         |
| Pampa                Blanca      |   | Concentrated                nitrate salts and iodine production                                      |
| Nueva                Victoria    |   | Iodine                production                                                                     |
| Salar                de Atacama  |   | Potassium                chloride, lithium chloride, potassium sulfate and boric                acid |
| Salar                del Carmen  |   | Lithium                carbonate and lithium hydroxide production                                    |
| Tocopilla                        |   | Port                facilities                                                                       |

| (2) | In                all tables in the segment disclosure this category includes principally                assets that may not be assigned to production facilities and investments                held by holding entities within the                group. |
|-----|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note      29 – Differences between Chilean and United States Generally Accepted      Accounting Principles (continued)**

| **k)** | **Industry                segment and geographic area information                (continued)** |
|--------|------------------------------------------------------------------------------------------------|

| (ii) | Other                segment information as of and for the years ended December 31, 2007,                2006                and 2005: |
|------|----------------------------------------------------------------------------------------------------------------------------------------|

|  **As                of and for the year ended****December                31, 2006** |   | **Chile** |          | **Latin                America****and****Caribbean** |   | **Europe** |   | **North                America** |       |  **Asia****and other** |   |   **Eliminations** |   | **Total** |      |
|-------------------------------------------------------------------------------------------|--------|-----------|---------------|------------------------------------------------------|--------|------------|--------|----------------------------------|------------|----------------------------------|--------|------------------------------|--------|-----------|-----------|
|                                                                                      |   | **ThUS$** |          | **ThUS$**                                            |   | **ThUS$**  |   | **ThUS$**                        |       | **ThUS$**                        |   | **ThUS$**                    |   | **ThUS$** |      |
| **Production                facilities (1):**                                             |   |      |          |                                                 |   |       |   |                             |       |                             |   |                         |   |      |      |   |   |   |   |   |   |   |
| Pedro                de Valdivia                                                          |   |      | 75,280        |                                                 |   | -          |   |                             | -          |                             |   | -                            |   |      | -         |   |   | - |   |   | 75,280 |   |
| María                Elena                                                           |   |      | 147,080       |                                                 |   | -          |   |                             | -          |                             |   | -                            |   |      | -         |   |   | - |   |   | 147,080 |   |
| Coya                Sur                                                                   |   |      | 93,320        |                                                 |   | -          |   |                             | -          |                             |   | -                            |   |      | -         |   |   | - |   |   | 93,320 |   |
| Pampa                Blanca                                                               |   |      | 3,410         |                                                 |   | -          |   |                             | -          |                             |   | -                            |   |      | -         |   |   | - |   |   | 3,410 |   |
| Nueva                Victoria                                                             |   |      | 112,880       |                                                 |   | -          |   |                             | -          |                             |   | -                            |   |      | -         |   |   | - |   |   | 112,880 |   |
| Salar                de Atacama                                                           |   |      | 239,640       |                                                 |   | -          |   |                             | -          |                             |   | -                            |   |      | -         |   |   | - |   |   | 239,640 |   |
| Salar                del Carmen                                                           |   |      | 48,110        |                                                 |   | -          |   |                             | -          |                             |   | -                            |   |      | -         |   |   | - |   |   | 48,110 |   |
| Others                                                                                    |   |      | 4,169         |                                                 |   | -          |   |                             | -          |                             |   | 23,035                       |   |      | 6,707     |   |   | - |   |   | 33,911 |   |
| Sub-total                production facilities                                            |   |      | 723,889       |                                                 |   | -          |   |                             | -          |                             |   | 23,035                       |   |      | 6,707     |   |   | - |   |   | 753,631 |   |
|                                                                                      |   |      |          |                                                 |   |       |   |                             |       |                             |   |                         |   |      |      |   |   |   |   |   |   |   |
| Port                facility (1)                                                          |   |      | 21,692        |                                                 |   | -          |   |                             | -          |                             |   | -                            |   |      | -         |   |   | - |   |   | 21,692 |   |
| Other                property, plant and equipment                                        |   |      | 130,250       |                                                 |   | -          |   |                             | -          |                             |   | -                            |   |      | -         |   |   | - |   |   | 130,250 |   |
| Assets                of commercial locations                                             |   |      | 6,614         |                                                 |   | 64,282     |   |                             | 3,115      |                             |   | 2,413                        |   |      | 555       |   |   | (62,627 | ) |   | 14,352 |   |
| Investments                in related companies                                           |   |      | 835,915       |                                                 |   | 15,603     |   |                             | 18,962     |                             |   | 48,202                       |   |      | -         |   |   | (900,353 | ) |   | 18,329 |   |
| Goodwill(3)                                                                               |   |      | 25,348        |                                                 |   | 131        |   |                             | 10,852     |                             |   | -                            |   |      | -         |   |   | - |   |   | 36,331 |   |
| Other                non-current assets (2)(3)                                            |   |      | 876,655       |                                                 |   | -          |   |                             | 53,669     |                             |   | 1,751                        |   |      | -         |   |   | (881,333 | ) |   | 50,742 |   |
| **Total                long-lived assets**                                                |   |      | **2,620,363** |                                                 |   | **80,016** |   |                             | **86,598** |                             |   | **75,401**                   |   |      | **7,262** |   |   | **(1,844,313** | **)** |   | **1,025,327** |   |
|                                                                                      |   |      |          |                                                 |   |       |   |                             |       |                             |   |                         |   |      |      |   |   |   |   |   |   |   |
| Expenditures                on long-lived assets                                          |   |      | 284,639       |                                                 |   | 90         |   |                             | 14,083     |                             |   | 802                          |   |      | 318       |   |   | - |   |   | 299,932 |   |
|                                                                                      |   |      |          |                                                 |   |       |   |                             |       |                             |   |                         |   |      |      |   |   |   |   |   |   |   |
| Export                by region                                                           |   |      | -             |                                                 |   | 122,394    |   |                             | 183,873    |                             |   | 187,781                      |   |      | 133,016   |   |   | - |   |   | 627,064 |   |

----

*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note      29 – Differences between Chilean and United States Generally Accepted      Accounting Principles (continued)**

| **k)** | **Industry                segment and geographic area information                (continued)** |
|--------|------------------------------------------------------------------------------------------------|

| (ii) | Other                segment information as of and for the years ended December 31, 2007,                2006                and 2005: |
|------|----------------------------------------------------------------------------------------------------------------------------------------|

|  **As                of and for the year ended****December                31, 2005** |   | **Chile** |          | **Latin                America****and****Caribbean** |   | **Europe** |   | **North                America** |       |  **Asia****and other** |   |   **Eliminations** |   | **Total** |    |
|-------------------------------------------------------------------------------------------|--------|-----------|---------------|------------------------------------------------------|--------|------------|--------|----------------------------------|------------|----------------------------------|--------|------------------------------|--------|-----------|---------|
|                                                                                      |   | **ThUS$** |          | **ThUS$**                                            |   | **ThUS$**  |   | **ThUS$**                        |       | **ThUS$**                        |   | **ThUS$**                    |   | **ThUS$** |    |
| **Production                facilities:**                                                 |   |      |          |                                                 |   |       |   |                             |       |                             |   |                         |   |      |    |   |   |   |   |   |   |   |
| Pedro                de Valdivia                                                          |   |      | 73,910        |                                                 |   | -          |   |                             | -          |                             |   | -                            |   |      | -       |   |   | - |   |   | 73,910 |   |
| María                Elena                                                           |   |      | 103,260       |                                                 |   | -          |   |                             | -          |                             |   | -                            |   |      | -       |   |   | - |   |   | 103,260 |   |
| Coya                Sur                                                                   |   |      | 60,220        |                                                 |   | -          |   |                             | -          |                             |   | -                            |   |      | -       |   |   | - |   |   | 60,220 |   |
| Pampa                Blanca                                                               |   |      | 180           |                                                 |   | -          |   |                             | -          |                             |   | -                            |   |      | -       |   |   | - |   |   | 180 |   |
| Nueva                Victoria                                                             |   |      | 92,380        |                                                 |   | -          |   |                             | -          |                             |   | -                            |   |      | -       |   |   | - |   |   | 92,380 |   |
| Salar                de Atacama                                                           |   |      | 243,140       |                                                 |   | -          |   |                             | -          |                             |   | -                            |   |      | -       |   |   | - |   |   | 243,140 |   |
| Salar                del Carmen                                                           |   |      | 41,080        |                                                 |   | -          |   |                             | -          |                             |   | -                            |   |      | -       |   |   | - |   |   | 41,080 |   |
| Others                                                                                    |   |      | 1,477         |                                                 |   | -          |   |                             | 7,289      |                             |   | 24,641                       |   |      | -       |   |   | - |   |   | 33,407 |   |
| Sub-total                production facilities                                            |   |      | 615,647       |                                                 |   | -          |   |                             | 7,289      |                             |   | 24,641                       |   |      | -       |   |   | - |   |   | 647,577 |   |
|                                                                                      |   |      |          |                                                 |   |       |   |                             |       |                             |   |                         |   |      |    |   |   |   |   |   |   |   |
| Port                facility                                                              |   |      | 19,776        |                                                 |   | -          |   |                             | -          |                             |   | -                            |   |      | -       |   |   | - |   |   | 19,776 |   |
| Other                property, plant and equipment                                        |   |      | 112,759       |                                                 |   | -          |   |                             | -          |                             |   | -                            |   |      | -       |   |   | - |   |   | 112,759 |   |
| Assets                of commercial locations                                             |   |      | 6,842         |                                                 |   | 47,379     |   |                             | 3,613      |                             |   | 6,519                        |   |      | 237     |   |   | (1,852 | ) |   | 62,738 |   |
| Investments                in related companies                                           |   |      | 684,214       |                                                 |   | 24,122     |   |                             | 19,991     |                             |   | 53,949                       |   |      | -       |   |   | (761,600 | ) |   | 20,676 |   |
| Goodwill(3)                                                                               |   |      | 27,055        |                                                 |   | 154        |   |                             | -          |                             |   | -                            |   |      | -       |   |   | - |   |   | 27,209 |   |
| Other                non-current assets(3)                                                |   |      | 884,143       |                                                 |   | 140        |   |                             | 6          |                             |   | 1,807                        |   |      | -       |   |   | (879,046 | ) |   | 7,050 |   |
| **Total                long-lived assets****long**                                        |   |      | **2,350,436** |                                                 |   | **71,795** |   |                             | **30,899** |                             |   | **86,916**                   |   |      | **237** |   |   | **(1,642,498** | **)** |   | **897,785** |   |
|                                                                                      |   |      |          |                                                 |   |       |   |                             |       |                             |   |                         |   |      |    |   |   |   |   |   |   |   |
| Expenditures                on long-lived assets                                          |   |      | 199,242       |                                                 |   | 102        |   |                             | 2,159      |                             |   | 1,268                        |   |      | -       |   |   | - |   |   | 202,771 |   |
|                                                                                      |   |      |          |                                                 |   |       |   |                             |       |                             |   |                         |   |      |    |   |   |   |   |   |   |   |
| Export                by region                                                           |   |      | -             |                                                 |   | 116,427    |   |                             | 243,964    |                             |   | 172,060                      |   |      | 51,908  |   |   | - |   |   | 584,359 |   |

----

*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note      29 – Differences between Chilean and United States Generally Accepted      Accounting Principles (continued)**

| **l)** | **Estimated                fair value of financial instruments and derivative financial                instruments** |
|--------|----------------------------------------------------------------------------------------------------------------------|

| - | The                data excludes non-financial assets and liabilities, such as property,                plant and equipment, and goodwill. |
|---|--------------------------------------------------------------------------------------------------------------------------------------------|

| - | While                the data represents management’s best estimates, the data is subjective                and involves significant estimates regarding current economic and                market                conditions and risk                characteristics, |
|---|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| - | Cash                and time deposits approximate fair value because of the short-term                maturity of these instruments. |
|---|--------------------------------------------------------------------------------------------------------------------------------------|

| - | Marketable                securities with a readily determinable market value are recorded                at fair                value, |
|---|-----------------------------------------------------------------------------------------------------------------------------------------|

| - | Current                liabilities that are contracted at variable interest rates, are considered                to have a fair value equal to book                value. |
|---|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| - | For                interest-bearing liabilities with an original contractual maturity                of                greater than one year, the fair values are calculated by discounting                contractual cash flows at current market origination rates with similar                terms. |
|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| - | For                forward contracts and swap agreements, fair value is determined using                quoted market prices of financial instruments with similar                characteristics. |
|---|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|                                                                 |   | **As                of December 31,**            |    |
|----------------------------------------------------------------------|--------|--------------------------------------------------|---------|
|                                                                 |   | **2007**                                         |    | **2006** |   |
|                                                                 |   | **US                GAAP****Carrying****Amount** |    |  **Estimated                Fair Value** |   | **US                GAAP****Carrying****Amount** |   |  **Estimated****Fair                Value** |   |
|                                                                 |   | **ThUS$**                                        |    | **ThUS$** |   | **ThUS$** |   | **ThUS$** |   |
| **Assets:**                                                          |   |                                             |    |   |   |   |   |   |   |   |   |   |   |
| Cash                and cash equivalents                             |   |                                             | 164,212 |   |   | 164,212 |   |   | 183,943 |   |   | 183,943 |   |
| Short-term                accounts receivable                        |   |                                             | 291,607 |   |   | 291,607 |   |   | 247,650 |   |   | 247,650 |   |
| Long-term                accounts receivable                         |   |                                             | 2,604   |   |   | 2,604 |   |   | 2,388 |   |   | 2,388 |   |
| Derivative                instruments                                |   |                                             | 14,968  |   |   | 14,968 |   |   | 5,498 |   |   | 5,498 |   |
|                                                                 |   |                                             |    |   |   |   |   |   |   |   |   |   |   |
| **Liabilities:**                                                     |   |                                             |    |   |   |   |   |   |   |   |   |   |   |
| Short-term                bank debt                                  |   |                                             | 1,806   |   |   | 1,806 |   |   | 58,350 |   |   | 58,350 |   |
| Short-term                notes and accounts payable                 |   |                                             | 107,730 |   |   | 107,730 |   |   | 87,164 |   |   | 87,164 |   |
| Derivative                instruments                                |   |                                             | 499     |   |   | 499 |   |   | 219 |   |   | 219 |   |
| Current                and long-term portions of long-term bank debt |   |                                             | 494,451 |   |   | 493,510 |   |   | 484,981 |   |   | 495,761 |   |
| Long-term                other accounts payable                      |   |                                             | 730     |   |   | 730 |   |   | 849 |   |   | 849 |   |

----

*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note      29 – Differences between Chilean and United States Generally Accepted      Accounting Principles (continued)**

| **m)** | **Post-retirement                obligations and staff severance                indemnities** |
|--------|-----------------------------------------------------------------------------------------------|

|                                                   |   | **2007** |   | **2006** |   |
|--------------------------------------------------------|--------|----------|--------|----------|--------|
|                                                   |   |     |   |     |   |
| Weighted-average                discount rate          |   |     | 6.5    | %        |   | 7.0 | % |
| Rate                of increase in compensation levels |   |     | 0.0    | %        |   | 0.0 | % |
| Long-term                rate of return on plan assets |   |     | 8.5    | %        |   | 8.5 | % |

----

*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note      29 – Differences between Chilean and United States Generally Accepted      Accounting Principles (continued)**

| **m)** | **Post-retirement                obligations and staff severance indemnities                (continued)** |
|--------|-----------------------------------------------------------------------------------------------------------|

|                                                                                                |   | 2007   |   | 2006   |   | 2005   |   |
|-----------------------------------------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|
|                                                                                                |   |   |   |   |   |   |   |
|                                                                                                |   | ThUS$  |   | ThUS$  |   | ThUS$  |   |
| Change                in benefit obligation:                                                        |   |   |   |   |   |   |   |   |   |   |
| Benefit                obligation at beginning of year                                              |   |   | 5,696  |   |   | 5,184  |   |   | 5,080 |   |
| Service                cost                                                                         |   |   | 1      |   |   | 17     |   |   | 16 |   |
| Interest                cost                                                                        |   |   | 391    |   |   | 381    |   |   | 369 |   |
| Actuarial                loss                                                                       |   |   | 405    |   |   | 359    |   |   | (37 | ) |
| Benefits                paid                                                                        |   |   | (248   | )      |   | (245   | )      |   | (244 | ) |
| Benefit                obligation at end of the year                                                |   |   | 6,245  |   |   | 5,696  |   |   | 5,184 |   |
|                                                                                                |   |   |   |   |   |   |   |   |   |   |
| Change                in plan assets:                                                               |   |   |   |   |   |   |   |   |   |   |
| Fair                value of plan assets at beginning of year                                       |   |   | 5,621  |   |   | 5,223  |   |   | 4,967 |   |
| Employer                contributions                                                               |   |   | 69     |   |   | 18     |   |   | - |   |
| Actual                return (loss) on plan assets                                                  |   |   | 699    |   |   | 625    |   |   | 500 |   |
| Benefits                paid                                                                        |   |   | (248   | )      |   | (245   | )      |   | (244 | ) |
| Fair                value of plan assets at end of year                                             |   |   | 6,141  |   |   | 5,621  |   |   | 5,223 |   |
|                                                                                                |   |   |   |   |   |   |   |   |   |   |
| Funded                status                                                                        |   |   | (104   | )      |   | (75    | )      |   | 39 |   |
| Items                not yet recognized as components of net periodic pension                costs: |   |   |   |   |   |   |   |   |   |   |
| Net                actuarial loss at the beginning of the period                                    |   |   | (1,218 | )      |   | (1,094 | )      |   | 1,133 |   |
| Amortization                during the period                                                       |   |   | 35     |   |   | 44     |   |   | - |   |
| Estimated                net gain loss occurring during the period                                  |   |   | (176   | )      |   | (168   | )      |   | - |   |
| Adjustment                to recognize minimum pension liability                                    |   |   | (1,359 | )      |   | (1,218 | )      |   | (1,094 | ) |
| Accrued                pension (liability)/ prepaid pension cost                                    |   |   | (104   | )      |   | (75    | )      |   | 39 |   |

|                                                                   |   | **2007**  |   | **2006**  |   | **2005**  |   |
|------------------------------------------------------------------------|--------|-----------|--------|-----------|--------|-----------|--------|
|                                                                   |   | **ThUS$** |   | **ThUS$** |   | **ThUS$** |   |
|                                                                   |   |      |   |      |   |      |   |
| Service                cost or benefits earned during the period  |   |      | 1      |      |   | 17        |   |   | 16 |   |
| Interest                cost on benefit obligation                |   |      | 391    |      |   | 381       |   |   | 369 |   |
| Actual                return on plan assets                            |   |      | (699   | )         |   | (625      | )      |   | (500 | ) |
| Amortization                of loss from prior periods            |   |      | 35     |      |   | 44        |   |   | - |   |
| Net                gain during the period                    |   |      | 229    |      |   | 192       |   |   | 147 |   |
| Net                periodic pension expense                       |   |      | (43    | )         |   | 9         |   |   | 32 |   |

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*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note      29 – Differences between Chilean and United States Generally Accepted      Accounting Principles (continued)**

| **m)** | **Post-retirement                obligations and staff severance indemnities                (continued)** |
|--------|-----------------------------------------------------------------------------------------------------------|

|                                                      |   | **2007** |   | **2006** |   |
|-----------------------------------------------------------|--------|----------|--------|----------|--------|
|                                                      |   |     |   |     |   |
| Growth                securities                |   |     | 55     | %        |   | 53 | % |
| International                securities         |   |     | 22     | %        |   | 21 | % |
| Growth                & income securities   |   |     | 12     | %        |   | 25 | % |
| Treasury                securities              |   |     | 9      | %        |   | - |   |
| Money                market funds               |   |     | 2      | %        |   | 1 | % |
| Total                                           |   |     | 100    | %        |   | 100 | % |

|                           |   | **ThUS$** |   |
|--------------------------------|--------|-----------|--------|
|                           |   |      |   |
| 2008                           |   |      | 274    |   |
| 2009                           |   |      | 340    |   |
| 2010                           |   |      | 356    |   |
| 2011                           |   |      | 396    |   |
| 2012                           |   |      | 427    |   |
| Years                2012-2015 |   |      | 2,679  |   |

| **n)** | **Cash                and cash equivalents** |
|--------|----------------------------------------------|

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*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note      29 – Differences between Chilean and United States Generally Accepted      Accounting Principles (continued)**

| **o)** | **Restricted                assets** |
|--------|--------------------------------------|

| **p)** | **Recent                US GAAP accounting                pronouncements** |
|--------|----------------------------------------------------------------------------|

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*Table          of Contents*

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

**Notes      to the Audited Consolidated Financial Statements**

**(Expressed      in thousands of US dollars, except as stated)**

**Note      29 – Differences between Chilean and United States Generally Accepted      Accounting Principles (continued)**

| **p)** | **Recent                US GAAP accounting pronouncements                (continued)** |
|--------|----------------------------------------------------------------------------------------|

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*Table          of Contents*